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Item 9A. Controls and Procedures

2024-02-23 compared with 2023-02-24 · 287 added, 288 removed, 1281 unchanged (31% of the section changed)

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Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2023.

Management has excluded from the scope of its assessment of the effectiveness of internal control over financial reporting as of December 31, 2022, the operations and related assets of Marks Paneth LLP and Stinnett & Associates, LLC, which were acquired on January 1, 2022 and July 1, 2022, respectively.

The aggregated total assets and revenue from Marks Paneth LLP and Stinnett & Associates, LLC were $95.4 million and $148.1 million, which represents approximately 5.1% and 10.5% of our respective consolidated total assets and total revenue as of December 31, 2022.

Management has excluded from the scope of its assessment of the effectiveness of internal control over financial reporting as of December 31, 2023 the operations and related assets of the following acquisitions completed In 2023:

Acquisitions Date of Acquisition

Danenhauer and Danenhauer, Inc.

January 1, 2023

Somerset CPAs and Advisors February 1, 2023

Pivot Point Security June 1, 2023

Ickovic and Co.

PC June 1, 2023

American Pension Advisors, Ltd.

The aggregated total assets and revenue from the above acquisitions were $46.3 million and $64.9 million, respectively, which represent approximately 2.3% and 4.1% of our respective consolidated total assets and total revenue as of and for the year ended December 31, 2023, respectively.

Our independent auditor, KPMG LLP, an independent registered public accounting firm, has issued an audit report on the effectiveness of our internal control over financial reporting which appears in Item 8 of this Annual Report.

OTHER INFORMATION.

During the quarter period ended December 31, 2023, none of the Company's directors or officers adopted or terminated a "Rule 10B5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement", as each term is defined in Item 408 of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

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We have adopted a Code of Professional Conduct and Ethics Guide that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

Our Code of Professional Conduct and Ethics Guide is available on the investor information page of our website, located at https://www.cbiz.com , and in print to any shareholder who requests them.

Our Code of Professional Conduct and Ethics Guide is available on the investor information page of our website, located at https://www.cbiz.com , and in print to any stockholder who requests them.

Any waiver or amendment to the code will be posted on our website.

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62 President & Chief Executive Officer, Director

DiMartino (2)(3)

France (1)(2)

Hudson (1)(3)

Slotkin (1)(3)

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Other Key Employees:

Gleespen 64 Secretary and General Counsel

Huddleston 46 Senior Vice President, Chief Legal Officer and Corporate Secretary

Fleischer 62 Senior Vice President and Chief Information Officer

Waxman 64 Senior Vice President and Chief Marketing Officer

Newman 46 Senior Vice President, Chief Administrative Officer and Chief Human Resources Officer

(1) Member of Audit Committee

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Burdick was elected by the Board as its Lead Director, a non-officer position, and in October 2002, he was elected by the Board as Vice Chairman, a non-officer position.

Burdick was a Partner at

the law firm of Akin Gump Strauss Hauer & Feld LLP, and was a Partner in the firm from 1988 until his retirement in 2019.

Burdick was a Partner at the law firm of Akin Gump Strauss Hauer & Feld LLP, and was a Partner in the firm from 1988 until his retirement in 2019.

Burdick serves a non-executive Chairman on the Board of Directors of AutoNation, Inc.

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He served on the Board of Governors of McMaster University in Hamilton, Ontario.

DiMartino has served as a Director of CBIZ since November 1997, when he was elected as an independent director.

DiMartino has been Chairman of the Boards of the funds in the BNY Mellon Corporation (formerly The Dreyfus Corporation) since January 1995.

DiMartino served as President, Chief Operating Officer and Director of The Dreyfus Corporation from October 1982 until December 1994 and also served as a director of Mellon Bank Corporation.

France was appointed to the CBIZ Board in February, 2015.

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France was a Senior Vice President with Lehman Brothers, Inc.

France serves on the boards of Huntington Bancshares, Inc., Cedar Fair, L.P.

and on the boards of the BNY Mellon Family of Funds.

France has previously served on the boards of FirstMerit Corporation, Dawn Food Products, Inc.

and Mack Industries.

Hudson was appointed to the CBIZ Board in February, 2015.

Until July 2016, upon the sale of the Company, Mr.

Hudson was Chairman of the Board of TECO Energy, Inc.

and was a member of its board since January 2003.

He was executive chairman from August 2010 to December 2012, after having served as Chairman and Chief Executive Officer since July 2004.

Hudson also serves on the boards of Lennar Corporation and United Insurance Holdings Corporation.

He served on the Publix Super Markets, Inc.

board from January 2003 until April 2015.

Hudson is also Chairman Emeritus of the Florida Chapter of the National Association of Corporate Directors.

Hudson retired from Deloitte & Touche, LLP in August 2002, after 37 years of service.

France serves on the boards of Huntington Bancshares, Inc.

Mellon Family of Funds.

France has previously served on the boards of FirstMerit Corporation, Dawn Food Products, Inc., Mack Industries, and Cedar Fair, L.P..

Slotkin has served as a Director of CBIZ since September 2003, when he was elected as an independent director.

Slotkin is President & COO of KMP Music LLC, a music publishing firm.

He was a Senior Advisor at Alvarez & Marsal from 2020 to 2021, and between 2014 and 2020 he served as the Global Business Head of Alvarez & Marsal’s Asset Management Services.

Slotkin was President & COO of KMP Music LLC, a music publishing firm from 2000 to 2023.

He was also a Senior Advisor at Alvarez & Marsal from 2020 to 2021, and between 2014 and 2020 he served as the Global Business Head of Alvarez & Marsal’s Asset Management Services.

Slotkin is also an independent director of the Apollo Closed End Fund Complex (Apollo Floating Rate Fund, Apollo Tactical Income Fund).

Slotkin was appointed the Managing Partner of Newton Pointe LLC, an advisory firm, a position he also held during the period 2007-2008.

Slotkin was appointed the Managing Partner of Newton Pointe LLC, an advisory firm, a position he also held during the period of 2007 to 2008.

Slotkin served on the Board of Martha Stewart Living Omnimedia from 2008 to 2012, and was head of its Audit Committee and Special Committee.

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He joined the company in 1994 as Corporate Controller.

He is also the Chairman of the Metal Services Center Institute (MSCI) and has also served on the Board of Trustees for the University of Mount Union since 2021.

He is also a director and the past Chairman of the Metal Services Center Institute (MSCI) and has also served on the Board of Trustees for the University of Mount Union since 2021.

He served on the Board of Directors and as Audit Committee Chairman for Hawk Corporation from 2008 until the company’s sale in November 2010.

Marabito has served on numerous non-profit boards over the course of his career including as Chair of the Northeast Ohio Regional Board for the Make-A-Wish Foundation.

Marabito has served on numerous non-profit boards over the course of his career including as a Trustee of Hawken School and Chair of the Northeast Ohio Regional Board for the Make-A-Wish Foundation.

Benaree Pratt Wiley has served as a Director of CBIZ since May 2008, when she was elected as an independent director.

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Young also previously held the Chair for the Board of Directors, Director, Chief Executive Officer and President roles for LecTec Corporation, a public disposable medical products and over-the-counter pharmaceuticals company.

Young currently serves as a Board Director and the Diversity, Equity and Inclusion Committee Chair of the Minnesota Business Partnership.

currently serves as a Board Director and the Diversity, Equity and Inclusion Committee Chair of the Minnesota Business Partnership.

Young received The Sanneh Foundation's Business Honoree Award in 2019 in recognition of his business leadership and community impact.

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Spurio served as Executive Managing Director of the Financial Services Group’s Midwest Region from September 2008 through March 2010, and as the Group’s Chief Operating Officer from March 2010 through December 2013.

associated with KPMG LLP, an international accounting firm, from July 1988 to January 1998.

Spurio was associated with KPMG LLP, an international accounting firm, from July 1988 to January 1998.

Spurio is a CPA, CGMA and a member of the American Institute of Certified Public Accountants and the Ohio Society of Certified Public Accountants.

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Other Key Employees:

Gleespen has served as Corporate Secretary since April 2001 and General Counsel since June 2001.

Gleespen is an attorney and has served as CBIZ’s Vice President of Regulatory Compliance and Accountancy Compliance Officer and Technical Director since February 1998.

Prior to joining CBIZ, Mr.

Gleespen was an Assistant Ohio Attorney General in the Business & Government Regulation Section and the Court of Claims Defense Section from 1988 until 1998, during which time he was counsel to the Ohio Accountancy Board, the Ohio State Teachers Retirement System and represented many other state departments and agencies.

Gleespen also held the post of Associate Attorney General for Pension, Disability and Annuity Plans and was the Co-Chairman of the Public Pension Plan Working Group.

Huddleston joined CBIZ in December 2023 as Senior Vice President, Chief Legal Officer and Corporate Secretary.

Prior to joining CBIZ, Ms.

Huddleston held various legal roles of increasing responsibility at Brown-Forman Corporation, a leading global spirits company based in Louisville, Kentucky, including Vice President – Associate General Counsel, Regional, Securities and Governance and Corporate Secretary from October 2022 to November 2023;

Vice President, Associate General Counsel and Corporate Secretary from September 2020 to October 2022;

Vice President, Assistant General Counsel and Assistant Secretary from March 2019 to September 2020;

and Managing Attorney and Assistant Secretary from July 2018 to March 2019.

Prior to joining Brown-Forman Corporation, Ms.

Huddleston served as Assistant Secretary and Corporate Counsel, Securities and Finance at Evergy, Inc., a publicly traded energy company based in Kansas City, Missouri, from 2010 to 2018.

Huddleston earned a bachelor’s degree in English from the University of Michigan, a juris doctor from Vanderbilt University School of Law, and a Master of Business Administration from the University of Missouri – Kansas City.

Fleischer has served as Senior Vice President and Chief Information Officer of CBIZ since August 2014.

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Fleischer held CIO roles at TTT Holdings (a Talisman Capital Partners company), Ferro Corporation, The Goodyear Tire & Rubber Company, and T-Systems.

Prior to these, he held senior IT roles at Volkswagen and Federal-Mogul Corporation.

Prior to these roles, he held senior IT roles at Volkswagen and Federal-Mogul Corporation.

While at T-Systems, Mr.

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Fleischer serves on the Board of Trustees of the Lakeside Chautauqua Association.

Waxman has served as Chief Marketing Officer since 2001.

Waxman has over thirty years of experience in marketing and branding.

Prior to joining CBIZ, he was Chief Executive Officer/Creative Director of one of Silicon Valley’s most well-known advertising agencies, Carter Waxman.

He was also a founding partner of SK Consulting (acquired by CBIZ in 1998) providing strategic marketing and branding services to a wide range of companies and industries.

Waxman has been a featured marketing columnist and contributor to many business and trade publications, and currently serves on the Advisory Board of several Silicon Valley start-ups.

He serves on the Board of Silicon Valley Creates, the Institute of Contemporary Art and the West Valley Mission Foundation.

He has served as the Chairman of the Board for organizations including the Silicon Valley Chamber of Commerce, Artsopolis.com, the Silicon Valley Ad Club, and The San Jose Repertory Theatre.

Newman was appointed Senior Vice President, Chief Administrative Officer (CAO) and Chief Human Resources Officer (CHRO) in December 2022 after joining CBIZ in 2019 as Chief of Staff.

Prior to CBIZ, Ms.

Newman was a non-profit executive leading a large, regional organization in Northeast Ohio.

Newman’s career has spanned the private, public and non-profit sectors including professional services experience with KPMG LLP which she joined through an acquisition.

Newman received a Master of Business Administration degree from The Ohio State University in 2011.

EXECUTIVE COMPENSATION.

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Information with respect to this item is incorporated by reference from our Definitive Proxy Statement for the 2024 Annual Stockholders’ Meeting to be filed with the SEC no later than 120 days after the end of our fiscal year.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) The following documents are filed as part of this Annual Report or incorporated by reference:

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Exhibits listed below refer to these names collectively as the “Company”.

Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Company’s Registration Statement on Form S-8, File No.

333-197284, and incorporated herein by reference).

Amended and Restated Certificate of Incorporation of the Company, dated August 7, 2000 (filed as Exhibit 3.1 to the Company’s Registration Statement on Form S-8, File No.

333-197284, dated May 24, 2019, and incorporated herein by reference).

Certificate of Amendment of the Certificate of Incorporation of the Company, effective August 1, 2005 (filed as Exhibit 3.5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, File No.

000-25890, dated March 16, 2006, and incorporated herein by reference).

Amended and Restated Bylaws of the Company (filed as Exhibit 3.3 to the Company’s Registration Statement on Form S-8, File No.

333-197284, and incorporated herein by reference).

Amended and Restated Bylaws of the Company, dated July 31, 2000 (filed as Exhibit 3.3 to the Company’s Registration Statement on Form S-8, File No.

333-197284, dated May 24, 2019, and incorporated herein by reference).

Amendment to Amended and Restated Bylaws of the Company dated November 1, 2007 (filed as Exhibit 3.1 to the Company’s Report on Form 8-K, File No.

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000-25890, dated March 4, 1999, and incorporated herein by reference).

Employee Stock Investment Plan (filed as Exhibit 4.4 to the Company’s Report on Form S-8, File No.

Employee Stock Investment Plan (filed as Exhibit 4.4 to the Company’s Registration Statement on Form S-8, File No.

000-333-62148, dated June 1, 2001, and incorporated herein by reference).

Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (filed as Exhibit 4.3 to the Company's Annual Report Form 10-K for the year ended December 31, 2019, File No.

001-32961, dated February 26, 2020, and incorporated herein by reference).

Description of the Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.

2002 Stock Incentive Plan (filed as Appendix A to the Company’s Proxy Statement for the 2002 Annual Meeting of Stockholders, File No.

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001-32961, dated August 9, 2011, and incorporated herein by reference).

2014 Stock Incentive Plan and 2002 Amended and Restated Stock Incentive Plan (filed as Exhibit 4.2 to Form S-8, dated July 7, 2014, and incorporated herein by reference).

Consulting Agreement by and between the Company and Steven L.

Gerard, dated March 9, 2016 (filed as Exhibit 10.1 to the Company’s Report on Form 10-Q, File No.

001-32961, dated March 3, 2016, and incorporated herein by reference).

2014 Stock Incentive Plan (filed as Exhibit 4.2 to the Company's Registration Statement on Form S-8, File No.

333-197284, dated July 7, 2014, and incorporated herein by reference).

Employment Agreement by and between the Company and Jerome P.

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001-32961, dated April 4, 2017, and incorporated herein by reference).

Loan Agreement dated as of August 16, 2018 by and among CBIZ Benefits and Insurance, Inc.

Loan Agreement dated as of August 16, 2018 by and among CBIZ Benefits and Insurance Services, Inc.

and The Huntington Bank (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, File No.

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Omnibus Incentive Plan (filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-8, File No.

333-197284, and incorporated herein by reference).

First Amendment to Loan Agreement, dated August 8, 2019, by and among CBIZ Benefit and Insurance, Inc.

333-197284, dated May 24, 2019, and incorporated herein by reference).

Amendment No.

1 to the 2019 CBIZ, Inc.

Omnibus Incentive Plan (filed as Exhibit 99.1 to the Company's Report on Form 8-K, File No.

001-32961, dated May 16, 2023, and incorporated herein by reference).

First Amendment to Loan Agreement, dated August 8, 2019, by and among CBIZ Benefit and Insurance Services, Inc.

and the Huntington National Bank (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, File No.

001-32961, on November 1, 2019, and incorporated herein by reference).

Second Amendment to Loan Agreement, dated August 6, 2020, by and among CBIZ Benefit and Insurance, Inc.

Second Amendment to Loan Agreement, dated August 6, 2020, by and among CBIZ Benefit and Insurance Services, Inc.

and the Huntington National Bank (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, File No.

001-32961, on November 1, 2020, and incorporated herein by reference).

Third Amendment to Loan Agreement, dated August 5, 2021, by and among CBIZ Benefit and Insurance, Inc.

Third Amendment to Loan Agreement, dated August 5, 2021, by and among CBIZ Benefit and Insurance Services, Inc.

and the Huntington National Bank (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, File No.

001-32961, on October 29, 2021, and incorporated herein by reference).

Fourth Amendment to Loan Agreement, dated August 1, 2022, by and among CBIZ Benefit and Insurance, Inc.

and the Huntington National Bank.

Fourth Amendment to Loan Agreement, dated August 1, 2022, by and among CBIZ Benefit and Insurance Services, Inc.

and the Huntington National Bank (filed as Exhibit 10.13 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022, File No.

001-32961, dated February 24, 2023, and incorporated herein by reference).

Fifth Amendment to Loan Agreement, dated August 3, 2023, by and among CBIZ Benefit and Insurance Services, Inc.

and the Huntington National Bank (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, File No.

001-32961, on October 26, 2023, and incorporated herein by reference).

Purchase Agreement, dated January 6, 2022, among CBIZ, Inc., CBIZ Acquisition 42, LLC, Marks Paneth LLP and all of the individuals who are equity partners of Marks Paneth (filed as Exhibit 2.1 to the Company’s Report on Form 8-K, File No.

001-32961, dated January 10, 2022, and incorporated herein by reference).

Form of CBIZ Restricted Share Unit Agreement

Form of CBIZ Performance Share Agreement

List of Subsidiaries of CBIZ, Inc.

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Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Compensation Recoupment Policy

XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document*

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101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document*

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document*

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document*

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† Management contract or compensatory plan contract or arrangement filed pursuant to Item 601 of Regulation S-K.

FORM 10-K SUMMARY.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

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DE GROOTE Director February 23, 2024

/s/ JOSEPH S.

DI MARTINO Director February 24, 2023

FRANCE Director February 23, 2024

/s/ SHERRILL W.

HUDSON Director February 24, 2023

SLOTKIN Director February 23, 2024

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Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company acquired Marks Paneth LLP and Stinnett & Associates, LLC during 2022, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, Marks Paneth LLP and Stinnett & Associates, LLC’s internal control over financial reporting associated with total assets of $95.4 million and total revenues of $148.1 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2022.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Marks Paneth LLP and Stinnett & Associates, LLC.

The Company acquired Danenhauer and Danenhauer, Inc., Somerset CPAs and Advisors, Pivot Point Security, Ickovic and Co.

PC and American Pension Advisors, Ltd.

during 2023, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, Danenhauer and Danenhauer, Inc., Somerset CPAs and Advisors, Pivot Point Security, Ickovic and Co.

PC and American Pension Advisors, Ltd.’s internal control over financial reporting associated with total assets of $46.3 million and total revenues of $64.9 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2023.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Danenhauer and Danenhauer, Inc., Somerset CPAs and Advisors, Pivot Point Security, Ickovic and Co.

PC and American Pension Advisors, Ltd.

Basis for Opinions

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Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in

accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

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Assets of deferred compensation plan 143,499 118,862

Right-of-use asset, net 184,043 151,145

Right-of-use asset 211,024 184,043

Other non-current assets 10,768 10,907

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( 899,093 ) ( 824,778 )

Accumulated other comprehensive income (loss) 3,604 ( 967 )

Accumulated other comprehensive income 1,778 3,604

Total stockholders’ equity 791,618 713,452

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Operating income 165,239 168,344 72,672

Other (expense) income:

Other income (expense):

Interest expense ( 20,131 ) ( 8,039 ) ( 3,868 )

Gain (loss) on sale of operations, net 413 5,995 ( 509 )

Other (expense) income, net ( 19,225 ) 18,241 16,500

Total other (expense) income, net ( 26,851 ) 20,368 11,008

Income from continuing operations before income tax expense 141,493 93,040 103,488

Gain on sale of operations, net 176 413 5,995

Other income (expense), net 21,019 ( 19,243 ) 18,217

Total other income (expense), net 1,064 ( 26,869 ) 20,344

Income before income tax expense 166,303 141,475 93,016

Income tax expense 45,335 36,121 22,129

Income from continuing operations 105,372 70,911 78,347

Loss from operations of discontinued operations, net of tax ( 18 ) ( 24 ) ( 48 )

Net income 120,968 105,354 70,887

Earnings (loss) per share:

Continuing operations $ 2.05 $ 1.35 $ 1.44

Discontinued operations — — —

Net income $ 2.05 $ 1.35 $ 1.44

Continuing operations $ 2.01 $ 1.32 $ 1.42

Discontinued operations — — ( 0.01 )

Net income $ 2.01 $ 1.32 $ 1.41

Earnings per share:

Basic $ 2.42 $ 2.05 $ 1.35

Diluted $ 2.39 $ 2.01 $ 1.32

Basic weighted average common shares outstanding 49,989 51,502 52,637

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Other comprehensive income (loss):

Net unrealized loss on available-for-sale securities, net of income tax benefit of $ 520 , $ 179 and $ 14

Net unrealized gain (loss) on available-for-sale securities, net of income tax expense (benefit) of $ 403 , $( 520 ) and $( 179 )

1,013 ( 1,391 ) ( 478 )

Net unrealized gain (loss) on interest rate swaps, net of income tax expense (benefit) of $ 1,965 , $ 577 and $( 494 )

Net unrealized (loss) gain on interest rate swaps, net of income tax (benefit) expense of $( 952 ), $ 1,965 and $ 577

( 2,821 ) 5,986 1,799

Foreign currency translation ( 18 ) ( 24 ) ( 19 )

Total other comprehensive income (loss) 4,571 1,302 ( 1,589 )

Total other comprehensive (loss) income ( 1,826 ) 4,571 1,302

Total comprehensive income $ 119,142 $ 109,925 $ 72,189

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Earnings Treasury

Stock Accumulated

Comprehensive

Income (Loss) Totals

Stock Accumulated Other Comprehensive (Loss) Income Totals

December 31, 2020 134,144 80,045 $ 1,341 $ 740,970 $ 557,875 $ ( 595,297 ) $ ( 2,269 ) $ 702,620

Net income — — — — 70,887 — — 70,887

Other comprehensive loss — — — — — — ( 1,589 ) ( 1,589 )

Other comprehensive income — — — — — — 1,302 1,302

Share repurchases — 3,012 — — — ( 96,382 ) — ( 96,382 )

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Restricted stock units and awards 120 — 1 ( 1 ) — — — —

Performance share units 211 — 2 ( 2 ) — — — —

Stock options exercised 670 — 7 10,028 — — — 10,035

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Net income — — — — 120,968 — — 120,968

Other comprehensive income — — — — — — 4,571 4,571

Other comprehensive loss — — — — — — ( 1,826 ) ( 1,826 )

Share repurchases — 1,285 — — — ( 65,142 ) — ( 65,142 )

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Business acquisitions 242 — 2 11,733 — — — 11,735

Excise tax on share repurchases — — — 554 — ( 725 ) ( 171 )

December 31, 2023 137,387 87,573 $ 1,374 $ 832,475 $ 855,084 $ ( 899,093 ) $ 1,778 $ 791,618

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Adjustments to reconcile net income to net cash provided by operating activities:

(Gain) loss on sale of operations, net of tax ( 413 ) ( 5,995 ) 509

Gain on sale of operations, net of tax ( 176 ) ( 413 ) ( 5,995 )

Depreciation and amortization expense 36,269 32,895 27,078

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Other liabilities 14,674 ( 1,876 ) 3,109

Net cash provided by continuing operations 126,150 131,178 146,916

Operating cash flows used in discontinued operations ( 18 ) ( 24 ) ( 71 )

Net cash provided by operating activities 153,507 126,132 131,154

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Changes in client funds obligations ( 13,574 ) 15,352 ( 8,874 )

Payment of contingent consideration of acquisitions ( 21,231 ) ( 14,084 ) ( 12,859 )

Payment of contingent consideration of acquisitions and client lists ( 45,175 ) ( 21,231 ) ( 14,084 )

Proceeds from exercise of stock options 8,764 10,035 7,311

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Net cash used in financing activities ( 77,111 ) ( 17,343 ) ( 69,005 )

Net increase (decrease) in cash, cash equivalents and restricted cash 9,671 ( 19,861 ) 23,830

Net (decrease) increase in cash, cash equivalents and restricted cash ( 2,997 ) 9,671 ( 19,861 )

Cash, cash equivalents and restricted cash at beginning of year 160,145 150,474 170,335

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SOFR - The Secured Overnight Financing Rate.

New Lease Standard - ASC Topic 842, Leases

ROU- Right of Use.

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A further description of products and services offered by each of the practice groups is provided in Note 19, Segment Disclosures, to the accompanying consolidated financial statements.

Effective April 1, 2023, CBIZ, Inc.

formed Rockside Insurance Company, Inc.

("Rockside"), a captive insurance company licensed in Vermont.

Rockside, wholly owned by CBIZ, Inc., provides insurance coverages for a portion of the retention deductibles from CBIZ, Inc.'s certain insurance programs with third party insurers.

Basis of Presentation - The accompanying consolidated financial statements reflect the operations of CBIZ, Inc.

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Refer to Note 17, Related Parties, for further discussion regarding the ASAs.

In 2021, CBIZ formed a grantor trust (the “Trust”) with Wilmington Savings Funds Society, FSB, a Federal savings bank, serving as trustee.

The Trust holds the majority of the funds provided by CBIZ’s clients for payroll processing

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

pending remittance to employees of those clients, tax authorities, and other payees.

In 2021, CBIZ formed a grantor trust (the “Trust”) with Wilmington Savings Funds Society, FSB, a Federal savings bank, serving as trustee.

The Trust holds the majority of the funds provided by CBIZ’s clients for payroll processing pending remittance to employees of those clients, tax authorities, and other payees.

CBIZ is the sole beneficial owner of the Trust.

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We have leases for office space and facilities, automobiles, and certain information technology equipment.

Certain of these leases include options to extend the lease and some include options to terminate the lease early.

Effective January 1, 2019, we adopted the New Lease Standard using the modified retrospective method of applying the new standard at the adoption date.

Certain of these leases include options to extend the

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

accounting policy election, we elected not to apply the recognition requirements under the New Lease Standards to short term leases (a lease at commencement date that has a lease term of 12 months or less and does not contain a purchase option that we are reasonably certain to exercise).

lease and some include options to terminate the lease early.

As an accounting policy election, we elected not to apply the recognition requirements to short term leases (a lease at commencement date that has a lease term of 12 months or less and does not contain a purchase option that we are reasonably certain to exercise).

The ROU assets and lease liabilities are recognized as of the commencement date based on the present value of the lease payments over the lease term.

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Related rent expense under such leases is recognized evenly throughout the term of the lease when the total lease commitment is a known amount, and recorded on an as incurred basis when future rent payment increases under the obligation are unknown due to rent escalations being tied to factors that are not currently measurable (such as increases in the consumer price index).

Differences between rent expense recognized and the cash payments required under these leases are recorded as a component of “Operating lease liability” in the Non-current liabilities section of the accompanying Consolidated Balance Sheets.

Differences between rent expense recognized and the cash payments required under these leases are recorded as a component of “Lease liability” in the current and non-current liabilities sections of the accompanying Consolidated Balance Sheets.

We may receive incentives to lease office facilities in certain areas.

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Goodwill and Other Intangible Assets - Goodwill represents the excess of the purchase price of the acquired businesses and the related fair value of the net assets acquired.

At December 31, 2022, the carrying value of goodwill totaled $ 819.9 million, compared to total assets of $ 1.9 billion and total shareholders’ equity of $ 713.5 million.

At December 31, 2023, the carrying value of goodwill totaled $ 865.2 million, compared to total assets of $ 2.0 billion and total stockholders’ equity of $ 791.6 million.

Intangible assets consist of identifiable intangibles other than goodwill.

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Recoverability is assessed based on a comparison of the undiscounted cash flows to the recorded value of the asset.

If impairment is indicated, the asset is written down to its estimated fair value determined by a discounted cash flow analysis or market comparable method.

If impairment is indicated, the asset is written down to its estimated fair value determined by a discounted cash flow analysis, market comparable method or a combination thereof as determined to be appropriate in the circumstances.

The goodwill impairment test is performed at a reporting unit level.

A reporting unit is an operating segment of a business or one level below an operating segment.

At December 31, 2022, we had five reporting units.

At December 31, 2023, we had six reporting units, of which five carry goodwill balances.

We may use either a qualitative or quantitative approach when testing a reporting unit’s goodwill for impairment.

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Any change in the fair value estimate, including the revaluation of common stock, is recorded in the earnings of that period.

For the years ended December 31, 2022, 2021 and 2020, we recorded other (expense) income of ($ 2.4 ) million, ($ 2.4 ) million and $ 0.6 million, respectively, related to net changes in the fair value of contingent consideration.

For the years ended December 31, 2023, 2022 and 2021, we recorded other expense of $ 2.7 million, $ 2.4 million and $ 2.4 million, respectively, related to net changes in the fair value of contingent consideration.

Refer to Note 7, Fair Value Measurements, and Note 18, Business Combinations, for further discussion of our contingent purchase price liabilities and acquisitions.

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Interest rate swap contracts mitigate the risk associated with the underlying hedged item.

If the contract is designated as a cash flow hedge, the mark-to-market gains or losses on the swap are deferred and included as a component of accumulated other comprehensive loss, net of tax, to the extent effective, and reclassified to interest expense in the same period during which the hedged transaction affects earnings.

If the contract is designated as a cash flow hedge, the mark-to-market gains or losses on the swap are deferred and included as a component of accumulated other comprehensive income, net of tax, to the extent effective, and reclassified to interest expense in the same period during which the hedged transaction affects earnings.

For further discussion regarding derivative financial instruments, refer to Note 6, Financial Instruments, to the accompanying consolidated financial statements.

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Accounting Standards Adopted in 2023

Reference Rate Reform:

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments in this ASU are effective for all entities through December 31, 2022.

Subsequently, in January 2021, the FASB issued ASU No.

2021-01, Reference Rate Reform (Topic 848):

Scope, which provides optional temporary guidance for entities transitioning away from the LIBOR and other interbank offered rates to new reference rates so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions within Topic 848.

This ASU clarifies that the derivative instruments affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions provided in Topic 848.

ASU 2021-01 is effective immediately for all entities.

Entities may elect to apply the amendments on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date that financial statements are available to be issued.

The amendments provided in this ASU do not apply to contract modifications made, as well as new hedging relationships entered into, after December 31, 2022, and to existing hedging relationships evaluated for effectiveness for periods after December 31, 2022, except for certain hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship.

On May 4, 2022, we entered into a Second Amended and Restated Credit Agreement (the "2022 credit facility" or the "credit facility"), by and among CBIZ Operations, Inc.

("CBIZ Operations"), and Bank of America, N.A., as administrative agent, and other financial institutions.

The 2022 credit facility amends the Amended and Restated Credit Agreement, dated as of April 3, 2018 (the "2018 credit facility").

Among other things, the 2022 Credit Facility amends the base interest rate from LIBOR to term SOFR.

Consequently, we amended the interest rate swap agreements with respect to the existing swaps.

Effective May 16, 2022, the scheduled reset date, the interest rate of the swaps was set to one month term SOFR to align the swaps to term SOFR in the 2022 credit facility.

No other terms under the swap agreements were amended.

As a result, we early adopted ASC Topic 848, Reference Rate Reform.

This adoption had immaterial impact on our consolidated financial statements.

Refer to Note 9, Debt and Financing Arrangements, and Note 6, Financial Instruments, for further discussion of the transaction.

In August 2023, the FASB issued ASU No.

2023-04, Liabilities (Topic 405):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

121, which amended and added various SEC paragraphs in the ASC to reflect the issuance of SEC Staff Bulletin No.

We adopted ASU No.

2023-04 upon issuance and the adoption did not have a material impact on our consolidated financial statements and related disclosures.

In July 2023, the FASB issued ASU No.

2023-03, Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General Revision of Regulation S-X:

Income or Loss Applicable to Common Stock, which amended and added various SEC paragraphs in the ASC to reflect the issuance of SEC Staff Bulletin No.

We adopted ASU No.

2023-03 upon issuance and the adoption did not have a material impact on our consolidated financial statements and related disclosures.

Accounting Standards Issued But Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires disaggregated information about an entity's effective tax rate reconciliation as well as information on income tax paid.

The guidance in this ASU is effective for public companies with annual periods beginning after December 15, 2024.

We plan to adopt the guidance for the fiscal year ending December 31, 2025.

We are currently evaluating the effect adoption of this ASU will have on our consolidated financial statements.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosure about significant segment expenses.

The guidance in this ASU is effective for public companies with annual periods beginning after December 15, 2023, and interim periods within the annual period beginning after December 15, 2024.

We plan to adopt the guidance for the fiscal year ending December 31, 2024.

We are currently evaluating the effect adoption of this ASU will have on our consolidated financial statements.

The following tables disaggregate our revenue by source (in thousands):

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Additions 79,147 — — 79,147

Divestitures — ( 2,786 ) — ( 2,786 )

Divestitures and other adjustments 27 — — 27

Gross 549,906 320,125 33,873 903,904

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Additions 41,322 3,932 — 45,254

Other adjustment 27 — — 27

Divestitures and other adjustments 9 — — 9

Gross 591,237 324,057 33,873 949,167

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Amortization expense for client lists and other intangible assets was $ 23.8 million, $ 21.7 million and $ 16.3 million in 2023, 2022 and 2021, respectively.

The weighted-average useful lives of total intangible assets, client lists and other intangible assets were 7.6 years, 7.7 years and 5.3 years, respectively.

The weighted-average useful lives of total intangible assets, client lists and other intangible assets were 7.4 years, 7.4 years and 5.2 years, respectively, as of December 31, 2023.

Other intangible assets are amortized over periods ranging from 3 to 15 years.

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The net par values of these securities total $ 40.0 million and $ 44.4 million at December 31, 2023 and 2022, respectively.

The bonds have maturity dates or callable dates ranging from January 2023 through November 2025, and are included in “Funds held for clients — current” in the accompanying Consolidated Balance Sheets based on our intent and ability to sell these investments at any time under favorable conditions.

At December 31, 2022, unrealized losses on the securities were not material and have not been recognized as a credit loss because the bonds are investment grade quality and management is not required or does not intend to sell prior to an expected recovery in value.

The bonds have maturity dates or callable dates ranging from January 2024 through December 2025, and are included in “Funds held for clients — current” in the accompanying Consolidated Balance Sheets based on our intent and ability to sell these investments at any time under favorable conditions.

At December 31, 2023 and December 31, 2022, unrealized losses on the securities were not material and have not been recognized as a credit loss because the bonds are investment grade quality and management is not required or does not intend to sell prior to an expected recovery in value.

The bond issuers continue to make timely principal and interest payments.

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Accordingly, the interest rate swaps are recorded as either an asset or liability in the accompanying Consolidated Balance Sheets at fair value.

The mark-to-market gains or losses on the swaps are deferred and included as a component of accumulated other comprehensive loss (“AOCL”), net of tax, to the extent the hedge is determined to be effective, and reclassified to interest expense in the same period during which the hedged transaction affects earnings.

The mark-to-market gains or losses on the swaps are deferred and included as a component of accumulated other comprehensive income (“AOCI”), net of tax, to the extent the hedge is determined to be effective, and reclassified to interest expense in the same period during which the hedged transaction affects earnings.

The interest rate swaps are assessed for effectiveness and continued qualification for hedge accounting on a quarterly basis.

For the years ended December 31, 2022 and 2021, the interest rate swaps were deemed to be highly effective.

For the years ended December 31, 2023 and 2022, the interest rate swaps were deemed to be effective.

As a result of the 2022 credit facility, CBIZ amended the interest rate swap agreements with respect to the existing swaps.

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No other terms under the swap agreements were amended.

As of December 31, 2023, we have five interest rate swaps outstanding.

Under the terms of the interest rate swaps, we pay interest at a fixed rate of interest plus applicable margin as stated in the amended agreements, and receive interest that varies with the one-month term SOFR.

The following table summarizes our outstanding interest rate swaps and their classification in the accompanying Consolidated Balance Sheets at December 31, 2023 and 2022 (in thousands).

Refer to Note 7, Fair Value Measurements, to the accompanying consolidated financial statements for additional disclosures regarding fair value measurements.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

December 31, 2023

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Value Balance Sheet Location

Interest rate swap $ 15,000 2.571 % 6/1/2023 $ 133 Other current asset

Interest rate swap $ 50,000 0.834 % 4/14/2025 $ 2,282 Other non-current asset

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Interest rate swap $ 20,000 2.450 % 8/14/2027 $ 784 Other non-current asset

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Interest rate swap (1)

$ 25,000 3.669 % 4/14/2028 $ ( 129 ) Other non-current liability

Interest rate swap (2)

$ 25,000 4.488 % 10/14/2028 $ ( 1,063 ) Other non-current liability

(1) Entered into during the first quarter of 2023.

(2) Entered into during the fourth quarter of 2023.

December 31, 2022

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Value Balance Sheet Location

Interest rate swap $ 20,000 1.770 % 5/14/2022 $ ( 120 ) Other current liability

Interest rate swap $ 15,000 2.640 % 6/1/2023 $ ( 432 ) Other non-current liability

Interest rate swap (3)

$ 15,000 2.571 % 6/1/2023 $ 133 Other current asset

Interest rate swap $ 50,000 0.834 % 4/14/2025 $ 3,726 Other non-current asset

Interest rate swap $ 30,000 1.249 % 12/14/2026 $ ( 64 ) Other non-current liability

During the third quarter of 2022, we entered into a new 5-year interest rate swap with a notional value of $ 20 million and fixed rate of 2.450 %.

One interest rate swap with a notional value of $ 20 million and fixed rate of 1.770 % expired during the second quarter of 2022.

As of December 31, 2022, we have four interest rate swaps outstanding.

During the next twelve months, the amount of the December 31, 2022 AOCL balance that will be reclassified to earnings is expected to be immaterial.

Interest rate swap $ 30,000 1.186 % 12/14/2026 $ 2,871 Other non-current asset

Interest rate swap $ 20,000 2.450 % 8/14/2027 $ 1,079 Other non-current asset

(3) Expired during the second quarter of 2023.

During the next twelve months, the amount of the December 31, 2023 AOCI balance that will be reclassified to earnings is expected to be immaterial.

The following table summarizes the effects of the interest rate swap on our accompanying Consolidated Statements of Comprehensive Income for the years ended December 31, 2023 and 2022 (in thousands):

Gain recognized in

AOCL, net of tax Gain (loss) reclassified from

AOCL into expense

AOCI, net of tax Gain reclassified from

AOCI into expense

Twelve Months Ended December 31, Twelve Months Ended December 31, Location

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Interest rate swaps $ 393 $ 6,255 $ 4,285 $ 357 Interest expense

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FAIR VALUE MEASUREMENTS

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As circumstances change, we will reassess the level in which the inputs are included in the fair value hierarchy.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

For the years ended December 31, 2023 and 2022, there were no transfers between the valuation hierarchy Levels 1, 2 and 3.

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Interest rate swaps, net 2 3,999 7,809

Bank debt 2 ( 310,826 ) ( 263,654 )

Contingent purchase price liabilities 3 ( 114,946 ) ( 132,010 )

Contingent Purchase Price Liabilities - During the years ended December 31, 2023 and 2022, we recorded expense of $ 2.7 million and expense of $ 2.4 million, respectively, due to accretion, adjusting for expected results of acquired businesses and the revaluation of stock related to contingent payments.

These changes are included in Other (expense) income, net in the accompanying Consolidated Statements of Comprehensive Income.

These changes are included in Other income (expense), net in the accompanying Consolidated Statements of Comprehensive Income.

Refer to Note 18, Business Combinations, for further discussion of our acquisitions and contingent purchase price liabilities.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

The following table summarizes the change in fair value of our contingent purchase price liabilities identified as Level 3 for the years ended December 31, 2023 and 2022 (pre-tax basis, in thousands):

Beginning balance — January 1, 2021 $ ( 54,391 )

Beginning balance — December 31, 2021 $ ( 79,139 )

Additions from business acquisitions ( 74,199 )

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Balance — December 31, 2023 $ ( 114,946 )

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

For financial reporting purposes, income from continuing operations before income taxes includes the following components (in thousands):

For financial reporting purposes, income before income taxes includes the following components (in thousands):

2023 2022 2021

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Total $ 166,303 $ 141,475 $ 93,016

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Income tax expense included in the accompanying Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands):

2023 2022 2021

Continuing operations:

Federal $ 29,835 $ 20,910 $ 12,369

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Total 5,086 7,862 6,311

Total income tax expense from continuing operations 36,121 22,129 25,141

Discontinued operations:

Operations of discontinued operations:

Current ( 7 ) ( 5 ) ( 11 )

Total income tax benefit from discontinued

operations ( 7 ) ( 5 ) ( 11 )

Total income tax expense 45,335 36,121 22,129

The provision for income taxes attributable to income from continuing operations differed from the amount obtained by applying the federal statutory income tax rate to income from continuing operations before income taxes, as follows (in thousands, except percentages):

The provision for income taxes attributable to income operations differed from the amount obtained by applying the federal statutory income tax rate to income before income taxes, as follows (in thousands, except percentages):

2023 2022 2021

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Other, net 411 1,376 1,117

Provision for income taxes from continuing operations $ 36,121 $ 22,129 $ 25,141

Provision for income taxes $ 45,335 $ 36,121 $ 22,129

Effective income tax rate 27.3 % 25.5 % 23.8 %

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2023 and 2022, were as follows (in thousands):

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Lease costs 7,398 6,871

Deferral of employer FICA taxes — 1,961

Other deferred tax assets 1,888 574

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We have established valuation allowances for deferred tax assets related to certain employee benefits and compensation and state net operating loss (“NOL”) carryforwards at December 31, 2023 and December 31, 2022.

The net increase in the valuation allowance of $ 1.2 million for the year ended December 31, 2022 related to changes in the valuation allowance for NOLs and certain employee benefits and compensation.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

The net decrease in the valuation allowance of $ 0.4 million for the year ended December 31, 2023 related to changes in the valuation allowance for NOLs and certain employee benefits and compensation.

In assessing the realization of deferred tax assets, management considers all available positive and negative evidence, including projected future taxable income, scheduled reversal of deferred tax liabilities, historical financial operations and tax planning strategies.

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income tax returns are no longer subject to tax authority examinations for years ending prior to January 1, 2019 and January 1, 2018, respectively.

The availability of NOLs and state tax credits are reported as deferred tax assets, net of applicable valuation allowances, in the accompanying Consolidated Balance Sheets.

The availability of NOLs and state tax credits are reported as a component of deferred tax assets, net of applicable valuation allowances, in the accompanying Consolidated Balance Sheets.

At December 31, 2023, we had state net operating loss carryforwards of $ 50.8 million and a state tax credit carryforward of $ 0.1 million.

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Balance at December 31 $ 1,847 $ 2,111 $ 1,594

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Included in the balance of unrecognized tax benefits at December 31, 2023 are $ 1.1 million of unrecognized tax benefits that, if recognized, would affect the effective tax rate.

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During 2023, we recorded an immaterial increase in accrued interest, and, as of December 31, 2023, we had recognized a liability for interest expense and penalties of $ 0.3 million and $ 0.2 million, respectively, relating to unrecognized tax benefits.

During 2021, we recorded an immaterial decrease in accrued interest, and, as of December 31, 2021, we had recognized a liability for interest expense and penalties of $ 0.2 million and $ 0.2 million, respectively, relating to unrecognized tax benefits.

During 2022, we recorded an immaterial increase in accrued interest, and, as of December 31, 2022, we had recognized a liability for interest expense and penalties of $ 0.3 million and $ 0.2 million, respectively, relating to unrecognized tax benefits.

DEBT AND FINANCING ARRANGEMENTS

2022 credit facility

On May 4, 2022, we entered into the 2022 credit facility, which amends the 2018 credit facility.

The 2022 credit facility increased our borrowing capacity from $ 400 million to $ 600 million, which provides us with the capital necessary to meet our working capital needs as well as the flexibility to continue with our strategic initiatives, including business acquisitions and share repurchases.

Other important key terms of the 2022 credit facility include:

On May 4, 2022, we entered into a credit facility (the "2022 credit facility" or the "credit facility"), which amended and restated the 2018 credit facility.

The 2022 credit facility increased our borrowing capacity from $ 400 million to $ 600 million, providing us with the capital necessary to meet our working capital needs as well as the flexibility to continue with our strategic initiatives, including business acquisitions and share repurchases.

Other important key terms of the 2022 credit facility included:

(i) an accordion feature that permits lenders to extend an additional $ 200 million at later date;

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(iii) upsizing of baskets and various sublimits to reflect the increased size of the Company's business;

(iv) a swing line facility increase from $ 25 million to $ 50 million, which provides for same-day funds to cover daily liquidity needs;

(iv) a swing line facility increase from $ 25 million to

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

$ 50 million, providing for same-day funds to cover daily liquidity needs;

and (v) base interest rate amended from LIBOR to Term SOFR.

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The 2022 credit facility matures on May 4, 2027.

The balance outstanding under the 2022 credit facility was $ 265.7 million at December 31, 2022.

The balance outstanding under the 2018 credit facility was $ 155.3 million at December 31, 2021.

The balance outstanding under the 2022 credit facility was $ 312.4 million and $ 265.7 million for the year ended December 31, 2023 and 2022, respectively.

The combined effective interest rates under the 2018 and 2022 credit facilities, including the impact of interest rate swaps associated with those credit facilities, were as follows:

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Historically, we have not paid cash dividends on our common stock.

Our Board of Directors has discretion over the payment and level of dividends on common stock,

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

subject to the limitations of the credit facility and applicable law.

Our Board of Directors has discretion over the payment and level of dividends on common stock, subject to the limitations of the credit facility and applicable law.

The credit facility contains a provision that, in the event of a defined change in control, the credit facility may be terminated.

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Interest expense, including amortization of deferred financing costs, commitment fees, line of credit fees, and other applicable bank charges, was as follows (in thousands):

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

2023 2022 2021

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$ 20,131 $ 8,039 $ 3,868

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The components of accumulated other comprehensive income (loss) at December 31, 2022 and 2021 were as follows (in thousands):

ACCUMULATED OTHER COMPREHENSIVE INCOME

The components of accumulated other comprehensive income at December 31, 2023 and 2022 were as follows (in thousands):

Net unrealized loss on available-for-sale securities, net of income tax benefit of $ 168 and $ 571 , respectively

$ ( 505 ) $ ( 1,518 )

Net unrealized income (loss) on interest rate swap, net of income tax expense (benefit) of $ 1,924 and $( 41 ), respectively

5,885 ( 101 )

Net unrealized gain on interest rate swap, net of income tax expense of $ 972 and $ 1,924 , respectively

Foreign currency translation ( 781 ) ( 763 )

Accumulated other comprehensive income (loss) $ 3,604 $ ( 967 )

Accumulated other comprehensive income $ 1,778 $ 3,604

COMMITMENTS AND CONTINGENCIES

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Indemnifications - We have various agreements in which we may be obligated to indemnify the other party with respect to certain matters.

Generally, these indemnification clauses are included in contracts arising in the normal

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

course of business under which the Company customarily agrees to hold the other party harmless against losses arising from a breach of representations, warranties, covenants or agreements, related to matters such as title to assets sold and certain tax matters.

Generally, these indemnification clauses are included in contracts arising in the normal course of business under which the Company customarily agrees to hold the other party harmless against losses arising from a breach of representations, warranties, covenants or agreements, related to matters such as title to assets sold and certain tax matters.

Payment by us under such indemnification clauses are generally conditioned upon the other party making a claim.

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Letters of Credit and Guarantees - We provide letters of credit to landlords (lessors) of our leased premises in lieu of cash security deposits, which totaled $ 3.5 million and $ 5.0 million at December 31, 2023 and 2022, respectively.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

In addition, we provide license bonds to various state agencies to meet certain licensing requirements.

The amount of license bonds outstanding was $ 2.3 million and $ 2.3 million at December 31, 2023 and 2022, respectively.

Legal Proceedings - On December 19, 2016, CBIZ Operations was named as a defendant in a lawsuit filed by Zotec Partners, LLC ("Zotec") in the Marion County Indiana Superior Court.

After various amendments, the lawsuit asserts claims under Indiana law for securities, statutory and common law fraud or deception, unjust enrichment, breach of contract, and vicarious liability against CBIZ Operations and a former employee of CBIZ MMP in connection with the sale of the CBIZ MMP medical billing practice to Zotec.

The plaintiff claims that CBIZ Operations had a duty to disclose the fact, unknown to employees of CBIZ Operations at the time of the transaction, that the former employee had a financial arrangement with a Zotec vendor at the time CBIZ Operations sold CBIZ MMP to Zotec.

The plaintiff is seeking damages of up to $ 177.0 million out of the $ 200.0 million transaction price.

Legal Proceedings - On December 19, 2016, CBIZ Operations, Inc.

("CBIZ Operations") was named as a defendant in a lawsuit filed by Zotec Partners, LLC (“Zotec”) in the Marion County Indiana Superior Court.

After various amendments, the lawsuit asserted claims under Indiana law for securities, statutory and common law fraud or deception, unjust enrichment, breach of contract, and vicarious liability against CBIZ Operations and a former employee of CBIZ MMP in connection with the sale of the CBIZ MMP medical billing practice to Zotec.

The plaintiff claimed that CBIZ Operations had a duty to disclose the fact, unknown to employees of CBIZ Operations at the time of the transaction, that the former employee had a financial arrangement with a Zotec vendor at the time CBIZ Operations sold CBIZ MMP to Zotec.

The plaintiff sought damages of up to $ 177.0 million out of the $ 200.0 million transaction price.

Trial was held in October 2021.

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The court also ruled in favor of CBIZ on its counterclaim for indemnification under contract.

The trial court is expected to set further proceedings to determine the amount of damages owed by Zotec to CBIZ.

The trial court conducted a hearing on December 12, 2023, to consider evidence regarding the amount of damages owed by Zotec to CBIZ on the counterclaim.

On November 10, 2023, CBIZ was named as a defendant in a putative class action lawsuit in the United States District Court for the District of Massachusetts by an individual claiming to be an employee of a CBIZ client whose personally identifiable information (“PII”) was compromised and stolen during a cyberattack CBIZ experienced on or about May 31, 2023.

As a result of this incident, hackers were able to access and download certain files from CBIZ’s MOVEit Transfer server.

The lawsuit alleges that CBIZ and Progress Software Corporation, the owner of MOVEit Transfer, failed to adequately secure and safeguard the individual’s, and similarly situated employees of CBIZ’s clients, PII from unauthorized access.

The lawsuit seeks various remedies, including actual, compensatory, and punitive damages, along with injunctive relief, costs, and attorneys’ fees.

On December 8, 2023, CBIZ was named as a defendant in a second putative class action lawsuit in the United States District Court for the District of Massachusetts by an individual making similar claims and seeking similar remedies as in the first lawsuit.

Both cases were transferred into a multidistrict litigation, styled as In Re:

MOVEit Customer Data Security Breach Litigation , pending in the United States District Court for the District of Massachusetts (the “MDL”).

To date, the MDL has over 180 cases against over 100 different defendants, all with claims arising out of the cyberbreach by hackers of Progress Software Corporation’s MOVEit Transfer software.

The cases in the MDL, including the cases against CBIZ, are in their earliest stages, with a stay in place until the MDL Court issues a scheduling order.

Due to the early stage of litigation, the Company is not able to determine or predict the ultimate outcome of these lawsuits nor reasonably provide an estimate or range of the possible outcome or losses, if any.

In addition to the item disclosed above, the Company is, from time to time, subject to claims and lawsuits arising in the ordinary course of business.

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Employer contributions (net of forfeitures) made to the plan during the years ended December 31, 2023, 2022 and 2021 were approximately $ 18.5 million, $ 16.1 million and $ 13.2 million, respectively.

Non-qualified Deferred Compensation Plan - We sponsor a non-qualified deferred compensation plan, under which certain members of management and other highly compensated employees may elect to defer receipt of a portion of their annual compensation, subject to maximum and minimum percentage limitations.

The amount of

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

The amount of compensation deferred under the plan is credited to each participant’s deferral account and a non-qualified deferred compensation plan obligation is established by us.

compensation deferred under the plan is credited to each participant’s deferral account and a non-qualified deferred compensation plan obligation is established by us.

An amount equal to each participant’s compensation deferral is transferred into a rabbi trust and invested in various debt and equity securities as directed by the participants.

2 unchanged sentences

The values of these investments are based on published market prices at the end of the period.

Adjustments to the fair value of these investments are recorded in “Other income, net,” offset by the same adjustments to compensation expense (recorded as “Operating expenses” or “G&A expenses” in the accompanying Consolidated Statements of Comprehensive Income).

We recorded a loss of $ 19.6 million related to those investments for the year ended December 31, 2022.

In 2021 and 2020, respectively, we recorded income of $ 19.5 million and $ 15.4 million related to these investments.

Adjustments to the fair value of these investments are recorded in “Other (expense) income, net,” offset by the same adjustments to compensation expense (recorded as “Operating expenses” or “G&A expenses” in the accompanying Consolidated Statements of Comprehensive Income).

We recorded income of $ 19.5 million related to those investments for the year ended December 31, 2023.

For the year ended December 31, 2022, we recorded a loss of $ 19.6 million and income of $ 19.5 million for the year ended December 31, 2021, related to these investments.

These investments are specifically designated as available to us solely for the purpose of paying benefits under the non-qualified deferred compensation plan.

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Other than a one-year holding period from the date of purchase, there are no vesting or other restrictions on the stock purchased by employees under the ESPP.

The total number of shares of common stock that can be purchased under the ESPP shall not exceed 2.0 million shares.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

The total number of shares of common stock that can be purchased under the ESPP shall not exceed 2.0 million shares.

Stock Awards - Effective May 9, 2019, the CBIZ shareholders approved CBIZ, Inc.

2019 Stock Omnibus Incentive Plan (“2019 Plan”), which amended and restated the CBIZ, Inc.

2014 Stock Incentive Plan (“2014 Plan”), of which we have granted various stock-based awards through the year ended December 31, 2022.

Effective January 1, 2020, the 2019 Plan replaced and superseded the 2014 Plan.

The operating terms of the 2019 Plan are substantially similar to those of the 2014 Plan.

Under the 2019 Plan, which expires in 2029, a maximum of 3.1 million stock options, restricted stock or other stock based compensation awards may be granted.

Shares subject to award under the 2019 Plan may be either authorized but unissued shares of our common stock or treasury shares.

Stock Awards - We granted various stock-based awards through the year ended December 31, 2023 under the CBIZ, Inc.

2019 Stock Omnibus Incentive Plan (“2019 Plan”).

On May 10, 2023, the stockholders of the Company approved an amendment to the 2019 Plan.

The amendment added 1.5 million shares to the total number of shares that may be issued under the 2019 Plan.

The 2019 Plan, which expires in 2029, permits the grant of various forms of stock-based awards.

The terms and vesting schedules for the share-based awards vary by type and date of grant.

Under the 2019 Plan, a maximum of 4.6 million stock options, restricted stock or other stock based compensation awards may be granted.

Shares subject to award under the 2019 Plan may be either authorized but unissued shares of our common stock or treasury shares.

At December 31, 2023, approximately 2.9 million shares were available for future grant under the 2019 Plan.

Effective January 1, 2020, the 2019 Plan replaced and superseded the CBIZ, Inc.

2014 Stock Incentive Plan (“2014 Plan”).

The terms and vesting schedule for the stock-based awards vary by type and date of grant.

During the years ended December 31, 2023, 2022 and 2021, we recognized compensation expense (before income tax expense) for these awards as follows (in thousands):

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Outstanding at December 31, 2022 553 $ 21.03

Granted 50 $ 48.40

Exercised ( 453 ) $ 19.35

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Vested ( 163 ) $ 31.63

Forfeited ( 4 ) $ 34.04

Non-vested at December 31, 2023 223 $ 41.19

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Adjustments for performance results (2)

Forfeited ( 5 ) $ 33.21

Outstanding at December 31, 2023 464 $ 33.84

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EARNINGS PER SHARE

The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share from continuing operations for the years ended December 31, 2022, 2021 and 2020 (in thousands, except per share data):

The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share for the years ended December 31, 2023, 2022 and 2021 (in thousands, except per share data):

Year Ended December 31,

2023 2022 2021

Income from continuing operations $ 105,372 $ 70,911 $ 78,347

Net income $ 120,968 $ 105,354 $ 70,887

Weighted average common shares outstanding 49,989 51,502 52,637

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Earnings Per Share:

Basic earnings per share from continuing operations $ 2.05 $ 1.35 $ 1.44

Diluted earnings per share from continuing operations $ 2.01 $ 1.32 $ 1.42

Basic earnings per share $ 2.42 $ 2.05 $ 1.35

Diluted earnings per share $ 2.39 $ 2.01 $ 1.32

(1) For the years ended December 31, 2023, 2022 and 2021, a total of 58 thousand, 68 thousand and 23 thousand stock based awards, respectively, were excluded from the calculation of diluted earnings per share as their exercise prices would render them anti-dilutive.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(1) For the years ended December 31, 2022, 2021 and 2020, a total of 68 thousand, 23 thousand and 253 thousand stock based awards, respectively, were excluded from the calculation of diluted earnings per share as their exercise prices would render them anti-dilutive.

(2) Contingent shares represent additional shares to be issued for purchase price earned by former owners of businesses acquired by us once future conditions have been met.

For further details, refer to Note 18, Business Combinations .

(3) The denominator used in calculating diluted earnings per share did not include 0.2 million and 0.3 million performance share units for the twelve months ended December 31, 2022 and 2021, respectively.

(3) The denominator used in calculating diluted earnings per share did not include 0.2 million, 0.2 million and 0.3 million performance share units for the twelve months ended December 31, 2023, 2022 and 2021 respectively.

The performance conditions associated with these performance share units were not met and consequently none of these performance share units were considered as issuable for the years ended December 31, 2023, 2022 and 2021.

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("Global Prairie").

Global Prairie performed consulting work for us during the year ended December 31, 2022 for which we paid approximately $ 0.2 million.

We maintain joint-referral relationships and ASAs with independent licensed CPA firms under which we provide administrative services in exchange for a fee.

These firms are owned by licensed CPAs who are employed by our subsidiaries and provide audit and attest services to clients including our clients.

The CPA firms with which we maintain ASAs operate as limited liability companies, limited liability partnerships or professional corporations.

The firms are separate legal entities with separate governing bodies and officers.

We have no ownership interest in any of these CPA firms, and neither the existence of the ASAs nor the providing of services thereunder is intended to constitute control of the CPA firms by us.

CBIZ and the CPA firms maintain their own respective liability and risk of loss in connection with performance of each of its respective services, and we do not believe that our arrangements with these CPA firms result in additional risk of loss.

Global Prairie performed consulting work for us during the year ended December 31, 2023 and 2022 for which we paid approximately $ 0.2 million and $ 0.2 million, respectively.

BUSINESS COMBINATIONS

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During the year ended December 31, 2023, we completed the following acquisitions:

◦ Effective January 1, 2022, we acquired all of the non-attest assets of Marks Paneth LLP ("Marks Paneth").

Marks Paneth, based in New York City, is a provider of a full range of accounting, tax and consulting services to a wide range of industries.

Marks Paneth is included as a component of our

◦ Effective January 1, 2023, we acquired all of the assets of Danenhauer and Danenhauer, Inc.

("Danenhauer and Danenhauer").

Danenhauer and Danenhauer, based in California, is a provider of forensic accounting, business valuation, expert witness testimony, and other services for businesses and individuals.

Operating results for Danenhauer and Danenhauer are reported in the Financial Services practice group.

◦ Effective February 1, 2023, we acquired the non-attest assets of Somerset CPAs and Advisors ("Somerset").

Somerset, based in Indianapolis, Indiana, is a provider of a full range of accounting, tax, and financial advisory services to clients in a wide array of industries.

Operating results for Somerset are reported in the Financial Services practice group.

◦ Effective June 1, 2023, we acquired all of the assets of Pivot Point Security ("PPS").

PPS, based in Hamilton, New Jersey, is a provider of cyber and information security, and compliance services for small and middle market businesses.

Operating results for PPS are reported in the Financial Services practice group.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Financial Services practice group.

◦ Effective June 1, 2023, we acquired all of the assets of Ickovic and Co.

PC ("Ickovic and Co.").

Ickovic and Co., based in Denver, Colorado, is a provider of bespoke services and solutions for high-net-worth individuals, business owners and executives.

Operating results for Ickovic and Co.

are reported in the Financial Services practice group.

◦ Effective July 1, 2023, we acquired all of the assets of American Pension Advisors, Ltd.

APA, based in Indianapolis, Indiana, is a provider of full-service retirement plan consulting and administration assisting more than 1,200 clients in the design, implementation, and administration of all types of retirement plans including 401(k), 403(b), 457(b), defined benefit and cash balance.

Operating results for APA are reported in the Benefits and Insurance Services practice group.

During the year ended December 31, 2022, we completed the following acquisitions:

◦ Effective January 1, 2022, we acquired all of the non-attest assets of Marks Paneth LLP ("Marks Paneth").

Marks Paneth, based in New York City, is a provider of a full range of accounting, tax and consulting services to a wide range of industries.

Marks Paneth is included as a component of our Financial Services practice group.

Operating results are reported in the Financial Services practice group.

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Operating results are reported in the Financial Services practice group.

During the year ended December 31, 2021, we completed the following acquisitions:

◦ Effective January 1, 2021, we acquired substantially all the assets of Middle Market Advisory Group (“MMA”).

MMA, based in Englewood, Colorado, is a provider of tax compliance and consulting services to middle market companies and family groups in the real estate, automotive, technology and SAAS, construction, and manufacturing industries.

Operating results are reported in the Financial Services practice group.

◦ Effective April 1, 2021, we acquired substantially all the assets of Wright Retirement Services, LLC ("Wright").

Wright, located in Valdosta, Georgia, specializes in third party administration services for retirement plan sponsors.

Operating results are reported in the Benefits and Insurance practice group.

◦ Effective May 1, 2021, we acquired substantially all of the non-attest assets of Berntson Porter & Company, PLLC ("BP").

BP, based in Bellevue, Washington, is a provider of comprehensive accounting and financial consulting services including tax, forensic, economic and valuation services and transaction services to a wide range of industries with specialties including construction, real estate, hospitality, manufacturing and technology.

Operating results are reported in the Financial Services practice group.

◦ Effective June 1, 2021, we acquired all of the issued and outstanding membership interests of Schramm Health Partners, LLC dba Optumas ("Optumas").

Optumas, based in Scottsdale, Arizona, is a provider of actuarial services to state government health care agencies to assist in the administration of Medicaid programs.

Operating results are reported in the Financial Services practice group.

◦ Effective September 1, 2021, we acquired all of the non-attest assets of Shea Labagh Dobberstein ("SLD").

SLD, based in San Francisco, California, is a provider of professional accounting, tax and advisory services to privately held businesses, individuals and nonprofit organizations.

Operating results are reported in the Financial Services practice group.

◦ Effective December 1, 2021, we acquired substantially all the assets of Kenneth Weiss & Company, P.C.

dba Weiss & Company (“Weiss”).

Weiss, based in San Diego, California, is a provider of tax compliance and consulting services to family groups and individuals.

Operating results are reported in the Financial Services practice group.

The acquisitions of Marks Paneth and Stinnett added approximately $ 148.1 million in incremental revenue in 2022.

The acquisitions of Danenhauer and Danenhauer, Somerset, PPS, Ickovic and Co., and APA (together, the "2023 Acquisitions") added approximately $ 64.9 million in incremental revenue in 2023.

During the year ended December 31, 2023, we recorded approximately $ 3.4 million in non-recurring transaction, retention and integration related costs associated with the Somerset acquisition.

During the year ended December 31, 2022, we recorded approximately $ 10.5 million in non-recurring transaction, retention and integration related costs associated with the Marks Paneth acquisition.

Pro forma results of operations for these acquisitions have not been presented because the effects of these acquisitions were not material, either individually or in aggregate, to our total revenue, income from continuing operations, and net income for year ended December 31, 2022 and 2021, respectively.

Pro forma results of operations for these acquisitions are not provided due to limitations in retrospective application of estimates to historical financial information as well as the immateriality of such information as compared to our total revenue and net income for year ended December 31, 2023 and 2022, respectively.

The following table summarizes the aggregated consideration and purchase price allocation for the acquisitions completed during the year ended December 31, 2023 and 2022, respectively (in thousands):

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Identifiable intangible assets acquired 35,267 53,400

Operating lease right-of-use asset acquired, net 49,291 19,153

Other assets acquired, net 1,693 848

Operating lease right-of-use asset acquired 14,972 49,291

Other assets acquired 1,163 1,693

Operating lease liability acquired - current ( 1,080 ) ( 5,860 )

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Goodwill represents the value of expected future earnings and cash flows, as well as the synergies created by the integration of the new businesses within our organization, including cross-selling opportunities expected with our Financial Services practice group and the Benefits and Insurance Services practice group, to help strengthen our existing service offerings and expand our market position.

Goodwill related to these acquisitions is deductible for tax purposes.

Client lists generally have an expected life of 10 years, and other intangibles, primarily non-compete agreements, have an expected life of 3 years.

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Divestitures and Sale of Assets

Sales of assets are recorded as "Other income (expense), net" in the accompanying Consolidated Statements of Comprehensive Income.

During the year ended December 31, 2023, we recorded a gain of $ 1.5 million related to the sale of one technology asset in the Financial Services practice group and a gain of $ 1.4 million related to contingent payments from a prior book of business sale in the Benefits and Insurance Services practice group.

In 2022, we sold one small book of business for $ 2.5 million in the Benefits and Insurance Services practice group and recorded a gain of $ 2.4 million.

This gain is recorded as "Other (expense) income, net" in the accompanying Condensed Consolidated Statements of Comprehensive Income.

Gain on book of business sales in 2021 was immaterial.

Divested operations and assets that do not qualify for treatment as discontinued operations are recorded as “Gain (loss) on sale of operations, net” in the accompanying Consolidated Statements of Comprehensive Income.

In 2021, we sold one business for $ 9.7 million in the Benefit and Insurance practice group and recorded a gain of $ 6.3 million.

This gain is recorded as "Other income (expense), net" in the accompanying Consolidated Statements of Comprehensive Income.

SEGMENT DISCLOSURES

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The business units are managed along these segment lines.

A general description of services provided by practice group is provided in the table below.

A general description of services provided by practice groups is provided in the table below.

Financial Services Benefits and Insurance Services National Practices

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Risk and Advisory Services Retirement and Investment Services

Government Healthcare Consulting

Government Health Care Consulting

Corporate and Other - Included in Corporate and Other are operating expenses that are not directly allocated to the individual business units.

These expenses primarily consist of certain healthcare costs, gains or losses attributable to assets held in our non-qualified deferred compensation plan, stock-based compensation, consolidation and integration charges, certain professional fees, certain advertising costs and other various expenses.

The discrete financial information of those practice groups are available and regularly reviewed by the Chief Operating Decision Maker ("CODM").

The CODM, who is our CEO, allocates resources to and assesses the performance of each practice group using information about their respective revenue and income (loss) before income tax expense (benefit), excluding those costs listed above, which are reported in the “Corporate and Other”.

Upon consolidation, intercompany accounts and transactions are eliminated, thus inter-segment revenue is not included in the measure of profit or loss for the practice groups.

Performance of the practice groups is evaluated on income (loss) from continuing operations before income tax expense (benefit) excluding those costs listed above, which are reported in the “Corporate and Other”.

The CODM does not evaluate practice groups using discrete asset information, and we do not identify or allocate assets by practice groups.

We operate in the United States and Canada and revenue generated from such operations during the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands):

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There is no one customer that represents a significant portion of our revenue.

Segment information for the years ended December 31, 2022, 2021 and 2020 is presented below (in thousands).

We do not manage our assets on a segment basis, therefore segment assets are not presented below.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Segment information for the years ended December 31, 2023, 2022 and 2021 is presented below (in thousands).

We do not manage our assets on a segment basis, therefore segment assets are not presented below.

For the Year Ended December 31, 2023

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Gain on sale of operations, net 176 — — — 176

Other income (expense), net 269 2,392 10 ( 21,896 ) ( 19,225 )

Other income, net 2,042 2,060 1 16,916 21,019

Total other income (expense) 2,218 2,058 1 ( 3,213 ) 1,064

Income (loss) from continuing operations before income tax expense $ 160,712 $ 70,006 $ 4,713 $ ( 93,938 ) $ 141,493

Income (loss) before income tax expense $ 187,828 $ 74,153 $ 4,844 $ ( 100,522 ) $ 166,303

For the Year Ended December 31, 2022

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Corporate general and administrative expenses — — — 55,023 55,023

Legal settlement, net — — — 30,468 30,468

Operating income (loss) 160,030 67,620 4,703 ( 64,009 ) 168,344

1 unchanged sentence

Interest expense — ( 6 ) — ( 8,033 ) ( 8,039 )

(Loss) gain on sale of operations, net ( 289 ) 6,284 — — 5,995

Other income, net 263 827 3 17,148 18,241

Total other (expense) income ( 26 ) 7,111 3 13,280 20,368

Income (loss) from continuing operations before income tax expense $ 125,762 $ 67,784 $ 4,085 $ ( 104,591 ) $ 93,040

Gain on sale of operations, net 413 — — — 413

Other income (expense), net 269 2,392 10 ( 21,914 ) ( 19,243 )

Total other income (expense) 682 2,386 10 ( 29,947 ) ( 26,869 )

Income (loss) before income tax expense $ 160,712 $ 70,006 $ 4,713 $ ( 93,956 ) $ 141,475

AND SUBSIDIARIES

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Corporate general and administrative expenses — — — 56,150 56,150

Legal settlement, net — — — 30,468 30,468

Operating income (loss) 125,788 60,673 4,082 ( 117,871 ) 72,672

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Total other (expense) income ( 26 ) 7,111 3 13,256 20,344

Income (loss) from continuing operations before income tax expense $ 104,219 $ 49,666 $ 3,725 $ ( 54,122 ) $ 103,488

Income (loss) before income tax expense $ 125,762 $ 67,784 $ 4,085 $ ( 104,615 ) $ 93,016

SUBSEQUENT EVENTS

Effective February 1, 2024, we acquired the tax and accounting service provider, Erickson, Brown & Kloster, LLC ("EBK").

EBK, based in Colorado Springs, CO, offers tax and accounting services to a diverse mix of business including automotive, wholesale, medical services, real estate, manufacturing, and non-profit.

Annualized revenue from EBK is estimated at $ 8.9 million.

EBK is included as a component of our Financial Services practice group.

Share Repurchase Program

Subsequent to December 31, 2022 and up to February 22, 2023, we repurchased approximately 0.1 million shares of our common stock on the open market at a total cost of approximately $ 4.5 million.

On February 7, 2023, our Board of Directors authorized the continuation of the Share Repurchase Program, which has been renewed annually for the past nineteen years .

On February 7, 2024, our Board of Directors authorized the continuation of the Share Repurchase Program, which has been renewed annually for the past twenty years .

It is effective beginning March 31, 2024, to which the amount of shares to be purchased will be reset to 5.0 million, and expires one year from the respective effective date.

This authorization allows us to purchase shares of our common stock (i) in the open market, (ii) in privately negotiated transactions, or (iii) under Rule 10b5-1trading plans.

Somerset Acquisition

Effective February 1, 2023, we acquired the non-attest assets of Somerset CPAs and Advisors ("Somerset").

Somerset, based in Indianapolis, IN, is a provider of a full range of accounting, tax, and financial advisory services to clients in a wide array of industries.

Mayer Hoffman, with whom we maintain an ASA, acquired the attest assets from Somerset in a separate transaction.

Annualized revenue from Somerset is estimated at $ 55.0 million.

Somerset is included as a component of our Financial Services practice group.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures