UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 20162019

orOR

For the transition period from                  to                 

Commission file number 1-32961

CBIZ, INC.

(Exact name of registrant as specified in its charter)

(216) 447-9000

(Registrant’s telephone number, including area code: (216) 447-9000code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ☐     No   ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes   ☐     No   ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ☒     No   ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months.months (or for such shorter period that the registrant was required to submit such files).    Yes   ☒     No   ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes   ☐     No   ☒

The aggregate market value of the votingcommon stock held by non-affiliates of the registrant, computed by reference to the last sales price of such common stock as of the closing of trading on June 28, 2019, was approximately $555.3 million as of June 30, 2016.$1.0 billion.

The number of outstanding shares of the registrant’s common stock is 54,029,55555,305,500 as of February 28, 2017.21, 2020.

DOCUMENTS INCORPORATED BY REFERENCE

The registrant incorporates by reference in Part III hereof portions of its definitive Proxy Statement for its 20172020 Annual Meeting of Stockholders.

CBIZ, INC.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 20162019

Table of Contents

Forward-Looking Statements

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (“the Exchange Act”). All statements other than statements of historical fact included in this Annual Report on Form 10-K including, without limitation, “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding CBIZ’sour financial position, business strategy and plans and objectives for future performance are forward-looking statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are commonly identified by the use of such terms and phrases as “will,” “could,” “can,” “may,” “strives,“strive,” “hopes,“hope,” “intends,“intend,” “believes,“believe,” “estimates,“estimate,” “expects,“continue,” “projects,“plan,” “anticipates,“expect,” “project,” “anticipate,” “outlook,” “foreseeable future,” “seeks”“seek” and words or phrases of similar import in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance or results of current and anticipated services, sales efforts, expenses, and financial results.

From time to time, the Companywe may also provide oral or written forward-looking statements in other materials the Company releaseswe release to the public. Any or all of the Company’sour forward-looking statements in this Annual Report on Form 10-K and in any other public statements that the Company makes,we make, are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Such forward-looking statements can be affected by inaccurate assumptions the Companywe might make or by known or unknown risks and uncertainties. Many factors mentioned in “Item 1A. Risk Factors” will be important in determining future results. Should one or more of these risks or assumptions materialize, or should the underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Such risks and uncertainties include, but are not limited to:

Consequently, no forward-looking statement can be guaranteed. The Company’sOur actual future results may vary materially, and CBIZ undertakeswe undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures the Company makeswe make on related subjects in the quarterly, periodic and annual reports the Company fileswe file with the United States Securities and Exchange Commission (the “SEC”). Also note that the Company provideswe provide cautionary discussion of risks, uncertainties and possibly inaccurate assumptions relevant to itsour businesses as discussed in Item 1.1 and Item 1A. These are factors that the Company thinkswe think could cause itsour actual results to differ materially from expected and historical results. Other factors besides those described here could also adversely affect operating or financial performance.

The following text is qualified in its entirety by reference to the more detailed information and consolidated financial statements (including the notes thereto) appearing elsewhere in this Annual Report on Form 10-K. Unless the context otherwise requires, references in this Annual Report to “we,” “our,” “us”,“us,” “CBIZ” or the “Company” shall mean CBIZ, Inc., a Delaware corporation, and its wholly-owned subsidiaries. All references to years, unless otherwise noted, refer to CBIZ’sour fiscal year which ends on December 31.

PART I

Item 1. Business.

Introduction

Overview

CBIZ, has been operating asInc. is a professionalleading provider of financial, insurance and advisory services business since 1996. We builttailored to help our professional services business through acquiringclients and integrating accountingtheir businesses grow and financial service providers, group health benefits consulting firms, propertysucceed. As a trusted advisor to small and casualty brokerage firms, payroll service providers, and valuation and other service firms throughoutmidsized businesses (“SMB”) across the United States.States, our comprehensive approach enables CBIZ is listedto address our clients’ most urgent needs and complex challenges. With more than 100 offices in 31 states and the District of Columbia, we are one of the largest accounting, insurance brokerage and related financial services providers in the nation. Shares of our common stock are traded on the New York Stock Exchange (“NYSE”) under the symbol “CBZ.”

Business Strategy

WeSince our founding in 1996, we have built our business through investment in high-growth industries and service lines and the strategic acquisition of financial and insurance services providers, specialty businesses and advisory firms.

At CBIZ, our mission is to provide professional business services, productsexceptional advice and solutions that help our clients growachieve their goals. We strive to be our clients’ preferred partner for their financial, insurance and succeedadvisory needs. We achieve this by better managingoffering a higher level of individualized service for SMB clients than what is typically delivered by traditional national firms. We are embedded in local and regional markets and build meaningful relationships to foster deeper understanding of our clients’ business and industry.  Our localized resources are supported by a robust national network of subject matter experts and specialty services that respond to our clients’ evolving needs. We believe this approach enables CBIZ to “out local the nationals, and out national the locals” that ultimately creates a differentiated experience for the clients we serve.

Our custom integrated solutions are designed to be comprehensive and eliminate the need for coordination of multiple service providers. We also leverage technology to create efficiencies and to link aligned services such as benefits, payroll and human capital management services. Our strength is helping our clients to focus on their financesown core competencies and employees. These servicesmanage risk through the efficient coordination and delivery of essential professional services.

Available Information - Our principal executive office is located at 6050 Oak Tree Boulevard, South, Suite 500, Cleveland, Ohio 44131, and our telephone number is (216) 447-9000. Our website is located at https://www.cbiz.com. We make available, free of charge on our website, through our investor relations page, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after we file (or furnish) such reports with the SEC. In addition, the SEC maintains an Internet Website that contains reports, proxy and information statements and other information about us at https://www.sec.gov. Our corporate code of conduct and ethics and the charters of the Audit Committee, the Compensation and Human Capital Committee and the Nominating and Governance Committee of the Board of Directors are providedavailable on the investor relations page of our website, referenced above, and in print to primarily small and midsized businesses (“SMB”), as well as individuals, governmental entities and not-for-profit enterprises throughout the United States and parts of Canada. CBIZ delivers itsany shareholder who requests them.

Business Services - We deliver our integrated services through the following three practice groups:

We believe that our diverse and integrated service offerings result in advantages for both the client and for CBIZ. By providing custom solutions that help clients manage their finances and employees, we enable our clients to focus their resources on their own core business and operational competencies. Additionally, working with one provider for several solutions enables our clients to utilize their resources more efficiently by eliminating the need to coordinate with multiple service providers. The ability to combine several services and offer them through one trusted provider distinguishes CBIZ from other service providers.

Business Strategy

We strive to maximize shareholder value and believe this is accomplished through growth in revenue and earnings per share, as well as the strategic allocation and deployment of free cash-flow and capital resources.

Revenue

We believe revenue growth will be achieved through internal organic growth, cross-serving additional services to our existing clients, and targeted acquisitions. Each of these components is critical to the long-term growth strategy, and we expect each component to contribute to our long-term revenue growth.

Earnings Per Share

We expect to grow earnings per share by increasing revenue and achieving operating leverage through improved productivity and cost management.

Cash Flows and Capital Resources

Our strategy is to utilize capital resources for strategic initiatives that will optimize shareholder return. The highest priority for the utilization of capital is focused on strategic acquisitions. We also believe that repurchasing shares of our common stock is a use of cash that provides stockholder value. Accordingly, CBIZ has historically adopted a repurchase plan annually and continually evaluates share repurchase opportunities. We may repurchase shares of our common stock when, after assessing capital needed to fund acquisitions and seasonal working capital needs, capital resources are available and such repurchases are accretive to stockholders.

Business Services

CBIZ delivers its integrated services through three operating practice groups.Practices. A general description of the services provided by each practice group is providedpresented in the table below.

Practice Groups

Revenue by practice group for the years ended December 31, 2016, 2015 and 2014 is provided in the table below (in thousands):

A discussion of our practice groups and certain external relationships and regulatory factors that currently impact those practice groups are provided below. See Note 21, Segment Disclosures, to the accompanying consolidated financial statements for further discussion of the CBIZ practice groups.

Financial Services

Financial Services

The Financial Services practice group  is divided into a Financial Services division, which represents the various accounting units spread geographically throughout the United States that providecomprised of core accounting services regionally, and a National Services division consisting of those units that provide their specialty services nationwide. Coreincluding traditional accounting, services consist mainly of accounting and tax compliance and consulting, as well asspecialty services, including transaction and risk advisory services, litigation support, while National Services consist primarily ofvaluation, federal and state governmental healthcaregovernment health care compliance, valuation services, real estate consulting and internal audit outsourcing.outsourcing nationwide. Financial Services reports to the President of Financial Services.  

Restrictions imposed by independence requirements and state accountancy laws and regulations preclude CBIZus from rendering audit and attest services (other than internal audit services). As such, CBIZ and its subsidiarieswe maintain joint-referral relationships and administrative service agreements (“ASAs”) with independent licensed Certified Public Accounting (“CPA”) firms (the “CPA firms”) under which audit and attest services may be provided to CBIZ'sour clients by such CPA firms. These firms are owned by licensed CPAs, a vast majority of whom are also employed by our subsidiaries. Under these ASAs, we provide a range of services to the CPA firms, including (but not limited to): administrative functions such as office management, bookkeeping and accounting; preparing marketing and promotional materials; providing office space, computer equipment and systems support; and leasing administrative and professional staff. Services are performed in exchange for a fee.

Fees earned by CBIZ under the ASAs are recorded as revenue in the accompanying Consolidated Statements of Comprehensive Income and totaled approximately $144.8 million, $137.5 million and $133.7 million for the years ended December 31, 2016, 2015 and 2014, respectively, a majority of which is related to services rendered to privately-held clients and governmental agencies. In the event that accounts receivable and unbilled work in process become uncollectible by the CPA firms, the service fee due to CBIZ is

typically reduced on a proportional basis. The ASAs have terms ranging up to eighteen years, are renewable upon agreement by both parties, and have certain rights of extension and termination.

At December 31, 2016,2019, we maintained ASAs with fourfive CPA firms. Most of the members and/or stockholders of thethose CPA firms are also CBIZour employees, and CBIZ renderswe render services to the CPA firms as an independent contractor. One of our ASAs is with Mayer Hoffman McCann, P.C. (“Mayer Hoffman”), an independent national CPA firm headquartered in Kansas City, Missouri. Mayer Hoffman has 251170 stockholders, athe vast majority of whom are also employees of CBIZ.our employees. Mayer Hoffman maintains an eight member board of directors. There are no board members of Mayer Hoffman who hold senior officer positions at CBIZ. Our association with Mayer Hoffman offers clients access to the multi-state resources and expertise of a national CPA firm. We also have an ASA with Myers &and Stauffer LLCLC (“M&S”MSLC”), an independent national governmental healthcarehealth care consulting firm headquartered in Kansas City, Missouri. M&SMSLC has eighteleven equity members, all of whom are also employees of CBIZ. M&Sour employees. MSLC maintains a threefive member executive committee, none of whom hold senior officer positions at CBIZ.

Although the ASAs do not constitute control, we are one of the beneficiaries of the agreements and may bear certain economic risks. As such, the CPA firms with which we maintain ASAs qualify as variable interest entities.

The ASAs have terms ranging up to fifteen years, are renewable upon agreement by both parties, and have certain rights of extension and termination. Under these ASAs, we provide a range of services to the CPA firms, including (but not limited to): administrative functions such as office management, bookkeeping and accounting; preparing marketing and promotional materials; providing office space, computer equipment, systems support and administrative and professional staff. Services are performed in exchange for a fee. Fees earned by us under the ASAs are recorded as revenue in the accompanying Consolidated Statements of Comprehensive Income and totaled approximately $157.6 million, $154.0 million and $156.4 million for the years ended December 31, 2019, 2018 and 2017, respectively, a majority of which is related to services rendered to privately-held clients and governmental agencies. In the event that accounts receivable and unbilled work in process become uncollectible by the CPA firms, the service fee due to us is typically reduced on a proportional basis. Refer to Note 1, OrganizationBasis of Presentation and Summary of Significant Accounting Policies,, to the accompanying consolidated financial statements for further discussion.

Benefits and Insurance Services

Benefits and Insurance Services

The CBIZ Benefits provides brokerage and Insurance Services practice group operates under a divisional President who oversees the practice group, along with a senior management team aligned along functional, product, and unit management lines. The Benefits and Insurance Services group is organizedconsulting along lines of services such as employeewhich include group health benefits consulting and brokerage, property and casualty brokerage, retirement plan advisory, services, payroll, services, human capital advisory services,management, actuarial, services, life insurance and other services that serve localrelated services. The leader for each service line reports to the President of Benefits and regional clients with national resources.

Insurance Services.

The Benefits and Insurance Services practice group maintains relationships with many different insurance carriers. We do not assume underwriting risk. Some of these carriers have compensation arrangements with CBIZus whereby some portion of payments due to the Company may be contingent upon meeting certain performance goals, or upon CBIZour providing client services that would otherwise be provided by the carriers. These compensation arrangements are provided to us as a result of our performance and expertise, and may result in enhancing our ability to access certain insurance markets and services on behalf of our clients. The aggregate compensation related to these arrangements received during the years ended December 31, 2016, 20152019, 2018 and 20142017 was less than 2% of consolidated CBIZ revenue for the respective periods.

National Practices

Our National Practices group consists ofprovides two services;services: healthcare consulting and information technology. The healthcare consulting serves hospitals and other healthcare providers, specializingbusiness, with expertise in revenue management, reimbursement optimization and managed care contracting.contracting, serves hospitals and other healthcare providers. The information technology business has been serving one client in the United States and Canada for more than fifteen15 years.

Revenue

SalesRevenue by practice group for the years ended December 31, 2019, 2018 and Marketing2017 is provided in the table below (in thousands) along with a discussion of certain external relationships and regulatory factors that currently impact those segments.

Our branding goals are focused on providing us with a consistent image while at the same time providing support, toolsrevenue growth model includes three components; internal organic growth, cross-serving additional services to our existing clients, and resources for each practice and markettargeted acquisitions. Each of these components is critical to utilize within each of our distinct geographic and industry markets. Three key strategies are employed to accomplish these goals: (i) thought leadership, (ii) market segmentation, and (iii) sales/sales management process development.long-term growth strategy.

Our focus has been on developing marketing strategies that specifically support each of our major practice areas: Financial Services (accounting) and Benefits and Insurance Services (insurance, payroll and human resources). In each of these segments, emphasis has been put on marketing technology that has the highest and most measurable return on investment, including enhanced targeted email campaigns, webinars, web lead generation, and an evolving web presence.

We have an initiative to build relationships and reputation through social media. Beginning with comprehensive training and support for LinkedIn and Twitter, our social media efforts have expanded to include programs on Facebook, Google+, YouTube and social sharing sites such as Slideshare and Pinterest.

Clients

We provide professional services to over 90,000 clients including overof which more than 50,000 are business clients. By providing various professional services and administrative functions, we enable our clients to focus their resources on their own operational competencies. Reducing administrative functions allows clients to enhance productivity, reduce costs and improve service quality and efficiency by focusing on their core business. Depending on a client's size and capabilities, it may choose to utilize one, some or many of the diverse and integrated services offered by the Company.

Our clients represent a large variety of industries and markets, including many government agencies, with the Company targetingmarkets. We target primarily SMB companies that have between 10050 and 2,000 employees and annual revenues between $5 million and $200 million. Our largest client comprised less than 3%2.7% of our consolidated revenue in 20162019 and is included in the National Practices operating practice group. Management believes that itsour client diversity helps insulate the Companyus from a downturn in a particular industry or geographic market. Nevertheless, economic conditions among select clients and groups of clients may have an impact on the demand for the services provided by us.

Competition

The professional business services industry is highly fragmented and competitive, with a majority of industry participants, such as accounting, group health and welfare benefits consultants, payroll providers or professional service organizations, offering only a limited number of services. Competition is based primarily on client relationships, quality of professional advice, range and quality of services or product offerings, customer service, timeliness, geographic proximity, and competitive rates. We compete with a number of multi-location regional or national professional services firms and a large number of relatively small independent firms in local markets. Our competitors in the professional business services industry include, but are not limited to, independent consulting services companies, independent accounting and tax firms, payroll service providers, independent insurance brokers and divisions of diversified services companies.

that we provide.

Acquisitions and Divestitures

We seek to strengthen our operations and customer service capabilities by selectively acquiringacquire businesses that expand our market position and strengthen our existing service offerings. Weofferings, introduce new specialties and expertise to better serve our clients and enter or expand in desirable geographies and growing markets. In 2019, we completed six acquisitions in 2016. Aggregate considerationand purchased one client list.

From time to time, we divest (through sale or closure) business operations on an as-needed basis that do not contribute to our long-term objectives for the acquisitions consisted of approximately $40.0 million in cash, $21.1 million in contingent considerationgrowth, or that are not complementary to our target service offerings and $2.1 million in CBIZ common stock. We also purchased seven client lists in 2016 for approximately $1.2 million in cash, $1.2 million in guaranteed future consideration and $1.5 million contingent upon future financial performances.markets.

For further discussion regarding acquisitions and divestitures, refer to Note 18, Acquisitions, and Note 19, Discontinued Operations and Divestitures,, to the accompanying consolidated financial statements.statement

Regulation

Our operations are subject to regulation by federal, state, local and professional governing bodies. Accordingly, our business services may be impacted by legislative changes by these bodies, particularly with respect to provisions relating to payroll, benefits administration and insurance services, pension plan administration and tax and accounting. We remain abreast of regulatory changes affecting itsour business, as these changes often affect clients’ activities with respect to employment, taxation, benefits, and accounting. For instance, changes in income, estate, or property tax laws may require additional consultation with clients subject to these changes to ensure their activitiesassist these clients to comply with revised regulations.

We are subject to industry regulation and changes, including changes in laws, regulations, and codes of ethics governing our accounting, insurance, valuation, registered investment advisory and broker-dealer operations, as well as in other industries, the interpretation of which may impact our operations.

We are subject to certain privacy and information security laws and regulations, including, but not limited to those under the Health Insurance Portability and Accountability Act of 1996, The Financial Modernization Act of 1999 (the Gramm-Leach-Bliley Act), the Health Information Technology for Economic and Clinical Health Act, and other provisions of federal and state laws which may restrict our operations and give rise to expenses related to compliance.

As a public company, we are subject to the provisions of the Sarbanes-Oxley Act of 2002 to reform the oversight of public company auditing, improve the quality and transparency of financial reporting by those companies and strengthen the independence of auditors.

With respect to CPA firm clients that are required to file audited financial statements with the SEC, the SEC staff views CBIZus and the CPA firms with which we have contractual relationships as a single entity in applying independence rules established by the accountancy regulators and the SEC. Accordingly, we do not hold any financial interest in an SEC-reporting attest client of an associated CPA firm, enter into any business relationship with an SEC-reporting attest client that the CPA firm performing an audit could not maintain, or sell any non-audit services to an SEC-reporting attest client that the CPA firm performing an audit could not sell, under the auditor independence limitations set out in the Sarbanes-Oxley Act of 2002 and other professional accountancy independence standards. Applicable professional standards generally permit us to provide additional services to privately-held companies in addition to those services which may be provided to SEC-reporting attest clients of an associated CPA firm. CBIZWe and the CPA firms with which we are associated have implemented policies and procedures designed to enable the Companyus and the CPA firms to maintain independence and freedom from conflicts of interest in accordance with applicable standards. Given the policies set by us on our relationships with SEC-reporting attest clients of associated CPA firms, and the limited number and size of such clients, the Sarbanes-Oxley Act of 2002 independence limitations do not, and are not expected to, materially affect our revenues.

The CPA firms with which we maintain ASAs may operate as limited liability companies, limited liability partnerships or professional corporations. The firms are separate legal entities with separate governing bodies and officers. Neither the existence of the ASAs nor the providing of services thereunder constitutes control of the CPA firms by us. CBIZThe Company and the CPA firms maintain their own respective liability and risk of loss in connection with the performance of their respective services. Attest services are not permitted to be performed by any individual or entity that is not licensed to do so. We are not permitted to perform audits, reviews, compilations, or other attest services, do not contract to perform them and do not provide the associated attest reports. Given this legal prohibition and course of conduct, we do not believe it is likely that we would bear the risk of litigation losses related to attest services provided by the CPA firms.

Although the ASAs do not constitute control, we are one of the beneficiaries of the agreements and may bear certain economic risks. As such, the CPA firms with which we maintain ASAs qualify as variable interest entities. Refer to Note 1, OrganizationBasis of Presentation and Summary of Significant Accounting Policies,, to the accompanying consolidated financial statements for further discussion.

As of December 31, 2016, we believe2019, we are in compliance with all governmental and professional organizations regulations in whichrelevant to the services we provide services.provide.

Liability Insurance

We carry insurance policies, including those for commercial general liability, automobile liability, property, crime, professional liability, directors’ and officers’ liability, fiduciary liability, employment practices liability and workers' compensation, subject to prescribed state mandates. Excess liability coverage is carried over the underlying limits provided by the commercial general liability, directors’ and officers’ liability, professional liability and automobile liability policies.

EmployeesSeasonality

At December 31, 2016, we employed approximately 4,600 employees. We believe that we haveCore financial services (traditional tax and accounting services) are impacted by seasonality given the nature of tax season due to a good relationship with our employees. A large numberheavier volume of our employees hold professional licenses or degrees. As a professional services company that differentiates itself from competitors through the quality and diversity of its service offerings, we believe that our employees are our most important asset. Accordingly, we strive to remain competitive as an employer while increasing the capabilities and performance of our employees.

Seasonality

A disproportionately large amount of our revenue occurs in the first half of the year. This is due primarily to accounting and tax services provided by our Financial Services practice group, which is subject to seasonality related to heavy volume inactivity during the first four months of the year.  The Financial Services practice group generated more than 40% of its revenueSeasonality is most evident in the first four months of each of the past five years. In addition, more than 50% of our annualquarterly earnings per share have been(EPS) as most of the annual EPS is earned during the first quarter of eachhalf of the past five years.year. Like most professional service companies, most of our operating costs are relatively fixed in the short term, which generally results in higher operating margins in the first half of the year.

Available InformationCompetition

The professional business services industry is highly fragmented and competitive. We compete with national, regional and local professional services firms including accounting and tax firms, insurance brokers, payroll advisors and consulting firms. The majority of industry participants offers only a limited number of services. We differentiate ourselves from competitors through the quality and diversity of our service offerings.

CBIZ's principal executive office is located at 6050 Oak Tree Boulevard, South, Suite 500, Cleveland, Ohio 44131,We believe that our strong client relationships, high quality of professional services, range of service offerings, industry expertise, geographic proximity, as well as our ability to provide national expertise on a local level give us a competitive advantage.

Employees

We employed approximately 4,800 employees as of December 31, 2019. A large number of our employees hold professional licenses or credentials required of their respective profession. As a leading provider of professional services, our success depends on our ability to recruit, retain, engage, and the Company’s telephone number is (216) 447-9000. CBIZ’s website is located at http://www.cbiz.com. CBIZ makes available, freedevelop a talented workforce. We believe that our employees are our most important asset and strive to be recognized as employer of charge on its website, through the investor information page, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after CBIZ files (or furnishes) such reports with the SEC. The public may read and copy materials the Company files (or furnishes) with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549, and may obtain information on the operations of the Public Reference Roomchoice by calling the SEC at 1-800-732-0330. In addition, the SEC maintains an Internet Website that contains reports, proxy and information statements and other information about CBIZ at http://www.sec.gov. CBIZ’s corporate code of conduct and ethics and the charters of the Audit Committee, the Compensation Committee and the Nominating and Governance Committee of the Board of Directors are available on the investor information page of CBIZ's website, referenced above, and in print to any shareholder who requests them.our employees.

ITEM 1A. RISK FACTORS.

The following factors may affect our actual operating and financial results and could cause results to differ materially from those in any forward-looking statements. You should carefully consider the following information.

We may be more sensitive to revenue fluctuations than other companies, which could result in fluctuations in the market price of our common stock.

A substantial majority of our operating expenses, such as personnel and related costs and occupancy costs, are relatively fixed in the short term. As a result, we may not be able to quickly reduce costs in response to any decrease in revenue. This factor could cause our quarterly results to be lower than expectations of securities analysts and stockholders, which could result in a decline in the price of our common stock.

Payments on accounts receivable may be slower than expected, or amounts due on receivables or notes may not be fully collectible.

Professional services firms often experience higher average accounts receivable days outstanding compared to many other industries, which may be magnified if the general economy worsens. If our collections become slower, our liquidity may be adversely impacted. We monitor the aging of receivables regularly and make assessments of the ability of customers to pay amounts due. We provide for potential bad debts each month and recognize additional reserves against bad debts as we deem it appropriate. Notwithstanding these measures, our customers may face unexpected circumstances that adversely impact their ability to pay their trade receivables or note obligations to us and we may face unexpected losses as a result.

We are dependent on the services of our executive officers and other key employees, the loss of any of whom may have a material adverse effect on our business, financial condition and results of operations.

Our success depends in large part upon the abilities and continued services of our executive officers and other key employees, such as those who generate substantial client revenue and our business unit presidents. In the course of business operations, employees may retire, resign and seek employment elsewhere. Certain principalkey employees, however, are bound in writing to agreements containing non-compete and other restrictive covenants barring competitive employment, client acceptance, and solicitation of employees for a period of between twoone and ten years following his or hertheir resignation. We cannot assure you that we will be able to retain the services of our key personnel. If we cannot retain the services of key personnel, there could be a material adverse effect on our business, financial condition and results of operations. While we generally have contractual arrangements with key personnel that contain restrictive covenants, courts are at times reluctant to enforce such covenants. In addition, many of our executive officers and other key personnel are either participants in our stock option plan or2019 Stock Omnibus Incentive Plan (the “2019 Plan”), holders of a significant amount of our common stock.stock, or receive other incentive-based compensation. We believe that these interests provide additional incentives for these key employees to remain with us. In order to support our growth, we intend to continue to effectively recruit, hire, train and retain

additional qualified management personnel. Our inability to attract and retain necessary personnel could have a material adverse effect on our business, financial condition and results of operations.

Restrictions imposed by independence requirements and conflict of interest rules may limit our ability to provide services to clients of the attest firms with which we have contractual relationships and the ability of such attest firms to provide attestation services to our clients.

Restrictions imposed by independence requirements and state accountancy laws and regulations preclude CBIZus from rendering audit and other attest services (other than internal audit services). As such, CBIZwe and itsour subsidiaries maintain joint-referral relationships and ASAs with independent licensed CPA firms under which audit and other attest services may be provided to CBIZ’sour clients by such CPA firms. The CPA firms are owned by licensed CPAs, a vast majority of whom are employed by CBIZ.us.

Under these ASAs, CBIZ provideswe provide a range of services to the CPA firms, including: administrative functions such as professional staff, office management, bookkeeping, and accounting; preparing marketing and promotion materials; providing office space, computer equipment, systems support and systems support; and leasing administrative and professional staff.support. Services are performed in exchange for a fee. Fees earned by CBIZus under the ASAs are recorded as revenue in the accompanying Consolidated Statements of Comprehensive Income. In the event that accounts receivable and unbilled work in process become uncollectible by the CPA firms, the service fee due to CBIZus is typically reduced on a proportional basis.

With respect to CPA firm clients that are required to file audited financial statements with the SEC, the SEC staff views CBIZus and the CPA firms with which we have contractual relationships as a single entity in applying independence rules established by the accountancy regulators and the SEC. Accordingly, we do not hold any financial interest in, nor do we enter into any business relationship with, an SEC-reporting attest client that the CPA firm performing an audit could not maintain; further, we do not sellprovide any non-audit services to an SEC-reporting attest client that the CPA firm performing an audit could not sell under the auditor independence limitations set out in the Sarbanes-Oxley Act of 2002 and other professional accountancy independence standards. SEC staff informed us that independence rules that apply to clients

that receive attest services under SEC and Public Company Accounting Oversight Board (“PCAOB”) standards from such CPA firms would prohibit such clients from holding any common stock of CBIZ, Inc.CBIZ. However, applicable professional standards generally permit CBIZus to provide additional services to privately-held companies, in addition to those services which may be provided to SEC-reporting attest clients of a CPA firm. CBIZWe and the CPA firms have implemented policies and procedures designed to enable us to maintain independence and freedom from conflicts of interest in accordance with applicable standards. Given the pre-existing limits set by CBIZus on itsour relationships with SEC-reporting attest clients of associated CPA firms, and the limited number and size of such clients, the imposition of independence limitations under the Sarbanes-Oxley Act of 2002, SEC rule or interpretation, or PCAOB standards do not and are not expected to materially affect CBIZour revenues.

There can be no assurance that following the policies and procedures implemented by us and the CPA firms will enable us and the CPA firms to avoid circumstances that would cause us and them to lack independence from an SEC-reporting attest client; nor can there be any assurance that state, U.S. Government Accountability Office or U.S. Department Of Labor accountancy authorities will not impose additional restrictions on the profession. To the extent that the CPA firms for whom we provide staffing, administrative and other services are affected, we may experience a decline in fee revenue from these businesses as well as expenses related to addressing independence concerns. To date, revenues derived from providing services in connection with attestation engagements of the attest firms performed for SEC-reporting clients have not been material.

Our goodwill and other intangible assets could become impaired, which could lead to material non-cash charges against earnings.

We assess potential impairment onAt December 31, 2019, the net carrying value of our goodwill and other intangible asset balances,assets totaled $588.2 million and $66.5 million, respectively. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles - Goodwill and Other, we assess these assets, including client lists, on an annual basis, or more frequentlyto determine if there is any indication that the assetof impairment. Significant negative industry or economic trends, disruptions to our business, adverse changes resulting from new governmental regulations, divestitures and sustained market capitalization declines may be impaired.result in recognition of impairments. Any impairment of goodwill or intangible assets resulting from this periodic assessment would result in a non-cash charge against current earnings, which could lead to a material impact on our results of operations and statements of financial position, and earnings per share. Any significant decline in future revenues, cash flows or growth rates as a result of adverse changes in the economic environment or an adverse change resulting from new governmental regulations could lead to an impairment of goodwill or intangible assets.position.

Certain liabilities resulting from acquisitions are estimated and could lead to a material impact on earnings.

Through our acquisition activities, we record liabilities for estimated future contingent earnout payments. Thesepayments that are settled in cash or through the issuance of common stock. The fair value of these liabilities are reviewedis assessed on a quarterly basis and changes in assumptions used to determine the amount of the liability or a change in the fair value of our common stock could lead to an adjustment that may have a material impact, favorable or unfavorable, on the Consolidated Statementsour results of Comprehensive Income.operations.

Governmental regulations and interpretations are subject to changes, which could have a material adverse effect on revenue.

LawsChanges in laws and regulations, or the interpretation and application thereof, could result in changes in the amount or the type of business services required by businesses and individuals.individuals, which could have a material adverse effect on our financial condition. We cannot be sure that future laws and regulations will provide the same or similar opportunities for us to provide business consulting and management services to businesses and individuals. State insurance regulators have conducted inquiries to clarify the nature of compensation arrangements within the insurance brokerage industry. Future regulatory actions or laws, including the Affordable Care Act, may limit or eliminate our ability to enhance revenue through all current compensation arrangements and may result in a diminution of future insurance brokerage revenue from these sources. Accordingly, CBIZ’s ability to continue to operate in some states may depend on our flexibility to modify our operational structure in response to these changes in regulations.

Changes in the United States healthcare environment, including new healthcare legislation, may adversely affect the revenue and margins in our healthcare benefit businesses.

Our employee benefits business, specifically our group health consulting and brokerage businesses, receives commissions for brokering employer-sponsored healthcare policies with insurance carriers on behalf of the client. In many cases, these commissions consist of a ratable portion of the insurance premiums on those policies, based upon a sliding scale pertaining to the dollar volume of premiums and/or the number of participants in the plan.

Changes in the healthcare environment, including, but not limited to, any legislated changes in the U.S.United States’ national healthcare system, that affect the methods by which insurance carriers remunerate brokers, could adversely impact our revenues and margins in this business. Specifically, legislation or other changes could afford our clients and their employees the ability to seek insurance coverage through other means, including, but not limited to, direct access with insurance carriers or other similar avenues, which could eliminate or adversely alter the remuneration brokers receive from insurance carriers for their services.

Higher rates of unemployment in the U.S.United States could result in a general reduction in the number of individuals with employer-sponsored healthcare coverage. This decline in employee participation in healthcare insurance plans at our clients could result in a reduction in the commissions we receive from insurance carriers for our brokerage services, which could have an adverse impact on revenues and margins in this business.

We are subject to risks relating to processing customer transactions for our payroll and other transaction processing businesses.

The high volume of client funds and data processed by us, or by our out-sourced resources abroad, in our transaction related businesses entails risks for which we may be held liable if the accuracy or timeliness of the transactions processed is not correct. In addition, related to our payroll and employee benefits businesses, we store personal information about some of our clients and their employees for which we may be liable under the Health Insurance Portability and Accountability Act or other governmental regulations if the security of this information is breached. We could incur significant legal expense to defend any claims against us, even those claims without merit. While we carry insurance against these potential liabilities, we cannot be certain that circumstances surrounding such an error or breach of security would be entirely reimbursed through insurance coverage. We believe we have controls and procedures in place to address our fiduciary responsibility and mitigate these risks. However, if we are not successful in managing these risks, our business, financial condition and results of operations may be harmed.

Cyber attacksCyber-attacks or other security breaches involving our computer systems or the systems of one or more of our vendors could materially and adversely affect our business.

Our systems, like others in the payroll, retirement and financial services industries we serve, are vulnerable to cyber security risks, and we are subject to potential disruption caused by such activities. Corporations such as ours are subject to frequent attacks on their systems. Such attacks may have various goals, from seeking confidential information to causing operational disruption. Although to date such activities have not resulted in material disruptions to our operations or, to our knowledge, a material breach of any security or confidential information, no assurance can be provided that such disruptions or breach will not occur in the future. Any significant violations of data privacy could result in the loss of business, litigation, regulatory investigations, penalties, ongoing expenses related to client credit monitoring and support, and other expenses, any of which could damage our reputation and adversely affect the growth of our business. While we have deployed resources that are responsible for maintaining appropriate levels of cyber security, and while we utilize third-party technology products and services to help identify, protect, and remediate our information technology systems and infrastructure against security breaches and cyber-incidents, our responsive and precautionary measures may not be adequate or effective to prevent, identify, or mitigate attacks by hackers, foreign governments, or other actors or breaches caused by employee error, malfeasance, or other disruptions. We are also dependent on security measures that some of our third-party vendors and customers are taking to protect their own systems and infrastructures. If our third-party vendors do not maintain adequate security measures, do not require their sub-contractors to maintain adequate security measures, do not perform as anticipated and in accordance with contractual requirements, or become targets of cyber-attacks, we may experience operational difficulties and increased costs, which could materially and adversely affect our business.

We are subject to risk as it relates to software that we license from third parties.

We license software from third parties, much of which is integral to our systems and our business. The licenses are generally terminable if we breach our obligations under the license agreements. If any of these relationships were terminated or if any of these parties were to cease doing business or cease to support the applications we currently utilize, we may be forced to spend significant

time and money to replace the licensed software. However, we cannot assure you that the necessary replacements will be available on reasonable terms, if at all.

We could be held liable for errors and omissions.

All of our business services entail an inherent risk of malpractice and other similar claims resulting from errors and omissions. Therefore, we maintain errors and omissions insurance coverage. Although we believe that our insurance coverage is adequate, we cannot be certain that actual future claims, judgments, settlements, or related legal expenses would not exceed the coverage amounts. If such judgments, settlements, or related legal expenses exceed insurance coverage by a material amount, they could have material adverse effect on our business, financial condition and result of operations. In addition, we cannot be certain that the different insurance carriers which provide errors and omissions coverage for different lines of our business will not dispute their obligation to cover a particular claim. If we have a large claim, or a large number of claims, on our insurance, the rates for such insurance may increase, and amounts expended in defense or settlement of these claims prior to exhaustion of deductible or self-retention levels may become significant, but contractual arrangements with clients may constrain our ability to incorporate such increases into service fees. Insurance rate increases, disputes by carriers over coverage questions, payments by us within deductible or self-retention limits, as well as any underlying claims or settlement of such claims, could have a material adverse effect on our business, financial condition and results of operations.

CBIZ isWe are not a CPA firm and doeswe do not perform any attest services for clients. CBIZ doesWe do not maintain any ownership interest in or control over any CPA firm with which a CBIZ subsidiaryone of our subsidiaries may maintain an ASA. All personnelof our administrative and professional staff of CBIZ who are provided to such CPA firms work under the sole direction, supervision and control of the particular CPA firm, and CBIZ doeswe do not control how attest work is conducted. For these reasons we do not believe we have liability to any party related to their receipt of attest services from such CPA firms. Nevertheless, from time to time CBIZ haswe have been sued for attest work that we do not perform but which is performed by such CPA firms. While we have been successful to date in defending against such suits, it is possible that similar claims may be brought in the future. We will be required to defend against such claims, and may incur expenses related to such lawsuits and may not be successful in

defending against such lawsuits. In the event that the CPA firms with which we maintain ASAs incur judgments and costs related to such suits that threaten the solvency of the CPA firms, CBIZwe may incur expenditures related to such proceedings.

The future issuance of additional shares could adversely affect the price of our common stock.

Future sales or issuances of common stock, including those related to the uses described below, or the perception that sales could occur, could adversely affect the market price of our common stock and dilute the percentage ownership held by our stockholders. We have authorized 250.0250 million shares of common stock, and have approximately 54.155.3 million shares of common stock outstanding at February 28, 2017.January 31, 2020. A substantial number of these shares have been issued in connection with acquisitions. As part of many acquisition transactions, shares are contractually restricted from sale for a one-year period, and as of February 28, 2017,January 31, 2020, approximately 0.60.1 million shares of our common stock were under lock-up contractual restrictions that expire by December 31, 2017.2020. We cannot be sure when sales by holders of our stock will occur, how many shares will be sold or the effect that sales may have on the market price of our common stock.

Our principal stockholders may have substantial control over our operations.

Our stockholders that beneficially own (within the meaning of Rule 13d-3 of the Exchange Act) significant percentages of our common stock relative to other individual stockholders may exert substantial influence over actions that require the consent of a majority of our outstanding shares, including the election of directors. CBIZ’sOur share repurchase activities may result in increased ownership percentages of these individuals and therefore increase the influence they may exert, if they do not participate in these share repurchase transactions or otherwise dispose of their common stock.

We require a significant amount of cash for interest payments on our debt and to expand our business as planned.

At December 31, 2016,2019, our debt consisted primarily of $191.4$105.5 million in principal amount outstanding under our $400 million unsecured credit facility (as amended(the “2018 credit facility” or the “credit facility”). Our debt requires us to dedicate a significant portion of our cash flow from operations to pay interest on our indebtedness, thereby reducing the funds available to use for acquisitions, capital expenditures and general corporate purposes. Our ability to make interest payments on our debt, and to fund acquisitions, will depend upon our ability to generate cash in the future. Insufficient cash flow could place us at risk of default under our debt agreements or could prevent us from expanding our business as planned. Our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Our business may not generate sufficient cash flow from operations and future borrowings may not be available to us under our credit facility in an amount sufficient to enable us to fund our other liquidity needs. Volatility in interest rates from monetary policy or economic conditions could increase expenses, cause uncertainty and impact our ability to pay interest on our indebtedness. Refer to Item 7A, Quantitative and Qualitative Disclosures about Market Risk,, for morefurther information regarding interest rate risk.

The interest rates under our 2018 credit facility and related interest rate swaps may be impacted by the phase-out of LIBOR. The London Interbank Offered Rate (“LIBOR”), is the basic rate of interest used in lending between banks on the London interbank market and is widely used as a reference for setting the interest rates on loans globally. We generally use LIBOR as a reference rate to calculate interest rates under our credit facility. In 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is unclear if LIBOR will cease to exist at that time or if new methods of calculating LIBOR will be established such that it continues to exist after 2021. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S. dollar LIBOR with a new index, the Secured Overnight Financing Rate (“SOFR”), calculated using short-term repurchase agreements backed by Treasury securities. SOFR is observed and backward looking, unlike LIBOR under the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panel members. Given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account bank credit risk (as is the case with LIBOR). SOFR also may be more volatile than LIBOR. Whether or not SOFR, or another alternative reference rate, attains market traction as a LIBOR replacement tool remains in question. If LIBOR ceases to exist, we may need to amend our 2018 credit facility and related interest rate swaps to replace LIBOR with an agreed upon replacement index, and certain of the interest rates under our 2018 credit facility may change. The new rates may not be as favorable to us as those in effect prior to any LIBOR phase-out. We may also find it desirable to engage in more frequent interest rate hedging transactions.

Terms of our credit facility may adversely affect our ability to run our business and/or reduce stockholder returns.

The terms of our credit facility, as well as the guarantees of our subsidiaries, could impair our ability to operate our business effectively and may limit our ability to take advantage of business opportunities. For example, our credit facility may (i) restrict our ability to repurchase or redeem our capital stock or debt, or merge or consolidate with another entity; (ii) limit our ability to borrow additional funds or to obtain other financing in the future for working capital, capital expenditures, acquisitions, investments and general corporate purposes; (iii) limit our ability to dispose of our assets, to

create liens on our assets, to extend credit or to issue dividends to our stockholders; and (iv) make us more vulnerable to economic downturns and reduce our flexibility in responding to changing business and economic conditions.

Our failure to satisfy covenants in our debt instruments willcould cause a default under those instruments.

Our debt instruments include a number of covenants relating to financial ratios and tests. Our ability to comply with these covenants may be affected by events beyond our control, including prevailing economic, financial and industry conditions. The breach of any of these covenants could result in a default under these instruments. An event of default would permit our lenders and other debt holders to declare all amounts borrowed from them to be due and payable, together with accrued and unpaid interest. If the lenders accelerate the repayment of borrowings, we may not have sufficient assets to repay our debt.

We are reliant on information processing systems and any failure or disruptions of these systems could have a material adverse effect on our business, financial condition and results of operations.

Our ability to provide business services depends on our capacity to store, retrieve, process and manage significant databases, and expand and upgrade periodically our information processing capabilities. Interruption or loss of our information processing capabilities through loss of stored data, breakdown or malfunctioning of computer equipment and software systems, telecommunications failure, or damage caused by fire, tornadoes, lightning,extreme weather conditions, electrical power outage, geopolitical events, or other disruption could have a material adverse effect on our business, financial condition and results of operations. Although we have disaster recovery procedures in place and insurance to protect against such contingencies, we cannot be sure that insurance or these services will continue to be available, cover all our losses or compensate us for the possible loss of clients occurring during any period that we are unable to provide business services.

We may not be able to acquire and finance additional businesses which may limit our ability to pursue our business strategy.

CBIZWe acquired six businesses and sevenone client listslist during 2016,2019, and maintainsmaintain a healthy pipeline of potential businesses for acquisition. Targeted acquisitions are part of our growth strategy, and it is our intention to selectively acquire businesses or client lists that are complementary to existing service offerings in our target markets. However, we cannot be certain that we will be able to continue identifying appropriate acquisition candidates and acquire them on satisfactory terms, and we cannot be assured that such acquisitions, even if completed, will perform as expected or will contribute significant synergies, revenues or profits. In addition, we may also face increased competition for acquisition opportunities, which may inhibit our ability to complete transactions on terms that are favorable to us. As discussed above, there are certain provisions under our credit facility that may limit our ability to acquire additional businesses. In the event that we are not in compliance with certain covenants as specified in our credit facility, we could be restricted from making acquisitions, restricted from borrowing funds from our credit facility for other uses, or required to pay down the outstanding balance on the line of credit. However, management believes that funds available under the credit facility, along with cash generated from operations, will be sufficient to meet our liquidity needs, including planned acquisition activity in the foreseeable future. To the extent we are unable to find suitable acquisition candidates, an important component of our growth strategy may not be realized.

The business services industry is competitive and fragmented. If we are unable to compete effectively, our business, financial condition and results of operations may be negatively impacted.

We face competition from a number of sources in the business services industry. Many of our competitors are large companies that may have greater financial, technical, marketing and other resources. Our principal competitors include financial and management consulting firms, the consulting practices of major accounting firms, local and regional business services companies, independent contractors, the in-house or former in-house resources of our clients, as well as new entrants into our markets. We cannot assure you that, as our industry continues to evolve, additional competitors will not enter the industry or that our clients will not choose to conduct more of their business services internally or through alternative business services providers. Although we intend to monitor industry trends and respond accordingly, we cannot assure you that we will be able to anticipate and successfully respond to such trends in a timely manner. We cannot be certain that we will be able to effectively compete against current and future competitors, or that competitive pressure will not have a material adverse effect on our business, financial condition and results of operations.

There is volatility in our stock price.

The market for our common stock has, from time to time, experienced price and volume fluctuations. Factors such as announcements of variations in our quarterly financial results and fluctuations in revenue, as well as the expectations of stockholders and securities analysts regarding the ability of our business to grow and achieve certain revenue or profitability targets, could cause the market price of our common stock to fluctuate significantly. In addition, the stock market in general has experienced volatility that often has been unrelated to the operating performance of companies such as ours. These broad market and industry fluctuations may adversely affect the price of our stock, regardless of our operating performance.

Given our levels of share-based compensation, our tax rate may vary significantly depending on our stock price. We apply FASB Accounting Standards Codification 718, Compensation - Stock Compensation under which the tax effects of the accounting for share-based compensation may significantly impact our effective tax rate from period to period. In periods in which our stock price is higher than the grant date fair value of the share-based compensation vesting or exercises in that period, we will recognize excess tax benefits that will decrease our effective tax rate. In future periods in which our stock price is lower than the grant price of the share-based compensation vesting in that period, our effective tax rate may increase. The amount and value of share-based compensation issued relative to our earnings in a particular period will also affect the magnitude of the impact of share-based compensation on our effective tax rate. These tax effects are dependent on our stock price and exercise activity, which we do not control, and a decline in our stock price could significantly increase our effective tax rate and adversely affect our financial results.

We may be subject to the actions of activist shareholders. Our Board of Directors and management team are committed to acting in the best interest of all of our shareholders. We value constructive input from investors and regularly engage in dialogue with our shareholders regarding strategy and performance. Activist shareholders who disagree with the composition of the Board of Directors, our strategy or the way the Company is managed may seek to effect change through various strategies and channels. Responding to shareholder activism can be costly and time-consuming, disrupt our operations, and divert the attention of management and our employees from our strategic initiatives. Activist campaigns can create perceived uncertainties as to our future direction, strategy, or leadership and may result in the loss of potential business opportunities, harm our ability to attract new employees, investors, and customers, and cause our stock price to experience periods of volatility or stagnation.

Changes in accounting policies, standards, and interpretations could materially affect how we report our financial condition, results of operations, and cash flows. The FASB, regulatory agencies, and other bodies that establish accounting standards periodically change the financial accounting and reporting standards governing the preparation of our consolidated financial statements. Additionally, those bodies that establish and interpret the accounting standards (such as the FASB and the SEC) may change prior interpretations or positions on how these standards should be applied. These changes can be difficult to predict and can materially affect how we record and report our financial condition, results of operations, and cash flows. In unusual circumstances, we could be required to retroactively apply a new or revised standard, resulting in changes to previously reported financial results.

Rapid technological changes could significantly impact our competitive position, client relationships and operating results. The professional business services industry has been and continues to be impacted by significant technological changes, enabling companies to offer services competitive with ours. Those technological changes may (i) reduce demand for our services, (ii) enable the development of competitive products or services, or (iii) enable our current customers to reduce or bypass the use of our services. Additionally, rapid changes in artificial intelligence and block chain-based technology are increasing the competitiveness landscape. We may not be successful in anticipating or responding to these changes and demand for our services could be further reduced by advanced technologies being deployed by our competitors. The effort to gain technological expertise and develop new technologies in our business may require us to incur significant expenses. In some cases, we depend on key vendors and partners to provide technology and other support. If these third parties fail to perform their obligations or cease to work with us, our ability to execute on our strategic initiatives could be adversely affected.

Climate change legislation or regulations restricting emissions of “Greenhouse Gases” could result in increased operating costs. In 2009, the EPA published its findings that emissions of carbon dioxide, methane, and other greenhouse gases (“GHGs”), present an endangerment to public health and the environment because emissions of such gases are, according to the EPA, contributing to the warming of the earth's atmosphere and other climate changes. These findings allow the EPA to adopt and implement regulations that would restrict emissions of GHGs under existing provisions of the federal Clean Air Act. The EPA has adopted two sets of regulations under the existing Clean Air Act that would require a reduction in emissions of GHGs from motor vehicles and could trigger permit review for GHG emissions from certain stationary sources. In addition, both houses of Congress have actively considered legislation to reduce emissions of GHGs, and almost one-half of the states have taken legal measures to reduce emissions of GHGs primarily through the planned development of GHG emission inventories and/or regional GHG cap and trade programs. Most of these cap and trade programs work by requiring either major sources of emissions or major producers of fuels to acquire and surrender emission allowances, with the number of allowances available for purchase reduced each year until the overall GHG emission reduction goal is achieved. The adoption and implementation of any regulations imposing GHG reporting obligations on, or limiting emissions of GHGs from, our equipment and operations could require us to incur costs to monitor and to reduce emissions of GHGs associated with our operations.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

CBIZ’sOur corporate headquarters isare located at 6050 Oak Tree Boulevard, South, Suite 500, Cleveland, Ohio 44131, in leased premises. CBIZ and its subsidiariesWe lease more than 100 offices in 33 states. CBIZ believes31 states and the District of Columbia and believe that itsour current facilities are sufficient for itsour current needs.

Item 3. Legal Proceedings.

Refer to Note 11, Commitments and Contingencies,, to the accompanying consolidated financial statements for information on legal proceedings, which is incorporated by reference herein.  

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Price Range ofMarket Information for Common Stock

-Our common stock is traded on the NYSE under the trading symbol “CBZ.”

Holders of Record - The table below sets forth the rangenumber of high and low sales prices for our common stock as reported on the NYSE for the periods indicated.

On December 30, 2016, the last reported sale priceholders of our common stock as reportedbased on the NYSE was $13.70 per share. As of February 28, 2017, we had approximately 2,125 holders of record of our common stock, and the last sale of our common stockownership as of that dateDecember 31, 2019 was $13.30.approximately 2,200.

Dividend Policy

Our $400 million credit facility does not permit us to declare or make any dividend payments, other than dividend payments made by one of our wholly-owned subsidiaries to the parent company.Dividends - Historically, we have not paid cash dividends on our common stock. Westock and do not anticipate paying cash dividends in the foreseeable future. The CBIZ Board of Directors has discretion over the paymentRefer to Note 9, Debt and level of dividends on common stock, subjectFinancing Arrangements, to the limitationsaccompanying consolidated financial statements for information relating to restrictions on declaring or making dividend payments under our 2018 credit facility.

Recent Sales of the credit facility and applicable law.

Issuer Purchases of EquityUnregistered Securities

(a) Recent sales of unregistered securities

- During the year ended December 31, 2016,2019, we issued approximately 0.4 million214.2 thousand shares of our common stock as payment for contingent consideration for acquisitions that occurred prior to 2016.

current year and previous acquisitions. The above referenced shares were issued in transactions not involving a public offering in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act. The persons to whom the shares were issued had access to full information about CBIZthe Company and represented that they acquired the shares for their own account and not for the purpose of distribution. The certificates for the shares contain a restrictive legend advising that the shares may not be offered for sale, sold, or otherwise transferred without having first been registered under the Securities Act or pursuant to an exemption from the Securities Act.

As previously disclosed, the 2010 Notes matured on October 1, 2015. Prior to the maturity date, we issued 5.1 million sharesIssuer Purchases of our common stock plus cash consideration in privately negotiated transactions in exchange for retiring $49.3 million of our 2010 Notes during the second quarter of 2015. The issuances of common stock were made pursuant to the exemption from the registration provided by Section 3(a)(9) of theEquity Securities Act, on the basis that the exchange constitutes an exchange with an existing holder exclusively in a privately negotiated transaction where no commission or other remuneration has been paid or given directly or indirectly for soliciting such exchange.

(c) Issuer purchases of equity securities

Our first priority for the use of capital is to make strategic acquisitions. We have the financing flexibility and the capacity to carry out an active acquisition program and to take an opportunistic approach towards using funds to repurchase shares. Periodically, the CBIZ Board of Directors authorizes a Share Repurchase Program (the “Share Repurchase Program”) which allows us to purchase shares of our common stock in the open market or in a privately negotiated transaction, which may include purchases from CBIZ employees, Officers and Directors, according to SEC rules. In 2016, we repurchased approximately 0.8 million shares of our common stock at a cost of approximately $7.8 million, which does not include the purchase of shares withheld for tax purposes under the stock incentive plan.

On February 9, 2017, February 11, 2016 and February 11, 2015, the CBIZ Board of Directors authorized the continuation of the Share Repurchase Program, which has been renewed annually for the past thirteen years. The Share Repurchase Program authorizes the

purchase of up to 5.0 million shares of our common stock to be obtained in open market, privately negotiated, or 10b5-1 trading plan purchases, which may include purchases from CBIZ employees, Officers and Directors. It is effective beginning April 1 of the respective program year and expires one year from the respective effective date. The Share Repurchase Program does not obligate us to acquire any specific number of shares and may be suspended at any time. At December 31, 2016, there were approximately 4.7 million shares of our common stock that may yet be purchased under the Share Repurchase Program that expires on March 31, 2017.

We have utilized, and may utilize in the future, trading plans under Rule 10b5-1 to allow for repurchases during periods when we would not normally be active in the trading market due to regulatory restrictions. Subsequent to December 31, 2016 up to the date of this filing, we repurchased approximately 0.2 million shares in the open market at a total cost of approximately $2.2 million under our current Rule 10b5-1 trading plan, which allows us to repurchase shares below a predetermined price per share.

- Shares repurchased during the three months ended December 31, 20162019 (reported on a trade datetrade-date basis) are summarized in the table below (in thousands, except per share data). During the fourth quarter of 2016, no shares were purchased from stock plan recipients in lieu of cash to satisfy certain tax obligations under the 2014 CBIZ, Inc. Stock Incentive Plan. Average price paid per share includes fees and commissions.

Performance Graph

- The graph below matches the cumulative 5-Yearfive-year total return of holders of CBIZ, Inc.’s common stock with the cumulative total returns of the S&P 500 index, the Russell 2000 index and a customized peer group of five companies that includes: Brown & Brown, Inc., H & R Block, Inc., Paychex, Inc., Resources Connection, Inc. and Willis Towers Watson & Company.Plc. The graph assumes that the value of the investment in our common stock, in each index, and in the peer group (including reinvestment of dividends) was $100 on 12/31/2011December 31, 2014 and tracks it through 12/31/2016.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

Among CBIZ, Inc., the S&P 500 Index, the Russell 2000 Index, and a Peer GroupDecember 31, 2019.

Fiscal year ending December 31.

Copyright© 2017 Standard & Poor's, a division of S&P Global. All rights reserved.

Copyright© 2017 Russell Investment Group. All rights reserved.

The stock price performance included in this graph is not necessarily indicative of future stock price performance.

Item 6. Selected Financial Data.

The following table presents our selected historical financial data for CBIZ.data. The information set forth below should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the accompanying consolidated financial statements and notes thereto, which are included elsewhere in this Annual Report.

In 2015 and 2014, we recorded non-operating charges of $0.8 million and $1.5 million in “Other income, net” from the early retirement of $49.3 million and $32.4 million face value of our 2010 Notes. Included in 2012 are proceeds of $1.9 million related to a legal settlement.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion is intendedThis Management’s Discussion and Analysis of Financial Condition and Results of Operations relates to, assist in the understanding of CBIZ’s financial position at December 31, 2016 and 2015, and results of operations and cash flows for each of the years ended December 31, 2016, 2015 and 2014. This discussion should be read in conjunction with, CBIZ’sour consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. Thisreport. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and should also be read in conjunction withassumptions, which could cause actual results to differ materially from management’s expectations. Please see the disclosures and information contained insections of this report entitled “Forward-Looking Statements” and “Item 1A. Risk Factors” in this Annual Report on Form 10-K.“Risk Factors.”

Executive Summary

Revenue

Financial Year in Review - Revenue of $799.8$948.4 million in 20162019 grew $49.4$26.4 million, or 6.6%2.9%, from revenue of $750.4$922.0 million in 2015. Acquisitions contributed $29.9 million, or 4.0%, while same-unit2018. Same-unit revenue improved by $19.5$18.2 million, or 2.6%2.0%, while acquisitions, net of divestitures, contributed $8.2 million to revenue, or 0.9%. A detailed discussion of revenue by practice group is included under “Operating Practice Groups.”

Income from Continuing Operations

Income from continuing operations in 20162019 increased $5.6$9.4 million, or 16.0%15.3%, to $40.6$71.0 million from $35.0$61.6 million in 2015.2018. Refer to “Results of Operations —- Continuing Operations” for a detailed discussion of the components of income from continuing operations.

Earnings Per Diluted Share from Continuing Operations

Earnings per diluted share from continuing operations were $0.76, $0.66 and $0.59$1.27 in 2016, 2015 and 2014, respectively,2019, compared to $1.09 in 2018, with a fully diluted weighted average share count of 53.5 million shares, 52.7 million shares and 51.5 million shares, respectively, in those same periods. The dilutive impact of the common stock equivalents related to the 4.875% 2010 Convertible Senior Subordinated Notes (the “2010 Notes”) was 1.255.9 million shares in 2015 and 2.02019, compared to 56.5 million shares in 2014. Excluding the impact2018.

Strategic Use of the common stock equivalents, fully diluted earnings per share from continuing operations would have been $0.68 and $0.61 in 2015 and 2014, respectively.

Share Repurchases

Capital - Our first priority for the use of capital is to make strategic acquisitions. We completed the following six acquisitions in 2019:

Refer to Note 18, Acquisitions, to the accompanying consolidated financial statements for further discussion on acquisitions.

We also have the financing flexibility and the capacity to carry outactively repurchase shares of our common stock. We believe that repurchasing shares of our common stock is a prudent use of our financial resources, and that investing in our stock is an active acquisition programattractive use of capital and an efficient means to take an opportunistic approach towards using fundsprovide value to repurchase shares. our shareholders. On February 9, 2017,6, 2020, the CBIZ Board of Directors authorized the purchase of up to 5.0 million shares of CBIZour common stock under theour Share Repurchase Program (the “Share Repurchase Program”), which may be suspended or discontinued at any time and expires on April 1, 2018.2021. The shares may be purchased (i) in the open market, (ii) in privately negotiated transactions, or (iii) under Rule 10b5-1 trading plan purchases,plans, which may include purchases from CBIZour employees, Officersofficers and Directors,directors, in accordance with the SECSecurities and Exchange Commission (the “SEC”) rules.  CBIZ management will determine the timing and amount of the transactionstransaction based on its evaluation of market conditions and other factors.

We believe that repurchasing shares of our common stock under the Share Repurchase Program is a prudent use of our financial resources, and that investing in our shares is an attractive use of capital and an efficient meansPursuant to provide value to the CBIZ shareholders. Wepreviously authorized share repurchase programs, we repurchased 0.81.3 million shares of our common stock at a total cost of approximately $7.8$27.2 million in 2016 compared to 3.82019, 0.9 million shares at a total cost of approximately $35.2$17.5 million in 20152018 and 3.21.3 million shares at a total cost of approximately $26.6$19.7 million in 2014. Subsequent to December 31, 2016 up to the date of this filing, we repurchased approximately 0.2 million shares at a total cost of approximately $2.2 million under a Rule 10b5-1 trading plan, which allows us to repurchase shares below a predetermined price per share.

Acquisitions

We completed six acquisitions in 2016. Aggregate consideration for the acquisitions consisted of approximately $40.0 million in cash, $21.1 million in contingent consideration and $2.1 million in CBIZ common stock. We also purchased seven client lists in 2016 for approximately $1.2 million in cash, $1.2 million in guaranteed future consideration and $1.5 million contingent upon future financial performances. For further discussion regarding acquisitions, refer2017. Refer to Note 18, Acquisitions,13, Common Stock, to the accompanying consolidated financial statements.statements for further discussion on the Share Repurchase Program.

Recent Accomplishments and Other Events

The following items highlight the Company’s significant, recent accomplishments and other events for the year ended December 31, 2016.

Jerome P. Grisko, Jr. Appointed as Chief Executive Officer

Jerome P. Grisko, Jr. was appointed Chief Executive Officer, effective March 9, 2016, following the retirement of Steven L. Gerard. Prior to the appointment, Mr. Grisko served as the President and Chief Operating Officer of CBIZ since February 2000. He will retain his role as President and as a member of the Board of Directors, to which he was appointed in November 2015.

CBIZ National and Local Market RecognitionWorkplace Awards

- In 2016, CBIZ was2019, we were honored and recognized for 3462 various national and local market awards. A sample of the awards with the two main awards being;won include;

Best Places to Work

In 2016, CBIZ was selected and honored as a “Best Places to Work in Insurance” by Business Insurance magazine based on our commitment to attracting, developing and retaining great talent through employee benefits and other programs. We were recognized for this award based on core focus areas such as leadership and planning, corporate culture, and communications, work environment and overall engagement.

Best and Brightest Companies to Work For

In 2016, CBIZ was selected and honored as a “2016 Best and Brightest Company” by National Association of Business Resources based on our commitment to human resource practices and employee enrichment. Organizations are assessed based on categories such as communication, work-life balance, employee education, diversity, recognition and retention.

Results of Operations — Continuing Operations

We provide professional business services that help clients manage their finances and employees. We deliver our integrated services through the following three practice groups: Financial Services, Benefits and Insurance Services and National Practices. A description of these groups’ operating results and factors affecting their businesses is provided below.

Same-unit revenue represents total revenue adjusted to reflect comparable periods of activity for acquisitions and divestitures. For example, for a business acquired on July 1, 2015,2018, revenue for the period January 1, 20162019 through June 30, 20162019 would be reported as revenue from acquired businesses; same-unit revenue would include revenue for the periods July 1 through December 31 of both years. Divested operations represent operations that did not meet the criteria for treatment as discontinued operations. Those businesses that have met the requirements to be treated as a discontinued operation are eliminated from continuing operations for all periods presented below.

Revenue

The following table summarizes total revenue for the years ended December 31, 2016, 20152019, 2018 and 2014:2017:

A detailed discussion of same-unit revenue by practice group is included under “Operating Practice Groups.”

Non-qualified Deferred Compensation Plan

- We sponsor a non-qualified deferred compensation plan, under which a CBIZ employee’s compensation deferral is held in a rabbi trust and invested accordingly as directed by the employee. Income and expenses related to the non-qualified deferred compensation plan are included in “Operating expenses”,expenses,” “Gross margin” and “G&A“Corporate General & Administrative expenses” and are directly offset by deferred compensation gains or losses in “Other income (expense), net” in the accompanying Consolidated Statements of Comprehensive Income. The non-qualified deferred compensation plan has no impact on “Income from continuing operations before income tax expense” or diluted earnings per share from continuing operations.

Operating Expenses

The following table presents our operating expenses for the years ended December 31, 2016, 20152019, 2018 and 2014:2017:

2016 Compared2019 compared to 20152018 - Our operating expenses increased by $33.2 million, and increased to 86.8% of revenue from 85.7% of revenue for the prior year. The deferred compensation plan increased operating expenses by $17.2 million in 2019, but decreased operating expenses by $4.5 million in 2018. Excluding the impact of the deferred compensation plan, operating expenses would have been $806.3 million, or 85.0% of revenue, in 2019 compared to $794.8 million, or 86.2% of revenue, in 2018.

The majority of our operating expenses relate to personnel costs, which includes (i) salaries and benefits, (ii) commissions paid to producers (iii) incentive compensation and (iv) share-based compensation. Our operating expenses increased by $45.3 million, or 6.9%, in 2016 compared to 2015, and increased to 87.2% of revenue from 86.9% of revenue for the prior year. Personnel costs increased $36.9$11.1 million, or 7.3%1.8%, to support our growth in revenue, with acquisitions contributing approximately $17.9$5.7 million to personnel costs. Personnel costs and other operating expenses are discussed in further detail under “Operating Practice Groups.”

The non-qualified deferred compensation plan added expense of $4.6 million in 20162018 compared to income of $0.6 million in 2015. Excluding these items, operating expenses would have been $693.2 million, or 86.7% of revenue, in 2016 compared to $652.9 million, or 87.0%, in 2015.

2015 Compared to 2014

2017 - Our operating expenses increased $22.6by $34.7 million, or 3.5%4.6%, in 20152018 compared to 2014,2017, and decreased to 86.9%85.7% of revenue from 87.5%88.3% of revenue for the prior year. The increase in operating expenses was due to the same factors in the “2016 Compared to 2015” period as discussed above. Personnel costs increased $20.2 million, or 4.2%. Acquisitions contributed approximately $11.0 million to personnel costs.

The non-qualified deferred compensation plan added income of $0.6decreased operating expenses by $4.5 million in 2015 compared to expense of $3.22018, but increased operating expenses by $10.9 million in 2014.2017.  Excluding these items,the impact of the deferred compensation plan, operating expenses would have been $652.9$794.8 million, or 87.0%86.2% of revenue, in 20152018 compared to $626.6$744.7 million, or 87.1% of revenue, in 2017. Personnel costs increased $44.8 million, or 7.7%, to support our growth in 2014.revenue, with acquisitions contributing approximately $15.0 million to personnel costs.

G&ACorporate General & Administrative Expenses

The following table presents our Corporate General & Administrative (“G&A&A”) expenses for the years ended December 31, 2016, 20152019, 2018 and 2014:2017:

2016 Compared2019 compared to 2015

2018 - Our G&A expenses increased by $3.8approximately $5.2 million, or 11.7%13.4%, in 20162019 compared to 2015,2018, and increased to 4.6%4.7% of revenue from 4.4%4.2% of revenue for the prior year. The deferred compensation plan increased G&A expenses by $2.0 million in 2019, but decreased G&A expenses by $0.4 million in 2018. Excluding the impact of the deferred compensation plan, G&A expenses would have been $42.4 million, or 4.5% of revenue, in 2019 compared to $39.6 million, or 4.3% of revenue, in 2018. Personnel costs, including stock-based compensation, increased $1.1 million, or 5.1%.  

2018 compared to 2017 - Our G&A expenses increased by approximately $5.9 million, or 17.7%, in 2018 compared to 2017, and increased to 4.2% of revenue from 3.9% of revenue for the prior year. The deferred compensation plan reduced G&A expenses by $0.4 million in 2018, but increased G&A expenses by $1.2 million in 2017. Excluding the impact of the deferred compensation plan, G&A expenses would have been $39.6 million, or 4.3% of revenue, in 2018 compared to $32.1 million, or 3.8% of revenue, in 2017. Personnel costs increased $1.8$3.7 million, or 9.9%20.5%, mainly due to an increase in incentive-based compensation duecompensation.  An increase in marketing expenses of approximately $1.6 million, mostly attributable to the Company’s performance in 2016. Also contributingnational marketing campaign, also contributed to the increase in G&A expenses was an increase of $0.9 million in professional fees related to legal fees incurred.

The non-qualified deferred compensation plan added expense of $0.7 million in 2016 compared to income of $0.1 million in 2015. Excluding these items, G&A expenses would have been $35.6 million, or 4.5% of revenue, in 2016 compared to $32.6 million, or 4.4% of revenue, in 2015.

2015 Compared to 2014

Our G&A expenses decreased by $1.7 million, or 4.8%, in 2015 compared to 2014, and decreased to 4.4% of revenue from 4.8% of revenue for the prior year. Professional fees decreased $1.2 million due to a decrease in legal expenses related to case dismissals and settlements. Also contributing to the decrease in G&A expenses was a decrease of $0.3 million related to incentive-based compensation.

The non-qualified deferred compensation plan added income of $0.1 million in 2015 compared to expense of $0.5 million in 2014. Excluding these items, G&A expenses would have been $32.6 million, or 4.4% of revenue, in 2015 compared to $33.7 million, or 4.7%, in 2014.expenses.

Other Income (Expense), Netnet

The following tables presenttable presents our other income (expense), net for the years ended December 31, 2016, 20152019, 2018 and 2014:2017:

Interest Expense

Interest expense decreased $2.3 million during 2016 compared to 2015 primarily due to a lower average interest rate, partially offset by a higher average debt balance. - Our primary financing arrangement is the $400 million2018 credit facility. We early retired a portion of the 2010 NotesInterest expense was $5.8 million in the second quarter of 2015 with funds available under the credit facility at an average interest rate of 2.14%. We used cash of $71.82019, compared to $6.6 million under the credit facility at an average interest rate of 2.02% when the 2010 Notes matured in the fourth quarter of 2015. The 2010 Notes had an interest rate of 7.50%.2018. Our average debt balance and interest rate was $234.5$158.3 million and 2.43%3.09%, respectively, in 20162019 compared to $213.8$182.3 million and 3.50%3.08%, respectively, in 2015.

2018. Interest expense decreased $4.2was $6.7 million during 2015 compared to 2014 primarily due to the same factors as discussed above. In 2015 and 2014 we early retired a portion of the 2010 Notesin 2017 with funds available under the $400 million credit facility at an average interest rate of 2.14% and 2.55%, respectively. Our average debt balance and interest rate was $213.8of $205.3 million and 3.50% in 2015 compared to $209.5 million and 5.43% in 2014.2.72%, respectively. Our debt is further discussed in Note 8, 9, Debt and Financing Arrangements,, to the accompanying consolidated financial statements.

Gain on Sale of Operations, Net

The $0.9 million net gain on sale of operations– We sold a small office in 2016 was primarily due to the sale ofFinancial Services practice group during 2019.  We sold a small office in the Financial Services practice group, along with two small books of business, underboth in the Benefits and Insurance Services practice group. The net gain on salegroup in 2018 and sold one small book of operations of $1.3 millionbusiness in 2014 was primarily due to the sale of the Miami, Florida office under the Financial Services practice group.group in 2017.

Other Income Net

In addition to(Expense), net - The majority of “Other income (expense), net” consists of net gains and losses associated with the impactvalue of the non-qualified deferred compensation plan on “Other income, net”as discussed above in footnoteNote 1, (net gainBasis of $5.3 million, aPresentation and Significant Accounting Policies, as well as net loss of $0.7 million and a net gain of $3.7 million in the years 2016, 2015 and 2014), adjustments to the fair value of our contingent purchase price liability related to prior acquisitions resulted in otheracquisitions. Other income net of $1.3 million, $2.9 million and $4.0$17.7 million in 2016, 20152019 consisted of a $19.2 million net gain related to the deferred compensation plan, partially offset by a $1.6 million net adjustment increase to the fair value of our contingent purchase price liability. Other expense of $7.1 million in 2018 consisted of a net loss of $4.9 million related to the deferred compensation plan and 2014, respectively. Also includeda $2.6 million net adjustment increase to the fair value of our contingent purchase price liability. Other income of $14.5 million in “Other income, net” is2017 consisted of a non-operating chargenet gain of $0.8$12.1 million andrelated to the deferred compensation plan, as well as a $1.5 million fromnet adjustment decrease to the early retirementfair value of the 2010 Notes in 2015 and 2014, respectively. No such charge was incurred in 2016.our contingent purchase price liability.

Income Tax Expense

The following tables presenttable presents our income tax expense for the years ended December 31, 2016, 20152019, 2018 and 2014:2017:

We recordedThe increase in income tax expense from continuing operations of $26.4 million, $22.8 million and $20.2 million2018 to 2019 was primarily driven by higher pre-tax income. The increase in 2016, 2015 and 2014, respectively. Thethe effective tax rate for those same periods is 39.4%, 39.5% and 39.9%, respectively. For further discussion regardingfrom 2018 to 2019 was primarily attributable to a larger reversal of estimated tax reserves due to the expiration of certain statutes of limitation in 2018 compared to 2019. The decrease in income tax expense referand effective tax rate from 2017 to 2018 was primarily due to the Tax Cuts and Jobs Act of 2017. Refer to Note 7, 8, Income Taxes,, to the accompanying consolidated financial statements. for additional information on our provision for income taxes.

GAAP RECONCILIATION

Income from Continuing Operations to Non-GAAP Financial MeasuresMeasure (1)