KORN FERRY 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements This Annual Report on Form 10-K may contain certain statements that we believe are, or may be considered to be, “forward-looking” statements, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements generally can be identified by use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “will,” “likely,” “estimates,” “potential,” “continue” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals, the timing and expected benefits of our completed restructuring plans and the magnitude and duration of the impact of the global (“COVID-19”) pandemic on our business, employees, customers and our ability to provide services in affected regions. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statement. The principal risk factors that could cause actual performance and future actions to differ materially from the forward-looking statements include, but are not limited to, those relating to the ultimate magnitude and duration of COVID-19 and of any future pandemics or similar outbreaks, and related restrictions and operational requirements that apply to our business and the businesses of our clients, and any related negative impacts on our business, employees, customers and our ability to provide services in affected regions, global and local political and or economic developments in or affecting countries where we have operations, competition, changes in demand for our services as a result of automation, dependence on and costs of attracting and retaining qualified and experienced consultants, maintaining our relationships with customers and suppliers and retaining key employees , maintaining our brand name and professional reputation, potential legal liability and regulatory developments, portability of client relationships, consolidation of or within the industries we serve, changes and developments in governmental laws and regulations, evolving investor and customer expectations with regard to environmental matters, currency fluctuations in our international operations, risks related to growth, alignment of our cost structure, restrictions imposed by off-limits agreements, reliance on information processing systems, cyber security vulnerabilities or events, changes to data security, data privacy, and data protection laws , dependence on third parties for the execution of critical functions, limited protection of our intellectual property (“IP”), our ability to enhance and develop new technology, our ability to successfully recover from a disaster or other business continuity problems, employment liability risk, an impairment in the carrying value of goodwill and other intangible assets , treaties, or regulations on our business and our Company, deferred tax assets that we may not be able to use, our ability to develop new products and services, the impact of the United Kingdom’s withdrawal from the European Union, changes in our accounting estimates and assumptions, the utilization and billing rates of our consultants, seasonality, the expansion of social media platforms, the ability to effect acquisitions, our indebtedness, the phase-out of LIBOR, and the matters disclosed under the heading “Risk Factors” in the Company’s Exchange Act reports, including Item 1A included in this Annual Report on Form 10-K. Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements included in this Annual Report on Form 10-K are made only as of the date of this Annual Report on Form 10-K and we undertake no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances. The following presentation of management’s discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes included in this Annual Report on Form 10-K . We also make available on the Investor Relations portion of our website earnings slides and other important information, which we encourage you to review. Executive Summary Korn Ferry (referred to herein as the “Company” or in the first-person notations “we,” “our,” and “us”) is a global organizational consulting firm . We help clients synchronize strategy, operations and talent to drive superior business performance. We work with organizations to design their structures, roles and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop and motivate their people. We are pursuing a strategy that will help Korn Ferry to focus on clients and collaborate intensively across the organization. This approach builds on the best of our past and gives us a clear path to the future with focused initiatives to increase our client and commercial impact. Korn Ferry is transforming how clients address their talent management needs. We have evolved from a mono-line business to a multi-faceted consultancy business, giving our consultants more frequent and expanded opportunities to engage with clients. Our seven reportable segments operate through the following four lines of business: 33 1. Consulting aligns organization structure, culture, performance and people to drive sustainable growth by addressing four fundamental needs: Organizational Strategy, Assessment and Succession, Leadership and Professional Development, and Total Rewards . This work is supported by a comprehensive range of some of the world ’s leading lP and data. 2. Digital leverages an artificial intelligence (“AI”) powered, machine-learning platform to identify the best structures, roles, capabilities and behaviors needed to drive business forward. The end-to-end system combines Korn Ferry proprietary data, client data, and external market data to generate insight and recommend action. 3. Executive Search helps organizations recruit board level, chief executive and other senior executive and general management talent. Behavioral interviewing and proprietary assessments are used to determine ideal organizational fit, and salary benchmarking builds appropriate frameworks for compensation and retention. 4. RPO and Professional Search combines people, process expertise and IP-enabled technology to deliver enterprise talent acquisition solutions to clients. Transaction sizes range from single professional searches to team, department and line of business projects, and global outsource recruiting solutions. Consulting and Digital became reportable segments in the third quarter of fiscal 2020. Previously, these were tracked and reported together as one reportable segment, Korn Ferry Advisory (“Advisory”). We have invested in the Digital business and harmonized the structure of our content and data, building a technology platform for the efficient delivery of these assets directly to an end consumer or indirectly through a consulting engagement. These investments, combined with the acquisitions of Miller Heiman Group, AchieveForum and Strategy Execution (“the “Acquired Companies”) in November 2019 from TwentyEighty, Inc. for $108.6 million, resulted in us reassessing how we managed our Advisory reportable segment. Therefore, beginning in the third quarter of fiscal 2020, we separated our Advisory reportable segment into two reportable segments to better align with the Company’s strategy (which included the acquisition of the Acquired Companies) and the decisions of the Company’s chief operating decision maker, who had begun to regularly make resource allocation decisions and assess performance separately between Consulting and Digital. As a result, the Company now has seven reportable segments: Consulting, Digital, Executive Search North America, Executive Search EMEA, Executive Search Asia Pacific, Executive Search Latin America and RPO & Professional Search. The addition of the Acquired Companies has further expanded our vast IP and content and leveraged the firm’s digital delivery platforms. We have invested in our Digital business to digitize and harmonize the structure of our IP content and data and in building a technology platform for the efficient delivery of these assets directly to an end consumer or indirectly through a consulting engagement. Highlights of our performance in fiscal 2021 include: ▪ Approximately 75% of the executive searches we performed in fiscal 2021 were for board level, chief executive and other senior executive and general management positions. Our 3,635 search engagement clients in fiscal 2021 included many of the world’s largest and most prestigious public and private companies. ▪ We have built strong client loyalty, with 90% of the assignments performed during fiscal 2021 having been on behalf of clients for whom we had conducted assignments in the previous three fiscal years. ▪ Approximately 70% of our revenues were generated from clients that have utilized multiple lines of our business. ▪ A vital pillar of our growth strategy is Digital. Our data and IP are embedded into the core business processes of our clients, helping us generate long-term relationships through large scale and technology-based talent programs. ▪ In fiscal 2021, Korn Ferry was recognized as one of the top RPO providers in the Baker’s Dozen list, marking our 14 th consecutive year on the list. We were also named leader on the Everest PEAK Matrix for four years running and achieved star performer status in 2021, with an improved leader position from 2020 . Through decades of experience, we have enhanced our RPO solution to deliver quality candidates that drive our clients’ business strategies. We leverage proprietary IP and data sets to guide clients on the critical skills and competencies to look for, compensation information to align with market demand, and assessment tools to ensure candidate fit. In fiscal 2021 we introduced Nimble, a new, fully integrated recruitment technology solution incorporating Candidate Relationship Management, AI Assistance & Screening and Korn Ferry Assessments. Restructuring and Operational Changes On June 12, 2018, the Company’s Board of Directors approved the One Korn Ferry rebranding plan for the Company (the “Plan”). The Plan includes going to market under a single, master brand architecture, solely as Korn Ferry and sunsetting all the Company’s sub-brands used at the time, including Futurestep, Hay Group and Lominger, among others. This integrated go-to-market approach was a key driver in our fee revenue growth in fiscal year 2018, which 34 led to the decision to further integrate our go-to-market activities under one master brand — Korn Ferry. As a result, the Company discontinued the use of all sub-brands and changed its name, effective January 1, 2019, to “Korn Ferry.” Two of the Company’s former sub-brands, Hay Group and Lominger, came to Korn Ferry through acquisitions. In connection with the accounting for these acquisitions, $106.6 million of the purchase price was allocated to indefinite-lived tradename intangible assets. As a result of the decision to discontinue their use, the Company took a one-time, non-cash write-off of tradenames of $106.6 million in fiscal 2019. During fiscal 2020 the Company completed the implementation of this plan. On November 1, 2019, we adopted a restructuring plan to rationalize our cost structure to realize the efficiencies and operational improvement that the investments in the digital business had enabled, or positioned us to realize. The plan impacted both Consulting and Digital and included the elimination of redundant positions and consolidation of office space. In the third quarter of fiscal 2020, we recognized $18.1 million of restructuring charges associated with severance and recorded $2.8 million of integration/acquisition costs associated with impairment of 16 office leases. The restructuring actions were completed by July 31, 2020. The Impact of COVID-19 In March 2020, COVID-19 was reported to have spread to over 100 countries, territories or areas, worldwide, and in the fourth quarter of fiscal 2020 the World Health Organization declared it a pandemic. The negative business impact of the coronavirus outbreak was initially most pronounced in the Asia Pacific Region. During fiscal 2021, the impact has been felt throughout all the geographical areas in which we do business. Governments and companies implemented social distancing - limiting either travel or in person individual or group face-to-face interaction as well as working from home to adhere to stay at home orders from national, state and city governments . Such restrictions initially impacted our ability to provide our products and services to our clients with such impact lessening in the second, third and fourth quarters of fiscal 2021 as the world learned to work in different ways. Further, the outbreak has restricted the level of economic activity in the areas in which we operate and has had an adverse impact on demand for and sales of our products and services. All of our reportable segments across all of our geographies have been impacted as fee revenue decreased in the fourth quarter of fiscal 2020 and further decreased in the first quarter of fiscal 2021 due to a decrease in demand as clients responded to the pandemic. As a result of this and, as part of a broader program aimed at further enhancing our strong balance sheet and liquidity position, on April 20, 2020, we initiated a plan that was intended to adjust our cost base to the economic environment at that time and to position us to invest in the recovery. This plan included (i) a reduction in workforce, which was completed by the end of the first quarter of fiscal 2021 and resulted in restructuring charges of $40.5 million and $30.7 million associated with severance during the fourth quarter of fiscal 2020 and fiscal 2021 , respectively, (ii) the temporary furlough of certain employees, (iii) subject to certain exceptions and legal requirements, salary reductions across the organization through December 31, 2020, and (iv) other cost saving measures relating to general and administrative expenses. In the third and fourth quarters of fiscal 2021, the Company saw business conditions improve substantially from where they were in the second and first quarters with fee revenues increasing 27% in the second quarter of fiscal 2021 compared to the first quarter, 9% in the third quarter from the second quarter of fiscal 2021, and 17% in the fourth quarter from the third quarter of fiscal 2021 to $555.2 million, with all reportable segments contributing to the improvement of fee revenue. As such, no new restructuring actions were taken in the last nine months of fiscal 2021. With the sequential improvement in fee revenue and leveraging the restructured cost base, the Company experienced notably better profitability starting in the second quarter of fiscal 2021 compared to sequential quarter. As such, in the second and third quarter of the Company’s 2021 fiscal year, the Company made a decision to pay all colleagues, including our named executive officers, their full salary and non-executive directors their full retainers for both the second and third quarter of the Company’s 2021 fiscal year. With the improvement in the operating results the Company decided to fully reimburse colleagues (except certain executive officers) for the remainder of their pay cuts that were taken in fiscal 2021. Employees will receive their final payment in the first quarter of fiscal 2022. Beginning on January 1, 2021 salaries of our employees were fully reinstated. While advances have been made in the science and societal and economic consequences of COVID-19, there remains significant uncertainty about the future impacts of COVID-19. On the positive side, governments around the world have begun distributing and administering the vaccine. In addition, the world has adopted new ways of working and interacting with substantial acceptance of business being conducted in a virtual world. On the negative side, there have been challenges in manufacturing the vaccines at scale as well as distributing and administrating to the population at large in many countries around the world. Since the end of the second quarter of fiscal 2021, we saw governments impose additional restrictions on travel and activities, particularly in Europe and in the United States, as the number of COVID-19 cases and hospitalizations continued to increase, reaching all-time highs in the United States. At the end of the third quarter and during the fourth quarter, hospitalizations in the United States started to decrease and restrictions are starting to ease whereas in Brazil, India and in some parts of Europe the opposite is true. The new, more contagious variants of the virus appear to be more resistant to the vaccines and it is unknown how long the antibodies developed by the vaccine will be effective against the virus mutations. Therefore, it is 35 unknown whether the easing of the restrictions will continue or be reversed. With the implementation of the plan discussed above and the improved business activity we experienced in the second , third and fourth quarter s , we believe our costs are in line with our current revenue levels. However, uncertainties such as whether the new variants of the virus become the dominant strain, for how long the vaccine is effective to virus mutations or whether new restrictions are imposed (or prior restrictions re-imposed), make us unable to give assurance that the rate of increase in fee revenue during the three months ended April 30 , 2021, will continue in the three months ended July 31, 2021. Given the amount available from our current revolver and the amount of cash and cash equivalents and marketable securities net of amounts held in trust for deferred compensation and accrued bonuses, we believe that we have sufficient liquidity to meet our anticipated working capital, capital expenditures, general corporate requirements, repayment of the debt obligations and dividend payments under our dividend policy in the next 12 months. Performance Highlights The Company evaluates performance and allocates resources based on the chief operating decision maker’s review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other than temporary impairments of investments). For fiscal 2021, Adjusted EBITDA excluded $30.7 million of restructuring charges and $0.7 million of integration/acquisition costs. For fiscal 2020, Adjusted EBITDA excluded $58.6 million of restructuring charges, $12.2 million of integration/acquisition costs and $1.8 million of separation costs. For fiscal 2019, Adjusted EBITDA excluded $106.6 million of tradename write-offs and $6.7 million of integration/acquisition costs. Consolidated and the subtotals of Executive Search Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. They have limitations as analytical tools, should not be viewed as a substitute for financial information determined in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”), and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. In addition, they may not necessarily be comparable to non-GAAP performance measures that may be presented by other companies. Management believes the presentation of these non-GAAP financial measures provides meaningful supplemental information regarding Korn Ferry’s performance by excluding certain charges, items of income and other items that may not be indicative of Korn Ferry’s ongoing operating results. The use of these non-GAAP financial measures facilitates comparisons to Korn Ferry’s historical performance and the identification of operating trends that may otherwise be distorted by the factors discussed above. Korn Ferry includes these non-GAAP financial measures because management believes it is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its evaluation of Korn Ferry’s ongoing operations and financial and operational decision-making. The accounting policies for the reportable segments are the same as those described in the summary of significant accounting policies in the accompanying consolidated financial statements, except that the above noted items are excluded to arrive at Adjusted EBITDA. Management further believes that Adjusted EBITDA is useful to investors because it is frequently used by investors and other interested parties to measure operating performance among companies with different capital structures, effective tax rates and tax attributes and capitalized asset values, all of which can vary substantially from company to company. Fee revenue was $1,810.0 million during fiscal 2021, a decrease of $122.7 million, or 6.3%, compared to $1,932.7 million in fiscal 2020, with decreases in fee revenue in the Consulting, Digital and Executive Search lines of business due to a decline in demand for our products and services as a result of COVID-19, partially offset by an increase in fee revenue in RPO & Professional Search. Net income attributable to Korn Ferry increased by $9.6 million during fiscal 2021 to $114.5 million from $104.9 million in fiscal 2020 . Adjusted EBITDA was $286.3 million, a decrease of $14.7 million during fiscal 2021, from Adjusted EBITDA of $301.0 million in fiscal 2020. During fiscal 2021, the Executive Search, Digital, Consulting and RPO & Professional Search lines of business contributed $127.8 million, $86.1 million, $81.5 million and $69.4 million, respectively, offset by Corporate expenses net of other income of $78.5 million. Our cash, cash equivalents and marketable securities increased by $233.8 million to $1,097.1 million at April 30, 2021, compared to $863.3 million at April 30, 2020. This increase was mainly due to cash flows from operations as a result of cost savings initiatives that were put in place and a positive effect of exchange rate changes on cash and cash equivalents, partially offset by repurchases of our common stock in the open market, purchases of property and equipment, interest payments on the 4.625% Senior Unsecured Notes due 2027 (the “Notes”) and dividends paid to stockholders during fiscal 2021. As of April 30, 2021, we held marketable securities to settle obligations under our Executive Capital Accumulation Plan (“ECAP”) with a cost value of $145.7 million and a fair value of $175.6 million. Our vested obligations for which these assets were held in trust totaled $157.3 million as of April 30, 2021 and our unvested obligations totaled $26.5 million. 36 Our working capital increased by $124.2 million to $737.1 million in fiscal 2021 . We believe that cash on hand and funds from operations and other forms of liquidity will be sufficient to meet our anticipated working capital, capital expenditures, general corporate requirements, repayment of our debt obligations and dividend payments under our dividend policy in the next twelve months. We had $ 646.0 million available for borrowing under our Revolver (as defined herein) at April 30, 2021 and 2020 . As of April 30, 2021 and 2020 , there was $4.0 million of standby letters of credit issued , under our long-term debt arrangements. We had a total of $ 11. 0 million and $ 11 . 3 million of standby letters of credits with other financial institutions as of April 30, 2021 and 2020 , respectively . Critical Accounting Policies The following discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements. Preparation of our periodic filings requires us to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates and assumptions and changes in the estimates are reported in current operations as new information is learned or upon the amounts becoming fixed and determinable. In preparing our consolidated financial statements and accounting for the underlying transactions and balances, we apply our accounting policies as disclosed in the notes to our consolidated financial statements. We consider the policies discussed below as critical to an understanding of our consolidated financial statements because their application places the most significant demands on management’s judgment and estimates. Specific risks for these critical accounting policies are described in the following paragraphs. Senior management has discussed the development, selection and key assumptions of the critical accounting estimates with the Audit Committee of the Board of Directors. Revenue Recognition . Substantially all fee revenue is derived from talent and organizational consulting services and digital sales, stand-alone or as part of a solution, fees for professional services related to executive and professional recruitment performed on a retained basis and RPO, either stand-alone or as part of a solution. Revenue is recognized when control of the goods and services is transferred to the customer, in an amount that reflects the consideration that we expect to be entitled to in exchange for those goods and services. Revenue contracts with customers are evaluated based on the five-step model outlined in Accounting Standard Codification 606 (“ASC 606”): 1) identify the contract with a customer; 2) identify the performance obligation(s) in the contract; 3) determine the transaction price; 4) allocate the transaction price to the separate performance obligation(s); and 5) recognize revenue when (or as) each performance obligation is satisfied. Consulting fee revenue is primarily recognized as services are rendered, measured by total hours incurred as a percentage of total estimated hours at completion. It is possible that updated estimates for consulting engagements may vary from initial estimates with such updates being recognized in the period of determination. Depending on the timing of billings and services rendered, we accrue or defer revenue as appropriate. Digital revenue is generated from IP platforms enabling large-scale, technology-based talent programs for pay, talent development, engagement, and assessment and is consumed directly by an end user or indirectly through a consulting engagement. Revenue is recognized as services are delivered and we have a legally enforceable right to payment. Revenue also comes from the sale of our proprietary IP subscriptions, which are considered symbolic IP due to the dynamic nature of the content. As a result, revenue is recognized over the term of the contract. Functional IP licenses grant customers the right to use IP content via the delivery of a flat file. Because the IP content license has significant stand-alone functionality, revenue is recognized upon delivery and when an enforceable right to payment exists. Revenue for tangible and digital products sold by the Company, such as books and digital files, is recognized when these products are shipped. Fee revenue from executive and professional search activities is generally one-third of the estimated first year compensation of the placed candidate plus a percentage of the fee to cover indirect engagement related expenses. In addition to the search retainer, an uptick fee is billed when the actual compensation awarded by the client for a placement is higher than the estimated compensation. In the aggregate, upticks have been a relatively consistent percentage of the original estimated fee; therefore, we estimate upticks using the expected value method based on historical data on a portfolio basis. In a standard search engagement, there is one performance obligation which is the promise to undertake a search. We generally recognize such revenue over the course of a search and when it is legally entitled to payment as outlined in the billing terms of the contract. Any revenues associated with services that are provided on a contingent basis are recognized once the contingency is resolved as this is when control is transferred to the customer. These assumptions determine the timing of revenue recognition for the reported period. RPO fee revenue is generated through two distinct phases: 1) the implementation phase and 2) the post-implementation recruitment phase. The fees associated with the implementation phase are recognized over the period that the related implementation services are provided. The post-implementation recruitment phase represents end-to-end recruiting services to clients for which there are both fixed and variable fees, which are recognized over the period that the related recruiting services are performed. 37 Annual Performance -Related Bonuses . Each quarter, management makes its best estimate of its annual performance related bonuses, which requires management to, among other things, project annual consultant productivity (as measured by engagement fees billed and collected by executive search consultants and revenue and other performance/profitability metrics for Consulting, Digital and RPO & Professional Search consultants), the level of engagements referred by a consultant in one line of business to a different line of business, our performance including profitability, competitive forces and future economic conditions and their impact on our results. At the end of each fiscal year, annual performance related bonuses take into account final individual consultant productivity (including referred work), Company/line of business results including profitability, the achievement of strategic objectives , the results of individual performance appraisals, and the current economic landscape. Accordingly, each quarter we reevaluate the assumptions used to estimate annual performance - related bonus liability and adjust the carrying amount of the liability recorded on the consolidated balance sheets and report any changes in the estimate in current operations. Because annual performance-based bonuses are communicated and paid only after we report our full fiscal year results, actual performance-based bonus payments may differ from the prior year’s estimate. Such changes in the bonus estimate historically have been immaterial and are recorded in current operations in the period in which they are determined. Deferred Compensation . Estimating deferred compensation requires assumptions regarding the timing and probability of payments of benefits to participants and the discount rate. Changes in these assumptions could significantly impact the liability and related cost on our consolidated balance sheets and statements of income, respectively. For certain deferred compensation plans, management engages an independent actuary to periodically review these assumptions in order to confirm that they reflect the population and economics of our deferred compensation plans in all material respects and to assist us in estimating our deferred compensation liability and the related cost. The actuarial assumptions we use may differ from actual results due to changing market conditions or changes in the participant population. These differences could have a significant impact on our deferred compensation liability and the related cost. Carrying Values . Valuations are required under GAAP to determine the carrying value of various assets. Our most significant assets for which management is required to prepare valuations are carrying value of receivables, goodwill, intangible assets and recoverability of deferred income taxes. Management must identify whether events have occurred that may impact the carrying value of these assets and make assumptions regarding future events, such as cash flows and profitability. Differences between the assumptions used to prepare these valuations and actual results could materially impact the carrying amount of these assets and our operating results. Of the assets mentioned above, goodwill is the largest asset requiring a valuation. Fair value of goodwill for purposes of the goodwill impairment test is determined utilizing (1) a discounted cash flow analysis based on forecasted cash flows (including estimated underlying revenue and operating income growth rates) discounted using an estimated weighted-average cost of capital for market participants and (2) a market approach, utilizing observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). We also reconcile the results of these analyses to its market capitalization. If the carrying amount of a reporting unit exceeds its estimated fair value, goodwill is considered potentially impaired and further tests are performed to measure the amount of impairment loss, if any. We perform an annual impairment test each year as of January 31, or more frequently if impairment indicators arise. The qualitative and quantitative test performed as of January 31, 2021 did not indicate any impairment. While historical performance and current expectations have resulted in fair values of goodwill in excess of carrying values, if our assumptions are not realized, it is possible that in the future an impairment charge may need to be recorded. However, it is not possible at this time to determine if an impairment charge would result or if such a charge would be material. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill impairment test will prove to be accurate predictions of the future. As of our testing date, the fair value of each reporting unit exceeded its carrying amount and as a result, no impairment charge was recognized. There was no indication of potential impairment through April 30, 2021 that would have required further testing. Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of the reporting units may include such items as follows: ▪ A prolonged downturn in the business environment in which the reporting units operate including a longer than anticipated public health crisis; ▪ An economic climate that significantly differs from our future profitability assumptions in timing or degree; ▪ The deterioration of the labor markets; 38 ▪ Volatility in equity and debt markets; and ▪ Competition and disruption in our core business. Results of Operations The following table summarizes the results of our operations as a percentage of fee revenue: (Numbers may not total exactly due to rounding) Year Ended April 30, 2021 2020 2019 Fee revenue 100.0 % 100.0 % 100.0 % Reimbursed out-of-pocket engagement expenses 0.5 2.3 2.5 Total revenue 100.5 102.3 102.5 Compensation and benefits 71.7 67.2 68.1 General and administrative expenses (1) 10.6 13.4 18.3 Reimbursed expenses 0.5 2.3 2.5 Cost of services 4.0 4.4 3.9 Depreciation and amortization 3.4 2.9 2.4 Restructuring charges, net 1.7 3.0 — Operating income 8.6 9.1 7.3 Net income 6.4 % 5.5 % 5.4 % Net income attributable to Korn Ferry 6.3 % 5.4 % 5.3 % (1) General and administrative expenses for fiscal 2019 includes write-off of tradenames of $106.6 million. The following tables summarize the results of our operations: (Numbers may not total exactly due to rounding) Year Ended April 30, 2021 2020 2019 Dollars % Dollars % Dollars % (dollars in thousands) Fee revenue Consulting $ 515,844 28.5 % $ 543,095 28.1 % 568,321 29.5 % Digital 287,306 15.9 292,366 15.1 252,727 13.1 Executive Search: North America 397,275 21.9 434,624 22.5 455,826 23.7 EMEA 138,954 7.7 170,314 8.8 182,829 9.5 Asia Pacific 83,306 4.6 98,132 5.1 104,291 5.4 Latin America 17,500 1.0 29,400 1.5 31,896 1.7 Total Executive Search 637,035 35.2 732,470 37.9 774,842 40.3 RPO & Professional Search 369,862 20.4 364,801 18.9 330,143 17.1 Total fee revenue 1,810,047 100.0 % 1,932,732 100.0 % 1,926,033 100.0 % Reimbursed out-of-pocket engagement expense 9,899 44,598 47,829 Total revenue $ 1,819,946 $ 1,977,330 $ 1,973,862 39 In the tables that follow, the Company presents a subtotal for Executive Search Adjusted EBITDA and a single percentage for Executive Search Adjusted EBITDA margin, which reflects the aggregate of all of the individual Executive Search Regions. These figures are non-GAAP financial measures and are presented as they are consistent with the Company’s l ines of b usiness and are financial metrics used by the Company’s investor base. Year Ended April 30, 2021 Executive Search Consulting Digital North America EMEA Asia Pacific Latin America Subtotal RPO & Professional Search Corporate Consolidated (in thousands) Fee revenue $ 515,844 $ 287,306 $ 397,275 $ 138,954 $ 83,306 $ 17,500 $ 637,035 $ 369,862 $ — $ 1,810,047 Total revenue $ 517,046 $ 287,780 $ 399,104 $ 139,213 $ 83,463 $ 17,500 $ 639,280 $ 375,840 $ — $ 1,819,946 Net income attributable to Korn Ferry $ 114,454 Net income attributable to noncontrolling interest 1,108 Other income, net (37,194 ) Interest expense, net 29,278 Income tax provision 48,138 Operating income $ 155,784 Depreciation and amortization 61,845 Other income, net 37,194 Integration/acquisition costs 737 Restructuring charges, net 30,732 Adjusted EBITDA $ 81,522 $ 86,095 $ 98,099 $ 11,742 $ 16,676 $ 1,289 $ 127,806 $ 69,411 $ (78,542 ) $ 286,292 Adjusted EBITDA margin 15.8 % 30.0 % 24.7 % 8.5 % 20.0 % 7.4 % 20.1 % 18.8 % 15.8 % Year Ended April 30, 2020 Executive Search Consulting Digital North America EMEA Asia Pacific Latin America Subtotal RPO & Professional Search Corporate Consolidated (in thousands) Fee revenue $ 543,095 $ 292,366 $ 434,624 $ 170,314 $ 98,132 $ 29,400 $ 732,470 $ 364,801 $ — $ 1,932,732 Total revenue $ 557,255 $ 294,261 $ 447,528 $ 172,978 $ 99,209 $ 29,493 $ 749,208 $ 376,606 $ — $ 1,977,330 Net income attributable to Korn Ferry $ 104,946 Net income attributable to noncontrolling interest 2,071 Other loss, net 2,879 Interest expense, net 22,184 Income tax provision 43,945 Operating income $ 176,025 Depreciation and amortization 55,311 Other loss, net (2,879 ) Integration/acquisition costs 12,152 Restructuring charges, net 58,559 Separation costs 1,783 Adjusted EBITDA $ 61,092 $ 83,073 $ 120,725 $ 31,067 $ 22,885 $ 6,402 $ 181,079 $ 60,168 $ (84,461 ) $ 300,951 Adjusted EBITDA margin 11.2 % 28.4 % 27.8 % 18.2 % 23.3 % 21.8 % 24.7 % 16.5 % 15.6 % 40 Year Ended April 30, 2019 Executive Search Consulting Digital North America EMEA Asia Pacific Latin America Subtotal RPO & Professional Search Corporate Consolidated (in thousands) Fee revenue $ 568,321 $ 252,727 $ 455,826 $ 182,829 $ 104,291 $ 31,896 $ 774,842 $ 330,143 $ — $ 1,926,033 Total revenue $ 585,893 $ 252,727 $ 469,743 $ 186,131 $ 105,543 $ 31,960 $ 793,377 $ 341,865 $ — $ 1,973,862 Net income attributable to Korn Ferry $ 102,651 Net income attributable to noncontrolling interest 2,145 Other income, net (10,405 ) Interest expense, net 16,891 Income tax provision 29,544 Operating income $ 140,826 Depreciation and amortization 46,489 Other income, net 10,405 Integration/acquisition costs 6,746 Tradename write-offs 106,555 Adjusted EBITDA $ 66,531 $ 84,455 $ 131,343 $ 31,660 $ 26,073 $ 4,730 $ 193,806 $ 54,407 $ (88,178 ) $ 311,021 Adjusted EBITDA margin 11.7 % 33.4 % 28.8 % 17.3 % 25.0 % 14.8 % 25.0 % 16.5 % 16.1 % Fiscal 2021 Compared to Fiscal 2020 Fee Revenue Fee Revenue. Fee revenue decreased by $122.7 million, or 6.3%, to $1,810.0 million in fiscal 2021 compared to $1,932.7 million in fiscal 2020. Exchange rates favorably impacted fee revenue by $21.6 million, or 1%, in fiscal 2021 compared to fiscal 2020. The lower fee revenue was attributable to decreases in our Executive Search, Digital and Consulting lines of business primarily due to the impact of COVID-19 on economies in which we operate in fiscal 2021, partially offset by fee revenue generated from the growth in RPO & Professional Search. Consulting. Consulting reported fee revenue of $515.8 million in fiscal 2021, a decrease of $27.3 million, or 5%, compared to $543.1 million in fiscal 2020. The decrease was primarily due to the contraction in economic activity due to COVID-19. Exchange rates favorably impacted fee revenue by $5.6 million, or 1%, compared to fiscal 2020 Digital. Digital reported fee revenue of $287.3 million in fiscal 2021, a decrease of $5.1 million, or 2%, compared to $292.4 million in fiscal 2020. The lower fee revenue was primarily due to the contraction in economic activity due to COVID-19. Exchange rates favorably impacted fee revenue by $3.0 million, or 1%, compared to fiscal 2020. Executive Search North America . Executive Search North America reported fee revenue of $397.3 million in fiscal 2021, a decrease of $37.3 million, or 9%, compared to $434.6 million in fiscal 2020. North America’s fee revenue was lower due to a 5% decrease in the number of engagements billed and a 4% decrease in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2021 compared to fiscal 2020. Executive Search EMEA. Executive Search EMEA reported fee revenue of $139.0 million in fiscal 2021, a decrease of $31.3 million, or 18%, compared to $170.3 million in fiscal 2020. Exchange rates favorably impacted fee revenue by $8.0 million, or 5%, in fiscal 2021, compared to fiscal 2020. The decrease in fee revenue was due to a 16% decrease in the number of engagements billed and an 8% decrease in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2021 compared to fiscal 2020. The performance in the United Kingdom, Germany, France, Switzerland, Netherlands and the UAE were the primary contributors to the decrease in fee revenue in fiscal 2021 compared to fiscal 2020. Executive Search Asia Pacific. Executive Search Asia Pacific reported fee revenue of $83.3 million in fiscal 2021, a decrease of $14.8 million, or 15%, compared to $98.1 million in fiscal 2020. Exchange rates favorably impacted fee revenue by $2.5 million, or 3%, in fiscal 2021, compared to fiscal 2020. The decrease in fee revenue was due to an 11% decrease in the weighted-average fees billed per engagement (calculated using local currency) and a 7% decrease in the number of engagements billed in fiscal 2021 compared to fiscal 2020. The performance in Australia, Hong Kong, and Singapore were the primary contributors to the decrease in fee revenue in fiscal 2021 compared to fiscal 2020. Executive Search Latin America. Executive Search Latin America reported fee revenue of $17.5 million in fiscal 2021, a decrease of $11.9 million, or 40%, compared to $29.4 million in fiscal 2020. Exchange rates unfavorably impacted fee revenue by $3.6 million, or 12%, in fiscal 2021, compared to fiscal 2020. The decrease in fee revenue was due to a 27% decrease in the number of engagements billed and a 7% decrease in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2021 compared to fiscal 2020. The decrease in fee revenue was due to lower fee revenue in Mexico, Brazil, Chile and Peru in fiscal 2021 compared to fiscal 2020. 41 RPO & Professional Search. RPO & Professional Search reported fee revenue of $369.9 million in fi scal 2021 , an increase of $5.1 million, or 1% , compared to $364.8 million in fiscal 2020 . Exchange rates favorably impacted fee revenue by $5.4 million, or 1% , compared to fiscal 2020 . The increase in fee revenue was due to higher fee revenue in RPO of $ 18 . 0 million due to a strong demand for our services in the fourth quarter of fiscal 2021 , partially offset by lower fee revenue in Professional Search of $ 12 . 9 million which was impacted by COVID-19. Compensation and Benefits Compensation and benefits expense remained flat at $1,297.9 million in fiscal 2021 and $1,298.0 million in fiscal 2020. Exchange rates unfavorably impacted compensation and benefits by $14.2 million, or 1%, in fiscal 2021 compared to fiscal 2020. The change in compensation and benefits expense was due to lower salaries and related payroll taxes and employer insurance due to a 5% decrease in average headcount as a result of actions taken to align our cost structure with lower-level business demand. This was fully offset by increases in performance-related bonus expense and deferred compensation expense driven by an increase in the fair value of participants’ accounts. Compensation and benefits expense, as a percentage of fee revenue, increased to 72% in fiscal 2021 from 67% in fiscal 2020. Consulting compensation and benefits expense decreased by $12.8 million, or 3%, to $360.4 million in fiscal 2021 from $373.2 million in fiscal 2020. Exchange rates unfavorably impacted compensation and benefits by $4.0 million, or 1%, in fiscal 2021 compared to fiscal 2020. The change was primarily due to a decrease in salaries and related payroll taxes and employer insurance due to an 11% decline in average headcount as a result of actions taken to align our cost structure with the lower level of business demand, partially offset by higher performance-related bonus expense. Consulting compensation and benefits expense, as a percentage of fee revenue, increased to 70% in fiscal 2021 from 69% in fiscal 2020. Digital compensation and benefits expense decreased by $3.0 million, or 2%, to $146.7 million in fiscal 2021 from $149.7 million in fiscal 2020. Exchange rates unfavorably impacted compensation and benefits by $1.6 million, or 1%, in fiscal 2021 compared to fiscal 2020. The decrease in compensation and benefits expense was due to a decline in salaries and related payroll taxes as a result of actions taken to align our cost structure with the lower level of business demand. This decrease was also impacted by lower integration/acquisition costs partially offset by increases in performance-related bonus expense and commission expense. Digital compensation and benefits expense, as a percentage of fee revenue, was 51% for both fiscal 2021 and 2020. Executive Search North America compensation and benefits expense increased by $29.8 million, or 11%, to $299.5 million in fiscal 2021 compared to $269.7 million in fiscal 2020. Exchange rates unfavorably impacted compensation and benefits by $0.3 million in fiscal 2021 compared to fiscal 2020. The increase was due to higher expenses associated with our deferred compensation and retirement plans driven by an increase in the fair value of participants’ accounts and an increase in performance-related bonus expense. These increases were partially offset by a decrease in salaries and related payroll taxes due to a 14% decline in average headcount as a result of actions taken to align our cost structure with the lower level of business demand in fiscal 2021 compared to fiscal 2020. Executive Search North America compensation and benefits expense, as a percentage of fee revenue, increased to 75% in fiscal 2021 from 62% in fiscal 2020. Executive Search EMEA compensation and benefits expense decreased by $8.6 million, or 7%, to $111.1 million in fiscal 2021 compared to $119.7 million in fiscal 2020. Exchange rates unfavorably impacted compensation and benefits by $5.3 million, or 4%, in fiscal 2021 compared to fiscal 2020. The decrease was due to lower salaries and related payroll taxes due to an 8% decline in average headcount as a result of actions taken to align our cost structure with the lower level of business demand in fiscal 2021 compared to fiscal 2020. Executive Search EMEA compensation and benefits expense, as a percentage of fee revenue, increased to 80% in fiscal 2021 from 70% in fiscal 2020. Executive Search Asia Pacific compensation and benefits expense decreased by $6.0 million, or 9%, to $58.3 million in fiscal 2021 compared to $64.3 million in fiscal 2020. Exchange rates unfavorably impacted compensation and benefits by $1.7 million, or 3%, in fiscal 2021 compared to fiscal 2020. The decrease was due to a decrease in salaries and related payroll taxes due to 12% decline in average headcount as a result of actions taken to align our cost structure with the lower level of business demand in fiscal 2021 compared to fiscal 2020. The decrease was partially offset by a higher performance-related bonus expense. Executive Search Asia Pacific compensation and benefits expense, as a percentage of fee revenue, increased to 70% in fiscal 2021 from 66% in fiscal 2020. Executive Search Latin America compensation and benefits expense decreased by $4.6 million, or 25%, to $14.1 million in fiscal 2021 compared to $18.7 million in fiscal 2020. Exchange rates favorably impacted compensation and benefits by $2.7 million, or 14%, in fiscal 2021 compared to fiscal 2020. The decrease was due to lower salaries and related payroll taxes due to a 16% decline in average headcount as a result of actions taken to align our cost structure with the lower level of business demand in fiscal 2021 compared to fiscal 2020. Executive Search Latin 42 America compensation and benefits expense, as a percentage of fee revenue, increased to 80% in fiscal 2021 from 64% in fiscal 2020 . RPO & Professional Search compensation and benefits expense increased by $3.6 million, or 1%, to $264.6 million in fiscal 2021 from $261.0 million in fiscal 2020. Exchange rates unfavorably impacted compensation and benefits by $4.0 million, or 2%, in fiscal 2021 compared to fiscal 2020. The increase was due to higher performance-related bonus expense, partially offset by a decrease in salaries and related payroll taxes in fiscal 2021 compared to fiscal 2020. RPO & Professional Search compensation and benefits expense, as a percentage of fee revenue, was 72% in both fiscal 2021 and 2020. Corporate compensation and benefits expense increased by $1.5 million, or 4%, to $43.2 million in fiscal 2021 from $41.7 million in fiscal 2020. The increase was primarily due to higher performance-related bonus expense and an increase in expenses associated with our deferred compensation and retirement plans driven by increases in the fair value of participants’ accounts. These increases were partially offset by lower salaries and related payroll taxes as a result of a 2% decline in headcount as a result of actions taken to align our cost structure with the lower level of business demand in fiscal 2021 compared to fiscal 2020 and an increase in income from company-owned life insurance (“COLI”) policies due to more death benefits recorded in fiscal 2021 compared to fiscal 2020. General and Administrative Expenses General and administrative expenses decreased $67.2 million, or 26%, to $191.8 million in fiscal 2021 compared to $259.0 million in fiscal 2020. Exchange rates unfavorably impacted general and administrative expenses by $3.3 million, or 1%, in fiscal 2021 compared to fiscal 2020. The decrease in general and administrative expenses was due to lower marketing and business development expenses, travel related expenses, premise and office expenses and legal and other professional fees as a result of actions taken to align our cost structure with the lower level of business demand and restrictions implemented by various governmental agencies due to COVID-19. Also contributing to the decrease in general and administrative expenses was a decrease in integration/acquisition costs related to the purchase of the Acquired Companies. General and administrative expenses, as a percentage of fee revenue, decreased to 11% in fiscal 2021 from 13% in fiscal 2020. Consulting general and administrative expenses decreased by $18.5 million, or 28%, to $48.6 million in fiscal 2021 compared to $67.1 million in fiscal 2020. The decrease in general and administrative expenses was due to lower marketing and business development expenses, premise and office expenses and travel related expenses as a result of actions taken to align our cost structure with the lower level of business demand and restrictions implemented by various governmental agencies due to COVID-19. Consulting general and administrative expenses, as a percentage of fee revenue, decreased to 9% in fiscal 2021 from 12% in fiscal 2020. Digital general and administrative expenses decreased by $9.6 million, or 25%, to $29.1 million in fiscal 2021 compared to $38.7 million in fiscal 2020. The decrease in general and administrative expenses was due to lower travel related expenses, marketing and business development expenses and premise and office expenses as a result of actions taken to align our cost structure with the lower level of business demand and restrictions implemented by various governmental agencies due to COVID-19. Also contributing to the decrease in general and administrative expenses was a decrease in integration/acquisition costs related to the purchase of the Acquired Companies. Digital general and administrative expenses, as a percentage of fee revenue, decreased to 10% in fiscal 2021 from 13% in fiscal 2020. Executive Search North America general and administrative expenses decreased by $12.1 million, or 31%, to $26.9 million in fiscal 2021 from $39.0 million in fiscal 2020. The decrease in general and administrative expenses was due to lower marketing and business development expenses, premise and office expenses and travel related expenses as a result of actions taken to align our cost structure with the lower level of business demand and restrictions implemented by various governmental agencies due to COVID-19. Executive Search North America general and administrative expenses, as a percentage of fee revenue was 7% in fiscal 2021 compared to 9% in fiscal 2020. Executive Search EMEA general and administrative expenses decreased by $5.0 million, or 24%, to $16.0 million in fiscal 2021 from $21.0 million in fiscal 2020. The decrease in general and administrative expenses was due to lower marketing and business development expenses and travel related expenses as a result of actions taken to align our cost structure with the lower level of business demand and restrictions implemented by various governmental agencies due to COVID-19. Also contributing to the decrease in general and administrative expenses was the impact of foreign currency with foreign exchange gains in fiscal 2021 compared to foreign currency losses in fiscal 2020. Executive Search EMEA general and administrative expenses, as a percentage of fee revenue was 12% in both fiscal 2021 and 2020. Executive Search Asia Pacific general and administrative expenses decreased by $2.0 million, or 19%, to $8.6 million in fiscal 2021 from $10.6 million in fiscal 2020. The decrease in general and administrative expenses was due to lower premise and office expenses, marketing and business development expenses and travel related expenses as a result of actions taken to align our cost structure with the lower level of business demand and restrictions 43 implemented by various governmental agencies due to COVID-19. Executive Search Asia Pacific general and administrative expenses, as a percentage of fee revenue was 10% in fiscal 2021 compared to 11% in fiscal 2020. Executive Search Latin America general and administrative expenses decreased by $2.1 million, or 49%, to $2.2 million in fiscal 2021 from $4.3 million in fiscal 2020. The decrease in general and administrative expenses was due to lower premise and office expenses and marketing and business development expenses as a result of actions taken to align our cost structure with the lower level of business demand and restrictions implemented by various governmental agencies due to COVID-19. Executive Search Latin America general and administrative expenses, as a percentage of fee revenue was 12% in fiscal 2021 compared to 15% in fiscal 2020. RPO & Professional Search general and administrative expenses decreased by $6.4 million, or 21%, to $24.8 million in fiscal 2021 from $31.2 million in fiscal 2020. The decrease in general and administrative expenses was due to lower travel related expenses and marketing and business development expenses as a result of actions taken to align our cost structure with the lower level of business demand and restrictions implemented by various governmental agencies due to COVID-19. Also contributing to the decrease in general and administrative expenses was the impact of foreign currency with foreign exchange gains in fiscal 2021 compared to foreign currency losses in fiscal 2020. RPO & Professional Search general and administrative expenses, as a percentage of fee revenue, was 7% in fiscal 2021 compared to 9% in fiscal 2020. Corporate general and administrative expenses decreased by $11.5 million, or 24%, to $35.5 million in fiscal 2021 compared to $47.0 million in fiscal 2020. The decrease in general and administrative expenses was due to lower marketing and business development expenses, legal and other professional fees and travel related expenses as a result of actions taken to align our cost structure with the lower level of business demand and restrictions implemented by various governmental agencies due to COVID-19. Also contributing to the decrease in general and administrative expenses was a decrease in integration/acquisition costs related to the purchase of the Acquired Companies. Cost of Services Expense Cost of services expense consists primarily of contractor and product costs related to the delivery of various services and products, primarily in RPO & Professional Search, Consulting and Digital. Cost of services expense was $72.0 million in fiscal 2021 compared to $85.9 million in fiscal 2020. Cost of services expense, as a percentage of fee revenue, was 4% in both fiscal 2021 and 2020. Depreciation and Amortization Expenses Depreciation and amortization expenses were $61.8 million in fiscal 2021, an increase of $6.5 million, or 12%, compared to $55.3 million in fiscal 2020. The increase was primarily from the Digital segment due to the acquisition of the Acquired Companies and technology investments made in the current and prior year in software and computer equipment. Restructuring Charges, Net In November 2019, we implemented a restructuring plan to eliminate redundant positions that were created due to investments made in our Digital business and the acquisition of the Acquired Companies. In April 2020, we implemented a second plan in response to the uncertainty caused by COVID-19 that resulted in reductions in our workforce. We continued the implementation of the second plan in fiscal 2021 and as a result of these plans recorded restructuring charges, net of $30.7 million and $58.6 million of severance costs in fiscal 2021 and 2020, respectively. Net Income Attributable to Korn Ferry Net income attributable to Korn Ferry increased by $9.6 million to $114.5 million in fiscal 2021 compared to $104.9 million in fiscal 2020. The increase was mainly driven by decreases in general and administrative expenses and cost of services expense associated with actions taken to align our cost structure with the lower level of business demand. A decline in restructuring charges, net and an increase in other income, net contributed to the increase in net income attributable to Korn Ferry as well. These changes were partially offset by a decrease in fee revenue and increases in interest expense, net and depreciation and amortization expense. Net income attributable to Korn Ferry, as a percentage of fee revenue, was 6% in fiscal 2021 as compared to 5% in fiscal 2020. Adjusted EBITDA Adjusted EBITDA decreased by $14.7 million to $286.3 million in fiscal 2021 compared to $301.0 million in fiscal 2020. The decrease in Adjusted EBITDA was driven by a decline in fee revenue that resulted from actions taken by various government and other authoritative bodies in response to COVID-19 that caused a contraction in economic activity during the year. This decrease was partially offset by a decline in general and administrative expenses (excluding integration/acquisition costs), which resulted from the cost savings initiatives that were put in place in response to COVID-19. Adjusted EBITDA, as a percentage of fee revenue, was 16% in both fiscal 2021 and 2020. 44 Consulting Adjusted EBITDA was $81.5 million in fisca l 2021 , an increase of $20.4 million, or 33% , compared to $61.1 million in fiscal 2020 . The in crease was driven by decreases in general and administrative expenses , cost of services expense and compensation and benefits expense , which resulted from the cost savings initiatives that were put in place in response to COVID-19 . These changes were partially offset by a decrease to fee revenue that resulted from actions taken by various government and other authoritative bodies in response to COVID-19 that caused a contraction in economic activity during the year. Consulting Adjusted EBITDA, as a percentage of fee revenue, was 16% in fiscal 2021 compared to 11% in fiscal 2020. Digital Adjusted EBITDA was $86.1 million in fiscal 2021, an increase of $3.0 million, or 4%, compared to $83.1 million in fiscal 2020. The increase was driven by decreases in general and administrative expenses (excluding integration/acquisition costs) and compensation and benefits expense (excluding integration/acquisition costs) in fiscal 2021 compared to fiscal 2020, which resulted from the cost savings initiatives that were put in place in response to COVID-19. These increases were partially offset by lower fee revenue that resulted from actions taken by various government and other authoritative bodies in response to COVID-19 that caused a contraction in economic activity during the year. Digital Adjusted EBITDA, as a percentage of fee revenue, was 30% in fiscal 2021 as compared to 28% in fiscal 2020. Executive Search North America Adjusted EBITDA decreased by $22.6 million, or 19%, to $98.1 million in fiscal 2021 compared to $120.7 million in fiscal 2020. The decrease was driven by lower fee revenue that resulted from actions taken by various government and other authoritative bodies in response to COVID-19 that caused a contraction in economic activity during the year, as well as an increase in compensation and benefits expense. These changes were partially offset by a decrease in general and administrative expenses, which resulted from the cost savings initiatives that were put in place in response to COVID-19. Executive Search North America Adjusted EBITDA, as a percentage of fee revenue, was 25% in fiscal 2021 compared to 28% in fiscal 2020. Executive Search EMEA Adjusted EBITDA decreased by $19.4 million, or 62%, to $11.7 million in fiscal 2021 compared to $31.1 million in fiscal 2020. The decrease was driven by lower fee revenue that resulted from actions taken by various government and other authoritative bodies in response to COVID-19 that caused a contraction in economic activity during the year. This was partially offset by decreases in compensation and benefits expense (excluding separation costs) and general and administrative expenses, which resulted from the cost savings initiatives that were put in place in response to COVID-19. Executive Search EMEA Adjusted EBITDA, as a percentage of fee revenue, was 8% in fiscal 2021 compared to 18% in fiscal 2020. Executive Search Asia Pacific Adjusted EBITDA decreased by $6.2 million, or 27%, to $16.7 million in fiscal 2021 compared to $22.9 million in fiscal 2020. The decrease was driven by lower fee revenue that resulted from actions taken by various government and other authoritative bodies in response to COVID-19 that caused a contraction in economic activity during the year. This decrease was partially offset by decreases in compensation and benefits expense and general and administrative expenses, which resulted from the cost savings initiatives that were put in place in response to COVID-19. Executive Search Asia Pacific Adjusted EBITDA, as a percentage of fee revenue, was 20% in fiscal 2021 compared to 23% in fiscal 2020. Executive Search Latin America Adjusted EBITDA decreased by $5.1 million, or 80%, to $1.3 million in fiscal 2021 compared to $6.4 million in fiscal 2020. The decrease was driven by lower fee revenue that resulted from actions taken by various government and other authoritative bodies in response to COVID-19 that caused a contraction in economic activity during the year. This decrease was partially offset by decreases in compensation and benefits expense and general and administrative expenses, which resulted from the cost savings initiatives that were put in place in response to COVID-19. Executive Search Latin America Adjusted EBITDA, as a percentage of fee revenue, was 7% in fiscal 2021 compared to 22% in fiscal 2020. RPO & Professional Search Adjusted EBITDA was $69.4 million in fiscal 2021, an increase of $9.2 million, or 15%, compared to $60.2 million in fiscal 2020. The increase was driven by higher fee revenue and a decrease in general and administrative expenses, which resulted from cost savings initiatives that were put in place in response to COVID-19. These changes were partially offset by an increase in compensation and benefits expense. RPO & Professional Search Adjusted EBITDA, as a percentage of fee revenue, was 19% in fiscal 2021 compared to 17% in fiscal 2020. 45 Other Income (Loss) , Net Other income, net was $37.2 million in fiscal 2021 compared to other loss, net of $2.9 million in fiscal 2020. The change from other loss, net to other income, net was primarily due to gains in the fair value of our marketable securities recognized in fiscal 2021 compared to losses in fiscal 2020. These gains recorded in fiscal 2021 were offset by the increases in our deferred compensation liability that were recorded as increases in compensation and benefits expense in fiscal 2021. Interest Expense, Net Interest expense, net primarily relates to our Notes issued in December 2019, our prior credit agreement, and borrowings under our COLI policies, which are partially offset by interest earned on cash and cash equivalent balances. Interest expense, net was $29.3 million in fiscal 2021 compared to $22.2 million in fiscal 2020. The increase in interest expense, net was related to the Notes, which have a higher interest rate than the revolver under our prior credit agreement that was outstanding for most of fiscal 2020. Income Tax Provision The provision for income tax was $48.1 million in fiscal 2021 compared to $43.9 million in fiscal 2020. This reflects a 29% effective tax rate in both fiscal 2021 and 2020. Net Income Attributable to Noncontrolling Interest Net income attributable to noncontrolling interest represents the portion of a subsidiary’s net earnings that are attributable to shares of such subsidiary not held by Korn Ferry that are included in the consolidated results of operations. Net income attributable to noncontrolling interest was $1.1 million and $2.1 million in fiscal 2021 and 2020, respectively. Fiscal 2020 Compared to Fiscal 2019 We changed the presentation from the last year’s Form 10-K to reflect the performance of each of our seven reportable segments. Fee Revenue Fee Revenue. Fee revenue increased by $6.7 million, or 0.3%, to $1,932.7 million in fiscal 2020 compared to $1,926.0 million in fiscal 2019. Exchange rates unfavorably impacted fee revenue by $36.2 million, or 2%, in fiscal 2020 compared to fiscal 2019. The higher fee revenue was attributable to fee revenue generated from the Acquired Companies and growth in RPO & Professional Search, offset by decreases in Executive Search and Consulting principally impacted by COVID-19 in the fourth quarter of fiscal 2020. Consulting. Consulting reported fee revenue of $543.1 million in fiscal 2020, a decrease of $25.2 million, or 4%, compared to $568.3 million in fiscal 2019. Exchange rates unfavorably impacted fee revenue by $10.9 million, or 2%, compared to fiscal 2019. The decrease was primarily due to the impact of COVID-19 in the fourth quarter of fiscal 2020. Digital. Digital reported fee revenue of $292.4 million in fiscal 2020, an increase of $39.7 million, or 16%, compared to $252.7 million in fiscal 2019. The higher fee revenue was attributable to fee revenue generated from the Acquired Companies. Exchange rates unfavorably impacted fee revenue by $6.4 million, or 3%, compared to fiscal 2019. Executive Search North America reported fee revenue of $434.6 million in fiscal 2020, a decrease of $21.2 million, or 5%, compared to $455.8 million in fiscal 2019. North America’s fee revenue was lower due to a 7% decrease in the number of engagements billed, partially offset by a 3% increase in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2020 compared to fiscal 2019. Executive Search EMEA reported fee revenue of $170.3 million in fiscal 2020, a decrease of $12.5 million, or 7%, compared to $182.8 million in fiscal 2019. Exchange rates unfavorably impacted fee revenue by $5.9 million, or 3%, in fiscal 2020, compared to fiscal 2019. The decrease in fee revenue was due to a 3% decrease in the number of engagements billed and a 1% decrease in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2020 compared to fiscal 2019. The performance in Germany, United Kingdom, Norway, Sweden and Denmark were the primary contributors to the decrease in fee revenue in fiscal 2020 compared to fiscal 2019. Executive Search Asia Pacific reported fee revenue of $98.1 million in fiscal 2020, a decrease of $6.2 million, or 6%, compared to $104.3 million in fiscal 2019. Exchange rates unfavorably impacted fee revenue by $2.9 million, or 3%, in fiscal 2020, compared to fiscal 2019. The decrease in fee revenue was due to a 5% decrease in the number of engagements billed, partially offset by a 2% increase in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2020 compared to fiscal 2019. The performance in Australia and China were the primary contributors to the decrease in fee revenue, partially offset by increases in fee revenue in Singapore and Japan in fiscal 2020 compared to fiscal 2019. 46 Executive Search Latin America reported fee revenue of $29.4 million in fiscal 2020, a decrease of $2.5 million, o r 8% , compared to $31.9 million in fiscal 2019. Exchange rates unfavorably impacted fee revenue by $2.6 million, or 8%, in fiscal 2020, compared to fiscal 2019 . The de crease in fee revenue was due to lower fee revenue in Brazil, Colombia and Argentina , partially offset by increases in fee revenue in Mexico and Chile in fiscal 2020 compared to fiscal 2019 . RPO & Professional Search. RPO & Professional Search reported fee revenue of $364.8 million in fiscal 2020, an increase of $34.7 million, or 11%, compared to $330.1 million in fiscal 2019. Exchange rates unfavorably impacted fee revenue by $6.9 million, or 2%, compared to fiscal 2019. Higher fee revenues in RPO and professional search of $26.4 million and $8.3 million, respectively, drove the increase in fee revenue. Compensation and Benefits Compensation and benefits expense decreased $13.2 million, or 1%, to $1,298.0 million in fiscal 2020 from $1,311.2 million in fiscal 2019. Exchange rates favorably impacted compensation and benefits by $22.6 million, or 2%, in fiscal 2020 compared to fiscal 2019. The decrease in compensation and benefits expense was due to lower performance-related bonus expense due to lower fee revenue as a result of the COVID-19 pandemic, a decrease in expenses associated with our deferred compensation and retirement plans driven by a decrease in the fair value of participants’ accounts and a decrease in integration/ acquisition costs. These decreases in compensation and benefits expense were partially offset by a 3% increase in average headcount, which contributed to an increase in salaries and related payroll taxes in fiscal 2020 compared to fiscal 2019. Compensation and benefits expense, as a percentage of fee revenue, decreased to 67% in fiscal 2020 from 68% in fiscal 2019. Consulting compensation and benefits expense decreased by $17.8 million, or 5%, to $373.2 million in fiscal 2020 from $391.0 million in fiscal 2019. Exchange rates favorably impacted compensation and benefits by $7.8 million, or 2%, in fiscal 2020 compared to fiscal 2019. The change was primarily due to lower performance-related bonus expense due to lower fee revenue as a result of the COVID-19 pandemic, partially offset by an increase in salaries and related payroll taxes. Consulting compensation and benefits expense, as a percentage of fee revenue, was 69% for both the fiscal 2020 and 2019. Digital compensation and benefits expense increased by $16.6 million, or 12%, to $149.7 million in fiscal 2020 from $133.1 million in fiscal 2019. Exchange rates favorably impacted compensation and benefits by $2.8 million, or 2%, in fiscal 2020 compared to fiscal 2019. The increase in compensation and benefits expense was due to an increase in salaries and related payroll taxes mainly from the Acquired Companies resulting in a 12% increase in the average headcount in fiscal 2020 compared to fiscal 2019. Digital compensation and benefits expense, as a percentage of fee revenue, decreased to 51% in fiscal 2020 from 53% in fiscal 2019. Executive Search North America compensation and benefits expense decreased by $16.3 million, or 6%, to $269.7 million in fiscal 2020 compared to $286.0 million in fiscal 2019. The decrease was due to lower performance-related bonus expense due to lower fee revenue as a result of the COVID-19 pandemic. The rest of the change was due to a decrease in the expenses associated with our deferred compensation and retirement plans driven by a decrease in the fair value of participants’ accounts. Executive Search North America compensation and benefits expense, as a percentage of fee revenue, decreased to 62% in fiscal 2020 from 63% in fiscal 2019. Executive Search EMEA compensation and benefits expense decreased by $9.1 million, or 7%, to $119.7 million in fiscal 2020 compared to $128.8 million in fiscal 2019. Exchange rates favorably impacted compensation and benefits by $3.8 million, in fiscal 2020 compared to fiscal 2019. The decrease was primarily due to lower performance-related bonus expense due to lower fee revenue as a result of the COVID-19 pandemic. Executive Search EMEA compensation and benefits expense, as a percentage of fee revenue, was 70% in both fiscal 2020 and 2019. Executive Search Asia Pacific compensation and benefits expense decreased by $2.9 million, or 4%, to $64.3 million in fiscal 2020 compared to $67.2 million in fiscal 2019. Exchange rates favorably impacted compensation and benefits by $1.8 million, in fiscal 2020 compared to fiscal 2019. The decrease was due to lower performance-related bonus expense due to lower fee revenue as a result of the COVID-19 pandemic. Executive Search Asia Pacific compensation and benefits expense, as a percentage of fee revenue, increased to 65% in fiscal 2020 from 64% in fiscal 2019. Executive Search Latin America compensation and benefits expense decreased by $1.8 million, or 9%, to $18.7 million in fiscal 2020 compared to $20.5 million in fiscal 2019. Exchange rates favorably impacted compensation and benefits by $1.6 million, in fiscal 2020 compared to fiscal 2019. The decrease in compensation and benefits expense was due to a decrease in salaries and related payroll taxes as a result of a 5% decrease in the average headcount in fiscal 2020 compared to fiscal 2019. Executive Search Latin America compensation and benefits expense, as a percentage of fee revenue, was 64% for both fiscal 2020 and fiscal 2019. RPO & Professional Search compensation and benefits expense increased by $26.4 million, or 11%, to $261.0 million in fiscal 2020 from $234.6 million in fiscal 2019. Exchange rates favorably impacted compensation and 47 benefits by $4.5 million, or 2%, in fiscal 2020 compared to fiscal 2019 . The increase was due to a 14 % increase in the average headcount in fiscal 2020 compared to fiscal 2019 , partially offset by a decrease in lower performance-related bonus expense due to lower fee revenue as a result of the COVID-19 pandemic . RPO & Professional Search compensation and benefits expense, as a percentage of fee revenue , increased to 72% in fiscal 2020 from 71% in fiscal 2019. Corporate compensation and benefits expense decreased by $8.4 million, or 17%, to $41.7 million in fiscal 2020 from $50.1 million in fiscal 2019. The decrease was primarily due to lower performance-related bonus expense due to lower fee revenue as a result of the COVID-19 pandemic and a decrease in expenses associated with our deferred compensation and retirement plans in fiscal 2020 compared to fiscal 2019. General and Administrative Expenses General and administrative expenses decreased $93.0 million, or 26%, to $259.0 million in fiscal 2020 compared to $352.0 million in fiscal 2019. Exchange rates favorably impacted general and administrative expenses by $6.2 million, or 2%, in fiscal 2020 compared to fiscal 2019. The decrease in general and administrative expenses was magnified by a one-time write-off of tradenames of $106.6 million in fiscal 2019 related to the Plan. The decrease in general and administrative expenses was partially offset by increases in marketing and business development expenses and integration/acquisition costs. General and administrative expenses, as a percentage of fee revenue, decreased to 13% in fiscal 2020 from 18% in fiscal 2019, however, excluding the tradename write-offs, general and administrative expenses as a percentage of fee revenue was 13% in both fiscal 2020 and 2019. Consulting general and administrative expenses decreased by $79.1 million, or 54%, to $67.1 million in fiscal 2020 compared to $146.2 million in fiscal 2019. The decrease in general and administrative expenses was magnified by a one-time write-off of tradenames related to the Plan of $77.0 million in fiscal 2019. Consulting general and administrative expenses, as a percentage of fee revenue, decreased to 12% in fiscal 2020 from 26% in fiscal 2019. Excluding the tradename write-offs, general and administrative expenses as a percentage of fee revenue was 12% in both fiscal 2020 and 2019. Digital general and administrative expenses decreased by $19.4 million, or 33%, to $38.7 million in fiscal 2020 compared to $58.1 million in fiscal 2019. The decrease in general and administrative expenses was magnified by a one-time write-off of tradenames related to the Plan of $29.6 million in fiscal 2019, partially offset by an increase in integration/acquisition costs and premise and office expenses. Digital general and administrative expenses, as a percentage of fee revenue, decreased to 13% in fiscal 2020 from 23% in fiscal 2019. Excluding the tradename write-offs, general and administrative expenses as a percentage of fee revenue was 13% in fiscal 2020 compared to 11% in fiscal 2019. Executive Search North America general and administrative expenses decreased by $2.9 million, or 7%, to $39.0 million in fiscal 2020 from $41.9 million in fiscal 2019. The decrease in general and administrative expenses was primarily due to decreases in legal and other professional fees and travel related expenses in fiscal 2020 compared to fiscal 2019. Executive Search North America general and administrative expenses, as a percentage of fee revenue, was 9% for both fiscal 2020 and 2019. Executive Search EMEA general and administrative expenses decreased by $1.3 million, or 6%, to $21.0 million in fiscal 2020 from $22.3 million in fiscal 2019. The decrease in general and administrative expenses was primarily due to decreases in travel related expenses and premise and office expenses, partially offset by an increase in foreign currency losses in fiscal 2020 compared to fiscal 2019. Executive Search EMEA general and administrative expenses, as a percentage of fee revenue, was 12% for both fiscal 2020 and 2019. Executive Search Asia Pacific general and administrative expenses decreased by $0.3 million, or 3%, to $10.6 million in fiscal 2020 from $10.9 million in fiscal 2019. The decrease in general and administrative expenses was primarily due to decreases in legal and other professional fees, travel related expenses and foreign currency gains in fiscal 2020 compared to foreign currency losses in fiscal 2019. This was partially offset by an increase in bad debt expense in fiscal 2020 compared to fiscal 2019. Executive Search Asia Pacific general and administrative expenses, as a percentage of fee revenue, increased to 11% in fiscal 2020 from 10% in fiscal 2019. Executive Search Latin America general and administrative expenses decreased by $2.7 million, or 39%, to $4.3 million in fiscal 2020 from $7.0 million in fiscal 2019. The decrease in general and administrative expenses was primarily due to a decrease in premise and office expenses and to a lesser extent foreign currency gains in fiscal 2020 compared foreign currency losses in fiscal 2019. Executive Search Latin America general and administrative expenses, as a percentage of fee revenue, decreased to 15% in fiscal 2020 from 22% in fiscal 2019. RPO & Professional Search general and administrative expenses increased by $3.1 million, or 11%, to $31.2 million in fiscal 2020 from $28.1 million in fiscal 2019. The increase was primarily due to an increase in premise and office expense and to a lesser extent foreign exchange loss in fiscal 2020 compared to foreign exchange gain in fiscal 48 2019 . RPO & Professional Search general and administrative expenses, as a percentage of fee revenue , was 9% in both fiscal 2020 and 2019. Corporate general and administrative expenses increased by $9.5 million, or 25%, to $47.0 million in fiscal 2020 compared to $37.5 million in fiscal 2019. The increase was due to integration/acquisition costs incurred in fiscal 2020 related to the purchase of the Acquired Companies and increases in marketing and business development expenses in fiscal 2020 compared to fiscal 2019. Cost of Services Expense Cost of services expense consists primarily of contractor and product costs related to the delivery of various services and products, primarily in RPO & Professional Search, Consulting and Digital. Cost of services expense was $85.9 million in fiscal 2020 compared to $75.5 million in fiscal 2019. Cost of services expense, as a percentage of fee revenue, was 4% in both the fiscal 2020 and 2019. Depreciation and Amortization Expenses Depreciation and amortization expenses were $55.3 million in fiscal 2020, an increase of $8.8 million, or 19%, compared to $46.5 million in fiscal 2019. The increase was related primarily to the Acquired Companies and technology investments made in the current and prior year in software and computer equipment, in addition to increases in leasehold improvement and furniture and fixtures. Restructuring Charges, Net In November 2019, we implemented a restructuring plan to eliminate redundant positions that were created due to investments made in our digital business and the acquisition of the Acquired Companies. In April 2020, we implemented a second plan in response to the uncertainty caused by COVID-19 that resulted in reductions in our workforce. As a result of these two plans, we recorded restructuring charges of $58.6 million of severance costs in fiscal 2020. There were no restructuring charges in fiscal 2019. Net Income Attributable to Korn Ferry Net income attributable to Korn Ferry increased by $2.2 million to $104.9 million in fiscal 2020 compared $102.7 million in fiscal 2019. The increase was primarily driven by lower operating expenses of $31.7 million, partially offset by an increase in income tax expense of $14.4 million and losses in the fair value of our marketable securities incurred in fiscal 2020 compared to gains in fiscal 2019. Net income attributable to Korn Ferry, as a percentage of fee revenue, was 5% in both the fiscal 2020 and 2019. Adjusted EBITDA Adjusted EBITDA decreased by $10.0 million to $301.0 million in fiscal 2020 compared to $311.0 million in fiscal 2019. Adjusted EBITDA, as a percentage of fee revenue, was 16% in both the fiscal 2020 and 2019. Consulting Adjusted EBITDA was $61.1 million in fiscal 2020, a decrease of $5.4 million, or 8%, compared to $66.5 million in fiscal 2019. The decrease was driven by lower fee revenue of $25.2 million largely due to the impact of COVID-19 in the fourth quarter of fiscal 2020. The decrease in adjusted EBITDA was partially offset by decreases of $12.5 million in compensation and benefits expense (excluding integration/acquisition costs), $6.0 million in cost of services expense and $2.1 million in general and administrative expenses (excluding tradename write-offs in fiscal 2019) in fiscal 2020 compared to fiscal 2019. Consulting Adjusted EBITDA, as a percentage of fee revenue, was 11% in fiscal 2020 compared to 12% in fiscal 2019. Digital Adjusted EBITDA was $83.1 million in fiscal 2020, a decrease of $1.4 million, or 2%, compared to $84.5 million in fiscal 2019. The decrease was driven by higher compensation and benefits expense (excluding integration/acquisition costs) of $15.5 million, higher cost of service expenses of $18.3 million and an increase of $6.7 million in general and administrative expenses (excluding integration/acquisition costs in fiscal 2020 and write-off of tradenames in fiscal 2019). This was partially offset by an increase of $39.7 million in fee revenue in fiscal 2020 compared to fiscal 2019. Digital Adjusted EBITDA, as a percentage of fee revenue, was 28% in fiscal 2020 as compared to 33% in fiscal 2019. Executive Search North America Adjusted EBITDA decreased by $10.6 million, or 8%, to $120.7 million in fiscal 2020 compared to $131.3 million in fiscal 2019. The decrease was driven by lower fee revenue of $21.2 million in fiscal 2020 compared to fiscal 2019 largely due to the impact of COVID-19 in the fourth quarter of fiscal 2020 and losses in the fair value of our marketable securities incurred in fiscal 2020 compared to gains in fiscal 2019. The decrease in Adjusted EBITDA was partially offset by a decrease of $16.3 million in compensation and benefits expense and $2.9 million in general and administrative expenses. Executive Search North America Adjusted EBITDA, as a percentage of fee revenue, decreased to 28% in fiscal 2020 from 29% in fiscal 2019. Executive Search EMEA Adjusted EBITDA decreased by $0.6 million, or 2%, to $31.1 million in fiscal 2020 compared to $31.7 million in fiscal 2019. The decrease was driven by lower fee revenue of $12.5 million in fiscal 2020 compared 49 to fiscal 2019 largely due to the impact of COVID-19 in the fourth quarter of fiscal 2020. The decrease in A djusted EBITDA was partially offset by a decrease of $10.9 million in compensation and benefits expense (excluding separation costs in fiscal 2020) and $1.3 million in general and administrative expenses. Executive Search EMEA Adjusted EBITDA, as a percentage of fee revenue, increased to 18% in fiscal 2020 from 17% in fiscal 2019. Executive Search Asia Pacific Adjusted EBITDA decreased by $3.2 million, or 12%, to $22.9 million in fiscal 2020 compared to $26.1 million in fiscal 2019. The decrease was driven by lower fee revenue of $6.2 million in fiscal 2020 compared to fiscal 2019 largely due to the impact of COVID-19 in the fourth quarter of fiscal 2020. The decrease in Adjusted EBITDA was partially offset by a decrease of $2.9 million in compensation and benefits expense and $0.3 million in general and administrative expenses. Executive Search Asia Pacific Adjusted EBITDA, as a percentage of fee revenue, decreased to 23% in fiscal 2020 from 25% in fiscal 2019. Executive Search Latin America Adjusted EBITDA increased by $1.7 million, or 36%, to $6.4 million in fiscal 2020 compared to $4.7 million in fiscal 2019. The increase was driven by decreases of $2.7 million in general and administrative expenses and $1.8 million in compensation and benefits expense. The increase was partially offset by lower fee revenue of $2.5 million in fiscal 2020 compared to fiscal 2019 largely due to the impact of COVID-19 in the fourth quarter of fiscal 2020. Executive Search Latin America Adjusted EBITDA, as a percentage of fee revenue, increased to 22% in fiscal 2020 from 15% in fiscal 2019. RPO & Professional Search Adjusted EBITDA was $60.2 million in fiscal 2020, an increase of $5.8 million, or 11%, compared to $54.4 million in fiscal 2019. The increase was driven by higher fee revenue of $34.7 million driven by higher fee revenues in RPO and professional search of $26.4 million and $8.3 million, respectively. The increase in adjusted EBITDA was partially offset by increases of $26.4 million in compensation and benefits expense and $3.1 million in general and administrative expenses, in fiscal 2020 compared to fiscal 2019. RPO & Professional Search Adjusted EBITDA, as a percentage of fee revenue, was 17% in fiscal 2020 compared to 16% in fiscal 2019. Other (Loss) Income, Net Other loss, net was $2.9 million in fiscal 2020 compared to other income, net of $10.4 million in fiscal 2019. The change from other income, net to other loss, net was primarily due to losses in the fair value of our marketable securities incurred in fiscal 2020 compared to gains in fiscal 2019. These losses were offset by the decreases in our deferred compensation liability that are recorded as decreases in compensation and benefits expense in fiscal 2020. Interest Expense, Net Interest expense, net primarily relates to the 4.625% Senior Unsecured Notes due 2027 (the “Notes”) issued in December 2019, our prior credit agreement, and borrowings under our COLI policies, which are partially offset by interest earned on cash and cash equivalent balances. Interest expense, net was $22.2 million in fiscal 2020 compared to $16.9 million in fiscal 2019. The increase in interest expense, net was related to the newly issued Notes, which have a higher interest rate and a higher principal balance than the revolver under our prior credit agreement. Income Tax Provision The provision for income tax was $43.9 million in fiscal 2020 compared to $29.5 million in fiscal 2019. This reflects a 29% and 22% effective tax rate for fiscal 2020 and 2019, respectively. The higher effective tax rate in fiscal 2020 is partially attributable to state income tax on a higher domestic income and a lower tax benefit recorded in connection with stock-based compensation than during fiscal 2019. Net Income Attributable to Noncontrolling Interest Net income attributable to noncontrolling interest represents the portion of a subsidiary’s net earnings that are attributable to shares of such subsidiary not held by Korn Ferry that are included in the consolidated results of operations. Net income attributable to noncontrolling interest was $2.1 million in both fiscal 2020 and 2019. Liquidity and Capital Resources The Company and its Board of Directors endorse a balanced approach to capital allocation. The Company’s long-term priority is to invest in growth initiatives, such as the hiring of consultants, the continued development of IP and derivative products and services, and the investment in synergistic, accretive merger and acquisition transactions that earn a return that is superior to the Company's cost of capital. Next, the Company’s capital allocation approach contemplates the return of a portion of excess capital to stockholders, in the form of a regular quarterly dividend, subject to the factors discussed below and in the “Risk Factors” section of this Annual Report on Form 10-K. Additionally, the Company considers share repurchases on an opportunistic basis and subject to the terms of our Credit Agreement (defined below) as well as using excess cash to repay the Notes. 50 On November 1, 2019, we completed the acquisition of the Acquired Companies in the leadership development area for $108.6 million, net of cash acquired . A ctual results of operations of the A cquired C ompanies are included in our consolidated financial statements from November 1, 2019, the effective date of the acquisition . On November 1, 2019, we also adopted a restructuring plan to rationalize our cost structure to position us to realize efficiencies and operational improvements . As previously discussed under the heading “Impact of COVID-19”, with the implementation of the restructuring plan that was initiated on April 20, 2020 to reduce, in part, our human capital expenditures, and the improved business activity we experienced in the second, third, and fourth quarter demonstrated by an increase in fee revenue compared to the first quarter of fiscal 2021, we believe our costs are in line with our current revenue levels, but given the unpredictable and fluid nature of the pandemic and its economic consequences our revenue levels could fall below our current levels. Given the amount available from our current revolver and the amount of cash and cash equivalents and marketable securities net of amounts held in trust for deferred compensations and accrued bonuses, we believe that we have sufficient liquidity to meet our anticipated working capital, capital expenditures, general corporate requirements, repayment of the debt obligations and dividend payments under our dividend policy in the next 12 months. On December 16, 2019, we completed a private placement of the Notes with a $400 million principal amount pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes were issued with a $4.5 million discount and will mature December 15, 2027, with interest payable semi-annually in arrears on June 15 and December 15 of each year, that commenced on June 15, 2020. The Notes represent senior unsecured obligations that rank equally in right of payment to all existing and future senior unsecured indebtedness. We may redeem the Notes prior to maturity, subject to certain limitations and premiums defined in the indenture governing the Notes. The Notes are guaranteed by each of our existing and future wholly owned domestic subsidiaries to the extent such subsidiaries guarantee our revolving credit facility under the Credit Agreement (defined below). The indenture governing the Notes requires that, upon the occurrence of both a Change of Control and a Rating Decline (each as defined in the indenture), we shall make an offer to purchase all of the Notes at 101% of their principal amount, and accrued and unpaid interest. We used the proceeds from the offering of the Notes to repay $276.9 million outstanding under our prior revolving credit facility (the “Prior Credit Agreement”) and to pay expenses and fees in connection therewith. As of April 30, 2021 , the fair value of the Notes is $ 416.5 million, which is based on borrowing rates currently required of notes with similar terms, maturity and credit risk. On December 16, 2019, we also entered into a senior secured $650.0 million credit agreement (the “Credit Agreement”) with a syndicate of banks and Bank of America, National Association as administrative agent to among other things, provide for enhanced financial flexibility. See Note 11— Long-Term Debt for a description of the Credit Agreement. We had a total of $646.0 million available under our $650.0 million five-year senior secured revolving credit facility (the “Revolver”) after $4.0 million of standby letters of credit had been issued as of April 30, 2021 and 2020. We had a total of $11.0 million and $11.3 million of standby letters of credits with other financial institutions as of April 30, 2021 and 2020, respectively. The standby letters of credits were generally issued as a result of entering into office premise leases. On December 8, 2014, the Board of Directors adopted a dividend policy to distribute to our stockholders a regular quarterly cash dividend of $0.10 per share. Every quarter since the adoption of the dividend policy, the Company has declared a quarterly dividend. On June 21, 2021, the Board of Directors approved a 20% increase to our quarterly dividend, which is now at $0.12 per share. The declaration and payment of future dividends under the quarterly dividend program will be at the discretion of the Board of Directors and will depend upon many factors, including our earnings, capital requirements, financial conditions, the terms of our indebtedness and other factors our Board of Directors may deem to be relevant. Our Board of Directors may, however, amend, revoke or suspend our dividend policy at any time and for any reason. On March 6, 2019, our Board of Directors approved an increase to the share repurchase program of approximately $200 million, which at the time brought our available capacity to repurchase shares in the open market or privately negotiated transactions to approximately $250 million. The Company repurchased approximately $30.4 million and $92.4 million of the Company’s stock during fiscal 2021 and 2020, respectively. As of April 30, 2021, $127.9 million remained available for common stock repurchases under our share repurchase program. Any decision to continue to execute our currently outstanding share repurchase program will depend on our earnings, capital requirements, financial condition and other factors considered relevant by our Board of Directors. The Credit Agreement permits us to pay dividends to our stockholders and make share repurchases so long as there is no default under the Credit Agreement, our total funded debt to adjusted EBITDA ratio (as set forth in the Credit Agreement, the “consolidated net leverage ratio”) is no greater than 4.00 to 1.00, and pro forma liquidity is at least $50 million, including the revolving credit commitment minus amounts outstanding on the Revolver, issued letters of credit and swing loans. Furthermore, our Notes allow us to pay $25 million of dividends per fiscal year with no restrictions plus an unlimited amount of dividends so long as our consolidated total leverage ratio is not greater than 3.50 to 1.00, and there is no default under the indenture governing the Notes. 51 Our performance is subject to the general level of economic activity in the geographic regions and the industries we service. We believe, based on current economic conditions, that our cash on hand and funds from operations and the Credit Agreement will be sufficient to meet anticipated working capital, capital expenditures, general corporate requirements, repayment of the debt, share repurchases and dividend payments under our dividend policy during the next 12 months. However, if COVID-19 continues to persist or worsen, or the national or global economy, credit market conditions and/or labor markets were to deteriorate in the future, such changes could put negative pressure on demand for our services and affect our operating cash flows. If these conditions were to persist over an extended period of time, we may incur negative cash flows and it might require us to access additional borrowings under the Credit Agreement to meet our capital needs and/or discontinue our share repurchases and dividend policy. Cash and cash equivalents and marketable securities were $1,097.1 million and $863.3 million as of April 30, 2021 and 2020, respectively. Net of amounts held in trust for deferred compensation plans and accrued bonuses, cash and marketable securities were $642.1 million and $531.9 million at April 30, 2021 and 2020, respectively. As of April 30, 2021 and 2020, we held $382.8 million and $308.2 million, respectively of cash and cash equivalents in foreign locations, net of amounts held in trust for deferred compensation plans and to pay fiscal 2021 annual bonuses. Cash and cash equivalents consist of cash and highly liquid investments purchased with original maturities of three months or less. Marketable securities consist of mutual funds and investments in commercial paper, corporate notes/bonds and US Treasury and Agency securities. The primary objectives of our investment in mutual funds are to meet the obligations under certain of our deferred compensation plans, while the commercial paper, corporate notes/bonds and U.S. Treasury and Agency securities are available for general corporate purposes . As of April 30, 2021 and 2020, marketable securities of $246.4 million and $174.1 million, respectively, included equity securities of $175.6 million (net of gross unrealized gains of $30.0 million and gross unrealized losses of $0.1 million) and $141.4 million (net of gross unrealized gains of $3.6 million and gross unrealized losses of $6.5 million), respectively, were held in trust for settlement of our obligations under certain deferred compensation plans, of which $166.5 million and $132.1 million, respectively, are classified as non-current. These marketable securities were held to satisfy vested obligations totaling $157.3 million and $124.6 million as of April 30, 2021 and 2020, respectively. Unvested obligations under the deferred compensation plans totaled $26.5 million and $21.7 million as of April 30, 2021 and 2020, respectively. The net increase in our working capital of $124.2 million as of April 30, 2021 compared to April 30, 2020 is primarily attributable to increases in cash and cash equivalents and accounts receivables, partially offset by increases in compensation and benefits payable. Cash and cash equivalents increased due to cash flows from operations and positive effect of exchange rate changes on cash and cash equivalents, partially offset by capital expenditures, net purchases of marketable securities, repurchases of common stock and dividends to shareholders. The increase in compensation and benefits payable was primarily due to an increase in bonus liability on April 30, 2021 compared to April 30, 2020 and to a lesser extent an increase in the deferred compensation amounts due within a year . The increase in accounts receivable was due to higher fee revenue in the fourth quarter of fiscal 2021 compared to year-ago period and the timing of when the revenue was recognized during the quarter. In fiscal 2021 more revenue was generated towards the end of the quarter whereas in fiscal 2020 more revenue was generated at the beginning of the quarter. Cash provided by operating activities was $251.4 million in fiscal 2021, an increase of $15.1 million, compared to $236.3 million in fiscal 2020. Cash used in investing activities was $61.4 million in fiscal 2021 compared to $198.8 million in fiscal 2020. A decrease in cash used in investing activities was primarily due to cash paid for the acquisition of the Acquired Companies of $108.6 million in fiscal 2020 and an increase in the proceeds received from life insurance policies. Also contributing to a lower amount of cash used in investing activity was a decrease in the purchase of property and equipment in fiscal 2021 compared to fiscal 2020. Cash used in financing activities was $66.9 million in fiscal 2021 compared to cash provided by financing activities of $43.7 million in fiscal 2020. The change from cash provided to cash used in financing activities was primarily due to net proceeds from long term debt of $168.6 million in fiscal 2020 as a result of issuing the Notes in the year-ago period and paying off the amount outstanding under the prior revolving credit facility and an increase in payments on life insurance policy loans of $11.3 million. This was partially offset by lower cash used to repurchase shares of common stock of $62.1 million. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements and have not entered into any transactions involving unconsolidated, special purpose entities. 52 Contractual Obligations Contractual obligations represent future cash commitments and liabilities under agreements with third parties and exclude contingent liabilities for which we cannot reasonably predict future payment. The following table represents our contractual obligations as of April 30, 2021: Payments Due in: Note (1) Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years (in thousands) Operating lease commitments 15 $ 230,681 $ 56,636 $ 89,308 $ 64,003 $ 20,734 Finance lease commitments 15 2,437 1,084 1,223 130 — Accrued restructuring charges 13 6,985 6,410 — — 575 Interest payments on COLI loans (2) 11 37,927 4,432 8,855 8,727 15,913 Long-term debt 11 400,000 — — — 400,000 Estimated interest on long-term debt (3) 11 129,500 18,500 37,000 37,000 37,000 Total $ 807,530 $ 87,062 $ 136,386 $ 109,860 $ 474,222 (1) See the corresponding Note in the accompanying consolidated financial statements in Item 15. (2) Assumes COLI loans remain outstanding until receipt of death benefits on COLI policies and applies current interest rates on COLI loans ranging from 4.76% to 8.00% with total death benefits payable, net of loans under COLI contracts of $443.9 million at April 30, 2021. (3) Interest on the Notes payable semi-annually in arrears on June 15 and December 15 of each year, commenced on June 15, 2020. In addition to the contractual obligations above, we have liabilities related to certain employee benefit plans. These liabilities are recorded in our consolidated balance sheets. The obligations related to these employee benefit plans are described in Note 6— Deferred Compensation and Retirement Plans , in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K. Lastly, we have contingent commitments under certain employment agreements that are payable upon involuntary termination without cause, as described in Note 17— Commitments and Contingencies , in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K. Cash Surrender Value of Company Owned Life Insurance Policies, Net of Loans We purchased COLI policies or contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans. As of April 30, 2021 and 2020, we held contracts with gross cash surrender value (“CSV”) of $241.3 million and $238.7 million, respectively. Total outstanding borrowings against the CSV of COLI contracts were $80.0 million and $92.3 million as of April 30, 2021 and 2020, respectively. Such borrowings do not require annual principal repayments, bear interest primarily at variable rates and are secured by the CSV of COLI contracts. At April 30, 2021 and 2020, the net cash value of these policies was $161.3 million and $146.4 million, respectively. Total death benefits payable, net of loans under COLI contracts, were $443.9 million and $451.7 million at April 30, 2021 and 2020, respectively. Long-Term Debt On December 16, 2019, we completed a private placement of the Notes with a $400 million principal amount. We may redeem the Notes prior to maturity, subject to certain limitations and premiums defined in the indenture governing the Notes. At any time prior to December 15, 2022, we may redeem at a redemption price equal to 100% of the principal plus the Applicable Premium (as defined in the indenture), and accrued and unpaid interest. At any time prior to December 15, 2022, we may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the Notes, including any permitted additional Notes, at a redemption price equal to 104.625% of the principal amount and accrued and unpaid interest. At any time and from time to time on or after December 15, 2022, we may redeem the Notes at the applicable redemption prices set forth in the table below, plus accrued and unpaid interest, if redeemed during the 12-month period beginning on December 15 of each of the years indicated: Year Percentage 2022 102.313% 2023 101.156% 2024 and thereafter 100.000% The fair value of the Notes is classified as a Level 2 measurement in the fair value hierarchy. 53 The pay-off of the term loan outstanding under our Prior Credit Agreement is considered a debt modification and therefore, the previously incurred unamortized and current debt issuance costs is amortized over the life of the new issuance. The principal balance of the Revolver is due on the date of its termination. The Revolver matures on December 16, 2024 and any unpaid principal balance is payable on this date. The Revolver may also be prepaid and terminated early by us at any time without premium or penalty (subject to customary LIBOR breakage fees). At our option, loans issued under the Credit Agreement will bear interest at either LIBOR or an alternate base rate, in each case plus the applicable interest rate margin. The interest rate applicable to loans outstanding under the Credit Agreement may fluctuate between LIBOR plus 1.25% per annum to LIBOR plus 2.00% per annum, in the case of LIBOR borrowings (or between the alternate base rate plus 0.125% per annum and the alternate base rate plus 1.00% per annum, in the alternative), based upon our total funded debt to adjusted EBITDA ratio (as set forth in the Credit Agreement, the “consolidated net leverage ratio”) at such time. In addition, we will be required to pay to the lenders a quarterly commitment fee ranging from 0.175% to 0.35% per annum on the average daily unused amount of the Revolver, based upon our consolidated net leverage ratio at such time, and fees relating to the issuance of letters of credit. During fiscal 2020, the average interest rate on amounts outstanding under the current Revolver and the prior revolver was 3.34%. As of April 30, 2021 and 2020, there was no outstanding liability under the Revolver. The unamortized debt issuance costs associated with the Credit Agreement were $3.3 million and $4.2 million as of April 30, 2021 and 2020, respectively. As of April 30, 2021, we were in compliance with our debt covenants. We had a total of $646.0 million available under the Revolver after $4.0 million of standby letters of credit had been issued as of April 30, 2021 and 2020. We had a total of $11.0 million and $11.3 million of standby letters of credits with other financial institutions as of April 30, 2021 and 2020, respectively. The standby letters of credits were generally issued as a result of entering into office premise leases. Other than the factors discussed in this section and the potential impacts of the COVID-19 on our business, we are not aware of any other trends, demands or commitments that would materially affect liquidity or those that relate to our resources as of April 30, 2021. Accounting Developments Recently Adopted Accounting Standards In June 2016, the Financial Accounting Standards Board (the “FASB”) issued guidance on accounting for measurement of credit losses on financial instruments, which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The standard became effective for fiscal years beginning after December 15, 2019. We adopted this guidance as of May 1, 2020. The adoption of this guidance did not have a material impact on the consolidated financial statements. In January 2017, FASB issued guidance simplifying the test for goodwill impairment. The new guidance simplified the test for goodwill impairment by removing Step 2 from the goodwill impairment test. Companies now perform the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value not to exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendments of this standard became effective for goodwill impairment tests in fiscal years beginning after December 15, 2019. We adopted this guidance as of May 1, 2020. The adoption of this guidance did not have a material impact on the consolidated financial statements. In August 2018, FASB issued guidance amending the disclosure requirements for fair value measurements. The amendment removed and modified disclosures that are currently required and added additional disclosures that are deemed relevant. The amendments of this standard became effective for fiscal years beginning after December 15, 2019. We adopted this guidance as of May 1, 2020. The adoption of this guidance did not have a material impact on the consolidated financial statements. In August 2018, FASB also issued guidance amending accounting for internal-use software. The new guidance aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with developing or obtaining internal-use software. The amendments of this standard became effective for fiscal years beginning after December 15, 2019, with early adoption permitted. We adopted this guidance as of May 1, 2020. The adoption of this guidance did not have a material impact on the consolidated financial statements. In December 2019, FASB issued guidance on Simplifying the Accounting for Income Taxes. This update eliminated certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income 54 taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The update also simplified aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarified the accounting for transactions that result in a step-up in the tax basis of goodwill. The amendments of this standard are effective for fiscal year s beginning after December 15, 2020, with early adoption permitted. We early adopted this guidance in fiscal year beginning May 1, 2020 . The adoption of this guidance did not have a material impact on the consolidated financial statements . Recently Proposed Accounting Standards - Not Yet Adopted In March 2020, FASB issued guidance on Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance provides optional expedients and exceptions to the guidance on contract modifications and hedge accounting related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative rates. Entities can elect to adopt this guidance as of any date within an interim period that includes or is subsequent to March 12, 2020 and can adopt it for new contracts and contract modifications entered into through December 31, 2022. We will adopt this guidance in our fiscal year beginning May 1, 2022 and we may elect to apply the amendments prospectively through December 12, 2022. We are currently evaluating the impact of this accounting guidance, but do not anticipate that it will have a material impact on the consolidated financial statements.