What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-06-28 compared with 2021-06-28 · 263 added, 476 removed, 279 unchanged (73% of the section changed)

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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.

Similarly, statements that describe our objectives, plans or goals, as well as 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 constitute forward-looking statements.

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.

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, inflationary pressures 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, 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.

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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.

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.

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.

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:

We support this work with a comprehensive range of some of the world’s leading lP and data.

The Consulting teams employ an integrated approach across core solutions,

each one intended to strengthen our work and thinking in the next, to help clients execute their strategy in a digitally enabled world.

Digital delivers scalable tech-enabled solutions designed to identify the best structures, roles, capabilities and behaviors to drive businesses forward.

Our digital products give clients direct access to our proprietary data, client data and analytics to deliver clear insights with the training tools needed to align organizational structure with business strategy.

Executive Search helps organizations recruit board level, chief executive and other senior executive and general management talent to deliver lasting impact.

Our approach to placing talent that brings together our research-based IP, proprietary assessments, and behavioral interviewing with our practical experience to determine the ideal organizational fit.

Salary benchmarking then builds appropriate frameworks for compensation and retention.

This business is managed and reported on a geographic basis and represents four of the Company’s reportable segments (Executive Search North America, Executive Search EMEA, Executive Search Asia Pacific, and Executive Search Latin America).

RPO and Professional Search focuses on delivering enterprise talent acquisition solutions to our clients, at the professional level.

We leverage the power of people, process expertise, IP-enabled technology, and compensation information to do this.

Transaction sizes range from single professional searches to team, department, line of business projects, and global outsource recruiting solutions.

The Company 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 2022 include:

Approximately 76% of the executive searches we performed in fiscal 2022 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.

Our more than 4,300 search engagement clients in fiscal 2022 included many of the world’s largest and most prestigious public and private companies.

We have built strong client loyalty, with nearly 90% of the assignments performed during fiscal 2022 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

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

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.

In fiscal 2022, we acquired The Lucas Group, which brings substantial professional search and interim placement expertise to Korn Ferry and has enhanced our industry-leading search portfolio.

We also recently acquired Patina Solutions Group, an interim executive search firm that is expected to bring access to a vast network of C-suite, top-tier, and professional interim talent.

Performance Highlights

On November 1, 2021, we completed the acquisition of The Lucas Group for $90.9 million, net of cash acquired.

The Lucas Group contributes a substantial professional search and interim expertise that has enhance our search portfolio.

The Lucas Group is a professional search and interim staffing firm, targeting middle market businesses.

The addition of The Lucas Group to Korn Ferry’s broader talent acquisition portfolio – spanning Executive Search and RPO & Professional Search – is expected to accelerate our ability to capture additional share of this significant market.

The Lucas Group is included in the RPO & Professional Search segment.

On April 1, 2022, we completed the acquisition of Patina Solutions Group for $42.9 million, net of cash acquired.

Patina contributes a substantial interim executive solutions expertise across multiple industry verticals.

Patina’s vast network of C-suite, top-tier, and professional interim talent spans functional area of expertise such as finance, operations, legal, human resources, IT and more.

We believe this combination presents real, tangible opportunity for Korn Ferry and our clients looking for the right talent, who are highly agile, with specialized skills and expertise, to help them drive superior performance, including on an interim basis.

Patina offers solutions for today’s nomadic labor market.

Patina Solutions Group is included in the RPO & Professional Search segment.

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 2022, Adjusted EBITDA excluded $7.9 million of integration/acquisition costs, a $7.4 million impairment of right-of-use assets and a $1.9 million impairment of fixed assets.

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.

Consolidated and the subtotals of Executive Search Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures and have limitations as analytical tools .

They 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.

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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.

Fee revenue was $2,626.7 million during fiscal 2022, an increase of $816.7 million, or 45.1%, compared to $1,810.0 million in fiscal 2021, with increases in fee revenue across all lines of business primarily due to the increasing relevance of the Company’s solutions and the acquisition of companies in the RPO and Professional Search Segment.

Exchange rates unfavorably impacted fee revenue by $2.8 million during fiscal 2022 compared to fiscal 2021.

Net income attributable to Korn Ferry increased by $211.9 million during fiscal 2022 to $326.4 million from $114.5 million in fiscal 2021 .

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.

Adjusted EBITDA was $538.9 million, an increase of $252.6 million during fiscal 2022, from Adjusted EBITDA of $286.3 million in fiscal 2021.

During fiscal 2022, the Executive Search, RPO & Professional, Consulting, and Digital lines of business contributed $257.6 million, $165.1 million, $116.1 million, and $110.1 million, respectively, offset by Corporate expenses net of other income of $110.0 million.

Our cash, cash equivalents and marketable securities increased by $114.0 million to $1,211.1 million at April 30, 2022, compared to $1,097.1 million at April 30, 2021.

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.

This increase was mainly due to cash flows from operations as a result of cost savings initiatives that were put in place in fiscal 2021, partially offset by cash paid for the acquisitions of The Lucas Group and Patina Solutions net of cash acquired, repurchases of our common stock in the open market, the negative effect of exchange rate changes on cash and cash equivalents, 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 2022.

