What changed in this filing

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Item 9A. Controls and Procedures

2022-06-28 compared with 2021-06-28 · 263 added, 353 removed, 1306 unchanged (32% of the section changed)

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As of the end of the period covered by this Annual Report on Form 10-K, management, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures and internal controls over financial reporting.

Based on their evaluation of our disclosure controls and procedures conducted as of the end of the period covered by this Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934 (the “Exchange Act”)) are effective as of April 30, 2021.

Changes in Internal Control over Financial Reporting.

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Other Information

Named Executive Officer Employment Agreements

On June 28, 2021, the Company entered into (1) an amended and restated employment agreement with Gary Burnison (the “Burnison Agreement”), (2) an amended and restated employment agreement with Robert Rozek (the “Rozek Agreement”), (3) an employment agreement with Byrne Mulrooney (the “Mulrooney Agreement”) and (4) an employment agreement with Mark Arian (the “Arian Agreement” and collectively, the “NEO Agreements” and each, an “NEO Agreement”).

Each NEO Agreement supersedes the executive’s prior employment agreement or letter, as the case may be.

The NEO Agreements are terminable on notice by either party (on ninety days’ notice if by the executive or 30 days’ notice in the case of termination for “Good Reason”, as defined in the applicable NEO Agreement).

The NEO Agreements provide for the following annual compensation:

(1) an annual base salary, effective July 1, 2021, of $1,000,000 for Mr.

Burnison, $625,000 for Mr.

Rozek and $550,000 for each of Messrs.

Mulrooney and Arian;

(2) participation in the Company’s annual cash incentive plan with an annual target award of 150% of annual base salary for Mr.

Burnison, 120% of annual base salary for Mr.

Rozek and 100% of annual base salary for Messrs.

Mulrooney and Arian, and the ability to earn additional amounts up to a maximum cash award of 200% of the applicable target bonus opportunity for each executive;

and (3) subject to approval of the Compensation and Personnel Committee of the Board of Directors, participation in the Company’s equity incentive program.

In addition, the executives are eligible to participate in employee benefit plans, arrangements and programs maintained from time to time by the Company for the benefit of senior executives.

The Burnison Agreement provides for continuation of the Retention Award originally granted under his previous employment agreement with the Company dated March 30, 2018 in the amount of $5 million, which cliff vests on March 30, 2022 (the “Retention Vesting Date”).

Under the Burnison Agreement, interest will accrue on the Retention Award from March 30, 2022 until Mr.

Burnison’s termination of employment at 120% of the long-term Applicable Federal Rate as in effect from time to time.

The Retention Award, together with accrued interest, will be paid in equal monthly installments in cash (without further interest) over twelve months following Mr.

Burnison’s termination of employment for any reason (other than termination by the Company for “Cause”, as defined in the Burnison Agreement) on or after the Retention Vesting Date.

Payment of the Retention Award will be conditioned on Mr.

Burnison’s execution and delivery of a general release of claims and his compliance with restrictive covenants relating to confidentiality, nonsolicitation and noncompetition.

Upon any termination of Mr.

Burnison’s employment on or after the Retention Vesting Date (other than by the Company for Cause or due to death or Disability (as defined in the NEO Agreements)), all unvested equity awards granted on or after March 30, 2018 (and at least 90 days prior to such termination, other than with respect to a termination by the Company without Cause or a termination by Mr.

Burnison for Good Reason (as defined in the Burnison Agreement) (an “Involuntary Termination”) during such 90-day period, in which case, there shall be no such 90-day requirement) will continue to vest in accordance with their terms, disregarding such termination.

Such continued vesting will be conditioned on Mr.

Burnison’s execution and delivery of a general release of claims and his compliance with restrictive covenants relating to confidentiality,

nonsolicitation and noncompetition.

As an exception, the post-Change in Control double trigger equity severance vesting rules described below would continue to apply in the event of an Involuntary Termination within 24 months after a Change in Control (as defined in the NEO Agreements).

Under each NEO Agreement, if the executive’s employment terminates due to death or Disability, then he, or his legal representatives, would receive:

(1) all accrued compensation as of the date of termination;

(2) full vesting of all outstanding stock options, other equity-type incentives (excluding performance shares) and benefits under the Executive Capital Accumulation Plan (“ECAP”);

(3) a pro rata portion of his target annual cash incentive award for the fiscal year in which his employment terminated;

(4) the number of performance shares that would have been earned if he had served the Company for the entire performance period and the target performance had been achieved;

and (5) reimbursement of COBRA coverage premiums for the executive and his dependents for as long as such coverage was available under COBRA.

In addition, for Mr.

Burnison, any unvested amount of the Retention Award would vest.

If the Company terminates the executive’s employment for Cause at any time or he voluntarily terminates his employment without Good Reason, then the Company would pay him accrued compensation through the date of termination.

If the executive’s employment is Involuntarily Terminated prior to a Change in Control or more than 24 months after a Change in Control, then he will be entitled to the following:

(1) his accrued compensation;

(2) a pro rata portion of his annual cash incentive award, based on actual Company performance, for the year in which his employment terminated;

(3) in the case of Mr.

Burnison, solely if such termination occurs prior to the Retention Vesting Date, cash payments equal to the greater of (i) the sum of one and one-half times his then current annual base salary and one and one-half times his target annual cash incentive award, or (ii) the prorated amount of the Retention Award based on days worked from March 30, 2018 until the date of termination;

and in the case of the other executives, cash payments equal to one and one-half times his then current annual base salary and one and one-quarter times his target annual cash incentive award;

(4) for up to 18 months after termination, reimbursement of COBRA coverage premiums for the executive and his dependents for as long as such coverage was available under COBRA;

(5) in the case of Mr.

Burnison, solely if such termination occurs prior to the Retention Vesting Date, and Mr.

Rozek, all outstanding stock options, other equity-type incentives, other long term awards and all benefits held under the ECAP (excluding performance awards) (collectively, the “Time Vested Awards”) will continue to vest in accordance with their terms (disregarding such termination) and, in the case of Messrs.

Mulrooney and Arian, the Time Vested Awards that would have vested within 12 months of termination will become fully vested as of the date of such termination;

and (6) in the case of Mr.

Burnison, solely if such termination occurs prior to the Retention Vesting Date, and Mr.

Rozek, the performance awards will vest based on actual performance through the entire performance period and, in the case of Messrs.

Mulrooney and Arian, a pro rata portion of the performance awards will vest based on actual performance during the entire performance period and the number of days the executive was employed during the performance period plus an additional year (provided this number of days does not exceed the number of days in the performance period).

If the executive’s employment is Involuntarily Terminated within 24 months following a Change in Control, then he will be entitled to the following:

(1) his accrued compensation;

(2) a pro rata portion of his target annual cash incentive award;

(3) in the case of Mr.

Burnison, cash payments equal to three times his current annual base salary, three times his target annual cash incentive award and the amount of the Retention Award (to the extent not yet paid) and, in the case of Messrs.

Rozek, Mulrooney and Arian, cash payments equal to two and one-half times the executive’s current annual base salary and two and one-half times the executive’s target annual cash incentive award;

(4) for up to 18 months after termination, reimbursement of COBRA coverage premiums for him and his dependents for so long as such coverage is available under COBRA and for six months thereafter, reimbursement of a portion of the cost of healthcare coverage for him and his dependents;

(5) vesting on the date of termination of all outstanding Time Vesting Awards;

and (6) a number of performance awards equal to the greater of (i) the performance awards that would have been earned if the executive had served for the Company for the entirety of any open performance period and the Company’s performance during such period had been the Company’s actual performance through the date of the Change in Control and at the target level for the period subsequent to the Change in Control and (ii) the performance awards that would have been earned if the executive had served the Company for the entirety of any open performance period and the Company’s performance during such period had been at the target level of performance for the entire performance period.

Rozek terminates his employment due to Retirement (as defined in the Rozek Agreement), he will be entitled to the following:

(1) his accrued compensation;

(2) Time Vested Awards that have been outstanding for more than 90 days will continue to vest in accordance with their terms (disregarding such termination);

and (3) performance awards that have been outstanding for more than 90 days will vest based on actual performance through the entire performance period.

Rozek is required to provide six months’ notice prior to terminating his employment due to Retirement.

Under the NEO Agreements, the severance benefits described above are conditioned on the executive’s execution and delivery of a general release and compliance with covenants relating to confidentiality, nonsolicitation and noncompetition.

In addition, in the event of a Change in Control, the NEO Agreements provide that any payments contingent on a Change in Control that would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code will be reduced by an amount equal to the smallest amount possible such that no payment would be subject to such excise tax;

provided that if, without any reduction in payments, the net amount retained by the executive, after subtracting all taxes imposed thereon, would exceed the after-tax amount that would be retained by him after the reduction described above, then no reduction in payments will be made.

The NEO Agreements also provide for indemnification of the executives to the fullest extent permitted by applicable law and the Company’s governing instruments in connection with suits or proceedings arising by reason of the fact that he is or was a director, officer or employee of the Company.

A copy of the NEO Agreements are attached as Exhibits 10.53, 10.54, 10.55 and 10.56 to this Annual Report.

Long-Term Performance Unit Plan and Executive Capital Accumulation Plan

On June 24, 2021, the Compensation and Personnel Committee (the “Committee”) of the Board of Directors of the Company amended and restated the Company’s Long-Term Performance Unit Plan (the “LTPUP”) and Executive Capital Accumulation Plan (the “ECAP”), effective as of July 1, 2021.

The Committee amended and restated the LTPUP to provide that unit awards made thereunder on or after July 1, 2021 will have a total value upon becoming fully vested of $62,500, generally payable over five years in equal annual installments subject to the terms and conditions of the LTPUP, including the alternate payment provisions provided therein.

The Committee amended and restated both the LTPUP and the ECAP to provide that, following the occurrence of a Change in Control Event (as defined in the applicable plan), a participant’s rights with respect to vested benefits under the plans may not be terminated due to the participant engaging in Detrimental Activity (as defined in the applicable plan).

In addition, under the ECAP, if a participant’s employment is terminated on or following a Change in Control Event by the Company for any reason (other than for Cause, as defined in the ECAP) or due to the Participant’s retirement on or after attaining age 65, then the participant will become 100% vested in all amounts under the ECAP.

A copy of the ECAP and the LTPUP are attached as Exhibits 10.50 and 10.51 to this Annual Report.

Disclosures Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

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Index to Financial Statements :

See Consolidated Financial Statements included as part of this Annual Report on Form 10-K and Schedule II — Valuation and Qualifying Accounts.

Pursuant to Rule 7-05 of Regulation S-X, the other schedules have been omitted as the information to be set forth therein is included in the notes of the audited consolidated financial statements.

See Consolidated Financial Statements included as part of this Annual Report on Form 10-K.

Index to Financial Statement Schedules:

All schedules have been omitted because the required information is included in the financial statements or notes thereto, or because it is not required.

Index to Exhibits:

See exhibits listed under Part (b) below.

Stock Purchase Agreement by and between HG (Bermuda) Limited and Korn/Ferry International, dated as of September 23, 2015, filed as Exhibit 2.1 to the Company’s Form 8-K, filed September 24, 2015.

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333-61697), filed September 4, 1998.

Korn/Ferry International Second Amended and Restated Performance Award Plan, filed as Appendix A

to the Company’s Definitive Proxy Statement, filed August 12, 2004.

Korn/Ferry International Second Amended and Restated Performance Award Plan, filed as Appendix A to the Company’s Definitive Proxy Statement, filed August 12, 2004.

Form of Indemnification Agreement between the Company and some of its executive officers and directors, filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed March 12, 2004.

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Korn Ferry Amended and Restated Employee Stock Purchase Plan, filed as Exhibit 10.17 to the Company’s Annual Report on Form 10-K, filed June 28, 2019.

Employment Agreement between the Company and Robert Rozek, filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed February 21, 2012.

Second Amended and Restated Korn/Ferry International 2008 Stock Incentive Plan, filed as Exhibit 10.1 to the Company’s Form 8-K, filed October 2, 2012.

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Form of Restricted Stock Unit Award Agreement to Employees Under the 2008 Stock Incentive Plan, filed as Exhibit 10.39 to the Company’s Annual Report on Form 10-K, filed June 25, 2013.

Letter Agreement between the Company and Byrne Mulrooney dated June 26, 2014, filed as Exhibit 10.33 to the Company’s Annual Report on Form 10-K, filed June 27, 2014.

Amended and Restated Korn Ferry Executive Capital Accumulation Plan, as of January 1, 2019, filed as Exhibit 10.23 to the Company’s Annual Report on Form 10-K, filed June 28, 2019.

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Form of Indemnification Agreement between the Company and some of its directors and executive officers, filed as Exhibit 10.1 to the Company’s Form 8-K, filed June 15, 2015.

Amendment to Employment Agreement dated December 28, 2015 between the Company and Robert Rozek, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed March 10, 2016.

Korn Ferry Long Term Performance Unit Plan, filed as Exhibit 10.26 to the Company's Annual Report on Form 10-K, filed June 28, 2019.

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Summary of Non-Employee Director Compensation Program Effective December 7, 2016, filed as Exhibit 10.1 to the Company’s 10-Q, filed March 10, 2017.

Letter Agreement between the Company and Mark Arian, dated March 17, 2017, filed as Exhibit 10.48 to the Company’s Annual Report on Form 10-K, filed June 28, 2017.

Form of Restricted Stock Unit Award Agreement to Non-Employee Directors under the 2008 Stock Incentive Plan, filed as Exhibit 10.31 to the Company's Annual Report on Form 10-K, filed June 28, 2019.

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Form of Restricted Stock Award Agreement to Employees Under the 2008 Stock Incentive Plan, filed as Exhibit 10.34 to the Company's Annual Report on Form 10-K, filed June 28, 2019.

Amended and Restated Employment Agreement dated March 30, 2018 between the Company and

Gary Burnison, filed as Exhibit 10.1 to the Company’s Form 8-K, filed April 4, 2018.

Amended and Restated Credit Agreement, dated December 19, 2018, by and among the Company and Wells Fargo, National Association, as administrative agent and other lender parties thereto, filed as Exhibit 10.1 to the Company’s Form 8-K, filed December 20, 2018 .

Credit Agreement, dated December 16, 2019, by and among Korn Ferry, Bank of America, N.A., as administrative agent, and other lender parties thereto, filed as Exhibit 10.1 to the Company’s Form 8-K, filed December 16, 2019.

Amendment to Amended and Restated Employment Agreement dated March 30, 2018 between the Company and Gary Burnison, filed as Exhibit 10.1 to the Company’s Form 8-K, filed April 17, 2020.

Amendment to Employment Agreement dated February 6, 2012 between the Company and Robert Rozek, as amended by that Amendment thereto dated December 28, 2015, filed as Exhibit 10.2 to the Company’s Form 8-K, filed April 17, 2020.

Amendment to Employment Letter dated June 26, 2014 between the Company and Byrne Mulrooney, filed as Exhibit 10.3 to the Company’s Form 8-K, filed April 17, 2020.

Amendment to Employment Letter dated March 17,2017 between the Company and Mark Arian, filed as Exhibit 10.4 to the Company’s Form 8-K, filed April 17, 2020.

Amended and Restated Korn Ferry Long Term Performance Unit Plan, effective June 1, 2020, filed as Exhibit 10.44 to the Company’s Annual Report on Form 10-K, filed July 15, 2020.

Korn Ferry Amended and Restated Employee Stock Purchase Plan, effective July 1, 2020, filed as Exhibit 10.45 to the Company’s Annual Report on Form 10-K, filed July 15, 2020.

Amendment to Amended and Restated Employment Agreement dated March 30, 2018 between the Company and Gary Burnison and the Letter Agreement dated April 14, 2020, filed as Exhibit 10.1 to the Company’s Form 8-K, filed July 10, 2020 .

Amendment to Employment Agreement dated February 6, 2012 between the Company and Robert Rozek, as amended by that Amendment thereto dated December 28, 2015 and the Letter Agreement dated as of April 14, 2020, filed as Exhibit 10.2 to the Company’s Form 8-K, filed July 10, 2020.

Amendment to Employment Letter dated June 26, 2014 between the Company and Byrne Mulrooney and the Letter Agreement dated as of April 14, 2020, filed as Exhibit 10.3 to the Company’s Form 8-K, filed July 10, 2020.

Amendment to Employment Letter dated March 17, 2017 between the Company and Mark Arian and the Letter Agreement dated as of April 14, 2020, filed as Exhibit 10.4 to the Company’s Form 8-K, filed July 10, 2020.

Amended and Restated Korn Ferry Executive Capital Accumulation Plan, effective July 1, 2021.

Amended and Restated Korn Ferry Long Term Performance Unit Plan, effective July 1, 2021.

Form of Unit Award Agreement under Amended and Restated Korn Ferry Long Term Performance Unit Plan.

Amended and Restated Employment Agreement dated June 28, 2021 between the Company and Gary Burnison.

Amended and Restated Employment Agreement dated June 28, 2021 between the Company and Robert Rozek.

Employment Agreement dated June 28, 2021 between the Company and Byrne Mulrooney.

Employment Agreement dated June 28, 2021 between the Company and Mark Arian.

Amended and Restated Korn Ferry Executive Capital Accumulation Plan, effective July 1, 2021, filed as Exhibit 10.50 to the Company’s Annual Report on Form 10-K, filed June 28, 2021.

Amended and Restated Korn Ferry Long Term Performance Unit Plan, effective July 1, 2021, filed as Exhibit 10.51 to the Company’s Annual Report on Form 10-K, filed June 28, 2021.

Form of Unit Award Agreement under Amended and Restated Korn Ferry Long Term Performance Unit Plan, filed as Exhibit 10.52 to the Company’s Annual Report on Form 10-K.

Amended and Restated Employment Agreement dated June 28, 2021 between the Company and Gary Burnison, filed as Exhibit 10.53 to the Company’s Annual Report on Form 10-K.

Amended and Restated Employment Agreement dated June 28, 2021 between the Company and Robert Rozek, filed as Exhibit 10.54 to the Company’s Annual Report on Form 10-K.

Employment Agreement dated June 28, 2021 between the Company and Byrne Mulrooney, filed as Exhibit 10.55 to the Company’s Annual Report on Form 10-K.

Employment Agreement dated June 28, 2021 between the Company and Mark Arian, filed as Exhibit 10.56 to the Company’s Annual Report on Form 10-K.

First Amendment to Credit Agreement, dated June 24, 2022, by and among Korn Ferry, Bank of America, N.A., as administrative agent, and other lender parties thereto.

Subsidiaries of Korn Ferry.

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June 28, 2022

/s/ J ERRY LEAMON

/s/ LAURA BISHOP

June 28, 2022

/s/ A NGEL MARTINEZ

/s/ JERRY LEAMON

June 28, 2022

/s/ ANGEL MARTINEZ

Angel Martinez

June 28, 2022

/s/ D EBRA J.

June 28, 2022

/s/ L ORI ROBINSON

/s/ LORI ROBINSON

Lori Robinson

June 28, 2022

/s/ G EORGE T.

/s/ GEORGE T.

June 28, 2022

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Management’s Report on Internal Control over Financial Reporting

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting (PCAOB ID:

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of April 30, 2022 and 2021

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Notes to Consolidated Financial Statements

Financial Statements Schedule II – Valuation and Qualifying Accounts

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

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In our opinion, Korn Ferry and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of April 30, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of April 30, 2021 and 2020, the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended April 30, 2021 and the related notes and the financial statement schedule listed in the index at Item 15(a) and our report dated June 28, 2021 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of April 30, 2022 and 2021, the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended April 30, 2022 and the related notes and our report dated June 28, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Korn Ferry and subsidiaries (the “Company”) as of April 30, 2021 and 2020, the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended April 30, 2021 and the related notes and the financial statement schedule listed in the index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Korn Ferry and subsidiaries (the “Company”) as of April 30, 2022 and 2021, the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended April 30, 2022 and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at April 30, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended April 30, 2022, in conformity with U.S.

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Operating income

Other income (loss), net

Other (loss) income, net

Interest expense, net

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(in thousands)

Other comprehensive income:

Other comprehensive (loss) income:

Foreign currency translation adjustments

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Noncontrolling

Stockholder's

Stockholders'

(in thousands)

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Other comprehensive loss

Effect of adoption of accounting standards

Dividends paid to shareholders

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Balance at April 30, 2020

Other comprehensive loss

Other comprehensive income

Dividends paid to shareholders

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Balance at April 30, 2021

Other comprehensive income

Other comprehensive loss

Dividends paid to shareholders

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Stock-based compensation expense

Tradename write-offs

Write-off of long-lived assets

Impairment of right to use assets

Impairment of fixed assets

Provision for doubtful accounts

Gain on cash surrender value of life insurance policies

(Gain) loss on marketable securities

Loss (gain) on marketable securities

Deferred income taxes

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Payments of tax withholdings on restricted stock

Proceeds from issuance of common stock upon exercise of employee

stock options and in connection with an employee stock purchase plan

Borrowings under life insurance policies

Proceeds from issuance of common stock upon exercise of employee stock options and in connection with an employee stock purchase plan

Payments on life insurance policy loans

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This work is supported by a comprehensive range of some of the world’s leading intellectual property (“lP”) and data.

Digital leverages an artificial intelligence powered machine-learning platform to identify structure, roles, capabilities and behaviours needed to drive business forward.

This 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.

The Consulting teams employ an integrated approach across core solutions each one strengthening our work and thinking in the next, to help clients execute their strategy in a digitally enabled world.

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

Powered by the Korn Ferry Intelligence Cloud, the end-to-end system combines Korn Ferry proprietary data, client data and external market data 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.

Korn Ferry’s approach to placing talent 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).

Recruitment Process Outsourcing (“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.

Recruitment Process Outsourcing (“RPO”) & Professional Search focuses on delivering enterprise talent acquisition solutions to our clients, at the professional level.

The Company leverages 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.

Basis of Consolidation and Presentation

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Noncontrolling interest, which represents the Mexican partners’ 51 % interest in the Mexican subsidiary, is reflected on the Company’s consolidated financial statements.

The Company considers events or transactions that occur after the balance sheet date but before the consolidated financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosures.

KORN FERRY AND SUBSIDIARIES

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April 30, 2022 (continued)

Use of Estimates and Uncertainties

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Revenue is recognized when control of the goods and services are transferred to the customer in an amount that reflects the consideration the Company expects 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 (“ASC”) 606 (“ASC 606”):

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

1) identify the contract with a customer;

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The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents.

As of April 30, 2021 and 2020, the Company’s investments in cash equivalents consisted of money market funds, and commercial paper and as of April 30, 2020 also includes corporate notes/bonds with initial maturity of less than 90 days for which market prices are readily available.

As of April 30, 2022 and 2021, the Company’s investments in cash equivalents consisted of money market funds and commercial paper with initial maturity of less than 90 days for which market prices are readily available.

Marketable Securities

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dividends are recorded as earned on the ex-dividend date.

Interest, dividend income and the changes in fair value in marketable securities are recorded in the accompanying consolidated statements of income in other income (loss), net.

Interest, dividend income and the changes in fair value in marketable securities are recorded in the accompanying consolidated statements of income in other (loss) income, net.

The Company also invests cash in excess of its daily operating requirements and capital needs primarily in marketable fixed income (debt) securities in accordance with the Company’s investment policy, which restricts the type of investments that can be made.

The Company’s investment portfolio includes commercial paper, corporate notes/bonds and US Treasury and Agency securities.

The Company’s investment portfolio includes commercial paper, corporate notes/bonds and US Treasury and Agency securities as of April 30, 2022 and 2021.

These marketable fixed income (debt) securities are classified as available-for-sale securities based on management’s decision, at the date such securities are acquired, not to hold these securities to maturity or actively trade them.

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The changes in fair values, net of applicable taxes, are recorded as unrealized gains or losses as a component of comprehensive income unless the change is due to credit loss.

A credit loss is recorded in the statement of income in other income (loss), net;

A credit loss is recorded in the statements of income in other (loss) income, net;

any amount in excess of the credit loss is recorded as unrealized gains or losses as a component of comprehensive income.

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The fair values of marketable securities classified as equity securities are obtained from quoted market prices, and the fair values of marketable securities classified as available-for-sale and foreign currency forward contracts are obtained from a third party, which are based on quoted prices or market prices for similar assets and financial instruments.

Derivative Financial Instruments

On December 16, 2019, in conjunction with the payoff of the credit facility, the Company terminated its interest rate swap.

The Company had entered into the interest rate swap agreement to effectively convert its variable debt to a fixed-rate basis.

The principal objective was to eliminate or reduce the variability of the cash flows in interest payments associated with the Company’s long-term debt, thus reducing the impact of interest rate changes on future interest payment cash flows.

The Company determined that the interest rate swap qualified as a cash flow hedge in accordance with ASC 815.

Changes in the fair value of an interest rate swap agreement designated as a cash flow hedge were recorded as a component of accumulated other comprehensive loss within stockholders’ equity and were amortized to interest expense over the term of the related debt.

Foreign Currency Forward Contracts Not Designated as Hedges

The Company has established a program that primarily utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures primarily originating from intercompany balances due to cross border work performed in the ordinary course of business.

These foreign currency forward contracts are neither used for trading purposes nor are they designated as hedging instruments pursuant to ASC 815.

These foreign currency forward contracts are neither used for trading purposes nor are they designated as hedging instruments pursuant to ASC 815, Derivatives and Hedging .

Accordingly, the fair value of these contracts is recorded as of the end of the reporting period in the accompanying consolidated balance sheets, while the change in fair value is recorded to the accompanying consolidated statements of income.

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During fiscal 2021, the Company recorded an adjustment of $ 2.6 million to increase goodwill as a result of additional tax liabilities from the Miller Heiman Group, Achieve Forum and Strategy Execution (the “Acquired Companies”) acquisition completed on November 1, 2019.

The measurement period for the Acquired Companies is closed.

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021 (continued)

The Company determines if an arrangement is a lease at inception.

1 unchanged sentence

Finance leases are included in property and equipment, net, other accrued liabilities and other liabilities in the consolidated balance sheets.

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2022 (continued)

ROU assets represent the Company's right to use an underlying asset for the lease term, and the lease liabilities represent the Company's obligation to make lease payments arising from the lease.

17 unchanged sentences

If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between fair value and the carrying value of the asset.

During fiscal 2022, the Company reduced its real estate footprint and as a result, the Company took an impairment charge of ROU assets of $ 7.4 million and an impairment of leasehold improvements and furniture and fixtures of $ 1.9 million, both recorded in the consolidated statements of income in general and administrative expenses.

During fiscal 2020, the Company decided that it would exit 16 office leases as part of the integration of the Acquired Companies.

This resulted in an impairment charge of the ROU asset of $ 2.3 million and impairment of leasehold improvements and furniture and fixtures of $ 0.4 million, both recorded in the consolidated statements of income in general and administrative expenses in the Digital reportable segment.

During fiscal 2021 and 2019, there were no impairment charges recorded.

During fiscal 2021, there were no impairment charges recorded.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of assets acquired.

The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill.

If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired.

To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill.

If the carrying amount of a reporting unit’s goodwill exceeds the fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation techniques, including a discounted cash flow methodology.

To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using 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).

Goodwill is tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

Results of the annual impairment test performed as of January 31, 2021, indicated that the fair value of each of the reporting units exceeded its carrying amount and no reporting units were at risk of failing the impairment test.

Results of the annual qualitative impairment test performed as of January 31, 2022, indicated that the fair value of each of the reporting units exceeded its carrying amount and no reporting units were at risk of failing the impairment test.

As a result, no impairment charge was recognized.

There was also no indication of potential impairment during the fourth quarter of fiscal 2022 that would require further testing.

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021 (continued)

Intangible assets primarily consist of customer lists, non-compete agreements, proprietary databases and IP.

2 unchanged sentences

The carrying amount of the intangible assets is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from use of the asset.

The coronavirus pandemic (“COVID-19”) impacted the Company’s fourth quarter of fiscal 2020 business, as well as the business during fiscal 2021.

The Company reviewed its intangible assets and noted no impairment as of April 30, 2022, 2021 and 2020.

On June 12, 2018, the Company’s Board of Directors voted to approve a plan to go to market under a single, master brand architecture and to simplify the Company’s organizational structure by eliminating and/or consolidating certain legal entities and implementing a rebranding of the Company to offer the Company’s current products and services using the “Korn Ferry” name, branding and trademarks.

As a result, the Company discontinued the use of all sub-brands.

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 non-cash intangible asset write-off of $ 106.6 million in fiscal 2019, recorded in general and administrative expenses in the consolidated statement of income.

Compensation and Benefits Expense

Compensation and benefits expense in the accompanying consolidated statements of income consist of compensation and benefits paid to consultants (employees who originate business), executive officers and administrative and support personnel.

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2022 (continued)

administrative and support personnel.

The most significant portions of this expense are salaries and the amounts paid under the annual performance-related bonus plan to employees.

9 unchanged sentences

Unearned compensation on the consolidated balance sheets includes long-term retention awards that are generally amortized over four-to- five years .

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021 (continued)

Deferred Compensation and Pension Plans

4 unchanged sentences

Actuarial gains and losses are initially recorded in accumulated other comprehensive loss.

The actuarial gains/losses included in accumulated other comprehensive income are amortized to the consolidated statements of income, if at the beginning of the year, the amount exceeds 10 % of the greater of the projected benefit obligation and market-related plan assets.

The actuarial gains/losses included in accumulated other comprehensive loss are amortized to the consolidated statements of income, if at the beginning of the year, the amount exceeds 10 % of the greater of the projected benefit obligation and market-related plan assets.

The amortization included in periodic benefit cost is divided by the average remaining service of inactive plan participants, or the period for which benefits will be paid, if shorter.

7 unchanged sentences

The Company amortizes these contributions on a straight-line basis as they vest, generally over a five-year period.

The amounts that are expected to be paid to employees over the next 12 months are classified as a current liability included in compensation and benefits payable in the accompanying consolidated balance sheets.

The amounts that are expected to be paid to employees over the

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2022 (continued)

next 12 months are classified as a current liability included in compensation and benefits payable in the accompanying consolidated balance sheets.

The ECAP is accounted for whereby the changes in the fair value of the vested amounts owed to the participants are adjusted with a corresponding charge (or credit) to compensation and benefits costs.

15 unchanged sentences

Changes in the estimates of the restructuring charges are recorded in the period the change is determined.

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021 (continued)

Stock-Based Compensation

6 unchanged sentences

dollars at exchange rates in effect at the balance sheet date, while revenue and expenses are translated at weighted-average exchange rates during the fiscal year.

Resulting translation adjustments are recorded as a component of accumulated comprehensive income.

Resulting translation adjustments are recorded as a component of accumulated comprehensive loss.

Gains and losses from foreign currency transactions of the Company’s foreign subsidiaries and the translation of the financial results of subsidiaries operating in highly inflationary economies are included in general and administrative expense in the period incurred.

8 unchanged sentences

Valuation allowances are then recorded to reduce deferred tax assets to the amounts management concludes are more likely than not to be realized.

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2022 (continued)

Income tax benefits are recognized and measured based upon a two-step model:

4 unchanged sentences

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, investments, foreign currency forward contracts, receivables due from clients and net CSV due from insurance companies, which are discussed above.

Cash equivalents include investments in money market securities, commercial papers and corporate notes/bonds while investments include mutual funds, commercial papers, corporate notes/bonds and US Treasury and Agency securities.

Cash equivalents include investments in money market securities and commercial papers while investments include mutual funds, commercial papers, corporate notes/bonds and US Treasury and Agency securities.

Investments are diversified throughout many industries and geographic regions.

2 unchanged sentences

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.

The Company adopted this guidance as of May 1, 2020 .

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

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021 (continued)

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.

The Company 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.

The Company 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.

The Company 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 years beginning after December 15, 2020, with early adoption permitted.

The Company early adopted this guidance in its 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.

The Company will adopt this guidance in its fiscal year beginning May 1, 2021 and the Company may elect to apply the amendments prospectively through December 12, 2022.

The Company adopted this guidance in its fiscal year beginning May 1, 2021 and the Company 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.

The Company will adopt this guidance in its fiscal year beginning May 1, 2023.

The Company is currently evaluating the impact of this accounting guidance but does not anticipate that it will have a material impact on the consolidated financial statements.

27 unchanged sentences

Restricted stock

Stock Options

Diluted weighted-average number of common shares outstanding

9 unchanged sentences

Deferred compensation and pension plan adjustments, net of taxes

Marketable securities unrealized (loss) gain, net of tax

Marketable securities unrealized loss, net of tax

Accumulated other comprehensive loss, net

8 unchanged sentences

Balance as of May 1, 2019

Unrealized losses arising during the period

Reclassification of realized net losses (gains) to net income

Effect of adoption of accounting standard

Balance as of April 30, 2019

Unrealized (losses) gains arising during the period

4 unchanged sentences

Balance as of April 30, 2021

Unrealized (losses) gains arising during the period

Reclassification of realized net losses to net income

Balance as of April 30, 2022

The tax effects on unrealized gains (losses) were $ 6.0 million, $ 1.1 million and $( 3.1 ) million as of April 30, 2022, 2021 and 2020, respectively.

The tax effects on reclassifications of realized net losses were $ 0.5 million, $ 1.0 million and $ 0.8 million as of April 30, 2022, 2021 and 2020, respectively.

The tax effects on unrealized (losses) gains were $( 0.2 ) million and $( 0.3 ) million as of 2020 and 2019, respectively.

The tax effects on the reclassification of realized net (losses) gains to net income was $( 0.1 ) million and $ 0.1 million as of 2020 and 2019, respectively.

The tax effects on unrealized (losses) were $( 0.1 ) million as of April 30, 2022.

The tax effects on unrealized (losses) were $( 0.2 ) million as of April 30, 2020.

The tax effects on the reclassification of realized net losses to net income was $ 0.1 million as of April 30, 2020.

Employee Stock Plans

26 unchanged sentences

As of April 30, 2022, there was $ 51.9 million of total unrecognized compensation cost related to all non-vested awards of restricted stock, which is expected to be recognized over a weighted-average period of 2.4 years.

During fiscal 2021 and 2020, 172,749 shares and 232,618 shares of restricted stock totaling $ 5.0 million and $ 9.0 million, respectively, were repurchased by the Company, at the option of the employee, to pay for taxes related to the vesting of restricted stock.

During fiscal 2022 and 2021, 271,794 shares of restricted stock for $ 18.5 million and 172,749 shares for $ 5.0 million, respectively, were repurchased by the Company, at the option of the employee, to pay for taxes related to the vesting of restricted stock.

Employee Stock Purchase Plan

6 unchanged sentences

As of April 30, 2022, the ESPP had approximately 0.4 million shares remaining available for future issuance.

During fiscal 2021, 2020 and 2019, the Company repurchased (on the open market or privately negotiated transactions) 973,451 shares, 2,606,861 shares and 809,074 shares, respectively, of the Company’s common stock for $ 30.4 million, $ 92.4 million and $ 37.4 million, respectively.

During fiscal 2022, 2021 and 2020, the Company repurchased (on the open market or privately negotiated transactions) 1,470,983 shares of the Company’s common stock for $ 98.8 million, 973,451 shares for $ 30.4 million and 2,606,861 shares for $ 92.4 million, respectively.

KORN FERRY AND SUBSIDIARIES

9 unchanged sentences

Changes in Fair Value Recorded in

Other Comprehensive Income

Other Comprehensive Loss

Commercial paper

10 unchanged sentences

Balance Sheet Classification

Other Accrued Liabilities

(in thousands)

3 unchanged sentences

Corporate notes/bonds

Treasury and Agency Securities

Total debt investments

9 unchanged sentences

Unvested obligations under the deferred compensation plans totaled $ 24.0 million and $ 26.5 million as of April 30, 2022 and 2021, respectively.

During fiscal 2021 and 2019, the fair value of the investments increased;

therefore, the Company recognized income of $ 38.5 million and $ 8.1 million, respectively, which was recorded in other income (loss), net.

During fiscal 2020, the fair value of the investments decreased;

therefore, the Company recognized a loss of $ 1.8 million which was recorded in other income (loss), net.

During fiscal 2022 and 2020, the fair value of the investments decreased;

therefore, the Company recognized a loss of $ 12.0 million and $ 1.8 million, respectively, which was recorded in other (loss) income, net.

During fiscal 2021, the fair value of the investments increased;

therefore, the Company recognized income of $ 38.5 million which was recorded in other (loss) income, net.

Investments in marketable securities classified as available-for-sale securities are made based on the Company’s investment policy, which restricts the types of investments that can be made.

As of April 30, 2021 and 2020, marketable securities classified as available-for-sale consisted of both commercial paper and corporate notes/bonds and on April 30, 2021 also consisted of US Treasury and Agency securities for which market prices for similar assets are readily available.

As of April 30, 2022 and 2021, marketable securities classified as available-for-sale consisted of commercial paper, corporate notes/bonds and US Treasury and Agency securities, for which market prices for similar assets are readily available.

Investments that have an original maturity of 90 days or less and are considered highly liquid investments are classified as cash equivalents.

As of April 30, 2022, available-for-sale marketable securities had remaining maturities ranging from one to twenty-one months .

During fiscal 2021 and 2020, there were $ 60.6 million and $ 4.8 million in sales/maturities of available-for-sale marketable securities, respectively.

During fiscal 2022, 2021 and 2020, there were $ 79.3 million, $ 60.6 million and $ 4.8 million in sales/maturities of available-for-sale marketable securities, respectively.

Investments in marketable securities that are held in trust for settlement of the Company’s vested obligations under the ECAP are equity securities and are based upon the investment selections the employee elects from a pre-determined set of securities in the ECAP and the Company invests in equity securities to mirror these elections.

As of April 30, 2022 and 2021, the Company’s investments in equity securities consisted of mutual funds for which market prices are readily available.

Unrealized gains that relate to equity securities still held as of April 30, 2021, was $ 32.7 million while unrealized losses that relate to equity securities held as of April 30, 2020 and 2019 was $ 8.2 million and $ 4.7 million, respectively.

Unrealized losses that relate to equity securities still held as of April 30, 2022 and 2020, was $ 27.3 million and $ 8.2 million while unrealized gains that relate to equity securities held as of April 30, 2021, was $ 32.7 million.

Foreign Currency Forward Contracts Not Designated as Hedges

8 unchanged sentences

The Company recognizes forward contracts as a net asset or net liability on the consolidated balance sheets as such contracts are covered by master netting agreements.

During fiscal 2021 and 2019 the Company incurred gains of $ 2.7 million and $ 1.2 million, respectively, related to forward contracts which is recorded in general and administrative expenses in the accompanying consolidated statements of income.

These foreign currency gains offset foreign currency losses that result from transactions denominated in a currency other than the Company’s functional currency.

During fiscal 2020, the Company incurred losses of $ 0.3 million, related to forward contracts which is recorded in general and administrative expenses in the accompanying consolidated statements of income.

During fiscal 2022 and 2020, the Company incurred losses of $ 0.2 million and $ 0.3 million, respectively, related to forward contracts which is recorded in general and administrative expenses in the accompanying consolidated statements of income.

These foreign currency losses offset foreign currency gains that result from transactions denominated in a currency other than the Company’s functional currency.

During fiscal 2021, the Company incurred gains of $ 2.7 million related to forward contracts which is recorded in general and administrative expenses in the accompanying consolidated statements of income.

These foreign currency gains offset foreign currency losses that result from transactions denominated in a currency other than the Company’s functional currency.

The cash flows related to foreign currency forward contracts are included in cash flows from operating activities.

25 unchanged sentences

On July 8, 2016, the Company established the LTPU Plan in order to promote the success of the Company by providing a select group of management and highly compensated employees with nonqualified supplemental retirement benefits as an additional means to attract, motivate and retain such employees.

A unit award has a base value of $ 50,000 for the purpose of determining the payment that would be made upon early termination for a partially vested unit award.

A unit award has a base value of either $ 25,000 or $ 50,000 for the purpose of determining the payment that would be made upon early termination for a partially vested unit award.

The units vest 25 % on each anniversary date with the unit becoming fully vested on the fourth anniversary of the grant date, subject to the participant’s continued service as of each anniversary date.

Each vested unit award will pay out an annual benefit of $ 25,000 for each of five years commencing on the seventh anniversary of the grant date.

Each vested unit award will pay out an annual benefit of either $ 12,500 or $ 25,000 for each of five years commencing on the seventh anniversary of the grant date.

KORN FERRY AND SUBSIDIARIES

2 unchanged sentences

Deferred Compensation and Pension Plans

The following tables reconcile the benefit obligation for the deferred compensation plans:

The following tables reconcile the benefit obligation for the deferred compensation and pension plans:

Year Ended April 30,

3 unchanged sentences

Interest cost

Actuarial (gain) loss

Actuarial gain

Administrative expenses paid

1 unchanged sentence

Benefits paid from cash

Plan amendment

Benefit obligation, end of year

17 unchanged sentences

The pension obligation in fiscal 2022 increased compared to fiscal 2021 due to the ongoing accruals for the LTPU Plan for additional awards issued in fiscal 2022.

The increase in pension benefit obligations was partially offset by a change in the mortality assumption.

The mortality assumption was updated from the MP-2019 projection scale to the MP-2020 mortality projection scale which improved our funded position.

Also improving the funded position was the actual return on plan assets that was greater than expected.

Additionally, the change in mortality assumption from the MP-2020 to the MP-2021 mortality projection scale, and the actual return on plan assets being lower than the assumed return caused our funded position to deteriorate.

The increase in pension benefit obligations was partially offset by the actuarial gain which was primarily due to an increase in discount rates.

The fair value measurements of the defined benefit plan assets fall within the following levels of the fair value hierarchy as of April 30, 2022 and 2021:

22 unchanged sentences

Net periodic benefit cost (1)

The service cost, interest cost and other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other income (loss), net, respectively, on the consolidated statements of income.

The service cost, interest cost and other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other (loss) income, net, respectively, on the consolidated statements of income.

The weighted-average assumptions used in calculating the benefit obligations were as follows:

13 unchanged sentences

In conjunction with the acquisition of Hay Group, the Company inherited a benefit plan which offers medical and life insurance coverage to 111 participants.

The medical and life insurance benefit plan is unfunded.

The medical and life insurance benefit plan is closed to new entrants and is unfunded.

The following table reconciles the benefit obligation for the medical and life insurance plan:

4 unchanged sentences

Interest cost

Actuarial (gain) loss

Actuarial gain

Benefits paid

10 unchanged sentences

Net periodic benefit cost (1)

The service cost, interest cost and the other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other income (loss), net, respectively, on the consolidated statements of income.

The service cost, interest cost and the other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other (loss) income, net, respectively, on the consolidated statements of income.

The weighted-average assumptions used in calculating the medical and life insurance plan were as follows:

15 unchanged sentences

Executive Capital Accumulation Plan

The Company’s ECAP is intended to provide certain employees an opportunity to defer salary and/or bonus on a pre-tax basis.

The Company’s ECAP is intended to provide certain employees an opportunity to defer their salary and/or bonus on a pre-tax basis.

In addition, the Company, as part of its compensation philosophy, makes discretionary contributions into the ECAP and such contributions may be granted to key employees annually based on the employee’s performance.

5 unchanged sentences

The ECAP is accounted for whereby the changes in the fair value of the vested amounts owed to the participants are adjusted with a corresponding charge (or credit) to compensation and benefits costs.

During both fiscal 2021 and fiscal 2019, the deferred compensation liability increased;

therefore, the Company recognized compensation expense of $ 37.3 million and $ 8.7 million, respectively.

During fiscal 2020, deferred compensation liability decreased;

therefore, the Company recognized a reduction in compensation expense of $ 0.8 million.

Offsetting the increases in compensation and benefits expense in fiscal 2021 and 2019 was increases in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $ 38.5 million and $ 8.1 million in fiscal 2021 and 2019, respectively, recorded in other income (loss), net on the consolidated statements of income.

Offsetting the decrease in compensation and benefits expense in fiscal 2020 was a decrease in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) $ 1.8 million in fiscal 2020, recorded in other income (loss), net on the consolidated statement of income.

During both fiscal 2022 and 2020, the deferred compensation liability decreased;

therefore, the Company recognized a reduction in compensation expense of $ 10.6 million and $ 0.8 million, respectively.

Offsetting the decreases in compensation and benefits expense in fiscal 2022 and 2020 was decreases in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $ 12.0 million and $ 1.8 million in fiscal 2022 and 2020, respectively, recorded in other (loss) income, net on the consolidated statements of income.

During fiscal 2021, deferred compensation liability increased;

therefore, the Company recognized a compensation expense of $ 37.3 million.

Offsetting the increase in compensation and benefits expense in fiscal 2021 was an increase in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $ 38.5 million in fiscal 2021, recorded in other (loss) income, net on the consolidated statement of income.

Changes in ECAP liability were as follows:

4 unchanged sentences

Amortization of employer contributions

Gain (loss) on investment

(Loss) gain on investment

Employee distributions

Acquisition of Lucas Group

Exchange rate fluctuations

7 unchanged sentences

In addition, the Company has the option to make matching contributions.

The Company intends to make matching contributions related to fiscal 2021 in fiscal 2022, which are accrued in compensation and benefits payable on the consolidated balance sheet.

Due to the impact of COVID-19, the Company suspended matching contributions related to fiscal 2020.

The Company made a $ 3.0 million matching contribution in fiscal 2020 related to contributions made by employees in fiscal 2019.

Beginning in fiscal 2022, the Company began to match a portion of the employee contributions each pay period and made $ 2.1 million matching contributions during fiscal 2022.

In addition the Company intends to make an additional matching contribution relating to fiscal 2022 of $ 3.2 million in fiscal 2023, which are accrued in compensation and benefits payable on the consolidated balance sheet.

The Company made a

KORN FERRY AND SUBSIDIARIES

1 unchanged sentence

April 30, 2022 (continued)

$ 3.0 million matching contribution in fiscal 2022 related to contributions made by employees in fiscal 2021 .

Due to the impact of COVID-19, the Company did no t make a matching contribution related to fiscal 2020.

Company Owned Life Insurance

11 unchanged sentences

Deferred revenue represents the future performance obligations to transfer control of products or services for which we have already received consideration.

Deferred revenue is presented in other accrued liabilities on the consolidated balance sheet.

The following table outlines our contract asset and liability balances as of April 30, 2021 and 2020:

Deferred revenue is presented in other accrued liabilities on the consolidated balance sheets.

The following table outlines the Company’s contract asset and liability balances as of April 30, 2022 and 2021:

(in thousands)

5 unchanged sentences

As of April 30, 2022, the aggregate transaction price allocated to the performance obligations that are unsatisfied for contracts with an expected duration of greater than one year at inception was $ 1,034.9 million.

Of the $ 739.5 million of remaining performance obligations, we expect to recognize approximately $ 415.8 million in fiscal 2022, $ 197.3 million in fiscal 2023, $ 92.4 million in fiscal 2024 and the remaining $ 34.0 million in fiscal 2025 and thereafter .

Of the $ 1,034.9 million of remaining performance obligations, the Company expects to recognize approximately $ 541.2 million in fiscal 2023, $ 295.6 million in fiscal 2024, $ 128.1 million in fiscal 2025 and the remaining $ 70.0 million in fiscal 2026 and thereafter .

However, this amount should not be considered an indication of the Company’s future revenue as contracts with an initial term of one year or less are not included.

3 unchanged sentences

This information is presented in Note 12— Segments .

The following table provides further disaggregation of fee revenue by industry:

KORN FERRY AND SUBSIDIARIES

1 unchanged sentence

April 30, 2022 (continued)

The following table provides further disaggregation of fee revenue by industry:

Year Ended April 30,

5 unchanged sentences

Credit Losses

The Company is exposed to credit losses primarily through the provision of its Executive Search, Consulting and Digital services.

The Company is exposed to credit losses primarily through the provision of its Executive Search, Consulting, Digital and RPO & Professional Search services.

The Company’s expected credit loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables.

5 unchanged sentences

Balances are written off when determined to be uncollectible.

The Company considered the current and expected future economic and market conditions surrounding COVID-19 as of the end of the fiscal year and determined that the estimate of credit losses was not significantly impacted as of that date.

The activity in the allowance for credit losses on the Company's trade receivables is as follows:

(in thousands)

Balance at April 30, 2018

Balance at May 1, 2019

Provision for credit losses

10 unchanged sentences

Balance at April 30, 2022

The fair value and unrealized losses on available for sale debt securities, aggregated by investment category and the length of time the security has been in an unrealized loss position, are as follows:

KORN FERRY AND SUBSIDIARIES

2 unchanged sentences

Less Than 12 Months

12 Months or longer

Balance Sheet Classification

Unrealized Loss

Unrealized Losses

Cash and Cash

1 unchanged sentence

Marketable Securities, Non-Current

Balance at April 30, 2021

(in thousands)

Balance at April 30, 2021

Commercial paper

Corporate notes/bonds

The unrealized losses on 18 investments in Commercial paper securities and 15 investments in Corporate notes/bonds were caused by fluctuations in market interest rates.

Balance at April 30, 2022

Commercial paper

Corporate notes/bonds

Treasury and Agency Securities

The unrealized losses on 27 and 18 investments in commercial paper securities, 23 and 15 investments in corporate notes/bonds, and 1 investment and no investments in U.S treasury and agency securities on April 30, 2022 and 2021, respectively, were caused by fluctuations in market interest rates.

The Company only purchases high grade bonds that have a maturity from the date of purchase of no more than two years.

13 unchanged sentences

Total provision for income taxes

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2022 (continued)

The reconciliation of the statutory federal income tax rate to the effective consolidated tax rate is as follows:

4 unchanged sentences

Non-deductible officers compensation

Excess tax expense (benefit) on stock-based compensation

Excess tax (benefit) expense on stock-based compensation

Change in valuation allowance

1 unchanged sentence

Change in uncertain tax positions

R&D tax credit

Effective income tax rate

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021 (continued)

Components of deferred tax assets and liabilities were as follows:

6 unchanged sentences

Allowance for doubtful accounts

Deferred revenue

Gross deferred tax assets

9 unchanged sentences

Deferred tax assets are reduced by a valuation allowance if it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

Management believes uncertainty exists regarding the realizability of certain deferred tax assets and has, therefore, established a valuation allowance for deferred tax assets that are not more-likely-than-not to be realized.

Management believes uncertainty exists regarding the realizability of certain deferred tax assets and has, therefore, established a valuation allowance offsetting deferred tax assets that are not more-likely-than-not to be realized.

Realization of the deferred tax asset is dependent on the Company generating enough taxable income of the appropriate nature in future years.

Although realization is not assured, management believes that it is more likely than-not that the net deferred tax assets will be realized.

In fiscal 2022, the Company’s valuation allowance decreased by $ 1.1 million primarily due to the reversal of valuation allowance previously recorded against deferred tax assets, including net operating losses, of certain foreign subsidiaries that had returned to profitability and were now more-likely-than-not to realize those deferred tax assets.

In fiscal 2021 and 2020, the Company’s valuation allowance increased by $ 7.3 million and $ 3.8 million, respectively, primarily due to increases in net operating losses in certain foreign jurisdictions that were not more-likely-than-not to be realized.

Deferred tax assets and deferred tax liabilities are presented net on the consolidated balance sheets by tax jurisdiction.

As of April 30, 2022, the Company had U.S.

federal net operating loss carryforwards of $ 2.2 million, which the Company anticipates will be fully utilized by fiscal 2028 .

federal net operating loss carryforwards of $ 14.6 million, which if unutilized, will begin to expire in fiscal 2030 .

The Company has state net operating loss carryforwards of $ 34.2 million, which, if unutilized, will begin to expire in fiscal 2023 .

The Company also has foreign net operating loss carryforwards of $ 112.5 million, which, if unutilized, will begin to expire in fiscal 2023 .

We continue to consider approximately $ 571.3 million of undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, have provided no taxes on such earnings other than the Transition Tax.

We continue to consider approximately $ 662.1 million of undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, have provided no state, local or foreign withholding income taxes on such

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2022 (continued)

While we do not anticipate a need to repatriate funds to the U.S.

to satisfy domestic liquidity needs, we review our cash positions regularly and, to the extent we determine that all or a portion of our foreign earnings are not indefinitely reinvested, we provide additional taxes, if applicable, including foreign withholding taxes and U.S.

state income taxes.

to satisfy domestic liquidity needs, we review our cash positions regularly and, to the extent we determine that all or a portion of our foreign earnings are not indefinitely reinvested, we provide additional state, local and foreign withholding income taxes .

Under current U.S.

federal tax law, w e do not expect to incur a U .

federal income tax liability on the undistributed earnings in the event they are repatriated to the United States.

The Company elected to treat taxes due on future U.S.

8 unchanged sentences

federal, state and foreign).

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021 (continued)

Unrecognized tax benefits are the differences between the amount of benefits of tax positions taken, or expected to be taken, on a tax return and the amount of benefits recognized for financial reporting purposes.

11 unchanged sentences

These resolutions could reduce the Company’s liability for unrecognized tax benefits by approximately $ 2.9 million.

The Company does not expect a change in the amount of unrecognized tax benefits to have a material financial statement impact.

The Company classifies interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes.

The Company had accruals of $ 1.4 million, $ 0.9 million, and $ 0.6 million for interest related to unrecognized tax benefits as of April 30, 2022, 2021, and 2020 respectively.

The Company had an accrual of $ 0.5 million as of April 30, 2021, for penalties related to unrecognized tax benefits and no accrual for penalties related to unrecognized tax benefits in fiscal 2020 and 2019.

The Company had an accrual of $ 0.5 million and $ 0.5 million as of April 30, 2022 and 2021, respectively, for penalties related to unrecognized tax benefits.

The Company recognized tax expense of $ 0.4 million, $ 0.8 million, and $ 0.2 million for interest and penalties related to unrecognized tax benefits during fiscal 2022, 2021, and 2020, respectively.

9 unchanged sentences

The net book value of the Company’s computer software costs included in property and equipment, net was $ 94.7 million and $ 85.6 million as of April 30, 2022 and 2021, respectively.

Depreciation expense for property and equipment was $ 42.6 million, $ 39.0 million and $ 33.0 million during fiscal 2021, 2020 and 2019, respectively.

KORN FERRY AND SUBSIDIARIES

1 unchanged sentence

April 30, 2022 (continued)

Depreciation expense for property and equipment was $ 43.2 million, $ 42.6 million and $ 39.0 million during fiscal 2022, 2021 and 2020, respectively.

Long-Term Debt

13 unchanged sentences

The remainder of the proceeds were used for general corporate requirements.

The effective interest rate on the Notes is 4.86 %.

The effective interest rate on the Notes is 4.86 % as of April 30, 2022.

As of April 30, 2022 and 2021, the fair value of the Notes was $ 379.5 million and $ 416.5 million, respectively, based on borrowing rates then required of notes with similar terms, maturity and credit risk.

9 unchanged sentences

The Credit Agreement provides for a $ 650.0 million five-year senior secured revolving credit facility (the “Revolver”), and contains certain customary affirmative and negative covenants, including a maximum consolidated net leverage ratio, a maximum consolidated secured net leverage ratio and a minimum interest coverage ratio.

The Credit Agreement permits the payment of dividends to stockholders and Company share repurchases so long as there is no default under the Credit Agreement, the 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 the pro forma liquidity is at least $ 50.0 million.

KORN FERRY AND SUBSIDIARIES

1 unchanged sentence

April 30, 2022 (continued)

the pro forma liquidity is at least $ 50.0 million.

The principal balance of the Revolver, if any, is due on the date of its termination.

2 unchanged sentences

At the Company’s 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 1.125 % 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 the Company’s total funded debt to adjusted EBITDA ratio (as set forth in the Credit Agreement, the “consolidated net leverage ratio”) at such time.

In addition, the Company 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 the Company’s consolidated net leverage ratio at such time, and fees relating to the issuance of letters of credit.

The average interest rate on our current and previous term loan for fiscal 2020 and 2019 was 3.34 % and 3.50 %, respectively.

The average interest rate on our current and previous term loan for fiscal 2020 was 3.34 %.

As of April 30, 2022 and 2021, there was no outstanding liability under the Revolver.

2 unchanged sentences

As of April 30, 2022, the Company was in compliance with its debt covenants.

The Company had a total of $ 646.0 million available under the Revolver after $ 4.0 million of standby letters of credit have been issued as of April 30, 2021 and 2020.

The Company had a total of $ 645.3 million and $ 646.0 million available under the Revolver after $ 4.7 million and $ 4.0 million of standby letters of credit have been issued as of April 30, 2022 and 2021, respectively.

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

10 unchanged sentences

This work is supported by a comprehensive range of some of the world’s leading lP and data.

Digital leverages an artificial intelligence powered, machine-learning platform to identify structure, roles, capabilities and behaviours needed to drive business forward.

This 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.

The Consulting teams employ an integrated approach across our core capabilities and integrated 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 and 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.

The Company’s approach to placing talent that brings together research-based IP, proprietary assessments, and behavioral interviewing with 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

KORN FERRY AND SUBSIDIARIES

1 unchanged sentence

April 30, 2022 (continued)

four of the Company’s reportable segments (Executive Search North America, Executive Search EMEA, Executive Search Asia Pacific, and Executive Search Latin America) .

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

The Company leverages 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.

Executive Search is managed by geographic regional leaders.

Worldwide operations for Consulting, Digital, and RPO and Professional Search are managed by their Chief Executive Officers.

Worldwide operations for Consulting, Digital, and RPO & Professional Search are managed by their Chief Executive Officers.

The Executive Search geographic regional leaders and the Chief Executive Officers of Consulting, Digital, and RPO & Professional Search report directly to the Chief Executive Officer of the Company.

10 unchanged sentences

Net income attributable to noncontrolling interest

Other income, net

Other loss, net

Interest expense, net

2 unchanged sentences

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 ( 1)

Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes integration/acquisition and net restructuring charges.

Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes integration/acquisition costs and impairment charges.

Year Ended April 30, 2021

4 unchanged sentences

Net income attributable to noncontrolling interest

Other loss, net

Other income, net

Interest expense, net

2 unchanged sentences

Depreciation and amortization

Other loss, net

Other income, net

Integration/acquisition costs

Restructuring charges, net

Separation costs

Adjusted EBITDA ( 1)

Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes integration/acquisition costs, net restructuring charges and separation costs.

KORN FERRY AND SUBSIDIARIES

1 unchanged sentence

April 30, 2022 (continued)

Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes integration/acquisition costs and net restructuring charges.

Year Ended April 30, 2020

4 unchanged sentences

Net income attributable to noncontrolling interest

Other income, net

Other loss, net

Interest expense, net

2 unchanged sentences

Depreciation and amortization

Other income, net

Other loss, net

Integration/acquisition costs

Tradename write-offs

Restructuring charges, net

Separation costs

Adjusted EBITDA ( 1)

Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes, integration/acquisition costs and tradename write-offs .

Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes, integration/acquisition costs, net restructuring charges and separation costs.

Fee revenue attributed to an individual customer or country, other than the U.S.

and United Kingdom, did not account for more than 10 % of the total fee revenue in fiscal 2021, 2020 or 2019.

in fiscal year 2022 and the U.S and United Kingdom in fiscal year 2021 and 2020, did not account for more than 10 % of the total revenue in those fiscal years.

Fee revenue classified by country in which the Company derives revenues are as follows:

5 unchanged sentences

Other than the U.S.

and United Kingdom, no single country had over 10% of the total long-lived assets, excluding financial instruments and tax assets.

in fiscal 2022 and the U.S.

and United Kingdom in fiscal 2021 and 2020, no single country had over 10% of the total long-lived assets, excluding financial instruments and tax assets.

Long-lived assets, excluding financial instruments and tax assets, classified by location of the controlling statutory country are as follows:

6 unchanged sentences

Restructuring Charges, Net

On April 20, 2020, in light of the uncertainty in worldwide economic conditions caused by the COVID-19 pandemic and, as part of a broader program aimed at further enhancing Korn Ferry’s strong balance sheet and liquidity position, the Company adopted a restructuring plan intended to adjust its cost base to the current economic environment and to position the Company to invest into the recovery.

The Company continued the implementation of this plan in the first quarter of fiscal 2021.

There were no new such actions in the rest of fiscal 2021.

Rather, the Company completed the actions initiated in prior quarters and made adjustments to previously recorded restructuring accruals resulting in restructuring charges, net of $ 30.7 million and $ 40.5 million during fiscal 2021 and 2020, respectively, across all lines of business relating to severance for eliminated positions.

There were no restructuring charges in fiscal 2022.

In the fourth quarter of fiscal 2020, in light of the uncertainty in worldwide economic conditions caused by COVID-19 and, as part of a broader program aimed at further enhancing Korn Ferry’s strong balance sheet and liquidity position, the Company adopted a restructuring plan intended to adjust its cost base to the then-current economic environment and to position the Company to invest in its recovery.

The Company continued the implementation of this plan in the first quarter of fiscal 2021 and this resulted in restructuring charges, net of $ 30.7 million and $ 40.5 million during fiscal 2021 and 2020, respectively, across all lines of business relating to severance for positions that were eliminated.

KORN FERRY AND SUBSIDIARIES

1 unchanged sentence

April 30, 2022 (continued)

In the third quarter of fiscal 2020, the Company adopted a restructuring plan to rationalize its cost structure to realize the efficiencies and operational improvement that the investments in the Digital business, as discussed in Note 12— Segments , have enabled, or position us to realize.

The restructuring plan impacted both the Consulting and Digital segments and included the elimination of redundant positions, which resulted in restructuring charges, net of $ 18.1 million in fiscal 2020, relating to severance for eliminated positions.

This plan impacted the Consulting and Digital segments which resulted in restructuring charges, net of $ 18.1 million in fiscal 2020, relating to severance for redundant positions that were eliminated.

Changes in the restructuring liability were as follows:

1 unchanged sentence

(in thousands)

As of April 30, 2019

As of May 1, 2019

Restructuring charges, net

8 unchanged sentences

As of April 30, 2021

Reductions for cash payments

Exchange rate fluctuations

As of April 30, 2022

As of April 30, 2022 and 2021, the restructuring liability is included in the current portion of other accrued liabilities on the consolidated balance sheets, except for $ 0.5 million and $ 0.6 million, respectively, which are included in other long-term liabilities.

6 unchanged sentences

Balance as of April 30, 2021

Additions (1)

Exchange rate fluctuations

Balance as of April 30, 2022

Additions to goodwill in fiscal 2022 was due to $ 76.8 million and $ 28.2 million from the acquisition of the Lucas Group and Patina Solutions Group, respectively .

Tax deductible goodwill from the Miller Heiman acquisition was $ 22.7 million and $ 24.5 million as of April 30, 2022 and 2021, respectively.

14 unchanged sentences

Total Intangible assets

Acquisition-related intangible assets acquired in fiscal 2020 consists of IP, customer relationships and tradenames of $ 36.0 million, $ 6.2 million, and $ 3.2 million, respectively, with weighted-average useful lives from the date of purchase of seven years , ten years , and nine years , respectively.

During fiscal 2019, the Company decided to further integrate our go-to-market activities under one master brand —Korn Ferry, and discontinued the use of all sub-brands.

Two of the Company’s sub-brands, Hay Group and Lominger, were acquired by Korn Ferry through acquisitions.

As a result of the decision to discontinue their use, the Company took a non-cash intangible asset impairment charge of $ 106.6 million during fiscal 2019, recorded in general and administrative expenses on the accompanying statement of income, of which $ 77.0 million was recorded in the Consulting reportable segment and $ 29.6 million in the Digital reportable segment.

In fiscal 2022 there were intangible assets additions of $ 11.6 million and $ 5.7 million from the acquisition of the Lucas Group and Patina Solutions Group, respectively.

Acquisition-related intangible assets acquired in fiscal 2022 consists of customer relationships and tradenames of $ 15.5 million and $ 1.8 million, respectively, with weighted-average useful lives from the date of purchase of seven years and two years , respectively.

Amortization expense for amortized intangible assets was $ 20.3 million, $ 19.2 million and $ 16.3 million during fiscal 2022, 2021 and 2020, respectively.

7 unchanged sentences

Non-lease components primarily include maintenance, insurance, taxes and other utilities.

The Company has decided to combine fixed payments for non-lease components with its lease payments and account for them as a single lease component, which increases its ROU assets and lease liabilities.

The Company combines fixed payments for non-lease components with its lease payments and accounts for them as a single lease component, which increases its ROU assets and lease liabilities.

Some of the leases include one or more options to renew or terminate the lease at the Company’s discretion.

1 unchanged sentence

The Company has elected not to recognize a ROU asset or lease liability for leases with an initial term of 12 months or less.

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021 (continued)

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of the future minimum lease payments.

2 unchanged sentences

Operating leases contain both office and equipment leases and have remaining terms that range from less than one year to 10 years, some of which also include options to extend or terminate the lease.

Finance leases are comprised of equipment leases and have remaining terms that range from less than one year to almost 5 years.

Finance leases are comprised

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2022 (continued)

of equipment leases and have remaining terms that range from less than one year t o five years .

Finance lease assets are included in property and equipment, net while finance lease liabilities are included in other accrued liabilities and other liabilities.

During fiscal 2022, the Company reduced its real estate footprint and as a result recorded an impairment charge of the ROU assets of $ 7.4 million recorded in the consolidated statements of income.

On November 1, 2021, the Company acquired Lucas Group and as a result recognized ROU assets of $ 3.8 million with a corresponding liability of $ 9.4 million.

On April 1, 2022, the Company acquired Patina Solutions Group and as a result recognized ROU asset of $ 0.2 million with a corresponding liability of $ 0.7 million.

In both acquisitions, the ROU asset was adjusted to reflect unfavorable lease terms when compared with current market rates.

As a result of the acquisition of the Acquired Companies in fiscal 2020, the Company recognized ROU assets of $ 3.2 million with a corresponding liability of $ 6.7 million.

13 unchanged sentences

Total lease cost

Rent expense, as previously defined under ASC 840, which includes the Company leased office premises and certain office equipment leases for fiscal 2019 was $ 58.2 million.

Supplemental cash flow information related to leases was as follows:

7 unchanged sentences

Finance leases

Supplemental balance sheet information related to leases was as follows:

KORN FERRY AND SUBSIDIARIES

1 unchanged sentence

April 30, 2022 (continued)

Supplemental balance sheet information related to leases was as follows:

Year Ended April 30,

18 unchanged sentences

imputed interest

On November 1, 2019, the Company completed its acquisition of the Acquired Companies for $ 108.6 million, net of cash acquired.

The Acquired Companies contributed a world-class portfolio of learning, development and performance improvement offerings and expertise to Korn Ferry and bolster the Company’s substantial leadership development capabilities.

These companies are included in the Digital segment which, working closely with the Consulting segment, provides clients with direct access to data, insights and analytics from one of the world’s most comprehensive people and organizational databases.

The addition of the Acquired Companies further expanded Korn Ferry’s vast IP and content and leveraged the firm’s digital delivery platforms.

Actual results of operations of the Acquired Companies are included in the Company’s consolidated financial statements from November 1, 2019, the effective date of the acquisition.

KORN FERRY AND SUBSIDIARIES

1 unchanged sentence

April 30, 2022 (continued)

The following table provides a summary of the net assets acquired in fiscal 2020 (as no acquisitions were completed in fiscal 2021 or 2019):

April 30, 2020

The following table provides a summary of the net assets acquired in the periods indicated (no acquisitions were completed in fiscal 2021):

2022 (2), (3)

(in thousands)

6 unchanged sentences

Purchase price

Included in current assets is acquired receivables in the amount of $ 41.1 million.

The aggregate purchase price was allocated on a preliminary basis to the assets acquired and liabilities assumed on their estimated fair values at the date of acquisition.

Included in current assets is acquired receivables in the amount of $ 24.5 million and $ 41.1 million for acquisitions completed in fiscal 2022 and 2020 , respectively .

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

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

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.

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.

Actual results of operation of Patina Solution Group are included in the Company’s consolidated financial statement from April 1, 2022, the effective date of the acquisition.

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

Lucas Group has contributed a substantial professional search and interim expertise that has enhanced the Company’s search portfolio.

The addition of Lucas Group to Korn Ferry’s broader talent acquisition portfolio – spanning Executive Search, RPO, and Professional Search – has accelerated Korn Ferry’s ability to capture additional share of this significant market.

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

Actual results of operations of Lucas Group are included in the Company’s consolidated financial statements from November 1, 2021, the effective date of the acquisition.

On November 1, 2019, the Company completed its acquisition of the Acquired Companies for $ 108.6 million, net of cash acquired.

These companies are included in the Digital segment.

The addition of the Acquired Companies further expanded Korn Ferry’s vast IP and content and leveraged the firm’s digital delivery platforms.

Actual results of operations of the Acquired Companies are included in the Company’s consolidated financial statements from November 1, 2019, the effective date of the acquisition.

During fiscal 2021, the Company finalized the purchase price allocation by recording an increase in goodwill of $ 2.6 million as a result of additional tax liabilities.

For each acquisition, the aggregate purchase price was allocated on a preliminary basis to the assets acquired and liabilities assumed on their estimated fair values at the date of acquisition.

As of April 30, 2022, the aggregate purchase price allocations for Lucas Group and Patina Solutions remain preliminary with regard to income taxes .

The measurement period for purchase price allocation ends as soon as information on the facts and circumstances become available, not to exceed 12 months.

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2022 (continued)

Commitments and Contingencies

6 unchanged sentences

The Company is currently not a party to any litigation which, if resolved adversely against the Company, would, in the opinion of management, after consultation with legal counsel, have a material adverse effect on the Company’s business, financial position or results of operations.

Quarterly Results (Unaudited)

The following table sets forth certain unaudited consolidated statements of income data for the quarters in fiscal 2021 and 2020.

The unaudited quarterly information has been prepared on the same basis as the annual financial statements and, in management’s opinion, includes all adjustments necessary to present fairly the information for the quarters presented.

Quarters Ended

(in thousands, except per share data)

Operating income (loss)

Net income (loss)

Net income (loss) attributable to Korn Ferry

Net earnings (loss) per common share:

KORN FERRY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2021 (continued)

Subsequent Event

3 unchanged sentences

The Board may amend, revoke or suspend the dividend policy at any time and for any reason.

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

Credit Facility

On June 24, 2022 , the Company entered into an amendment (the “Amendment”) to its December 16, 2019 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 (the “Revolver”) and a $ 500 million delayed draw term loan facility (the “Delayed Draw Facility”, and together with the Revolver, the “Credit Facilities”).

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 plus an unlimited amount subject to a consolidated secured net leverage ratio of 3.25 to 1.00.

Extensions of credit under the Delayed Draw Facility are available to the Company in up to two advances through June 24, 2023.

Any amounts undrawn under the Delayed Draw Facility as of June 24, 2023 will no longer be available to the Company.

The Amended Credit Agreement contains certain customary affirmative and negative covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens and make certain acquisitions, investments, asset dispositions and restricted payments.

In addition, the Amended Credit Agreement contains a covenant that requires the Company to maintain a maximum consolidated secured leverage ratio of 3.50 to 1.00 (which may be temporarily increased to 4.00 following certain material acquisitions under certain circumstances) (the “Financial Covenant”).

The principal balance of the Delayed Draw Facility, if any, is subject to annual term loan amortization of 2.5 % for the fiscal quarters ending September 30, 2022 through June 30, 2024 , and 5.0 % for the fiscal quarters ending September 30, 2024 through June 30, 2027 , with the remaining principal due at maturity.

The principal balance of the Revolver, if any, is due at maturity.

The Credit Facilities mature on June 24, 2027 and any unpaid principal balance is payable on

KORN FERRY AND SUBSIDIARIES

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

April 30, 2021

(in thousands)

Deferred tax asset valuation allowance:

Year Ended April 30, 2021

Year Ended April 30, 2020

Year Ended April 30, 2019

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2022 (continued)

The Credit Facilities may also be prepaid and terminated early by the Company at any time without premium or penalty (subject to customary breakage fees).

Amounts outstanding under the Amended Credit Agreement will bear interest at a rate equal to, at the Company’s election, either Term Secured Financing Overnight Rate (“SOFR”) plus a SOFR adjustment of 0.10 %, plus an interest rate margin between 1.125 % per annum and 2.00 % per annum, depending on the Company’s consolidated net leverage ratio, or base rate plus an interest rate margin between 0.125 % per annum and 1.00 % per annum, depending on the Company’s consolidated net leverage ratio.

In addition, the Company will be required to pay to the lenders ticking fee of 0.20 % per annum on the actual daily unused portion of the Delayed Draw facility, and a quarterly commitment fee ranging from 0.175 % to 0.300 % per annum on the actual daily unused amount of the Revolver, based upon the Company’s consolidated net leverage ratio at such time, and fees relating to the issuance of letters of credit.

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

What changed 10-K

Item 9A. Controls and Procedures