As of April 30, 2022, we held marketable securities to settle obligations under our Executive Capital Accumulation Plan (“ECAP”) with a cost value of $164.2 million and a fair value of $168.7 million.

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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 .

We had $645.3 million and $646.0 million available for borrowing under our Revolver (as defined herein) at April 30, 2022 and 2021, respectively.

As of April 30, 2022 and 2021, there was $4.7 million and $4.0 million of standby letters of credit issued, respectively, under our long-term debt arrangements.

We had a total of $10.0 million and $11.0 million of standby letters of credits with other financial institutions as of April 30, 2022 and 2021, respectively.

Our Annual Report on Form 10-K for the year ended April 30,2021 includes a discussion and analysis of our financial condition and results of operations for the year ended April 30, 2021 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Critical Accounting Policies

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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.

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.

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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”):

Revenue contracts with customers are evaluated based on the five-step model outlined in Accounting Standard Codification 606 (“ASC 606”), Revenue from Contracts with Customers:

1) identify the contract with a customer;

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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.

Fee revenue from Executive Search 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.

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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.

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.

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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.

Our most significant assets for which management is required to prepare valuations are carrying value of receivables, goodwill, other intangible assets, share-based payments, leases 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.

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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).

Fair value of goodwill for purposes of the goodwill impairment test when performing the quantitative 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.

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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.

The qualitative test performed as of January 31, 2022 did not indicate any impairment, and therefore there was no need to perform a quantitative test.

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.

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Net income attributable to Korn Ferry

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:

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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.

These figures are non-GAAP financial measures and are presented as they are consistent with the Company’s lines of business and are financial metrics used by the Company’s investor base.

Year Ended April 30, 2022

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Net income attributable to noncontrolling interest

Other income, net

Other loss, net

Interest expense, net

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Depreciation and amortization

Other income, net

Other loss, net

Integration/acquisition costs

Restructuring charges, net

Impairment of fixed assets

Impairment of right of use assets

Adjusted EBITDA

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Net income attributable to noncontrolling interest

Other loss, net

Other income, net

Interest expense, net

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Depreciation and amortization

Other loss, net

Other income, net

Integration/acquisition costs

Restructuring charges, net

Separation costs

Adjusted EBITDA

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Net income attributable to noncontrolling interest

Other income, net

Other loss, net

Interest expense, net

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Depreciation and amortization

Other income, net

Other loss, net

Integration/acquisition costs

Tradename write-offs

Restructuring charges, net

Separation costs

Adjusted EBITDA

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Fiscal 2022 Compared to Fiscal 2021

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 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 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.

Fee revenue increased by $816.7 million, or 45.1%, to $2,626.7 million in fiscal 2022 compared to $1,810.0 million in fiscal 2021.

Exchange rates unfavorably impacted fee revenue by $2.8 million, in fiscal 2022 compared to fiscal 2021.

The higher fee revenue was attributable to increases in all lines of business primarily due to an increase in new business driven by the increased relevance of the Company’s solutions and the acquisition of companies in the RPO & Professional Search.

Further, COVID-19 had adversely impacted demand for the Company’s services on a worldwide basis in fiscal 2021.

Consulting reported fee revenue of $650.2 million in fiscal 2022, an increase of $134.4 million, or 26%, compared to $515.8 million in fiscal 2021.

The increase in fee revenue was partially driven by our Organizational Strategy work in organization and job redesign, people strategy and culture transformation.

In addition, our diversity, equity & inclusion (“DE&I”) business remained strong in fiscal 2022 as we helped clients move the needle on their diversity efforts.

Also, greater expectations for organizations to be a force for good in society more broadly has been increasing demand for our environmental and social governance (“ESG”) and sustainability offerings.

Leadership Development continues to focus on the importance of increasing employee engagement through coaching and structured leadership workshops.

Assessment and Succession increased as clients rely on Korn Ferry’s robust data, science and IP to fuel leadership and scaled workforce transformations.

Finally, growth in Total Rewards was fueled by global compensation and retention challenges associated with labor market dislocation;

merger & acquisition and IPO activity;

and increased focus on executive pay and governance issues, all of which increased pressure to offer higher and more competitive compensation.

Exchange rates unfavorably impacted fee revenue by $2.8 million, or 1%, compared to fiscal 2021.

Digital reported fee revenue of $349.0 million in fiscal 2022, an increase of $61.7 million, or 21%, compared to $287.3 million in fiscal 2021.

The increase in fee revenue was primarily due to Professional Development where we targeted new offerings and partnerships in fiscal 2022 to meet the growing need of companies focusing on sales effectiveness.

We had double digit increases in fee revenue across our other solutions focusing on assessment, total rewards and organizational strategy as companies focused on retaining and rewarding key talent to reduce levels of attrition from dislocation in the labor markets.

Exchange rates unfavorably impacted fee revenue by $1.8 million, or 1%, compared to fiscal 2021.

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 North America reported fee revenue of $605.7 million in fiscal 2022, an increase of $208.4 million, or 52%, compared to $397.3 million in fiscal 2021.

Exchange rates favorably impacted fee revenue by $1.3 million in fiscal 2022 compared to fiscal 2021.

North America’s fee revenue was higher due to a 35% increase in the number of engagements billed and a 12% increase in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2022 compared to fiscal 2021.

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 EMEA reported fee revenue of $182.2 million in fiscal 2022, an increase of $43.2 million, or 31%, compared to $139.0 million in fiscal 2021.

Exchange rates unfavorably impacted fee revenue by $0.5 million in fiscal 2022 compared to fiscal 2021.

The increase in fee revenue was due to a 15% increase in the number of engagements billed and a 14% increase in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2022 compared to fiscal 2021.

The performance in the United Kingdom, France, the United Arab Emirates and Belgium were the primary contributors to the increase in fee revenue in fiscal 2022 compared to fiscal 2021, driving $31.0 million of increased revenue.

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.

Executive Search Asia Pacific reported fee revenue of $118.6 million in fiscal 2022, an increase of $35.3 million, or 42%, compared to $83.3 million in fiscal 2021.

Exchange rates favorably impacted fee revenue by $0.6 million, or 1%, in fiscal 2022 compared to fiscal 2021.

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.

The increase in fee revenue was due to a 27% increase in the number of engagements billed and an 11% increase in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2022 compared to fiscal 2021.

The performance in Australia, India, China and Singapore were the primary contributors to the increase in fee revenue in fiscal 2022 compared to fiscal 2021, contributing $28.8 million of increased fee revenue.

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.

Executive Search Latin America reported fee revenue of $29.1 million in fiscal 2022, an increase of $11.6 million, or 66%, compared to $17.5 million in fiscal 2021.

Exchange rates favorably impacted fee revenue by $0.2 million, or 1%, in fiscal 2022 compared to fiscal 2021.

The increase in fee revenue was due to a 34% increase in the number of engagements billed and a 22% increase in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2022 compared to fiscal 2021.

The performance in Mexico, Brazil and Chile were the primary contributors to the increase in fee revenue in fiscal 2022 compared to fiscal 2021, driving $9.4 million of increased revenue.

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.

RPO & Professional Search reported fee revenue of $691.9 million in fiscal 2022, an increase of $322.0 million, or 87%, compared to $369.9 million in fiscal 2021.

Exchange rates favorably impacted fee revenue by $0.2 million compared to fiscal 2021.

The increase in fee revenue was due to higher fee revenue in

Professional Search of $166.2 million and RPO of $ 1 55 .

8 million due to wider adoption of RPO services in the market .

T he increase in Professional Search is due to an 86 % increase in engagements billed and a 21 % increase in the weighted-average fees billed per engagement in fiscal 2022 compared to fiscal 2021.

The increase in Professional Search was also due to the acquisition of The Lucas Group and Patina Solutions Group (“Acquisitions”) , which contributed $69.3 million and $4.1 million of fee revenue , respectively .

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.

Compensation and benefits expense increased $443.6 million, or 34% to $1,741.5 million in fiscal 2022 from $1,297.9 million in fiscal 2021.

Exchange rates favorably impacted compensation and benefits by $0.3 million in fiscal 2022 compared to fiscal 2021.

The increase in compensation and benefits expense was primarily due to increases in salaries and related payroll taxes of $230.4 million, performance-related bonus expense of $160.3 million, amortization of long-term incentive awards of $16.4 million, employer insurance of $13.8 million and the use of outside contractors of $9.3 million.

These increases were due to the increase in fee revenue combined with increases in overall profitability and average headcount.

Also contributing to higher compensation and benefit expense was an increase in commission expense of $28.5 million due to the Acquisitions, partially offset by a decrease in deferred compensation expenses of $30.7 million as a result of decreases in the fair value of participants’ accounts in fiscal 2022 compared to fiscal 2021.

Compensation and benefits expense, as a percentage of fee revenue, decreased to 66% in fiscal 2022 from 72% in fiscal 2021.

Consulting compensation and benefits expense increased by $90.5 million, or 25%, to $450.9 million in fiscal 2022 from $360.4 million in fiscal 2021.

Exchange rates favorably impacted compensation and benefits by $1.2 million in fiscal 2022 compared to fiscal 2021.

The increase in compensation and benefits expense was primarily due to increases in salaries and related payroll taxes of $48.9 million, performance-related bonus expense of $24.5 million, amortization of long-term incentive awards of $5.0 million and employer insurance of $2.7 million due to an increase in fee revenue combined with increases in overall profitability and average headcount in fiscal 2022 compared to fiscal 2021.

Consulting compensation and benefits expense, as a percentage of fee revenue, decreased to 69% in fiscal 2022 from 70% in fiscal 2021.

Digital compensation and benefits expense increased by $31.1 million, or 21%, to $177.8 million in fiscal 2022 from $146.7 million in fiscal 2021.

The impact of exchange rates was essentially flat in fiscal 2022 compared to fiscal 2021.

The increase in compensation and benefits expense was primarily due to increases in performance-related bonus expense of $11.4 million, salaries and related payroll taxes of $7.9 million and commission expenses of $5.8 million in fiscal 2022 compared to fiscal 2021 as a result of an increase in fee revenue combined with increases in overall profitability and average headcount.

Digital compensation and benefits expense, as a percentage of fee revenue, was 51% in both fiscal 2022 and fiscal 2021.

Executive Search North America compensation and benefits expense increased by $77.6 million, or 26%, to $377.1 million in fiscal 2022 compared to $299.5 million in fiscal 2021.

Exchange rates unfavorably impacted compensation and benefits by $0.7 million in fiscal 2022 compared to fiscal 2021.

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.

The increase was primarily due to increases in performance-related bonus expense of $82.6 million and salaries and related payroll taxes of $24.6 million due to the increase in fee revenue combined with increases in overall profitability and average headcount in fiscal 2022 compared to fiscal 2021.

The increases in compensation and benefit expense was partially offset by a decrease in the amounts owed under certain deferred compensation and retirement plans $35.4 million due to a decrease in the fair market value of the participants’ accounts in fiscal 2022 compared to fiscal 2021.

Executive Search North America compensation and benefits expense, as a percentage of fee revenue, decreased to 62% in fiscal 2022 from 75% in fiscal 2021.

Executive Search EMEA compensation and benefits expense increased by $22.0 million, or 20%, to $133.1 million in fiscal 2022 compared to $111.1 million in fiscal 2021.

Exchange rates favorably impacted compensation and benefits by $0.5 million in fiscal 2022 compared to fiscal 2021.

The increase was primarily due to higher salaries and related payroll taxes of $12.6 million and performance-related bonus expense of $8.2 million in fiscal 2022 compared to fiscal 2021 due to the increase in fee revenue combined with an increase in overall profitability.

Executive Search EMEA compensation and benefits expense, as a percentage of fee revenue, decreased to 73% in fiscal 2022 from 80% in fiscal 2021.

Executive Search Asia Pacific compensation and benefits expense increased by $14.0 million, or 24%, to $72.3 million in fiscal 2022 compared to $58.3 million in fiscal 2021.

Exchange rates unfavorably impacted compensation and benefits by $0.4 million, or 1%, in fiscal 2022 compared to fiscal 2021.

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.

The increase was primarily due to increases in performance-related bonus expense of $10.2 million and salaries and related payroll taxes of $6.2 million in fiscal 2022 compared to fiscal 2021 due to an increase in fee revenue combined with an increase overall profitability.

Executive Search Asia Pacific compensation and benefits expense, as a percentage of fee revenue, decreased to 61% in fiscal 2022 from 70% in fiscal 2021.

Executive Search Latin America compensation and benefits expense increased by $4.3 million, or 30% , to $18.4 million in fiscal 2022 compared to $14.1 million in fiscal 2021 .

Exchange rates unfavorably impacted compensation and benefits by $0.3 million, or 2% , in fiscal 2022 compared to fiscal 2021 .

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

America compensation and benefits expense, as a percentage of fee revenue, increased to 80% in fiscal 2021 from 64% in fiscal 2020 .

The in crease was primarily due to higher salaries and related payroll taxes of $2.0 million and performance-related bonus expense of $1.4 million in fiscal 2022 compared to fiscal 2021 due to an increase in fee revenue combined with an increase in overall profitability .

Executive Search Latin America compensation and benefits expense, as a percentage of fee revenue, decreased to 63% in fiscal 2022 from 80% in fiscal 2021 .

RPO & Professional Search compensation and benefits expense increased by $187.4 million, or 71%, to $452.0 million in fiscal 2022 from $264.6 million in fiscal 2021.

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.

The impact of exchange rates was essentially flat in fiscal 2022 compared to fiscal 2021.

The increase was due to higher salaries and related payroll taxes of $122.1 million, performance-related bonus expense of $17.6 million, employer insurance of $8.4 million and the use of outside contractors of $5.0 million due to the increase in fee revenue combined with increases in overall profitability and average headcount in fiscal 2022 compared to fiscal 2021.

Also contributing to the increase in compensation and benefit was an increase in commission expenses of $22.7 million and integration and acquisition costs of $1.9 million driven by the Acquisitions.

RPO & Professional Search compensation and benefits expense, as a percentage of fee revenue, decreased to 65% in fiscal 2022 from 72% in fiscal 2021.

Corporate compensation and benefits expense increased by $16.5 million, or 38%, to $59.7 million in fiscal 2022 from $43.2 million in fiscal 2021.

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.

The increase of $7.2 million was due to the changes in cash surrender value (“CSV”) of the company-owned life insurance (“COLI”) contracts due to lower death benefits recognized in fiscal 2022 compared to fiscal 2021.

Also contributing to the increase was higher salaries and related payroll taxes of $6.0 million and performance-related bonus expense of $4.2 million due to an increase in consolidated fee revenue, combined with increases in overall profitability and average headcount in fiscal 2022 compared to fiscal 2021.

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 increased $45.5 million, or 24%, to $237.3 million in fiscal 2022 compared to $191.8 million in fiscal 2021.

Exchange rates favorably impacted general and administrative expenses by $0.9 million in fiscal 2022 compared to fiscal 2021.

The increase in general and administrative expenses was primarily due to higher marketing and business development expenses of $14.0 million, which contributed to the increase in fee revenue and new business in fiscal 2022, as well as an increase in premise and office expense of $6.9 million, bad debt expense of $5.8 million and legal and other professional fees of $5.3 million.

In addition the Company recorded impairment charges associated with the reduction of the Company’s real estate footprint of $9.3 million and integration and acquisition costs of $6.0 million incurred with the acquisition of The Lucas Group that closed on November 1, 2021 and Patina Solutions Group that closed on April 1, 2022.

General and administrative expenses, as a percentage of fee revenue, decreased to 9% in fiscal 2022 from 11% in fiscal 2021.

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 increased by $2.9 million, or 6%, to $51.5 million in fiscal 2022 compared to $48.6 million in fiscal 2021.

The increase in general and administrative expenses was primarily due to impairment charges associated with the reduction of the Company’s real estate footprint of $2.8 million in fiscal 2022.

Consulting general and administrative expenses, as a percentage of fee revenue, decreased to 8% in fiscal 2022 from 9% in fiscal 2021.

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 increased by $1.9 million, or 7%, to $31.0 million in fiscal 2022 compared to $29.1 million in fiscal 2021.

The increase in general and administrative expenses was primarily due to impairment charges associated with the reduction of the Company’s real estate footprint of $1.5 million in fiscal 2022.

Digital general and administrative expenses, as a percentage of fee revenue, decreased to 9% in fiscal 2022 from 10% in fiscal 2021.

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.

Executive Search North America general and administrative expenses increased by $3.9 million, or 14%, to $30.8 million in fiscal 2022 from $26.9 million in fiscal 2021.

The increase in general and administrative expenses was primarily due to increases in business development expenses of $2.4 million and bad debt expense of $0.7 million.

Executive Search North America general and administrative expenses, as a percentage of fee revenue, was 5% in fiscal 2022 compared to 7% in fiscal 2021.

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

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 EMEA general and administrative expenses increased by $2.0 million, or 13%, to $18.0 million in fiscal 2022 from $16.0 million in fiscal 2021.

The increase in general and administrative expenses was primarily due to impairment charges associated with the reduction of the Company’s real estate footprint of $1.1 million and the impact of foreign currency with foreign exchange losses of $0.7 million in fiscal 2022 compared to foreign currency gains of $0.3 million in fiscal 2021.

Executive Search EMEA general and administrative expenses, as a percentage of fee revenue was 10% in fiscal 2022 compared to 12% in fiscal 2021.

Executive Search Asia Pacific general and administrative expenses increased by $2.4 million, or 28%, to $11.0 million in fiscal 2022 from $8.6 million in fiscal 2021.

The increase in general and administrative expenses was primarily due to higher bad debt expense of $1.0 million in fiscal 2022 compared to fiscal 2021.

Executive Search

Asia Pacific general and administrative expenses, as a percentage of fee revenue , was 9% in fiscal 2022 compared to 10% in fiscal 2021 .

Executive Search Latin America general and administrative expenses decreased by $1.3 million, or 59%, to $0.9 million in fiscal 2022 from $2.2 million in fiscal 2021.

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.

The decrease in general and administrative expenses was primarily due to lower premise and office expenses of $1.4 million in fiscal 2022 compared to fiscal 2021.

Executive Search Latin America general and administrative expenses, as a percentage of fee revenue, was 3% in fiscal 2022 compared to 12% in fiscal 2021.

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.

RPO & Professional Search general and administrative expenses increased by $15.8 million, or 64%, to $40.6 million in fiscal 2022 from $24.8 million in fiscal 2021.

The increase in general and administrative expenses was primarily due to an increase in premise and office expense $5.3 million, higher bad debt expense of $3.7 million, impairment charges associated with the reduction of the Company’s real estate footprint of $3.9 million and integration and acquisition costs associated with the Acquisitions of $1.8 million.

RPO & Professional Search general and administrative expenses, as a percentage of fee revenue, was 6% in fiscal 2022 compared to 7% in fiscal 2021.

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.

Corporate general and administrative expenses increased by $18.0 million, or 51%, to $53.5 million in fiscal 2022 compared to $35.5 million in fiscal 2021.

The increase in general and administrative expenses was primarily due to higher marketing expense of $7.2 million, integration and acquisition costs of $4.2 million incurred with the Acquisitions in fiscal 2022, legal and other professional fees of $3.8 million and an increase of $1.5 million in charitable contributions in fiscal 2022 compared to fiscal 2021.

Cost of Services Expense

1 unchanged sentence

Cost of services expense was $114.4 million in fiscal 2022 compared to $72.0 million in fiscal 2021.

Cost of services expense, as a percentage of fee revenue, was 4% in both fiscal 2021 and 2020.

The increase was due to an increase in fee revenue and the Acquisitions.

Cost of services expense, as a percentage of fee revenue, was 4% in both fiscal 2022 and fiscal 2021.

Depreciation and Amortization Expenses

Depreciation and amortization expenses were $63.5 million in fiscal 2022, an increase of $1.7 million, or 3%, compared to $61.8 million in fiscal 2021.

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.

The increase was primarily due to the technology investments made in the current and prior year in software for our Digital business and the Acquisitions.

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.

There were no restructuring charges, net during fiscal 2022.

In April 2020, we implemented a restructuring plan in response to the uncertainty caused by COVID-19 that resulted in reductions in our workforce in the fourth quarter of fiscal 2020.

We continued the implementation of this plan in fiscal 2021 and as a result recorded restructuring charges, net of $30.7 million of severance costs in fiscal 2021.

Net Income Attributable to Korn Ferry

Net income attributable to Korn Ferry increased by $211.9 million to $326.4 million in fiscal 2022 compared to $114.5 million in fiscal 2021.

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.

The increase in net income attributable to Korn Ferry was driven by the increase in fee revenue of $816.7 million, which was driven by the factors discussed above, and restructuring charges, net of $30.7 million incurred in fiscal 2021.

This was partially offset by increases in compensation and benefits expense of $443.6 million, cost of services expense of $42.4 million associated with the higher levels of business demand, a higher income tax provision of $54.0 million and general and an increase in administrative expenses of $45.5 million.

The rest of the change is due to other loss, net of $11.9 million in fiscal 2022 compared to other income, net of $37.2 million in fiscal 2021.

Net income attributable to Korn Ferry, as a percentage of fee revenue, was 12% in fiscal 2022 as compared to 6% in fiscal 2021.

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.

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.

Adjusted EBITDA increased by $252.6 million to $538.9 million in fiscal 2022 compared to $286.3 million in fiscal 2021.

The increase in Adjusted EBITDA was driven by the increase in fee revenue, partially offset by increases in compensation and benefits expense (excluding integration/acquisition costs), cost of services expense, and general and administrative expenses (excluding integration/acquisition costs and impairment charges).

Adjusted EBITDA, as a percentage of fee revenue, was 21% and 16% in fiscal 2022 and 2021.

Consulting Adjusted EBITDA was $116.1 million in fiscal 2022, an increase of $34.6 million, or 42%, compared to $81.5 million in fiscal 2021.

The increase in Adjusted EBITDA was driven by higher fee revenue in the segment, as well as cost savings realized from work being conducted virtually.

These changes were partially offset by increases in compensation and benefits expense and cost of services expense.

Consulting Adjusted EBITDA, as a percentage of fee revenue, was 18% in fiscal 2022 compared to 16% in fiscal 2021.

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 A djusted EBITDA was $110.1 million in fiscal 2022 , an increase of $24.0 million, or 28% , compared to $86.1 million in fiscal 2021 .

The increase in Adjusted EBITDA was mainly driven by the increase in fee revenue in the segment, as well as cost savings realized from work being conducted virtually.

These changes were partially offset by increases in compensation and benefits expense (excluding integration/acquisition costs) and cost of services expense in fiscal 2022 compared to fiscal 2021.

Digital Adjusted EBITDA, as a percentage of fee revenue, was 32% in fiscal 2022 as compared to 30% in fiscal 2021 .

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 increased by $83.5 million, or 85%, to $181.6 million in fiscal 2022 compared to $98.1 million in fiscal 2021.

The increase was driven by higher fee revenue in the segment, partially offset by an increase in compensation and benefits expense and general and administrative expenses.

Executive Search North America Adjusted EBITDA, as a percentage of fee revenue, was 30% in fiscal 2022 compared to 25% in fiscal 2021.

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.

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 increased by $20.1 million, or 172%, to $31.8 million in fiscal 2022 compared to $11.7 million in fiscal 2021.

The increase in Adjusted EBITDA was driven by higher fee revenue in the segment, partially offset by increases in compensation and benefits expense and general and administrative expenses (excluding impairment charges).

Executive Search EMEA Adjusted EBITDA, as a percentage of fee revenue, was 17% in fiscal 2022 compared to 8% in fiscal 2021.

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.

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 increased by $18.4 million, or 110%, to $35.1 million in fiscal 2022 compared to $16.7 million in fiscal 2021.

The increase in Adjusted EBITDA was driven by higher fee revenue in the segment, partially offset by increases in the compensation and benefits expense and general and administrative expenses.

Executive Search Asia Pacific Adjusted EBITDA, as a percentage of fee revenue, was 30% in fiscal 2022 compared to 20% in fiscal 2021.

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.

Executive Search Latin America Adjusted EBITDA increased by $7.8 million to $9.1 million in fiscal 2022 compared to $1.3 million in fiscal 2021.

The increase in Adjusted EBITDA was driven by higher fee revenue in the segment, partially offset by an increase in compensation and benefit expense.

Executive Search Latin America Adjusted EBITDA, as a percentage of fee revenue, was 31% in fiscal 2022 compared to 7% in fiscal 2021.

RPO & Professional Search Adjusted EBITDA was $165.1 million in fiscal 2022, an increase of $95.7 million, or 138%, compared to $69.4 million in fiscal 2021.

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.

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 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 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 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.

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

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

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

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.

The increase in Adjusted EBITDA was mainly driven by higher fee revenue in the segment, partially offset by increases in compensation and benefits expense (excluding integration/acquisition costs), cost of services expense, and general and administrative expenses (excluding impairment charges and integration and acquisition costs).

RPO & Professional Search Adjusted EBITDA, as a percentage of fee revenue, was 24% in fiscal 2022 compared to 19% in fiscal 2021.

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Other loss, net was $11.9 million in fiscal 2022 compared to other income, net of $37.2 million in fiscal 2021.

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.

The difference was primarily due to losses from the fair value of our marketable securities in fiscal 2022 compared to gains in fiscal 2021.

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 primarily relates to our Notes issued in December 2019 and borrowings under our COLI policies, which are partially offset by interest earned on cash and cash equivalent balances.

Interest expense, net was $25.3 million in fiscal 2022 compared to $29.3 million in fiscal 2021.

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.

Interest expense, net decreased due to interest income earned on the death benefits received from our COLI policies in fiscal 2022 and lower interest expense on borrowings under our COLI policies in fiscal 2022 compared to fiscal 2021 due to the lower amount of borrowings outstanding.

Income Tax Provision

The provision for income tax was $102.1 million in fiscal 2022 compared to $48.1 million in fiscal 2021.

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.

This reflects a 24% effective tax rate for fiscal 2022 compared to a 29% effective tax rate for fiscal 2021.

In addition to the impact of U.S.

state income taxes and jurisdictional mix of earnings, which generally create variability in our effective tax rate over time, the lower effective tax rate in fiscal 2022 was partially attributable to a tax benefit recorded in connection with tax credits claimed in the current year for eligible research and development expenditures.

The fiscal 2021 effective tax rate was higher due to a tax expense recorded for withholding taxes on intercompany dividends that are not eligible for credit and a shortfall recorded in connection with stock-based awards that vested in fiscal 2021.

The shortfall is the amount by which the Company’s tax deduction for these awards, based on the fair market value of the awards on the date of vesting, is less than the expense recorded in the Company’s financial statements over the awards’ vesting period.

Conversely, the Company recorded a tax benefit for a windfall in connection with stock-based awards that vested in fiscal 2022.

Net Income Attributable to Noncontrolling Interest

Net income attributable to noncontrolling interest was $2.1 million in both fiscal 2020 and 2019.

Net income attributable to noncontrolling interest was $4.5 million and $1.1 million in fiscal 2022 and fiscal 2021, respectively.

Liquidity and Capital Resources

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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.

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.

Additionally, the Company considers share repurchases on an opportunistic basis and subject to the terms of our Amended Credit Agreement (defined below) as well as using excess cash to repay the Notes.

On April 1, 2022, we completed the acquisition of Patina Solutions Group for $42.9 million, net of cash acquired.

We believe Patina Solutions Group contributes a substantial interim executive solutions expertise across multiple industry verticals as well as offers ideal solutions for today’s nomadic labor market.

Patina Solutions Group’s vast network of C-suite, top-tier, and professional interim talent spans functional areas of expertise such as finance, operations, legal, human resources, IT and more.

This combination presents real, tangible opportunity for Korn Ferry and our clients looking for the right talent, who are highly agile, with specialized skills and expertise, to help them drive superior performance, including on an interim basis.

Patina Solutions Group offers.

On November 1, 2021, we completed the acquisition of The Lucas Group for $90.9 million, net of cash acquired.

The Lucas Group contributes a substantial professional search and interim expertise that is expected to enhance our search portfolio.

The Lucas Group is a professional search and interim staffing firm, targeting middle market businesses.

The addition of The Lucas Group to Korn Ferry’s broader talent acquisition portfolio – spanning Executive Search, RPO & Professional Search – is expected to accelerate our ability to capture additional share of this significant market.

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.

2 unchanged sentences

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 Notes are guaranteed by each of our existing and future wholly owned domestic subsidiaries to the extent such subsidiaries guarantee our obligations 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.

As of April 30, 2022 , the fair value of the Notes was $ 379.5 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 c redit a greement (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 1 1 — 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.

We ha d a total of $ 64 5 .

3 million and $646.0 million available under our $650.0 million five-year senior secured revolving credit facility (the “Revolver”) after $4.7 million and $ 4 .

0 million of standby letters of credit had been issued as of April 30, 2022 and 202 1, respectively .

We had a total of $ 1 0 .

0 million and $ 11 .

0 million of standby letters of credits with other financial institutions as of April 30, 2022 and 2021 , res pectively.

The standby letters of credits were generally issued as a result of entering into office premise leases.

One June 24, 2022, we entered into an Amendment to the Credit Agreement (as amended by the Amendment, the “Amended Credit Agreement”) with the lenders party thereto and Bank of America, National Association as administrative agent, to, among other things, extend the existing maturity date and provide for a new delayed draw term loan facility.

The Amended Credit Agreement provides for five-year senior secured credit facilities in an aggregate amount of $1,150 million comprised of a $650.0 million revolving credit facility and a $500 million delayed draw term loan facility.

The Amended Credit Agreement also provides that, under certain circumstances, the Company may incur term loans or increase the aggregate principal amount of revolving commitments by an aggregate amount of up to $250 million.

See Note 18— Subsequent Events – Credit Facility for a further description of the Amended Credit Agreement.

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.

On June 21, 2021, the Board of Directors increased the quarterly dividend to $0.12 per share.

On June 21, 2022, the Board of Directors approved a 25% increase in the quarterly dividend, which increased the quarterly dividend to $0.15 per share.

The Amended Credit Agreement permits us to pay dividends to our stockholders and make share repurchases so long as there is no default under the Amended Credit Agreement, our total funded debt to adjusted EBITDA ratio (as set forth in the Amended Credit Agreement, the “consolidated net leverage ratio”) is no greater than 5.00 to 1.00, and we are in pro forma compliance with our financial covenant.

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.

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.

On June 21, 2022, our Board of Directors approved an increase to the share repurchase program of approximately $300 million, which at the time brought our available capacity to repurchase shares in the open market or privately negotiated transactions to $318 million.

The Company repurchased approximately $98.8 million and $30.4 million of the Company’s stock during fiscal 2022 and 2021, 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.

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.

We believe, based on current economic conditions, that our cash on hand and funds from operations and the Amended Credit Agreement will be sufficient to meet anticipated working capital, capital expenditures, general corporate requirements, debt repayments, share repurchases and dividend payments under our dividend policy during the next 12 months.

However, if 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 Amended Credit Agreement to meet our capital needs and/or discontinue our share repurchases and dividend policy.

Cash and cash equivalents and marketable securities were $1,211.1 million and $1,097.1 million as of April 30, 2022 and 2021, 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.

Net of amounts held in trust for deferred compensation plans and accrued bonuses, cash and cash equivalents and marketable securities were $605.4 million and $642.1 million at April 30, 2022 and 2021, respectively.

As of April 30, 2022 and 2021, we held $416.7 million and $382.8 million, respectively of cash and cash equivalents and marketable securities in foreign locations, net of amounts held in trust for deferred compensation plans and to pay accrued 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.

Marketable securities consist of mutual funds and investments in commercial paper, corporate notes/bonds and U.S.

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.

As of April 30, 2022 and 2021 , marketable securities of $ 2 33 .

0 million and $ 246.4 million, respectively, included equity securities of $ 1 68 .

7 million (net of gross unrealized gains of $ 10 .

7 million and gross unrealized losses of $ 6 .

1 million) and $ 175.6 million (net of gross unrealized gains of $ 3 0 .

0 million and gross unrealized losses of $ 0 .

1 million), respectively, and were held in trust for settlement of our obligations under certain deferred compensation plans, of which $ 1 5 8 .

7 million and $ 1 66 .

5 million, respectively, are classified as non-current.

These marketable securities were held to satisfy vested obligations totaling $160.8 million and $ 1 57 .

3 million as of April 30, 2022 and 2021 , respectively.

Unvested obligations under the deferred compensation plans totaled $24.0 million and $ 2 6 .

5 million as of April 30, 2022 and 2021 , respectively.

The net increase in our working capital of $38.6 million as of April 30, 2022 compared to April 30, 2021 is primarily attributable to increase s in cash and cash equivalents and accounts receivables, partially offset by increases in compensation and benefits payable and other accrued liabilities.

Cash and cash equivalents increased primarily due to cash from operations, partially offset by the Acquisitions, purchase of property and equipment, repurchase of common stock and dividends issued to shareholders.

The increase in accounts receivable was due to higher revenue in the fourth quarter of fiscal 2022 compared to fiscal 2021.

Compensation and benefits payable increased due to higher performance-related bonus liability as a result of higher fee revenue while the increase in other accrued liabilities was due to higher levels of new business.

Cash provided by operating activities was $501.7 million in fiscal 2022, an increase of $250.3 million, compared to $251.4 million in fiscal 2021.

Cash used in investing activities was $184.3 million in fiscal 2022 compared to $61.4 million in fiscal 2021.

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.

An increase in cash used in investing activities was primarily due to $133.8 million in cash paid for the Acquisitions, an increase in the purchase of property and equipment of $18.3 million and a decrease in proceeds received from life insurance policies of $15.3 million.

This was partially offset by an increase of proceeds received from sales of marketable securities for $22.8 million and a decrease in purchase of marketable securities for $21.5 million in fiscal 2022 compared to fiscal 2021.

Cash used in financing activities was $137.4 million in fiscal 2022 compared to cash used in financing activities of $66.9 million in fiscal 2021.

The increase in cash used in financing activities was primarily due to an increase in repurchases of shares of the Company’s common stock of $65.9 million in fiscal 2022 compared to fiscal 2021, higher cash used to repurchase shares of common stock to satisfy tax withholding requirements upon the vesting of restricted stock of $18.5 million in fiscal 2022 compared to $5.0 million in fiscal 2021 and an increase of $4.3 million in dividends paid to our shareholders.

This was partially offset by less payments made on life insurance policy loans of $12.1 million in fiscal 2022 compared to fiscal 2021.

Off-Balance Sheet Arrangements

16 unchanged sentences

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.

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.

6 unchanged sentences

Total death benefits payable, net of loans under COLI contracts, were $449.3 million and $443.9 million at April 30, 2022 and 2021, 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:

2024 and thereafter

The fair value of the Notes is classified as a Level 2 measurement in the fair value hierarchy.

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.

Other than the factors discussed in this section, 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, 2022.

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

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.

In March 2020, the Financial Accounting Standards Board (the “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 adopted this guidance in our fiscal year beginning May 1, 2021 and we elected to apply the amendments prospectively through December 12, 2022.

The adoption of this guidance did not have a material impact on the consolidated financial statements.

Recently Proposed Accounting Standards - Not Yet Adopted

In October 2021, the FASB issued an amendment in accounting for contract assets and contract liabilities from contracts with customers, which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASC 606, Revenue from Contracts with Customers .

The amendment of this standard becomes effective in fiscal years beginning after December 15, 2022.

The amendment should be applied prospectively to business combinations that occur after the effective date.

We will adopt this guidance in our fiscal year beginning May 1, 2023.

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.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis