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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “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 Exchange Act). Yes ☐ No ☑

The number of shares outstanding of our common stock as of ~~December 2, 2019~~March 5, 2020 was ~~55,230,531~~55,044,489 shares.

	October 31, 2019			April 30, 2019			January 31, 2020			April 30, 2019
	(unaudited)						(unaudited)
	(in thousands, except per share data)						(in thousands, except per share data)
ASSETS
Cash and cash equivalents	$	464,423		$	626,360		$	563,708		$	626,360
Marketable securities		6,508			8,288			41,022			8,288
Receivables due from clients, net of allowance for doubtful accounts of $23,165 and $21,582 at October 31, 2019 and April 30, 2019, respectively		458,263			404,857
Receivables due from clients, net of allowance for doubtful accounts of $25,168 and $21,582 at January 31, 2020 and April 30, 2019, respectively								472,261			404,857
Income taxes and other receivables		40,506			26,767			38,656			26,767
Unearned compensation		48,195			42,003			46,386			42,003
Prepaid expenses and other assets		31,603			28,535			35,094			28,535
Total current assets		1,049,498			1,136,810			1,197,127			1,136,810

Marketable securities, non-current		138,055			132,463			143,789			132,463
Property and equipment, net		140,685			131,505			143,230			131,505
Operating lease right-of-use assets, net		214,421			—			209,236			—
Cash surrender value of company-owned life insurance policies, net of loans		128,626			126,000			145,305			126,000
Deferred income taxes		36,779			43,220			44,928			43,220
Goodwill		578,307			578,298			615,513			578,298
Intangible assets, net		76,288			82,948			116,882			82,948
Unearned compensation, non-current		101,308			80,924			93,934			80,924
Investments and other assets		22,314			22,684			29,705			22,684
Total assets	$	2,486,281		$	2,334,852		$	2,739,649		$	2,334,852
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	30,599		$	39,156		$	36,044		$	39,156
Income taxes payable		15,018			21,145			17,128			21,145
Compensation and benefits payable		198,284			328,610			258,789			328,610
Operating lease liability, current		48,493			—			53,592			—
Other accrued liabilities		158,071			162,047			194,838			162,047
Total current liabilities		450,465			550,958			560,391			550,958

Deferred compensation and other retirement plans		274,241			257,635			283,293			257,635
Operating lease liability, non-current		200,266			—			194,209			—
Long-term debt		273,310			222,878			393,986			222,878
Deferred tax liabilities		1,064			1,103			837			1,103
Other liabilities		28,444			58,891			29,280			58,891
Total liabilities		1,227,790			1,091,465			1,461,996			1,091,465

Stockholders' equity
Common stock: $0.01 par value, 150,000 shares authorized, 73,120 and 72,442 shares issued and 55,315 and 56,431 shares outstanding at October 31, 2019 and April 30, 2019, respectively		601,686			656,463
Common stock: $0.01 par value, 150,000 shares authorized, 73,210 and 72,442 shares issued and 55,258 and 56,431 shares outstanding at January 31, 2020 and April 30, 2019, respectively								604,609			656,463
Retained earnings		734,891			660,845			749,301			660,845
Accumulated other comprehensive loss, net		(80,646	)		(76,652	)		(78,810	)		(76,652	)
Total Korn Ferry stockholders' equity		1,255,931			1,240,656			1,275,100			1,240,656
Noncontrolling interest		2,560			2,731			2,553			2,731
Total stockholders' equity		1,258,491			1,243,387			1,277,653			1,243,387
Total liabilities and stockholders' equity	$	2,486,281		$	2,334,852		$	2,739,649		$	2,334,852

The accompanying notes are an integral part of these consolidated financial statements.

	Three Months Ended October 31,						Six Months Ended October 31,						Three Months Ended January 31,						Nine Months Ended January 31,
	2019			2018			2019			2018			2020			2019			2020			2019
	(in thousands, except per share data)												(in thousands, except per share data)
Fee revenue	$	492,389		$	495,205		$	976,938		$	960,773		$	515,325		$	474,504		$	1,492,263		$	1,435,277
Reimbursed out-of-pocket engagement expenses		11,788			11,588			23,437			24,382			12,654			11,668			36,091			36,050
Total revenue		504,177			506,793			1,000,375			985,155			527,979			486,172			1,528,354			1,471,327

Compensation and benefits		337,382			335,835			665,878			657,740			348,597			321,835			1,014,475			979,575
General and administrative expenses		62,009			57,738			127,816			226,462			71,355			61,179			199,171			287,641
Reimbursed expenses		11,788			11,588			23,437			24,382			12,654			11,668			36,091			36,050
Cost of services		18,414			19,627			35,549			37,954			30,822			17,066			66,371			55,020
Depreciation and amortization		12,715			11,018			25,492			22,749			14,863			11,741			40,355			34,490
Restructuring charges, net														18,093			—			18,093			—
Total operating expenses		442,308			435,806			878,172			969,287			496,384			423,489			1,374,556			1,392,776

Operating income		61,869			70,987			122,203			15,868			31,595			62,683			153,798			78,551
Other income (loss), net		1,133			(4,500	)		2,959			20
Other income, net														5,055			2,463			8,014			2,483
Interest expense, net		(4,210	)		(4,337	)		(8,267	)		(8,440	)		(6,919	)		(4,282	)		(15,186	)		(12,722	)
Income before provision (benefit) for income taxes		58,792			62,150			116,895			7,448
Income tax provision (benefit)		15,760			14,833			30,213			(1,277	)
Income before provision for income taxes														29,731			60,864			146,626			68,312
Income tax provision														8,775			15,420			38,988			14,143
Net income		43,032			47,317			86,682			8,725			20,956			45,444			107,638			54,169
Net income attributable to noncontrolling interest		(228	)		(1,283	)		(927	)		(1,302	)		(963	)		(480	)		(1,890	)		(1,782	)
Net income attributable to Korn Ferry	$	42,804		$	46,034		$	85,755		$	7,423		$	19,993		$	44,964		$	105,748		$	52,387

Earnings per common share attributable to Korn Ferry:
Basic	$	0.78		$	0.82		$	1.54		$	0.13		$	0.37		$	0.81		$	1.92		$	0.94
Diluted	$	0.77		$	0.81		$	1.54		$	0.13		$	0.36		$	0.80		$	1.90		$	0.92

Weighted-average common shares outstanding:
Basic		54,568			55,461			54,917			55,420			53,999			55,233			54,611			55,358
Diluted		54,716			56,239			55,170			56,306			54,264			55,753			55,006			56,181

Cash dividends declared per share:	$	0.10		$	0.10		$	0.20		$	0.20		$	0.10		$	0.10		$	0.30		$	0.30

The accompanying notes are an integral part of these consolidated financial statements.

	Three Months Ended October 31,						Six Months Ended October 31,						Three Months Ended January 31,						Nine Months Ended January 31,
	2019			2018			2019			2018			2020			2019			2020			2019
	(in thousands)												(in thousands)
Net income	$	43,032		$	47,317		$	86,682		$	8,725		$	20,956		$	45,444		$	107,638		$	54,169

Other comprehensive income (loss):
Foreign currency translation adjustments		1,213			(12,778	)		(4,085	)		(27,334	)		497			6,089			(3,588	)		(21,245	)
Deferred compensation and pension plan adjustments, net of tax		495			273			990			546			943			273			1,933			819
Net unrealized (loss) gain on interest rate swap, net of tax		(356	)		145			(951	)		278
Comprehensive income (loss)		44,384			34,957			82,636			(17,785	)
Net unrealized loss on marketable securities, net of tax														(5	)		—			(5	)		—
Net unrealized gain (loss) on interest rate swap, net of tax														495			(980	)		(456	)		(702	)
Comprehensive income														22,886			50,826			105,522			33,041
Less: comprehensive income attributable to noncontrolling interest		(112	)		(1,016	)		(875	)		(1,041	)		(1,057	)		(552	)		(1,932	)		(1,593	)
Comprehensive income (loss) attributable to Korn Ferry	$	44,272		$	33,941		$	81,761		$	(18,826	)
Comprehensive income attributable to Korn Ferry													$	21,829		$	50,274		$	103,590		$	31,448

The accompanying notes are an integral part of these consolidated financial statements.

										Accumulated Other			Total																		Accumulated Other			Total
										Comprehensive			Korn Ferry						Total												Comprehensive			Korn Ferry						Total
	Common Stock						Retained			(Loss) Income,			Stockholders'			Noncontrolling			Stockholder's			Common Stock						Retained			(Loss) Income,			Stockholders'			Noncontrolling			Stockholder's
	Shares			Amount			Earnings			Net			Equity			Interest			Equity			Shares			Amount			Earnings			Net			Equity			Interest			Equity
	(in thousands)																					(in thousands)
Balance as of April 30, 2019		56,431		$	656,463		$	660,845		$	(76,652	)	$	1,240,656		$	2,731		$	1,243,387			56,431		$	656,463		$	660,845		$	(76,652	)	$	1,240,656		$	2,731		$	1,243,387
Net income		—			—			42,951			—			42,951			699			43,650			—			—			42,951			—			42,951			699			43,650
Other comprehensive (loss) income		—			—			—			(5,462	)		(5,462	)		64			(5,398	)		—			—			—			(5,462	)		(5,462	)		64			(5,398	)
Dividends paid to shareholders		—			—			(6,081	)		—			(6,081	)		—			(6,081	)		—			—			(6,081	)		—			(6,081	)		—			(6,081	)
Purchase of stock		(546	)		(21,329	)		—			—			(21,329	)		—			(21,329	)		(546	)		(21,329	)		—			—			(21,329	)		—			(21,329	)
Issuance of stock		711			5,074			—			—			5,074			—			5,074			711			5,074			—			—			5,074			—			5,074
Stock-based compensation		—			5,091			—			—			5,091			—			5,091			—			5,091			—			—			5,091			—			5,091
Balance as of July 31, 2019		56,596			645,299			697,715			(82,114	)		1,260,900			3,494			1,264,394			56,596			645,299			697,715			(82,114	)		1,260,900			3,494			1,264,394
Net income		—			—			42,804			—			42,804			228			43,032			—			—			42,804			—			42,804			228			43,032
Other comprehensive income (loss)		—			—			—			1,468			1,468			(116	)		1,352			—			—			—			1,468			1,468			(116	)		1,352
Dividends paid to shareholders		—			—			(5,628	)		—			(5,628	)		—			(5,628	)		—			—			(5,628	)		—			(5,628	)		—			(5,628	)
Dividends paid to noncontrolling interest		—			—			—			—			—			(1,046	)		(1,046	)		—			—			—			—			—			(1,046	)		(1,046	)
Purchase of stock		(1,313	)		(49,325	)		—			—			(49,325	)		—			(49,325	)		(1,313	)		(49,325	)		—			—			(49,325	)		—			(49,325	)
Issuance of stock		32			—			—			—			—			—			—			32			—			—			—			—			—			—
Stock-based compensation		—			5,712			—			—			5,712			—			5,712			—			5,712			—			—			5,712			—			5,712
Balance as of October 31, 2019		55,315		$	601,686		$	734,891		$	(80,646	)	$	1,255,931		$	2,560		$	1,258,491			55,315			601,686			734,891			(80,646	)		1,255,931			2,560			1,258,491
Net income																							—			—			19,993			—			19,993			963			20,956
Other comprehensive income																							—			—			—			1,836			1,836			94			1,930
Dividends paid to shareholders																							—			—			(5,583	)		—			(5,583	)		—			(5,583	)
Dividends paid to noncontrolling interest																							—			—			—			—			—			(1,064	)		(1,064	)
Purchase of stock																							(157	)		(6,263	)		—			—			(6,263	)		—			(6,263	)
Issuance of stock																							100			3,967			—			—			3,967			—			3,967
Stock-based compensation																							—			5,219			—			—			5,219			—			5,219
Balance as of January 31, 2020																							55,258		$	604,609		$	749,301		$	(78,810	)	$	1,275,100		$	2,553		$	1,277,653

										Accumulated Other			Total
										Comprehensive			Korn Ferry						Total
	Common Stock						Retained			(Loss) Income,			Stockholders'			Noncontrolling			Stockholder's
	Shares			Amount			Earnings			Net			Equity			Interest			Equity
	(in thousands)
Balance as of April 30, 2018		56,517		$	683,942		$	572,800		$	(40,135	)	$	1,216,607		$	3,008		$	1,219,615
Net loss		—			—			(38,611	)		—			(38,611	)		19			(38,592	)
Other comprehensive (loss) income		—			—			—			(14,156	)		(14,156	)		6			(14,150	)
Effect of adopting new accounting standards		—			—			8,853			(2,197	)		6,656			—			6,656
Dividends paid to shareholders		—			—			(6,027	)		—			(6,027	)		—			(6,027	)
Purchase of stock		(200	)		(13,054	)		—			—			(13,054	)		—			(13,054	)
Issuance of stock		621			4,803			—			—			4,803			—			4,803
Stock-based compensation		—			5,369			—			—			5,369			—			5,369
Balance as of July 31, 2018		56,938			681,060			537,015			(56,488	)		1,161,587			3,033			1,164,620
Net income		—			—			46,034			—			46,034			1,283			47,317
Other comprehensive loss		—			—			—			(12,093	)		(12,093	)		(267	)		(12,360	)
Dividends paid to shareholders		—			—			(5,716	)		—			(5,716	)		—			(5,716	)
Dividends paid to noncontrolling interest		—			—			—			—			—			(690	)		(690	)
Purchase of stock		(459	)		(22,875	)		—			—			(22,875	)		—			(22,875	)
Issuance of stock		32			—			—			—			—			—			—
Stock-based compensation		—			6,301			—			—			6,301			—			6,301
Balance as of October 31, 2018		56,511			664,486			577,333			(68,581	)		1,173,238			3,359			1,176,597
Net income		—			—			44,964			—			44,964			480			45,444
Other comprehensive income		—			—			—			5,310			5,310			72			5,382
Dividends paid to shareholders		—			—			(6,015	)		—			(6,015	)		—			(6,015	)
Dividends paid to noncontrolling interest		—			—			—			—			—			(1,565	)		(1,565	)
Purchase of stock		(503	)		(21,940	)		—			—			(21,940	)		—			(21,940	)
Issuance of stock		412			3,724			—			—			3,724			—			3,724
Stock-based compensation		—			5,413			—			—			5,413			—			5,413
Balance as of January 31, 2019		56,420		$	651,683		$	616,282		$	(63,271	)	$	1,204,694		$	2,346		$	1,207,040

Accumulated

Total

Other

Korn Ferry

Total

Common Stock

Retained

Comprehensive

Stockholders'

Noncontrolling

Stockholder's

Shares

Amount

Earnings

Loss, Net

Equity

Interest

Equity

(in thousands)

Balance as of April 30, 2018

56,517

$
683,942

$
572,800

$
(40,135
)

$
1,216,607

$
3,008

$
1,219,615

Net loss

—

—

(38,611
)

—

(38,611
)

19

(38,592
)
Other comprehensive (loss) income

—

—

—

(14,156
)

(14,156
)

6

(14,150
)
Effect of adopting new accounting standards

—

—

8,853

(2,197
)

6,656

—

6,656

Dividends paid to shareholders

—

—

(6,027
)

—

(6,027
)

—

(6,027
)
Purchase of stock

(200
)

(13,054
)

—

—

(13,054
)

—

(13,054
)
Issuance of stock

621

4,803

—

—

4,803

—

4,803

Stock-based compensation

—

5,369

—

—

5,369

—

5,369

Balance as of July 31, 2018

56,938

681,060

537,015

(56,488
)

1,161,587

3,033

1,164,620

Net income

—

—

46,034

—

46,034

1,283

47,317

Other comprehensive loss

—

—

—

(12,093
)

(12,093
)

(267
)

(12,360
)
Dividends paid to shareholders

—

—

(5,716
)

—

(5,716
)

—

(5,716
)
Dividends paid to noncontrolling interest

—

—

—

—

—

(690
)

(690
)
Purchase of stock

(459
)

(22,875
)

—

—

(22,875
)

—

(22,875
)
Issuance of stock

32

—

—

—

—

—

—

Stock-based compensation

—

6,301

—

—

6,301

—

6,301

Balance as of October 31, 2018

56,511

$
664,486

$
577,333

$
(68,581
)

$
1,173,238

$
3,359

$
1,176,597

The accompanying notes are an integral part of these consolidated financial statements.

	Six Months Ended October 31,						Nine Months Ended January 31,
	2019			2018			2020			2019
	(in thousands)						(in thousands)
Cash flows from operating activities:
Net income	$	86,682		$	8,725		$	107,638		$	54,169
Adjustments to reconcile net income to net cash used in operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		25,492			22,749			40,355			34,490
Stock-based compensation expense		11,520			12,369			16,988			18,028
Tradename write-offs		—			106,555			—			106,555
Write-off of long-lived assets								2,654			—
Provision for doubtful accounts		7,150			7,471			10,958			11,012
Gain on cash surrender value of life insurance policies		(4,209	)		(3,003	)		(5,794	)		(4,547	)
(Gain) loss on marketable securities		(3,121	)		836
Gain on marketable securities								(8,341	)		(1,330	)
Deferred income taxes		6,402			(19,838	)		(1,974	)		(23,192	)
Change in other assets and liabilities:
Deferred compensation		14,817			(1,646	)		26,646			5,486
Receivables due from clients		(60,556	)		(52,536	)		(37,258	)		(44,332	)
Income taxes and other receivables		(13,468	)		345			(6,424	)		(1,142	)
Prepaid expenses and other assets		(8,140	)		(5,326	)		(9,191	)		(479	)
Unearned compensation		(26,576	)		(21,103	)		(17,393	)		(15,097	)
Income taxes payable		(6,139	)		(5,898	)		(1,444	)		(532	)
Accounts payable and accrued liabilities		(133,444	)		(76,544	)		(59,911	)		(33,076	)
Other		(508	)		(5,345	)		(372	)		(5,056	)
Net cash used in operating activities		(104,098	)		(32,189	)
Net cash provided by operating activities								57,137			100,957
Cash flows from investing activities:
Purchase of property and equipment		(23,817	)		(24,565	)		(33,753	)		(36,886	)
Purchase of marketable securities		(3,826	)		(8,539	)		(39,081	)		(8,672	)
Proceeds from sales/maturities of marketable securities		3,016			8,923			3,245			13,557
Cash paid for acquisitions, net of cash acquired								(108,602	)		—
Premium on company-owned life insurance policies		(355	)		(33,752	)		(15,448	)		(34,612	)
Proceeds from life insurance policies		1,999			4,517			2,280			6,972
Dividends received from unconsolidated subsidiaries		166			—			286			140
Net cash used in investing activities		(22,817	)		(53,416	)		(191,073	)		(59,501	)
Cash flows from financing activities:
Proceeds from long term debt		50,000			—			445,500			226,875
Principal payments on long term debt								(276,875	)		(238,906	)
Payment of debt issuance costs								(3,050	)		(2,181	)
Repurchases of common stock		(61,929	)		(22,745	)		(68,055	)		(37,372	)
Payments of tax withholdings on restricted stock		(8,725	)		(13,184	)		(8,862	)		(20,497	)
Proceeds from issuance of common stock upon exercise of employee stock options and in connection with an employee stock purchase plan		4,313			4,105			7,684			7,271
Borrowings under life insurance policies								—			31,870
Payments on life insurance policy loans		(943	)		(2,567	)		(943	)		(4,351	)
Principal payments on finance leases		(927	)		—			(1,426	)		—
Dividends paid to shareholders		(11,709	)		(11,743	)		(17,292	)		(17,758	)
Dividends - noncontrolling interest		(1,046	)		(690	)		(2,110	)		(2,255	)
Borrowings under life insurance policies		—			31,870
Principal payments on term loan		—			(12,031	)
Payment of contingent consideration from acquisitions		(455	)		(455	)		(455	)		(455	)
Net cash used in financing activities		(31,421	)		(27,440	)
Net cash provided by (used in) financing activities								74,116			(57,759	)
Effect of exchange rate changes on cash and cash equivalents		(3,601	)		(20,124	)		(2,832	)		(15,036	)
Net decrease in cash and cash equivalents		(161,937	)		(133,169	)		(62,652	)		(31,339	)
Cash and cash equivalents at beginning of period		626,360			520,848			626,360			520,848
Cash and cash equivalents at end of the period	$	464,423		$	387,679		$	563,708		$	489,509

The accompanying notes are an integral part of these consolidated financial statements.

Korn Ferry, a Delaware corporation (the “Company”), and its subsidiaries ~~currently operate~~is a global organizational consulting firm. The Company helps clients synchronize strategy and talent to drive superior performance. The Company works with organizations to design their structures, roles, and responsibilities. The Company helps organizations hire the right people to bring their strategy to life and advise them on how to reward, develop, and motivate their people.

The Company is pursuing a strategy that will help Korn Ferry to focus on clients and collaborate intensively across the organization. This approach builds on the best of our past and gives the Company a clear path to the future with focused initiatives to increase our client and commercial impact. Korn Ferry is transforming how clients address their talent management needs. The Company has evolved from a mono-line to a diversified business, giving our consultants more frequent and expanded opportunities to engage with clients.

The combination of Consulting and Digital were formerly referred to as Korn Ferry Advisory (“Advisory”)~~, Executive Search and Korn Ferry RPO and Professional Search (“RPO & Professional Search”)~~. Advisory assists clients to synchronize strategy and talent by addressing four fundamental needs: Organizational Strategy, Assessment and Succession, Leadership Development, and Rewards and Benefits, all underpinned by a comprehensive array of some of the world’s leading intellectual property (“IP”), products and tools. Executive Search focuses on recruiting board level, chief executive and other senior executive and general management positions, in addition to research-based interviewing and assessment solutions, for clients predominantly in the consumer goods, financial services, industrial, life sciences/healthcare and technology industries. RPO & Professional Search uses data-backed insight and IP, matched with strategic collaboration and innovative technology, to meet people challenges head-on—and succeed. Solutions span all aspects of Recruitment Process Outsourcing (“RPO”), Professional Search and Project Recruitment.

The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended April 30, 2019 for the Company and its wholly and majority owned/controlled domestic and international subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The preparation of the consolidated financial statements conform with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and prevailing practice within the industry. The consolidated financial statements include all adjustments, consisting of normal recurring accruals and any other adjustments that management considers necessary for a fair presentation of the results for these periods. The results of operations for the interim period are not necessarily indicative of the results for the entire fiscal year.

Investments in affiliated companies, which are 50% or less owned and where the Company exercises significant influence over operations, are accounted for using the equity method.

The Company has control of a ~~Mexico~~Mexican subsidiary and consolidates the operations of this subsidiary. Noncontrolling interest, which represents the ~~Mexico~~Mexican partners’ 51% interest in the ~~Mexico~~Mexican subsidiary, is reflected on the Company’s consolidated financial statements.

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

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates, and changes in estimates are reported in current operations as new information is learned or upon the amounts becoming fixed or determinable. The most significant areas that require management’s judgment are revenue recognition, deferred compensation, annual performance-related bonuses, evaluation of the carrying value of receivables, goodwill and other intangible assets, share-based payments, leases, and the recoverability of deferred income taxes.

Substantially all fee revenue is derived from talent and organizational ~~advisory~~consulting services and the digital sales, fees for professional services related to executive and professional recruitment performed on a retained basis and RPO, either stand-alone or as part of a solution.

Revenue is recognized when control of the goods and services are transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods and services. Revenue contracts with customers are evaluated based on the five-step model outlined in Accounting Standard Codification 606 (“ASC 606”): 1) identify the contract with a customer; 2) identify the performance obligation(s) in the contract; 3) determine the transaction price; 4) allocate the transaction price to the separate performance obligation(s); and 5) recognize revenue when (or as) each performance obligation is satisfied.

Consulting fee revenue is primarily ~~generated from Advisory, is~~ recognized as services are rendered, measured by total hours incurred to the total estimated hours at completion. It is possible that updated estimates for consulting engagements may vary from initial estimates with such updates being recognized in the period of determination. Depending on the timing of billings and services rendered, the Company accrues or defers revenue as appropriate.

Digital revenue is generated from ~~a range of online tools designed to support human resource processes~~IP platforms enabling large-scale, technology-based talent programs for pay, talent ~~and~~development, engagement, and ~~assessments,~~assessment and is consumed directly by an end user or indirectly through a consulting engagement. Revenue is recognized as ~~well as licenses~~services are delivered and the Company has a legally enforceable right to payment. Revenue also comes from the sale of our proprietary IP ~~and tangible/digital products. IP~~subscriptions, ~~grant access to proprietary compensation and job evaluation databases. IP subscriptions~~which are considered symbolic IP due to the dynamic nature of the ~~content and, as~~content. As a result, revenue is recognized over the term of the contract.Functional IP licenses grant customers the right to use IP content via the delivery of a flat file. Because the IP content license has significant stand-alone functionality, revenue is recognized upon delivery and when an enforceable right to payment ~~exists~~.~~Online assessments are delivered in the form of online questionnaires.A bundle of assessments represents one performance obligation,~~exists. Revenue for tangible and ~~revenue is recognized as assessment services are delivered and the Company has a legally enforceable right to payment.~~ ~~Tangible/~~digital products sold by the Company, ~~mainly consist of~~such as books and digital files, ~~covering a variety of topics including performance management, team effectiveness, and coaching and development. The Company recognizes digital revenue~~is recognized when these products are sold or ~~shipped, as is the case for books.~~shipped.

Fee revenue from executive and professional search activities is generally one-third of the estimated first-year cash compensation of the placed candidate, plus a percentage of the fee to cover indirect engagement-related expenses. In addition to the search retainer, an uptick fee is billed when the actual compensation awarded by the client for a placement is higher than the estimated compensation. In the aggregate, upticks have been a relatively consistent percentage of the original estimated fee; therefore, the Company estimates upticks using the expected value method based on historical data on a portfolio basis. In a standard search engagement, there is one performance obligation, which is the promise to undertake a search. The Company generally recognizes such revenue over the course of a search and when it is legally entitled to payment as outlined in the billing terms of the contract. Any revenues associated with services that are provided on a contingent basis are recognized once the contingency is resolved, as this is when control is transferred to the customer. These assumptions determine the timing of revenue recognition for the reported period.

RPO fee revenue is generated through two distinct phases: 1) the implementation phase and 2) the post-implementation recruitment phase. The fees associated with the implementation phase are recognized over the period that the related implementation services are provided. The post-implementation recruitment phase represents end-to-end recruiting services to clients for which there are both fixed and variable fees, which are recognized over the period that the related recruiting services are performed.

The Company incurs certain out-of-pocket expenses that are reimbursed by its clients, which are accounted for as revenue in the consolidated statements of income.

An allowance is established for doubtful accounts by taking a charge to general and administrative expenses. The amount of the allowance is based on historical loss experience and assessment of the collectability of specific accounts, as well as expectations of future collections based upon trends and the type of work for which services are rendered. After the Company exhausts all collection efforts, the amount of the allowance is reduced for balances identified as uncollectible.

The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. As of ~~October~~January 31, ~~2019 and April 30, 2019,~~2020, the Company’s investments in cash equivalents consisted of money market funds, commercial papers and corporate notes/bonds with maturity of less than 90 days for which market prices are readily available. As of April 30, 2019, cash equivalents consisted of money market funds.

The Company currently has investments in marketable securities and mutual funds that are classified as either trading securities or available-for-sale, based upon management’s intent and ability to hold, sell or trade such securities. The classification of the investments in these marketable securities and mutual funds is assessed upon purchase and reassessed at each reporting period. These investments are recorded at fair value and are classified as marketable securities in the accompanying consolidated balance sheets.The investments that the Company may sell within the next twelve months are carried as current assets.

The Company invests in mutual funds (for which market prices are readily available) that are held in trust to satisfy obligations under the Company’s deferred compensation plans. Such investments are classified as trading securities based upon the employees’ investment elections in their deemed accounts in the Executive Capital Accumulation Plan and similar plans in Asia Pacific and Canada (“ECAP”) from a pre-determined set of securities, and the Company invests in marketable securities to mirror these elections. These investments are recorded at fair value with the change in value in the period being reflected in the consolidated statements of income and are classified as marketable securities in the accompanying consolidated balance sheets. The investments that the Company may sell within the next twelve months are carried as current assets. Realized gains (losses) on marketable securities are determined by specific identification. Interest is recognized on an accrual basis; dividends are recorded as earned on the ex-dividend date. Interest, dividend income and the changes in fair value in marketable securities are recorded in the accompanying consolidated statements of income in other income, ~~(loss),~~ net.

The Company also invests cash in excess of its daily operating requirements and capital needs primarily in marketable fixed income (debt) securities in accordance with the Company’s investment policy, which restricts the type of investments that can be made. The Company’s investment portfolio includes commercial paper and corporate notes/ bonds. These marketable fixed income (debt)securities are classified as available-for-sale securities based on management’s decision, at the date such securities are acquired, not to hold these securities to maturity or actively trade them. The Company carries these marketable debt securities at fair value based on the market prices for these marketable debt securities or similar debt securities whose prices are readily available. The changes in fair values, net of applicable taxes, are recorded as unrealized gains or losses as a component of comprehensive income. When, in the opinion of management, a decline in the fair value of an investment below its amortized cost is considered to be “other-than-temporary,” a credit loss is recorded in the statement of income in other income, net; any amount in excess of the credit loss is recorded as unrealized gains or losses as a component of comprehensive income. Generally, the amount of the loss is the difference between the cost or amortized cost and its then current fair value; a credit loss is the difference between the discounted expected future cash flows to be collected from the debt security and the cost or amortized cost of the debt security. The determination of the other-than-temporary decline includes, in addition to other relevant factors, a presumption that if the market value is below cost by a significant amount for a period, a write-down may be necessary. During the three and nine months ended January 31, 2020 and 2019, 0 other-than-temporary impairment was recognized.

Fair value is the price the Company would receive to sell an asset or transfer a liability (exit price) in an orderly transaction between market participants. For those assets and liabilities recorded or disclosed at fair value, the Company determines the fair value based upon the quoted market price, if available. If a quoted market price is not available for identical assets, the fair value is based upon the quoted market price of similar assets. The fair values are assigned a level within the fair value hierarchy as defined below:

As of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, the Company held certain assets that are required to be measured at fair value on a recurring basis.These included cash, cash equivalents, accounts receivable, marketable securities, foreign currency forward contracts and an interest rate swap. The carrying amount of cash, cash equivalents and accounts receivable approximates fair value due to the short-term maturity of these instruments. The fair values of marketable securities classified as trading are obtained from quoted market prices, and the fair values of marketable securities classified as available-for-sale, foreign currency forward contracts and ~~the~~ interest rate swap are obtained from a third party, which are based on quoted prices or market prices for similar assets and financial instruments.

On December 16, 2019, in conjunction with the payoff of the credit facility, the Company terminated its interest rate swap. The Company ~~has~~had entered into anthe interest rate swap agreement to effectively convert its variable debt to a fixed-rate basis. The principal objective ~~of these contracts is~~was to eliminate or reduce the variability of the cash flows in interest payments associated with the Company’s long-term debt, thus reducing the impact of interest rate changes on future interest payment cash flows. The Company ~~has~~ determined that the interest rate swap ~~qualifies~~qualified as a cash flow hedge in accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”). Changes in the fair value of an interest rate swap agreement designated as a cash flow hedge ~~are~~were recorded as a component of accumulated other comprehensive ~~(loss) income~~loss within stockholders’ equity and are amortized to interest expense over the term of the related debt.

The Company has established a program that primarily utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures primarily originating from intercompany balances due to cross border work performed in the ordinary course of business. These foreign currency forward contracts are neither used for trading purposes nor are they designated as hedging instruments pursuant to ASC 815. Accordingly, the fair value of these contracts is recorded as of the end of the reporting period in the accompanying consolidated balance sheets, while the change in fair value is recorded to the accompanying consolidated statements of income.

Business acquisitions are accounted for under the acquisition method. The acquisition method requires the reporting entity to identify the acquirer, determine the acquisition date, recognize and measure the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquired entity, and recognize and measure goodwill or a gain from the purchase. The acquiree’s results are included in the Company’s consolidated financial statements from the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill, or if the fair value of the assets acquired exceeds the purchase price consideration, a bargain purchase gain is recorded. Adjustments to fair value assessments are generally recorded to goodwill over the measurement period (not longer than twelve months). The acquisition method also requires that acquisition-related transaction and post-acquisition restructuring costs be charged to expense as committed and requires the Company to recognize and measure certain assets and liabilities including those arising from contingencies and contingent consideration in a business combination.

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of use (“ROU”) assets and current and non-current operating lease liability, in the consolidated balance sheets. Finance leases are included in property and equipment, net, other accrued liabilities and other liabilities in the consolidated balance sheets.

ROU assets represent the Company's right to use an underlying asset for the lease term, and the lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the periods in which they are incurred.

The Company has lease agreements with lease and non-lease components. For all leases with non-lease components the Company accounts for the lease and non-lease components as a single lease component.

Long-lived assets include property, equipment, right-of-use assets and software developed or obtained for internal use. In accordance with ASC 360, Property, Plant and Equipment (“ASC 360”), management reviews the Company’s recorded long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period. The Company determines the extent to which an asset may be impaired based upon its expectation of the asset’s future usability, as well as on a reasonable assurance that the future cash flows associated with the asset will be in excess of its carrying amount. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between fair value and the carrying value of the asset. During the three months ended January 31, 2020, the Company decided that it would exit 16 office leases as part of the integration of the acquisition of Miller Heiman Group, AchieveForum and Strategy Execution (“Acquired Companies”). This resulted in an impairment charge of the ROU asset of $2.3 million and impairment of leasehold improvements and furniture and fixtures of $0.4 million, both recorded in the consolidated statements of income in general and administrative expenses.

Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). Results of the annual impairment test performed as of January 31, 2019, indicated that the fair value of each reporting unit exceeded its carrying amount and no reporting units were at risk of failing the impairment test. As a result, 0 impairment charge was recognized. The Company’s annual impairment test will be performed in the fourth quarter of fiscal 2020. There was also no indication of potential impairment as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019 that required further testing.

Intangible assets primarily consist of customer lists, non-compete agreements, proprietary databases and IP. Intangible assets are recorded at their estimated fair value at the date of acquisition and are amortized in a pattern in which the asset is consumed, if that pattern can be reliably determined, or using the straight-line method over their estimated useful lives, which range from one to 24 years. For intangible assets subject to amortization, an impairment loss is recognized if the carrying amount of the intangible assets is not recoverable and exceeds fair value. The carrying amount of the intangible assets is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from use of the asset. Intangible assets with indefinite lives are not amortized, but are reviewed annually for impairment or more frequently whenever events or changes in circumstances indicated that the fair value of the asset may be less than its carrying amount. As of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, there were 0 indicators of impairment with respect to the Company’s intangible assets.

On June 12, 2018, the Company’s Board of Directors voted to approve a plan to go to market under a single, master brand architecture and to simplify the Company’s organizational structure by eliminating and/or consolidating certain legal entities and implementing a rebranding of the Company to offer the Company’s current products and services using the “Korn Ferry” name, branding and trademarks. As a result, the Company discontinued the use of all ~~sub-brands.~~sub-brands being used at that time. Two of the Company’s former sub-brands, Hay Group and Lominger, came to Korn Ferry through acquisitions. In connection with the accounting for these acquisitions, $106.6 million of the purchase price was allocated to indefinite-lived tradename intangible assets. As a result of the decision to discontinue their use, the Company took a non-cash intangible asset write-off of $106.6 million during the ~~six~~nine months ended ~~October~~January 31, ~~2018,~~2019, recorded in general and administrative expenses.

Compensation and benefits expense in the accompanying consolidated statements of income consist of compensation and benefits paid to consultants (employees who originate business), executive officers and administrative and support personnel. The most significant portions of this expense are salaries and the amounts paid under the annual performance-related bonus plan to employees. The portion of the expense applicable to salaries is comprised of amounts earned by employees during a reporting period. The portion of the expenses applicable to annual performance-related bonuses refers to the Company’s annual employee performance-related bonus with respect to a fiscal year, the amount of which is communicated and paid to each eligible employee following the completion of the fiscal year.

Each quarter, management makes its best estimate of its annual performance-related bonuses, which requires management to, among other things, project annual consultant productivity (as measured by engagement fees billed and collected by executive search consultants and revenue and other performance/profitability metrics for ~~Advisory~~Consulting, Digital and RPO & Professional Search consultants), the level of engagements referred by a consultant in one line of business to a different line of business,

and Company performance, including profitability, competitive forces and future economic conditions and their impact on the Company’s results. At the end of each fiscal year, annual performance-related bonuses take into account final individual consultant productivity (including referred work), Company/line of business results, including profitability, the achievement of strategic objectives, the results of individual performance appraisals, and the current economic landscape. Accordingly, each quarter the Company reevaluates the assumptions used to estimate annual performance-related bonus liability and adjusts the carrying amount of the liability recorded on the consolidated balance sheet and reports any changes in the estimate in current operations.

Because annual performance-based bonuses are communicated and paid only after the Company reports its full fiscal year results, actual performance-based bonus payments may differ from the prior year’s estimate. Such changes in the bonus estimate historically have been immaterial and are recorded in current operations in the period in which they are determined. The performance-related bonus expense was ~~$117.4~~$177.9 million and ~~$142.9~~$202.4 million during the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018,~~2019, respectively, included in compensation and benefits expense in the consolidated statements of income. During the three months ended ~~October~~January 31, ~~2019~~2020 and ~~2018,~~2019, the performance related bonus expense was ~~$64.4~~$60.5 million and ~~$81.9~~$59.5 million, respectively.

Other expenses included in compensation and benefits expense are due to changes in deferred compensation and pension plan liabilities, changes in cash surrender value (“CSV”) of company-owned life insurance (“COLI”) contracts, amortization of stock compensation awards, payroll taxes and employee insurance benefits. Unearned compensation on the consolidated balance sheets includes long-term retention awards that are generally amortized over four-to-five years.

The Company accounts for its restructuring charges as a liability when the obligations are incurred and records such charges at fair value. Changes in the estimates of the restructuring charges are recorded in the period the change is determined.

The Company has employee compensation plans under which various types of stock-based instruments are granted. These instruments principally include restricted stock units, restricted stock and an Employee Stock Purchase Plan (“ESPP”). The Company recognizes compensation expense related to restricted stock units, restricted stock and the estimated fair value of stock purchases under the ESPP on a straight-line basis over the service period for the entire award.

Certain reclassifications have been made to the amounts in prior periods in order to conform to the current period’s presentation.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance (Accounting Standard Codification 842 – Leases) on accounting for leases that generally requires all leases to be recognized on the consolidated balance sheet. The guidance is effective for fiscal years beginning after December 15, 2018. On July 30, 2018, the FASB issued an amendment that allows entities to apply the provisions at the effective date without adjusting comparative periods. The Company adopted this guidance in its fiscal year beginning May 1, 2019 using a modified retrospective approach without restatement of comparative periods. As such, periods prior to the date of adoption are presented in accordance with Accounting Standard Codification 840 - Leases. The FASB also issued subsequent related Accounting Standards Updates (“ASUs”), which detail amendments to the ASU, implementation considerations, narrow-scope improvements and practical expedients. The Company has elected to apply the group of practical expedients which allows the Company to carry forward its identification of contracts that are or contain leases, its historical lease classification and its initial direct costs for existing leases. The Company has also elected to combine lease and non-lease components for all asset classes and recognize leases with an initial term of 12 months or less on a straight-line basis without recognizing a ROU asset or operating lease liability.

The adoption of this standard had a material impact on the consolidated balance sheet as of ~~October~~January 31, ~~2019~~2020 due to the recognition of ROU assets and operating lease liabilities, but an immaterial impact on the Company’s consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of stockholders’ equity, and consolidated statements of cash flows. Upon adoption we recognized total ROU assets of $236.1 million with a corresponding liability of $272.3 million. The ROU asset balance was adjusted by the reclassification of pre-existing prepaid expenses and other assets and deferred rent balances of $5.1 million and $41.3 million, respectively.

In August 2017, the FASB issued guidance amending and simplifying accounting for hedging activities. The guidance refined and expanded strategies that qualify for hedge accounting and ~~simplify~~simplified the application of hedge accounting in certain situations. The guidance is effective for fiscal years beginning after December 15, 2018. The Company adopted this guidance in its fiscal year beginning May 1, 2019. The adoption of this guidance did not have an impact on the consolidated financial statements.

In June 2016, the FASB issued guidance on accounting for measurement of credit losses on financial Instruments, which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The standard is effective for fiscal years beginning after December 15, 2019. The Company will adopt this guidance in its fiscal year beginning May 1, 2020. The adoption of this guidance is not anticipated to have a material impact on the consolidated financial statements.

In January 2017, the FASB issued guidance simplifying the test for goodwill impairment. The new guidance simplifies the test for goodwill impairment by removing Step 2 from the goodwill impairment test. Companies will now perform the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value not to exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendments of this standard are effective for goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted for goodwill impairment tests performed after January 1, 2017. The Company will adopt this guidance in its fiscal year beginning May 1, 2020. The adoption of this guidance is ~~evaluating the adoption timeline and doesn’t anticipate the guidance~~not anticipated to have a material impact on the consolidated financial statements.

In August 2018, the FASB issued guidance amending the disclosure requirements for fair value measurements. The amendment removes and modifies disclosures that are currently required and adds additional disclosures that are deemed relevant. The amendments of this standard are effective for fiscal years beginning after December 15, 2019. The Company will adopt this guidance in its fiscal year beginning May 1, 2020. The Company is currently evaluating the impact of adopting this guidance and doesn’t anticipate the guidance to have a material impact on the consolidated financial statements.

In August 2018, the FASB issued guidance amending accounting for internal-use software. The new guidance will align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with developing or obtaining internal-use software. The amendments of this standard are effective for fiscal years ending after December 15, 2019 with early adoption permitted. The Company will adopt this guidance in its fiscal year beginning May 1, 2020. The Company is currently evaluating the impact of adopting this guidance.

In December 2019, the FASB issued guidance on Simplifying the Accounting for Income Taxes. This update eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The update also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The amendments of this standard are effective for fiscal year beginning after December 15, 2020, with early adoption permitted. The Company will adopt this guidance in its fiscal year beginning May 1, 2021. The adoption of this guidance is not anticipated to have a material impact on the consolidated financial statements.

Accounting Standards Codification 260, Earnings Per Share, requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividends prior to vesting as a separate class of securities in calculating earnings per share. The Company has granted and expects to continue to grant to certain employees under its restricted stock agreements grants that contain non-forfeitable rights to dividends. Such grants are considered participating securities. Therefore, the Company is required to apply the two-class method in calculating earnings per share. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The dilutive effect of participating securities is calculated using the more dilutive of the treasury method or the two-class method.

Basic earnings per common share was computed using the two-class method by dividing basic net earnings attributable to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per common share was computed using the two-class method by dividing diluted net earnings attributable to common stockholders by the weighted-average number of common shares outstanding plus dilutive common equivalent shares. Dilutive common equivalent shares include all in-the-money outstanding options or other contracts to issue common stock as if they were exercised or converted. Financial instruments that are not in the form of common stock, but when converted into common stock increase earnings per share are anti-dilutive and are not included in the computation of diluted earnings per share.

During the three and ~~six~~nine months ended ~~October~~January 31, ~~2019,~~2020, restricted stock awards of 0.7 million were outstanding, but not included in the computation of diluted earnings per share because they were anti-dilutive. During the three and ~~six~~nine months ended ~~October~~January 31, ~~2018,~~2019, restricted stock awards of 0.7 million and 0.6 million were outstanding, respectively, but not included in the computation of diluted earnings per share because they were anti-dilutive.

The following table summarizes basic and diluted earnings per common share attributable to common stockholders:

	Three Months Ended October 31,				Six Months Ended October 31,				Three Months Ended January 31,				Nine Months Ended January 31,
	2019		2018		2019		2018		2020		2019		2020		2019
	(in thousands, except per share data)								(in thousands, except per share data)
Net income attributable to Korn Ferry	$	42,804	$	46,034	$	85,755	$	7,423	$	19,993	$	44,964	$	105,748	$	52,387
Less: distributed and undistributed earnings to nonvested restricted stockholders		466		485		910		118		222		468		1,138		541
Basic net earnings attributable to common stockholders		42,338		45,549		84,845		7,305		19,771		44,496		104,610		51,846
Add: undistributed earnings to nonvested restricted stockholders		406		425		792		—		161		409		960		365
Less: reallocation of undistributed earnings to nonvested restricted stockholders		405		419		788		—		160		405		953		359
Diluted net earnings attributable to common stockholders	$	42,339	$	45,555	$	84,849	$	7,305	$	19,772	$	44,500	$	104,617	$	51,852

Weighted-average common shares outstanding:
Basic weighted-average number of common shares outstanding		54,568		55,461		54,917		55,420		53,999		55,233		54,611		55,358
Effect of dilutive securities:
Restricted stock		138		767		228		871		258		516		363		799
ESPP		10		11		25		14		7		4		32		24
Stock Options		—		—		—		1
Diluted weighted-average number of common shares outstanding		54,716		56,239		55,170		56,306		54,264		55,753		55,006		56,181

Net earnings per common share:
Basic earnings per share	$	0.78	$	0.82	$	1.54	$	0.13	$	0.37	$	0.81	$	1.92	$	0.94
Diluted earnings per share	$	0.77	$	0.81	$	1.54	$	0.13	$	0.36	$	0.80	$	1.90	$	0.92

Comprehensive income (loss) is comprised of net income and all changes to stockholders’ equity, except those changes resulting from investments by stockholders (changes in paid in capital) and distributions to stockholders (dividends) and is reported in the accompanying consolidated statements of comprehensive income (loss). Accumulated other comprehensive income (loss), net of taxes, is recorded as a component of stockholders’ equity.

The components of accumulated other comprehensive income (loss) were as follows:

	October 31, 2019			April 30, 2019			January 31, 2020			April 30, 2019
	(in thousands)						(in thousands)
Foreign currency translation adjustments	$	(64,303	)	$	(60,270	)	$	(63,900	)	$	(60,270	)
Deferred compensation and pension plan adjustments, net of tax		(15,848	)		(16,838	)		(14,905	)		(16,838	)
Interest rate swap unrealized (loss) gain, net of tax		(495	)		456
Marketable securities unrealized loss, net of tax								(5	)		—
Interest rate swap unrealized gain, net of tax								—			456
Accumulated other comprehensive loss, net	$	(80,646	)	$	(76,652	)	$	(78,810	)	$	(76,652	)

The following table summarizes the changes in each component of accumulated other comprehensive income (loss), net for the three months ended January 31, 2020:

The following table summarizes the changes in each component of accumulated other comprehensive income (loss), net for the ~~three~~nine months ended ~~October~~January 31, ~~2019:~~2020:

~~The following table summarizes the changes in each component of accumulated other comprehensive income (loss) for the six months ended October 31, 2019:~~

~~(2) The tax effect on unrealized losses was $0.1 million and $0.3 million for the three and six months ended October 31, 2019, respectively.~~

The following table summarizes the changes in each component of accumulated other comprehensive income (loss), net for the three months ended ~~October~~January 31, ~~2018:~~2019:

	Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized Gains on Interest Rate Swap (2)			Accumulated Other Comprehensive Income (Loss)			Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized Gains (Losses) on Interest Rate Swap (2)			Accumulated Other Comprehensive Income (Loss)
	(in thousands)												(in thousands)
Balance as of July 31, 2018	$	(46,961	)	$	(11,196	)	$	1,669		$	(56,488	)
Unrealized (losses) gains arising during the period		(12,511	)		—			193			(12,318	)
Balance as of October 31, 2018													$	(59,472	)	$	(10,923	)	$	1,814		$	(68,581	)
Unrealized gains (losses) arising during the period														6,017			—			(880	)		5,137
Reclassification of realized net losses (gains) to net income		—			273			(48	)		225			—			273			(100	)		173
Balance as of October 31, 2018	$	(59,472	)	$	(10,923	)	$	1,814		$	(68,581	)
Balance as of January 31, 2019													$	(53,455	)	$	(10,650	)	$	834		$	(63,271	)

The following table summarizes the changes in each component of accumulated other comprehensive income (loss), net for the ~~six~~nine months ended ~~October~~January 31, ~~2018:~~2019:

	Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized Gains on Interest Rate Swap (2)			Accumulated Other Comprehensive Income (Loss)			Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized Gains (Losses) on Interest Rate Swap (2)			Accumulated Other Comprehensive Income (Loss)
	(in thousands)												(in thousands)
Balance as of April 30, 2018	$	(32,399	)	$	(9,073	)	$	1,337		$	(40,135	)	$	(32,399	)	$	(9,073	)	$	1,337		$	(40,135	)
Unrealized (losses) gains arising during the period		(27,073	)		—			342			(26,731	)
Unrealized losses arising during the period														(21,056	)		—			(538	)		(21,594	)
Reclassification of realized net losses (gains) to net income		—			546			(64	)		482			—			819			(164	)		655
Effect of adoption of accounting standard		—			(2,396	)		199			(2,197	)		—			(2,396	)		199			(2,197	)
Balance as of October 31, 2018	$	(59,472	)	$	(10,923	)	$	1,814		$	(68,581	)
Balance as of January 31, 2019													$	(53,455	)	$	(10,650	)	$	834		$	(63,271	)

The following table summarizes the components of stock-based compensation expense recognized in the Company’s consolidated statements of income for the periods indicated:

	Three Months Ended October 31,				Six Months Ended October 31,				Three Months Ended January 31,				Nine Months Ended January 31,
	2019		2018		2019		2018		2020		2019		2020		2019
	(in thousands)								(in thousands)
Restricted stock	$	5,712	$	6,301	$	10,803	$	11,670	$	5,219	$	5,413	$	16,022	$	17,083
ESPP		346		354		717		699		249		246		966		945
Total stock-based compensation expense	$	6,058	$	6,655	$	11,520	$	12,369	$	5,468	$	5,659	$	16,988	$	18,028

At the Company’s 2019 Annual Meeting of Stockholders, held on October 3, 2019, the Company’s stockholders approved an amendment and restatement to the Korn Ferry Amended and Restated 2008 Stock Incentive Plan (the 2019 amendment and restatement being the “Fourth A&R 2008 Plan”), which, among other things, eliminated the fungible share counting provision and decreased the total number of shares of the Company’s common stock available for stock-based awards by 2,141,807 shares, leaving 3,600,000 shares available for issuance, subject to certain changes in the Company’s capital structure and other extraordinary events. The Fourth A&R 2008 Plan was also amended to generally require a minimum one-year vesting for all future awards, and provides for the grant of awards to eligible participants, designated as either nonqualified or incentive stock options, restricted stock and restricted stock units, any of which are market-based, and incentive bonuses, which may be paid in cash or stock or a combination thereof.

The Company grants time-based restricted stock awards to executive officers and other senior employees generally vesting over a four-year period. In addition, certain key management members typically receive time-based restricted stock awards upon commencement of employment and may receive them annually in conjunction with the Company’s performance review. Time-based restricted stock awards are granted at a price equal to fair value, which is determined based on the closing price of the Company’s common stock on the grant date. The Company recognizes compensation expense for time-based restricted stock awards on a straight-line basis over the vesting period.

The Company also grants market-based restricted stock units to executive officers and other senior employees. The market-based units vest after three years depending upon the Company’s total stockholder return over the three-year performance period relative to other companies in its selected peer group. The fair value of these market-based restricted stock units are determined by using extensive market data that is based on historical Company and peer group information. The Company recognizes compensation expense for market-based restricted stock units on a straight-line basis over the vesting period.

Restricted stock activity during the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 is summarized below:

	Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value
	(in thousands, except per share data)					(in thousands, except per share data)
Non-vested, April 30, 2019		1,460		$	38.42		1,460		$	38.42
Granted		586		$	38.31		605		$	38.44
Vested		(615	)	$	25.06		(622	)	$	25.16
Forfeited/expired		(21	)	$	20.86		(49	)	$	34.92
Non-vested, October 31, 2019		1,410		$	44.47
Non-vested, January 31, 2020							1,394		$	44.48

As of ~~October~~January 31, ~~2019,~~2020, there were 0.5 million shares outstanding relating to market-based restricted stock units with total unrecognized compensation totaling ~~$15.4~~$12.7 million.

As of ~~October~~January 31, ~~2019,~~2020, there was ~~$46.4~~$40.7 million of total unrecognized compensation cost related to all non-vested awards of restricted stock, which is expected to be recognized over a weighted-average period of ~~2.5~~2.4 years. During the three and ~~six~~nine months ended ~~October~~January 31, ~~2019, 3,582~~2020, 3,343 shares and ~~225,236~~228,579 shares of restricted stock totaling $0.1 million and ~~$8.7~~$8.8 million, respectively, were repurchased by the Company, at the option of employees, to pay for taxes related to the vesting of restricted stock. During the three and ~~six~~nine months ended ~~October~~January 31, ~~2018, 2,708~~2019, 150,227 shares and ~~202,503~~352,730 shares of restricted stock totaling ~~$0.1~~$7.3 million and ~~$13.2~~$20.5 million, respectively, were repurchased by the Company, at the option of employees, to pay for taxes related to the vesting of restricted stock.

The Company has an ESPP that, in accordance with Section 423 of the Internal Revenue Code, allows eligible employees to authorize payroll deductions of up to 15% of their salary to purchase shares of the Company’s common stock at 85% of the fair market price of the common stock on the last day of the enrollment period. Employees may not purchase more than $25,000 in stock during any calendar year. The maximum number of shares that may be issued under the ESPP is 3.0 million shares. During the three and nine months ended ~~October~~January 31, ~~2019 and 2018, 0 shares were purchased under the ESPP. During the six months ended October 31, 2019 and 2018,~~2020, employees purchased ~~126,604~~93,557 shares at ~~$34.06~~$36.04 per share and ~~75,106~~220,161 shares at ~~$52.64~~$34.90 per share, respectively. During the three and nine months ended January 31, 2019, employees purchased 94,193 shares at $33.61 per share and 169,299 shares at $42.05 per share, respectively. As of ~~October~~January 31, ~~2019,~~2020, the ESPP had approximately ~~0.8~~0.7 million shares remaining available for future issuance.

During the three and nine months ended January 31, 2020, the Company repurchased (on the open market or through privately negotiated transactions) 154,100 shares and 1,787,292 shares of the Company’s common stock for $6.2 million and $68.1 million, respectively. During the three and nine months ended January 31, 2019, the Company repurchased (on the open market or through privately negotiated transactions)352,800 shares and 809,074 shares of the Company’s common stock for $14.7 million for $37.4 million, respectively.

During the three and six months ended October 31, 2019, the Company repurchased (on the open market or through privately negotiated transactions) 1,309,092 shares and 1,633,192 shares of the Company’s common stock for $49.2 million and $61.9 million, respectively. During the three and six months ended October 31, 2018, the Company repurchased (on the open market or through privately negotiated transactions)~~456,274 shares for $22.7 million.~~

The following tables show the Company’s financial instruments and balance sheet classification as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019:

	October 31, 2019																					January 31, 2020
	Fair Value Measurement										Balance Sheet Classification											Fair Value Measurement									Balance Sheet Classification
	Cost		Unrealized Gains		Unrealized Losses			Fair Value			Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non- current		Income Taxes & Other Receivables		Other Accrued Liabilities			Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non- current		Income Taxes & Other Receivables
	(in thousands)																					(in thousands)
Level 1:
Cash	$	459,313	$	—	$	—		$	459,313		$	459,313	$	—	$	—	$	—	$	—		$	506,816	$	—	$	—		$	506,816	$	506,816	$	—	$	—	$	—
Money market funds		5,110		—		—			5,110			5,110		—		—		—		—			50,402		—		—			50,402		50,402		—		—		—
Mutual funds (1)		137,601		7,560		(598	)		144,563			—		6,508		138,055		—		—			143,885		8,366		(662	)		151,589		—		7,800		143,789		—
Total	$	602,024	$	7,560	$	(598	)	$	608,986		$	464,423	$	6,508	$	138,055	$	—	$	—		$	701,103	$	8,366	$	(662	)	$	708,807	$	557,218	$	7,800	$	143,789	$	—

Level 2:
Commercial paper																						$	19,281	$	—	$	(2	)	$	19,279	$	2,793	$	16,486	$	—	$	—
Corporate notes/bonds																							20,438		1		(6	)		20,433		3,697		16,736		—		—
Total debt investments																						$	39,719	$	1	$	(8	)	$	39,712	$	6,490	$	33,222	$	—	$	—
Foreign currency forward contracts	$	—	$	1,301	$	(548	)	$	753		$	—	$	—	$	—	$	753	$	—		$	—	$	751	$	(629	)	$	122	$	—	$	—	$	—	$	122
Interest rate swap	$	—	$	—	$	(666	)	$	(666	)	$	—	$	—	$	—	$	—	$	(666	)

	April 30, 2019
	Fair Value Measurement									Balance Sheet Classification
	Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non- current		Income Taxes & Other Receivables
	(in thousands)
Level 1:
Cash	$	579,998	$	—	$	—		$	579,998	$	579,998	$	—	$	—	$	—
Money market funds		46,362		—		—			46,362		46,362		—		—		—
Mutual funds (1)		135,439		6,301		(989	)		140,751		—		8,288		132,463		—
Total	$	761,799	$	6,301	$	(989	)	$	767,111	$	626,360	$	8,288	$	132,463	$	—

Level 2:
Foreign currency forward contracts	$	—	$	821	$	(722	)	$	99	$	—	$	—	$	—	$	99
Interest rate swap	$	—	$	619	$	—		$	619	$	—	$	—	$	—	$	619

Investments in marketable securities classified as available-for-sale securities are made based on the Company’s investment policy, which restricts the types of investments that can be made. As of January 31, 2020, marketable securities classified as available-for-sale consist of commercial paper and corporate notes/bonds for which market prices for similar assets are readily available. Investments that have an original maturity of 90 days or less and are considered highly liquid investments are classified as cash equivalents. As of January 31, 2020, available-for-sale marketable securities have remaining maturities ranging from three to eleven months. During the three and nine months ended January 31, 2020, there were 0 sales/maturities of available-for-sale marketable securities. Investments in marketable securities classified as trading are based upon investment selections the employee elects from a pre-determined set of securities in the ECAP and the Company invests in marketable securities to mirror these elections. As of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, the Company’s investments in marketable securities classified as trading consisted of mutual funds for which market prices are readily available.

In March 2017, the Company entered into an interest rate swap contract with a notional amount of $129.8 million to hedge the variability to changes in cash flows attributable to interest rate risks caused by changes in interest rates related to its variable rate debt. The ~~Company has designated the swap as a cash flow hedge. As of October 31, 2019, the notional amount was $99.7 million. The~~ interest rate swap agreement ~~matures on June 15, 2021, and locks~~locked the interest rates on a portion of the debt outstanding at 1.919%, exclusive of the credit spread on the debt. The Company designated the swap as a cash flow hedge. On December 16, 2019, in conjunction with the payoff of the credit facility, the Company terminated the interest rate swap and recorded $0.5 million in interest expense, net.

The fair value of the derivative designated as a cash flow hedge instrument was as follows:

	October 31, 2019		April 30, 2019		January 31, 2020		April 30, 2019
	(in thousands)				(in thousands)
Derivative asset:
Interest rate swap contract	$	—	$	619	$	—	$	619
Derivative liability:
Interest rate swap contract	$	666	$	—

During the three and ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018,~~2019, the Company recognized the following gains and losses on the interest rate swap:

As the critical terms of the hedging instrument and the hedged forecasted transaction are the same, the Company has concluded that the changes in the fair value or cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis.

We estimate that $0.4 million of derivative losses included in accumulated other comprehensive income (loss) as of October 31, 2019 will be reclassified into interest expense, net within the following 12 months.The cash flows related to the interest rate swap contract are included in net cash provided by operating activities.

The fair value of derivatives not designated as hedge instruments are as follows:

	October 31, 2019		April 30, 2019		January 31, 2020		April 30, 2019
	(in thousands)				(in thousands)
Derivative assets:
Foreign currency forward contracts	$	1,301	$	821	$	751	$	821
Derivative liabilities:
Foreign currency forward contracts	$	548	$	722	$	629	$	722

As of ~~October~~January 31, ~~2019,~~2020, the total notional amounts of the forward contracts purchased and sold were ~~$55.1~~$78.4 million and ~~$47.9~~$58.5 million, respectively. As of April 30, 2019, the total notional amounts of the forward contracts purchased and sold were $51.4 million and $40.0 million, respectively. The Company recognizes forward contracts as a net asset or net liability on the consolidated balance sheets as such contracts are covered by a master netting agreement. During the three and ~~six~~nine months ended ~~October~~January 31, ~~2019,~~2020, the Company incurred gains of ~~$2.1~~$0.5 million and ~~$0.5~~$1.0 million, respectively, related to forward contracts, which is recorded in general and administrative expenses in the accompanying consolidated statements of income. These foreign currency gains offset foreign currency losses that result from transactions denominated in a currency other than the Company’s functional currency. During the three and ~~six~~nine months ended ~~October~~January 31, ~~2018,~~2019, the Company incurred ~~losses~~gains of ~~$0.2~~$0.7 million and ~~$0.1~~$0.6 million, respectively, related to forward contracts, which isare recorded in general and administrative expenses in the accompanying consolidated statements of income. These ~~foreign currency losses~~gains offset foreign currency ~~gains~~losses that result from transactions denominated in a currency other than the Company’s functional currency. The cash flows related to foreign currency forward contracts are included in net cash used in operating activities.

The Company’s lease portfolio is comprised of operating leases for office space and equipment and finance leases for equipment. Equipment leases are comprised of vehicles and office equipment. The majority of the Company’s leases include both lease and non-lease components. Non-lease components primarily include maintenance, insurance, taxes and other utilities. The Company has decided to combine fixed payments for non-lease components with its lease payments and account for them as a single lease component, which increases its ROU assets and lease liabilities. Some of the leases include one or more options to renew or terminate the lease at the Company’s discretion. Generally, the renewal and termination options are not included in the ROU assets and lease liabilities as they are not reasonably certain of exercise. The Company has elected not to recognize a ROU asset or lease liability for leases with an initial term of 12 months or less.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of the future minimum lease payments. The Company applies the portfolio approach when determining the incremental borrowing rate since it has a centrally managed treasury function. The Company’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments in a similar economic environment.

Operating leases contain both office and equipment leases, have remaining terms that range from less than one year to 11 years, some of which also include options to extend or terminate the lease. Finance leases are comprised of equipment leases and have remaining terms that range from less than one year to 5 years. Finance lease assets are included in property and equipment, net while finance lease liabilities are included in other accrued liabilities and other liabilities.

The Company has several deferred compensation and retirement plans for eligible consultants and vice presidents that provide defined benefits to participants based on the deferral of current compensation or contributions made by the Company subject to vesting and retirement or termination provisions. Among these plans is a defined benefit pension plan for certain employees in the U.S.. The assets of this plan are held separately from the assets of the sponsor in self-administered funds. All other defined benefit obligations from other plans are unfunded.

The Company purchased COLI contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of setting aside funds to cover such plans. The gross CSV of these contracts of ~~$220.9~~$237.6 million and $219.2 million as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively, was offset by outstanding policy loans of $92.3 million and $93.2 million in the accompanying consolidated balance sheets as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively. The CSV value of the underlying COLI investments increased by ~~$1.9~~$1.6 million and ~~$4.2~~$5.8 million during the three and ~~six~~nine months ended ~~October~~January 31, ~~2019,~~2020, respectively, and is recorded as a decrease in compensation and benefits expense in the accompanying consolidated statements of income. The CSV value of the underlying COLI investments increased by ~~$1.7~~$1.5 million and ~~$3.0~~$4.5 million during the three and ~~six~~nine months ended ~~October~~January 31, ~~2018,~~2019, respectively, and is recorded as a decrease in compensation and benefits expense in the accompanying consolidated statements of income.

The Company’s ECAP is intended to provide certain employees an opportunity to defer salary and/or bonus on a pre-tax basis. In addition, the Company, as part of its compensation philosophy, makes discretionary contributions into the ECAP and such contributions may be granted to key employees annually based on the employee’s performance. Certain key management may also receive Company ECAP contributions upon commencement of employment. The Company amortizes these contributions on a straight-line basis over the service period, generally a four-to-five year period. Participants have the ability to allocate their deferrals among a number of investment options and may receive their benefits at termination, retirement or ‘in service’ either in a lump sum or in quarterly installments over one-to-15 years. The ECAP amounts that are expected to be paid to employees over the next 12 months are classified as a current liability included in compensation and benefits payable on the accompanying consolidated balance sheets.

The ECAP is accounted for whereby the changes in the fair value of the vested amounts owed to the participants are adjusted with a corresponding charge (or credit) to compensation and benefits costs. During the three and ~~six~~nine months ended ~~October~~January 31, ~~2019,~~2020, deferred compensation liability increased; therefore, the Company recognized compensation expense of ~~$1.3~~$5.0 million and ~~$3.5~~$8.6 million, respectively. Offsetting the increases in compensation and benefits expense was an increase in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of ~~$1.2~~$5.2 million and ~~$3.1~~$8.3 million during the three and ~~six~~nine months ended ~~October~~January 31, ~~2019,~~2020, respectively, recorded in other income, ~~(loss),~~ net on the consolidated statements of income. During the three and ~~six~~nine months ended ~~October~~January 31, ~~2018,~~2019, deferred compensation liability ~~decreased;~~increased; therefore, the Company recognized ~~a decrease~~an increase in compensation expense of ~~$4.3~~$2.2 million and ~~$0.2~~$2.0 million, respectively. Offsetting the ~~decrease~~increase in compensation and benefits expense was ~~a decrease~~an increase in the fair value of marketable securities (held in trust to satisfy obligations under the ECAP) of ~~$4.8~~$2.2 million and ~~$0.8~~$1.3 million during the three and ~~six~~nine months ended ~~October~~January 31, ~~2018,~~2019, respectively, recorded in other income, ~~(loss),~~ net on the consolidated statements of income (see Note 5—Financial Instruments).

Substantially all fee revenue is derived from talent and organizational ~~advisory~~consulting services and digital sales, fees for professional services related to executive and professional recruitment performed on a retained basis and RPO, standalone or as part of a solution.

A contract asset (unbilled receivables) is recorded when the Company transfers control of products or services before there is an unconditional right to payment. A contract liability (deferred revenue) is recorded when cash is received in advance of performance of the obligation. Deferred revenue represents the future performance obligations to transfer control of products or services for which we have already received consideration. Deferred revenue is presented in other accrued liabilities on the consolidated balance sheet.

The following table outlines our contract asset and liability balances as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019:

	October 31, 2019		April 30, 2019		January 31, 2020		April 30, 2019
	(in thousands)				(in thousands)
Contract assets (unbilled receivables)	$	78,391	$	60,595	$	91,462	$	60,595
Contract liabilities (deferred revenue)	$	115,630	$	112,999	$	142,014	$	112,999

During the ~~six~~nine months ended ~~October~~January 31, ~~2019,~~2020, we recognized revenue of ~~$69.0~~$84.1 million that was included in the contract liabilities balance at the beginning of the period.

The Company has elected to apply the practical expedient to exclude the value of unsatisfied performance obligations for contracts with a duration of one year or less, which applies to all executive search and professional search fee revenue. As of ~~October~~January 31, ~~2019,~~2020, the aggregate transaction price allocated to the performance obligations that are unsatisfied for contracts with an expected duration of greater than one year at inception was ~~$608.3~~$596.1 million. Of the ~~$608.3~~$596.1 million of remaining performance obligations, the Company expects to recognize approximately ~~$203.4~~$122.0 million as fee revenue in fiscal 2020, ~~$209.1~~$263.6 million in fiscal 2021, ~~$117.4~~$117.2 million in fiscal 2022 and the remaining ~~$78.4~~$93.3 million in fiscal 2023 and thereafter. However, this amount should not be considered an indication of the Company’s future revenue as contracts with an initial term of one year or less are not included. Further, the Company’s contract terms and conditions allow for clients to increase or decrease the scope of services and such changes do not increase or decrease a performance obligation until the Company has an enforceable right to payment.

The Company disaggregates its revenue by line of business and further by region for Executive Search. This information is presented in Note 10—Segments.

	Six Months Ended October 31,										Three Months Ended January 31,
	2019					2018					2020					2019
	Dollars		%			Dollars		%			Dollars		%			Dollars		%
	(dollars in thousands)										(dollars in thousands)
Industrial	$	278,917		28.5	%	$	279,699		29.1	%	$	148,552		28.8	%	$	138,460		29.2	%
Financial Services		172,333		17.6			174,405		18.2			87,917		17.1			86,570		18.2
Life Sciences/Healthcare		170,921		17.5			162,771		16.9			88,924		17.3			76,654		16.2
Consumer Goods		147,060		15.1			150,662		15.7			76,719		14.9			74,186		15.6
Technology		139,450		14.3			122,967		12.8			78,823		15.3			66,188		13.9
Education/Non-Profit		60,463		6.2			61,640		6.4			32,142		6.2			29,108		6.1
General		7,794		0.8			8,629		0.9			2,248		0.4			3,338		0.8
Fee Revenue	$	976,938		100.0	%	$	960,773		100.0	%	$	515,325		100.0	%	$	474,504		100.0	%

The provision for income tax was ~~$15.8~~an expense of $8.8 million and ~~$30.2~~$39.0 million in the three and ~~six~~nine months ended ~~October~~January 31, ~~2019,~~2020, respectively, ~~with an~~resulting in a 29.5% and 26.6% effective tax rate, ~~of 26.8% and 25.8%,~~ respectively. In both periods, the Company’s effective tax rate was higher than the U.S. federal statutory rate of 21.0% primarily due to the impact of U.S. state income taxes and the recognition of taxable income outside the U.S. at higher statutory tax rates.

During the three months ended January 31, 2020, the Company adopted a restructuring plan to rationalize its cost structure to realize the efficiencies and operational improvement that the investments in the Digital business, as discussed in Note 10—Segments, have enabled us to, or position us to, realize. The restructuring plan impacts both the Consulting and Digital segments and includes the elimination of redundant positions, which resulted in restructuring charges, net of $18.1 million in the three and nine months ended January 31, 2020, relating to severance for positions that have been eliminated.

Changes in the restructuring liability during the three months ended January 31, 2020 are as follows:

Changes in the restructuring liability during the nine months ended January 31, 2020 are as follows:

As of January 31, 2020 and April 30, 2019, the restructuring liability is included in the current portion of other accrued liabilities on the consolidated balance sheets, except for $0.7 million and $0.5 million, respectively, which are included in other long-term liabilities.

Over the past year the Company invested in its digital business in order to digitize and harmonize the structure of its IP content and data and to build a technology platform for the efficient delivery of these assets directly to an end consumer or indirectly through a consultant engagement. These investments combined with the recent acquisition of the Acquired Companies have provided the Company the opportunity to reassess how the Company manages its Advisory business. Given the Company’s strategy and development of financial and operational metrics for the Consulting and Digital businesses the Company’s chief operating decision maker has begun to regularly make resource allocation decisions and assess performance separately between Consulting and Digital. Therefore, on November 1, 2019, the Company changed the composition of its global segments and under the new reporting format, the Advisory segment has been separated into two segments, Consulting and Digital.Revenues are directly attributed to a segment and expenses not directly associated with a specific segment are allocated based on the most relevant measures applicable, including revenues, headcount and other factors. Due to this change, the Company completed a qualitative assessment for any potential goodwill impairment both prior and subsequent to the aforementioned change and determined that no impairment indicators were present. Operating results prior to November 1, 2019 have been revised to conform to the new segment reporting.

The Company ~~currently~~ operates through 34 global ~~business~~ segments: Advisory, Executive Search and RPO & Professional Search. Advisory assists clients to synchronize strategy and talent by addressing four fundamental needs: Organizational Strategy, Assessment and Succession, Leadership Development and Rewards and Benefits, all underpinned by a comprehensive array of some of the world’s leading IP, products and tools. Executive Search focuses on recruiting ~~board level, chief executive and other senior executive and general management positions~~, in addition to research-based interviewing and assessment solutions, for clients predominantly in the consumer goods, financial services, industrial, life sciences/healthcare and technology industries. RPO & Professional Search uses data-backed insight and IP, matched with strategic collaboration and innovative technology, to meet people challenges head on—and succeed. Solutions span all aspects of RPO, Professional Search and Project Recruitment.

Executive Search is managed by geographic regional ~~leaders and Advisory~~leaders. Worldwide operations for Consulting, Digital, and RPO &and Professional Search ~~worldwide operations~~ are managed by their Chief Executive Officers. The Executive Search geographic regional leaders and the Chief Executive Officers of ~~Advisory~~Consulting, Digital and RPO &and Professional Search, report directly to the Chief Executive Officer of the Company. The Company also operates a Corporate segment to record global ~~expenses of the Company.~~expenses.

The Company evaluates performance and allocates resources based on the Company’s chief operating decision maker’s review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other than temporary impairment). The accounting policies for the reportable segments are the same as those described in the summary of significant accounting policies in Note 1—Organization and Summary of Significant Accounting Policies, except the items described above are excluded from EBITDA to arrive at Adjusted EBITDA. The Company’s chief operating decision maker is not provided asset information by reportable segment.

Three Months Ended October 31, 2019

Executive Search

Advisory

North
America

EMEA

Asia Pacific

Latin
America

Subtotal

RPO & Professional Search

Corporate

Consolidated

(in thousands)

Fee revenue

$
209,760

$
113,818

$
39,821

$
25,944

$
8,272

$
187,855

$
94,774

$
—

$
492,389

Total revenue

$
213,922

$
117,077

$
40,441

$
26,168

$
8,273

$
191,959

$
98,296

$
—

$
504,177

Net income attributable to Korn Ferry

$
42,804

Net income attributable to noncontrolling interest

228

Other income, net

(1,133
)
Interest expense, net

4,210

Income tax provision

15,760

Operating income (loss)

$
28,391

$
28,124

$
6,511

$
5,803

$
791

$
41,229

$
15,094

$
(22,845
)

61,869

Depreciation and amortization

8,042

869

450

329

315

1,963

990

1,720

12,715

Other income (loss), net

520

637

107

72

30

846

54

(287
)

1,133

EBITDA

36,953

29,630

7,068

6,204

1,136

44,038

16,138

(21,412
)

75,717

Integration/acquisition costs

—

—

—

—

—

—

—

2,615

2,615

Adjusted EBITDA

$
36,953

$
29,630

$
7,068

$
6,204

$
1,136

$
44,038

$
16,138

$
(18,797
)

$
78,332

	Three Months Ended October 31, 2018																							Three Months Ended January 31, 2020
			Executive Search																									Executive Search
	Advisory		North America			EMEA		Asia Pacific		Latin America		Subtotal			RPO & Professional Search			Corporate			Consolidated			Consulting		Digital		North America		EMEA		Asia Pacific		Latin America		Subtotal		RPO & Professional Search		Corporate			Consolidated
	(in thousands)																							(in thousands)
Fee revenue	$	217,089	$	115,863		$	44,928	$	27,936	$	8,907	$	197,634		$	80,482		$	—		$	495,205		$	140,525	$	99,389	$	106,888	$	44,301	$	25,089	$	7,283	$	183,561	$	91,850	$	—		$	515,325
Total revenue	$	221,419	$	119,322		$	45,636	$	28,146	$	8,912	$	202,016		$	83,358		$	—		$	506,793		$	144,298	$	100,663	$	110,230	$	45,077	$	25,365	$	7,351	$	188,023	$	94,995	$	—		$	527,979

Net income attributable to Korn Ferry																					$	46,034																					$	19,993
Net income attributable to noncontrolling interest																						1,283																						963
Other loss, net																						4,500
Other income, net																																												(5,055	)
Interest expense, net																						4,337																						6,919
Income tax provision																						14,833																						8,775
Operating income (loss)	$	29,426	$	35,328		$	7,319	$	6,767	$	2,053	$	51,467		$	12,516		$	(22,422	)		70,987		$	2,663	$	8,463	$	21,808	$	4,644	$	5,070	$	1,198	$	32,720	$	14,144	$	(26,395	)		31,595
Depreciation and amortization		6,964		968			95		375		101		1,539			761			1,754			11,018			4,417		5,832		847		422		329		295		1,893		979		1,742			14,863
Other income (loss), net		265		(3,981	)		22		77		93		(3,789	)		(79	)		(897	)		(4,500	)		558		193		3,963		29		106		162		4,260		88		(44	)		5,055
EBITDA		36,655		32,315			7,436		7,219		2,247		49,217			13,198			(21,565	)		77,505			7,638		14,488		26,618		5,095		5,505		1,655		38,873		15,211		(24,697	)		51,513
Integration/acquisition costs		2,755		—			—		—		—		—			—			80			2,835			—		4,332		—		—		—		—		—		—		2,372			6,704
Restructuring, charges, net																									11,061		7,032		—		—		—		—		—		—		—			18,093
Separation costs																									—		—		—		1,783		—		—		1,783		—		—			1,783
Adjusted EBITDA	$	39,410	$	32,315		$	7,436	$	7,219	$	2,247	$	49,217		$	13,198		$	(21,485	)	$	80,340		$	18,699	$	25,852	$	26,618	$	6,878	$	5,505	$	1,655	$	40,656	$	15,211	$	(22,325	)	$	78,093

Six Months Ended October 31, 2019

Executive Search

Advisory

North
America

EMEA

Asia Pacific

Latin
America

Subtotal

RPO & Professional Search

Corporate

Consolidated

(in thousands)

Fee revenue

$
405,286

$
225,540

$
86,351

$
53,306

$
15,857

$
381,054

$
190,598

$
—

$
976,938

Total revenue

$
413,242

$
232,523

$
87,753

$
53,836

$
15,860

$
389,972

$
197,161

$
—

$
1,000,375

Net income attributable to Korn Ferry

$
85,755

Net income attributable to noncontrolling interest

927

Other income, net

(2,959
)
Interest expense, net

8,267

Income tax provision

30,213

Operating income (loss)

$
54,182

$
58,446

$
13,822

$
12,796

$
1,801

$
86,865

$
30,135

$
(48,979
)

122,203

Depreciation and amortization

16,095

1,770

906

675

643

3,994

1,982

3,421

25,492

Other income (loss), net

1,246

1,777

119

87

87

2,070

128

(485
)

2,959

EBITDA

71,523

61,993

14,847

13,558

2,531

92,929

32,245

(46,043
)

150,654

Integration/acquisition costs

—

—

—

—

—

—

—

2,615

2,615

Adjusted EBITDA

$
71,523

$
61,993

$
14,847

$
13,558

$
2,531

$
92,929

$
32,245

$
(43,428
)

$
153,269

	Six Months Ended October 31, 2018																						Three Months Ended January 31, 2019
				Executive Search																							Executive Search
	Advisory			North America			EMEA		Asia Pacific		Latin America		Subtotal		RPO & Professional Search		Corporate			Consolidated			Consulting		Digital		North America		EMEA		Asia Pacific			Latin America		Subtotal		RPO & Professional Search		Corporate			Consolidated
	(in thousands)																						(in thousands)
Fee revenue	$	412,464		$	227,960		$	91,582	$	54,231	$	16,785	$	390,558	$	157,751	$	—		$	960,773		$	139,029	$	62,473	$	114,215	$	45,940	$	25,687		$	7,554	$	193,396	$	79,606	$	—		$	474,504
Total revenue	$	421,566		$	235,079		$	93,385	$	54,771	$	16,815	$	400,050	$	163,539	$	—		$	985,155		$	143,204	$	62,473	$	117,725	$	46,639	$	26,046		$	7,573	$	197,983	$	82,512	$	—		$	486,172

Net income attributable to Korn Ferry																				$	7,423																						$	44,964
Net income attributable to noncontrolling interest																					1,302																							480
Other income, net																					(20	)																						(2,463	)
Interest expense, net																					8,440																							4,282
Income tax benefit																					(1,277	)
Income tax provision																																												15,420
Operating income (loss)	$	(53,653	)	$	61,842		$	14,288	$	13,408	$	2,807	$	92,345	$	24,161	$	(46,985	)		15,868		$	11,782	$	17,497	$	30,596	$	7,525	$	5,929		$	653	$	44,703	$	12,176	$	(23,475	)		62,683
Depreciation and amortization		14,395			1,947			465		745		208		3,365		1,522		3,467			22,749			4,001		3,306		970		402		338			97		1,807		803		1,824			11,741
Other income (loss), net		835			(480	)		362		252		130		264		26		(1,105	)		20			582		204		1,626		26		(134	)		133		1,651		77		(51	)		2,463
EBITDA		(38,423	)		63,309			15,115		14,405		3,145		95,974		25,709		(44,623	)		38,637			16,365		21,007		33,192		7,953		6,133			883		48,161		13,056		(21,702	)		76,887
Integration/acquisition costs		5,782			—			—		—		—		—		—		160			5,942			650		127		—		—		—			—		—		—		27			804
Tradename write-offs		106,555			—			—		—		—		—		—		—			106,555
Adjusted EBITDA	$	73,914		$	63,309		$	15,115	$	14,405	$	3,145	$	95,974	$	25,709	$	(44,463	)	$	151,134		$	17,015	$	21,134	$	33,192	$	7,953	$	6,133		$	883	$	48,161	$	13,056	$	(21,675	)	$	77,691

	Nine Months Ended January 31, 2020
					Executive Search
	Consulting		Digital		North America		EMEA		Asia Pacific		Latin America		Subtotal		RPO & Professional Search		Corporate			Consolidated
	(in thousands)
Fee revenue	$	422,103	$	223,097	$	332,428	$	130,652	$	78,395	$	23,140	$	564,615	$	282,448	$	—		$	1,492,263
Total revenue	$	433,832	$	224,371	$	342,753	$	132,830	$	79,201	$	23,211	$	577,995	$	292,156	$	—		$	1,528,354

Net income attributable to Korn Ferry																				$	105,748
Net income attributable to noncontrolling interest																					1,890
Other income, net																					(8,014	)
Interest expense, net																					15,186
Income tax provision																					38,988
Operating income (loss)	$	24,272	$	41,036	$	80,254	$	18,466	$	17,866	$	2,999	$	119,585	$	44,279	$	(75,374	)		153,798
Depreciation and amortization		13,188		13,156		2,617		1,328		1,004		938		5,887		2,961		5,163			40,355
Other income (loss), net		1,469		528		5,740		148		193		249		6,330		216		(529	)		8,014
EBITDA		38,929		54,720		88,611		19,942		19,063		4,186		131,802		47,456		(70,740	)		202,167
Integration/acquisition costs		—		4,332		—		—		—		—		—		—		4,987			9,319
Restructuring charges, net		11,061		7,032		—		—		—		—		—		—		—			18,093
Separation costs		—		—		—		1,783		—		—		1,783		—		—			1,783
Adjusted EBITDA	$	49,990	$	66,084	$	88,611	$	21,725	$	19,063	$	4,186	$	133,585	$	47,456	$	(65,753	)	$	231,362

	Nine Months Ended January 31, 2019
						Executive Search
	Consulting			Digital		North America		EMEA		Asia Pacific		Latin America		Subtotal		RPO & Professional Search		Corporate			Consolidated
	(in thousands)
Fee revenue	$	423,958		$	190,008	$	342,175	$	137,522	$	79,918	$	24,339	$	583,954	$	237,357	$	—		$	1,435,277
Total revenue	$	437,235		$	190,008	$	352,804	$	140,024	$	80,817	$	24,388	$	598,033	$	246,051	$	—		$	1,471,327

Net income attributable to Korn Ferry																					$	52,387
Net income attributable to noncontrolling interest																						1,782
Other income, net																						(2,483	)
Interest expense, net																						12,722
Income tax provision																						14,143
Operating income (loss)	$	(47,431	)	$	23,057	$	92,438	$	21,813	$	19,337	$	3,460	$	137,048	$	36,337	$	(70,460	)		78,551
Depreciation and amortization		12,219			9,483		2,917		867		1,083		305		5,172		2,325		5,291			34,490
Other income (loss), net		1,107			514		1,146		388		118		263		1,915		103		(1,156	)		2,483
EBITDA		(34,105	)		33,054		96,501		23,068		20,538		4,028		144,135		38,765		(66,325	)		115,524
Integration/acquisition costs		5,304			1,255		—		—		—		—		—		—		187			6,746
Tradename write-offs		76,967			29,588		—		—		—		—		—		—		—			106,555
Adjusted EBITDA	$	48,166		$	63,897	$	96,501	$	23,068	$	20,538	$	4,028	$	144,135	$	38,765	$	(66,138	)	$	228,825

On December ~~19, 2018,~~16, 2019, the Company completed a private placement of 4.625% Senior Unsecured Notes due 2027 (the “Notes”) with $400 million principal amount pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes were issued with a $4.5 million discount and will mature December 15, 2027, with interest payable semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2020. The Notes represent senior unsecured obligations that rank equally in right of payment to all existing and future senior unsecured indebtedness. The Company may redeem the Notes prior to maturity, subject to certain limitations and premiums defined in the indenture governing the Notes. At any time prior to December 15, 2022, the Company may redeem the Notes at a redemption price equal to 100% of the principal plus the Applicable Premium (as defined in the indenture governing the Notes), and accrued and unpaid interest. At any time prior to December 15, 2022, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the Notes, including any permitted additional notes, at a redemption price equal to 104.625% of the principal amount and accrued and unpaid interest. At any time and from time to time on or after December 15, 2022, the Company may redeem the Notes at the applicable redemption prices set forth in the table below, plus accrued and unpaid interest, if redeemed during the twelve-month period beginning on December 15 of each of the years indicated:

The Notes allow the Company to pay $25 million of dividends per fiscal year with no restrictions, plus an unlimited amount of dividends so long as the Company’s consolidated total leverage ratio is not greater than 3.50 to 1.00, and the Company is not in default under the indenture governing the Notes. The Notes are guaranteed by each of the Company's existing and future wholly owned domestic subsidiaries to the extent such subsidiaries guarantee the Company's revolving credit facility. The indenture governing the Notes requires that, upon the occurrence of both a Change of Control and a Rating Decline (each as defined in the indenture), the Company shall make an offer to purchase all of the Notes at 101% of their principal amount, and accrued and unpaid interest. The Company used the proceeds from the offering of the Notes to repay $276.9 million outstanding under the Company’s prior revolving credit facility (the “Prior Credit Agreement”) and to pay expenses and fees in connection therewith. The remainder of the proceeds will be used for general corporate requirements. The effective interest rate on the Notes is 4.86%. As of January 31, 2020, the fair value of the Notes was $402 million, based on borrowing rates then required of notes with similar terms, maturity and credit risk. The fair value of the Notes was classified as a Level 2 measurement in the fair value hierarchy.

On December 16, 2019, the Company entered into ~~an Amended and Restated~~a Credit Agreement (the “Credit Agreement”) with a syndicate of banks and ~~Wells Fargo~~ Bank of America, National Association as administrative agent to among other things, provide for enhanced financial flexibility. The Credit Agreement provides for ~~among other things: (a)~~ a $650.0 million five-year senior secured revolving credit facility (the “Revolver”), and ~~(b)~~contains certain customary affirmative and negative covenants, including a maximum consolidated ~~total~~net leverage ratio, ~~(as defined below)~~a maximum consolidated secured net leverage ratio and a minimum interest coverage ratio.The Credit Agreement permits the payment of dividends to stockholders and Company share repurchases so long as there is no default under the ~~pro forma~~Credit Agreement, the consolidated net leverage ratio, which uses adjusted EBITDA is no greater than ~~3.25~~4.00 to 1.00, and the pro forma ~~domestic~~ liquidity is at least $50.0 million. ~~The Company drew down $226.9 million on the Revolver and used the proceeds to pay-off its term loan that was outstanding under its prior credit facility as of December 19, 2018.~~ The payoff of the term loan under the ~~prior credit facility and draw down on the Revolver are~~Prior Credit Agreement is considered a debt modification and therefore, the previously incurred unamortized and current debt issuance costs will be amortized over the life of the new issuance. ~~On October 29, 2019, the Company drew down $50.0 million on the Revolver along with cash on hand to finance the recently completed acquisitions.~~

The principal balance of the Revolver, if any, is due on the date of its termination. The Revolver matures on December ~~19, 2023~~16, 2024 and any unpaid principal balance is payable on this date. The Revolver may also be prepaid and terminated early by the Company at any time without premium or penalty (subject to customary LIBOR breakage fees).

At the Company’s option, loans issued under the Credit Agreement will bear interest at either LIBOR or an alternate base rate, in each case plus the applicable interest rate margin. The interest rate applicable to loans outstanding under the Credit Agreement may fluctuate between LIBOR plus ~~1.25%~~1.125% per annum to LIBOR plus 2.00% per annum, in the case of LIBOR borrowings (or between the alternate base rate plus ~~0.25%~~0.125% per annum and the alternate base rate plus 1.00% per annum, in the alternative), based upon the Company’s total funded debt to ~~Adjusted~~adjusted EBITDA ratio (as set forth in the Credit Agreement, the “consolidated net leverage ratio”) at such time. In addition, the Company will be required to pay to the lenders a quarterly commitment fee ranging from ~~0.20%~~0.175% to 0.35% per annum on the average daily unused amount of the Revolver, based upon the Company’s consolidated net leverage ratio at such time, and fees relating to the issuance of letters of credit. During the three and ~~six~~nine months ended ~~October~~January 31, 2020, the average interest rate on amounts outstanding under the prior revolver was 2.94% and 3.44%, respectively. During the three and nine months ended January 31, 2019, the average interest rate on ~~our long-term debt arrangements~~amounts outstanding under the prior revolver was ~~3.37%~~3.64% and ~~3.53%, respectively. During the three and six months ended October 31, 2018, the average interest rate on our long-term debt arrangements was 3.39% and 3.31%~~3.42%, respectively.

As of ~~October~~January 31, ~~2019, $276.9 million~~2020, there was 0 outstanding liability under the Revolver compared to $226.9 million as of April 30, ~~2019.~~2019 under the prior revolver. The unamortized debt issuance costs associated with the ~~long-term debt were $3.6~~Credit Agreement was $4.5 million as of January 31, 2020 and $4.0 million under the Prior Credit Agreement as of ~~October 31, 2019 and~~ April 30, 2019, respectively. The fair value of the Company’s Revolver is based on borrowing rates currently required of loans with similar terms, maturity and credit risk. The carrying amount of the Revolver approximates fair value because the base interest rate charged varies with market conditions and the credit spread is commensurate with current market spreads for issuers of similar risk. The fair value of the Revolver is classified as a Level 2 liability in the fair value hierarchy.2019. As of ~~October~~January 31, ~~2019,~~2020 debt issuance costs were included in other current assets and other non-current assets on the balance sheet. As of January 31, 2020, the Company was in compliance with its debt covenants.

The Company had a total of ~~$369.9~~$646.0 million available under the Revolverafter ~~the Company drew down $276.9 million and after $3.2~~$4.0 million of standby letters of credit ~~were~~has been issued as of ~~October~~January 31, ~~2019.~~2020. The Company had a total of $420.2 million available under the ~~Revolver~~prior revolver after the Company drew down $226.9 million and after $2.9 million of standby letters of credit ~~were~~had been issued as of April 30, 2019. The Company had a total of ~~$11.0~~$11.1 million and $8.5 million of standby letters with other financial institutions as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively. The standby letters of credits were generally issued as a result of entering into office premise leases.

As a result of the acquisition of the Acquired Companies, the Company recognized ROU assets of $3.2 million with a corresponding liability of $6.7 million. The ROU asset balance was adjusted by reclassification of pre-existing prepaid expenses, restructuring liabilities and deferred rent totaling $3.5 million. As part of the plan for integrating the Acquired Companies, the Company decided to exit 16 office leases and as a result, recorded an impairment charge of the ROU assets of $2.3 million recorded in the consolidated statements of income.

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

The Acquired Companies contribute a world-class portfolio of learning, development and performance improvement offerings and expertise to Korn Ferry and bolster the Company’s substantial leadership development capabilities. The Acquired Companies specialize in transforming sales performance and customer experience, offer frontline leadership development and provide organizational and project management training. These companies are included in the new Digital segment which, working closely with the new Consulting segment, will provide clients with direct access to data, insights and analytics from one of the world’s most comprehensive people and organizational databases. The addition of the Acquired Companies further expands Korn Ferry’s vast intellectual property and content and leverages the firm’s digital delivery platforms. Actual results of operations of the Acquired Companies are included in the Company’s consolidated financial statements from November 1, 2019, the effective date of the acquisition.

The aggregate purchase price was allocated on a preliminary basis to the assets acquired and liabilities assumed on their estimated fair values at the date of acquisition. As of January 31, 2020, these allocations remain preliminary with regard to income taxes. The measurement period for purchase price allocation ends as soon as information on the facts and circumstances becomes available, not to exceed 12 months.

On ~~December 4, 2019,~~March 10, 2020, the Board of Directors of the Company declared a cash dividend of $0.10 per share with a payment date of ~~January~~April 15, 2020 to holders of the Company’s common stock of record at the close of business on ~~December 20, 2019.~~March 26, 2020. The declaration and payment of future dividends under the quarterly dividend policy will be at the discretion of the Board of Directors and will depend upon many factors, including the Company’s earnings, capital requirements, financial conditions, the terms of the Company’s indebtedness and other factors that the Board of Directors may deem to be relevant. The Board of Directors may amend, revoke or suspend the dividend policy at any time and for any reason.

On November 1, 2019, the “Company adopted a restructuring plan relating to actions in respect to the integration of the recently completed acquisitions. The purpose of this plan is to rationalize the Company’s cost structure as a result of efficiencies and operational improvements that the Company will be positioned to realize upon integration of the Acquired Entities into the Company. The plan will include the elimination of redundant positions and consolidation of office space. The estimated cost of the actions contemplated by the plan is between $20.0 million to $26.0 million, of which $18.0 million to

$22.0 million relates to severance and $2.0 million to $4.0 million relates to office consolidation and abandonment of premises. These charges are expected to include approximately $18.0 million to $24.0 million of cash expenditures. The Company ~~expects~~ ~~to recognize these charges between the three months ended January 31, 2020 and the three months ended July 31, 2020 and expects the restructuring actions to be completed by July 31, 2020.~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q may contain certain statements that we believe are, or may be considered to be, “forward-looking” statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements generally can be identified by use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “will,” “likely,” “estimates,” “potential,” “continue” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals as well as the expected benefits of the acquisition of Miller Heiman Group, AchieveForum and Strategy Execution (collectively, the “Acquired Companies”), the timing and expected benefits of our recently adopted restructuring plan and the potential negative impact of the coronavirus (COVID-19) outbreak on our business, employees, customers and our ability to provide services in affected regions, also are forward-looking statements. All of these forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statement. The principal risk factors that could cause actual performance and future actions to differ materially from the forward-looking statements include, but are not limited to, changes in demand for our services as a result of automation, dependence on and costs of attracting and retaining qualified and experienced consultants, maintaining our relationships with customers and suppliers and retaining key employees, maintaining our brand name and professional reputation, the expected timing of the consummation of the Plan (as defined below), the impact of the Plan’s rebranding on the Company’s products and services, potential legal liability and regulatory developments, portability of client relationships, global and local political or economic developments in or affecting countries where we have operations, currency fluctuations in our international operations, risks related to growth, restrictions imposed by off-limits agreements, competition, consolidation of the industries we serve, reliance on information processing systems, cyber security vulnerabilities, changes to data security, data privacy, and data protection laws, dependence on third parties for the execution of critical functions, limited protection of our intellectual property (“IP”), our ability to enhance and develop new technology, our ability to successfully recover from a disaster or other business continuity problems, employment liability risk, an impairment in the carrying value of goodwill and other intangible assets, the effects of the Tax Cuts and Jobs Act (the “Tax Act”) and other future changes in tax laws, treaties, or regulations on our business and our company, deferred tax assets that we may not be able to use, our ability to develop new products and services, the impact of the withdrawal of the United Kingdom from the European Union, changes in our accounting estimates and assumptions, alignment of our cost structure, the utilization and billing rates of our consultants, seasonality, expansion of social media platforms, ability to effect acquisition and integrate ~~recently acquired~~ ~~companies~~the Acquired Companies; the ability to recognize the anticipated benefits of the acquisition of the ~~acquired companies;~~Acquired Companies; the costs related to the acquisition of the ~~acquired companies;~~Acquired Companies; our indebtedness, the phase-out of LIBOR, the potential negative impact of the coronavirus (COVID-19) outbreak on our business, employees, customers and our ability to provide services in affected regions, and the matters disclosed under the heading “Risk Factors” in the this Quarterly Report on Form 10-Q and in the Company’s ~~Exchange~~other Exchanges Act reports, including Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2019 (“Form 10-K”). Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this Quarterly Report on Form 10-Q, and we undertake no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

The following presentation of management’s discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. We also make available on the Investor Relations portion of our website earnings slides and other important information, which we encourage you to review.

Korn Ferry (referred to herein as the “Company,” or in the ~~first person~~first-person notations “we,” “our,” and “us”) is a global organizational consulting firm. We ~~currently~~help clients synchronize strategy and talent to drive superior performance. We work with organizations to design their structures, roles, and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop, and motivate their people. We operate through ~~three~~four global segments:

Consulting and Digital were formerly referred to, and reported together, as Korn Ferry Advisory (“Advisory”)~~, Executive Search~~. Over the past year we have invested in the digital business in order to digitize and ~~Korn Ferry RPO~~harmonize the structure of our IP content and ~~Professional Search (“RPO & Professional Search”).~~data and to build a technology platform for the efficient delivery of these assets directly to an end consumer or indirectly through a consultant engagement. These investments combined with the recent acquisitions resulted in reassessing how we manage our Advisory ~~assists clients~~business. Therefore, beginning in the third quarter of fiscal 2020, we separated Advisory into two segments in order to ~~synchronize~~better align with the Company’s strategy ~~and talent by addressing four fundamental needs: Organizational Strategy, Assessment and Succession, Leadership Development, and Rewards and Benefits, all underpinned by a comprehensive array of some~~(which included the acquisition of the ~~world’s leading IP, products~~Acquired Companies) and tools. Executive Search focuses on recruiting board level, chief executive and other senior executive and general management positions, in addition to research-based interviewing and assessment solutions, for clients predominantly in the consumer goods, financial services, industrial, life sciences/healthcare and technology industries. RPO & Professional Search uses data-backed insight and IP, matched with strategic collaboration and innovative technology, to meet people challenges head-on—and succeed. Solutions span all aspects of Recruitment Process Outsourcing (“RPO”), Professional Search and Project Recruitment. We also operate a Corporate segment to record global expensesdecisions of the ~~Company.~~Company’s chief operating decision maker, which has begun to regularly make resource allocation decisions and assess performance separately between Consulting and Digital.

While most organizations can develop a sound strategy, they often struggle with how to make it stick. That is where we come in: synchronizing an organization’s strategy with its talent to drive superior performance. We help companies design their organization—the structure, roles and responsibilities—to seize these opportunities. In addition, we help organizations select and hire the talent they need to execute their strategy—and show them the best way to compensate, develop and motivate their people.

On June 12, 2018, the Company’s Board of Directors approved the One Korn Ferry rebranding plan for the Company (the “Plan”). ~~This~~The Plan includes going to market under a single, master brand architecture, solely as Korn Ferry and sunsetting all the Company’s sub-brands used at that time, including Futurestep, Hay Group and Lominger, among others. This integrated go-to-market approach was a key driver in our fee revenue growth in fiscal year 2018, which led to the decision to further integrate our go-to-market activities under one master brand — Korn Ferry. As a result, the Company discontinued the use of all sub-brands and changed its name, effective January 1, 2019, to “Korn Ferry.” Two of the Company’s former sub-brands, Hay Group and Lominger, came to Korn Ferry through acquisitions. In connection with the accounting for these acquisitions, $106.6 million of the purchase price was allocated to indefinite-lived tradename intangible assets. As a result of the decision to discontinue their use, the Company took a one-time, non-cash write-off of tradenames of $106.6 million during the ~~six~~nine months ended ~~October~~January 31, ~~2018.~~2019.

On November 1, 2019, we completed the acquisitions of the Acquired Companies from TwentyEighty, Inc. for $108.6 million. The addition of the Acquired Companies has further expanded our vast intellectual property and content and leveraged the firm’s digital delivery platforms. We have invested in our digital business to digitize and harmonize the structure of our IP content and data and in building a technology platform for the efficient delivery of these assets directly to an end consumer or indirectly through a consulting engagement. These investments combined with the acquisition of the Acquired Companies resulted in reassessing how we manage our Advisory business. On November 1, 2019, we adopted a restructuring plan ~~relating to actions in respect of the integration of the recently completed acquisitions. The purpose of this plan is~~ to rationalize our cost structure ~~as a result of~~to realize the efficiencies and operational ~~improvements~~improvement that ~~we will be in position~~these investments have enabled us to, ~~realize upon integration of the Acquired Entities.~~or positioned us to, realize. The plan ~~will include~~impacts both Consulting and Digital and includes the elimination of redundant positions and consolidation of office space. ~~The estimated cost of~~ During the ~~actions contemplated by the plan is between $20.0 million to $26.0 million, of which $18.0 million to $22.0 million relates to severance~~three and $2.0 million to $4.0 million relates to office consolidation and abandonment of premises. These charges are expected to include approximately $18.0 million to $24.0 million of cash expenditures. We ~~expect~~ ~~to recognize these charges between the three~~

nine months ended January 31, 2020, we recognized $18.1 million of restructuring charges associated with severance and ~~the three months ended July 31, 2020 and expects~~recorded $2.8 million of integration/acquisition costs associated with impairment of 16 office leases. We expect the restructuring actions to be completed by July 31, 2020.

In December 2019, a new strain of the coronavirus (COVID-19) was reported to have spread to over 100 countries, territories or areas worldwide. Initially, the negative business impact of the coronavirus outbreak was most pronounced in the Asia Pacific Region, and in particular China and Hong Kong. In recent weeks and days, however, the impact has become more global. Recently, select governments and companies have implemented social distancing - limiting either travel or in person individual or group face-to-face interaction. The extent to which further, incremental measures are put in place or additional government bodies adopt such measures is unknown. The measures taken to date will impact our business for the fiscal fourth quarter and potentially beyond. We expect that all of our business segments across all of our geographies will be impacted to some degree, but the significance of the impact of the coronavirus outbreak on our business and the duration for which it may have an impact cannot be determined at this time.

The Company currently operates through ~~three~~four global segments. See Note 10—Segments,in the Notes to Consolidated Unaudited Financial Statements for discussion of the Company’s global business segments. The Company evaluates performance and allocates resources based on the chief operating decision maker’s review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other than temporary impairment). In the ~~six~~three months ended ~~October~~January 31, ~~2018,~~2020, Adjusted EBITDA excluded $18.1 million of restructuring charges, $6.7 million of integration/acquisition costs and $1.8 million of separation costs. In the nine months ended January 31, 2020, Adjusted EBITDA excluded $18.1 million of restructuring charges, $9.3 million of integration/acquisition costs and $1.8 million of separation costs. In the nine months ended January 31, 2019, Adjusted EBITDA excluded $106.6 million of write-off of tradenames related to the ~~Plan.~~Plan and $6.7 million of integration/acquisition costs.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin are non-GAAP financial measures. They have limitations as analytical tools, should not be viewed as a substitute for financial information determined in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”), and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. In addition, they may not necessarily be comparable to non-GAAP performance measures that may be presented by other companies.

Management believes the presentation of these non-GAAP financial measures provides meaningful supplemental information regarding Korn Ferry’s performance by excluding certain charges, items of income and other items that may not be indicative of Korn Ferry’s ongoing operating results. The use of these non-GAAP financial measures facilitates comparisons to Korn Ferry’s historical performance and the identification of operating trends that may otherwise be distorted by the factors discussed above. Korn Ferry includes these non-GAAP financial measures because management believes it is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its evaluation of Korn Ferry’s ongoing operations and financial and operational decision-making. The accounting policies for the reportable segments are the same as those described in the summary of significant accounting policies in the accompanying consolidated financial statements, except that the above noted items are excluded from EBITDA to arrive at Adjusted EBITDA. Management further believes that EBITDA is useful to investors because it is frequently used by investors and other interested parties to measure operating performance among companies with different capital structures, effective tax rates and tax attributes and capitalized asset values, all of which can vary substantially from company to company.

Fee revenue was ~~$492.4~~$515.3 million during the three months ended ~~October~~January 31, ~~2019, a decrease~~2020, an increase of ~~$2.8~~$40.8 million, or 1%9%, compared to ~~$495.2~~$474.5 million in the three months ended ~~October~~January 31, ~~2018.~~2019. Exchange rates unfavorably impacted fee revenue by ~~$9.4~~$3.1 million, or 2%1%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter. During the three months ended ~~October~~January 31, ~~2019,~~2020, we recorded operating income of ~~$61.9~~$31.6 million, a decrease of ~~$9.1~~$31.1 million, compared to ~~$71.0~~$62.7 million in the three months ended ~~October~~January 31, ~~2018,~~2019, with the ~~Advisory,~~ Executive Search, ~~and~~ RPO & Professional Search, Digital and Consulting segments contributing ~~$28.4~~$32.7 million, ~~$41.2~~$14.1 million, $8.5 million, and ~~$15.1~~$2.7 million, respectively, offset by Corporate expenses of ~~$22.8~~$26.4 million. Net income attributable to Korn Ferry in the three months ended ~~October~~January 31, ~~2019~~2020 was ~~$42.8~~$20.0 million, a decrease of ~~$3.2~~$25.0 million as compared to ~~$46.0~~$45.0 million in the year-ago quarter. During the three months ended ~~October~~January 31, ~~2019,~~2020, Adjusted EBITDA was ~~$78.3~~$78.1 million, ~~a decrease~~an increase of ~~$2.0~~$0.4 million, compared to ~~$80.3~~$77.7 million in the year-ago quarter, with the ~~Advisory,~~ Executive Search, Digital, Consulting and RPO & Professional Search segments contributing ~~$37.0~~$40.7 million, ~~$44.0~~$25.9 million, $18.7 million and ~~$16.1~~$15.2 million, respectively, offset by Corporate expenses, net of other income of ~~$18.8~~$22.3 million.

Our cash, cash equivalents and marketable securities decreased by ~~$158.1~~$18.6 million to ~~$609.0~~$748.5 million at ~~October~~January 31, ~~2019,~~2020, compared to $767.1 million at April 30, 2019.This decrease was mainly due to annual bonuses earned in fiscal 2019 and paid during the first quarter of fiscal 2020, sign-on and retention payments, ~~$61.9~~$108.6 million paid for the acquisition of the Acquired Companies, $68.1 million for stock repurchases in the open market, ~~$23.8~~$33.8 million in payments for the purchase of property and equipment, ~~$8.7 million paid in tax withholding on restricted stock vestings~~ and ~~$11.7~~$17.3 million in dividends paid during the ~~first half of fiscal~~nine months ended January 31, 2020. These decreases were ~~partially~~substantially offset by cash flows from operations and ~~$50~~an increase in net borrowings of $180.7 million as a result of ~~additional~~our note offering and borrowings under ~~the Revolver.~~our credit agreement (discussed further below). As of ~~October~~January 31, ~~2019,~~2020, we held marketable securities to settle obligations under our Executive Capital Accumulation Plan (“ECAP”) with a cost value of ~~$137.6~~$143.9 million and a fair value of ~~$144.6~~$151.6 million. Our vested obligations for which these assets were held in trust totaled ~~$131.5~~$135.7 million as of ~~October~~January 31, ~~2019~~2020 and our unvested obligations totaled $23.2 million.

Our working capital increased by ~~$13.1~~$50.8 million to ~~$599.0~~$636.7 million as of ~~October~~January 31, ~~2019,~~2020, as compared to $585.9 million at April 30, 2019.We believe that cash on hand and funds from operations and other forms of liquidity will be sufficient to meet our anticipated working capital, capital expenditures, general corporate requirements, repayment of the debt obligations and dividend payments under our dividend policy in the next twelve months. We had ~~$369.9~~$646.0 million and ~~$420.2~~$420.2 million available for borrowing under our ~~Revolver~~current and prior revolvers at ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively. As of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, there was ~~$3.2~~$4.0 million and ~~$2.9~~$2.9 million of standby letters of credit issued, respectively, under our ~~long-term debt arrangements.~~ credit agreements.We had a total of ~~$11.0~~$11.1 million and $8.5 million of standby letters of credits with other financial institutions as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively.

The following table summarizes the results of our operations as a percentage of fee revenue:

	Three Months Ended October 31,						Six Months Ended October 31,						Three Months Ended January 31,						Nine Months Ended January 31,
	2019			2018			2019			2018			2020			2019			2020			2019
Fee revenue		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Reimbursed out-of-pocket engagement expenses		2.4			2.3			2.4			2.5			2.5			2.5			2.4			2.5
Total revenue		102.4			102.3			102.4			102.5			102.5			102.5			102.4			102.5
Compensation and benefits		68.5			67.8			68.2			68.5			67.6			67.8			68.0			68.2
General and administrative expenses		12.6			11.7			13.1			23.6			13.8			12.9			13.3			20.0
Reimbursed expenses		2.4			2.3			2.4			2.5			2.5			2.5			2.4			2.5
Cost of services		3.7			4.0			3.6			4.0			6.0			3.6			4.4			3.8
Depreciation and amortization		2.6			2.2			2.6			2.4			2.9			2.5			2.7			2.4
Restructuring charges, net														3.5			—			1.2			—
Operating income		12.6			14.3			12.5			1.7			6.1			13.2			10.3			5.5
Net income		8.7	%		9.6	%		8.9	%		0.9	%		4.1	%		9.6	%		7.2	%		3.8	%
Net income attributable to Korn Ferry		8.7	%		9.3	%		8.8	%		0.8	%		3.9	%		9.5	%		7.1	%		3.6	%

The operating results prior to November 1, 2019 have been revised to conform to the new segment reporting.

The following tables summarize the results of our operations by business segment:

	Three Months Ended October 31,										Six Months Ended October 31,										Three Months Ended January 31,										Nine Months Ended January 31,
	2019					2018					2019					2018					2020					2019					2020					2019
	Dollars		%			Dollars		%			Dollars		%			Dollars		%			Dollars		%			Dollars		%			Dollars		%			Dollars		%
	(dollars in thousands)																				(dollars in thousands)
Fee revenue
Advisory	$	209,760		42.6	%	$	217,089		43.8	%	$	405,286		41.5	%	$	412,464		42.9	%
Consulting																					$	140,525		27.3	%	$	139,029		29.3	%	$	422,103		28.3	%	$	423,958		29.5	%
Digital																						99,389		19.3			62,473		13.2			223,097		15.0			190,008		13.2
Executive Search:
North America		113,818		23.1			115,863		23.4			225,540		23.1			227,960		23.7			106,888		20.7			114,215		24.1			332,428		22.3			342,175		23.8
EMEA		39,821		8.1			44,928		9.1			86,351		8.8			91,582		9.5			44,301		8.6			45,940		9.7			130,652		8.8			137,522		9.6
Asia Pacific		25,944		5.3			27,936		5.6			53,306		5.5			54,231		5.7			25,089		4.9			25,687		5.4			78,395		5.3			79,918		5.6
Latin America		8,272		1.7			8,907		1.8			15,857		1.6			16,785		1.8			7,283		1.4			7,554		1.6			23,140		1.6			24,339		1.7
Total Executive Search		187,855		38.2			197,634		39.9			381,054		39.0			390,558		40.7			183,561		35.6			193,396		40.8			564,615		37.8			583,954		40.7
RPO & Professional Search		94,774		19.2			80,482		16.3			190,598		19.5			157,751		16.4			91,850		17.8			79,606		16.8			282,448		18.9			237,357		16.5
Total fee revenue		492,389		100.0	%		495,205		100.0	%		976,938		100.0	%		960,773		100.0	%		515,325		100.0	%		474,504		100.0	%		1,492,263		100.0	%		1,435,277		100.0	%
Reimbursed out-of-pocket engagement expense		11,788					11,588					23,437					24,382					12,654					11,668					36,091					36,050
Total revenue	$	504,177				$	506,793				$	1,000,375				$	985,155				$	527,979				$	486,172				$	1,528,354				$	1,471,327

	Three Months Ended October 31,												Six Months Ended October 31,												Three Months Ended January 31,												Nine Months Ended January 31,
	2019						2018						2019						2018						2020						2019						2020						2019
	Dollars			Margin (1)			Dollars			Margin (1)			Dollars			Margin (1)			Dollars			Margin (1)			Dollars			Margin (1)			Dollars			Margin (1)			Dollars			Margin (1)			Dollars			Margin (1)
	(dollars in thousands)																								(dollars in thousands)
Operating income (loss)
Advisory	$	28,391			13.5	%	$	29,426			13.6	%	$	54,182			13.4	%	$	(53,653	)		(13.0	%)
Consulting																									$	2,663			1.9	%	$	11,782			8.5	%	$	24,272			5.8	%	$	(47,431	)		(11.2	%)
Digital																										8,463			8.5			17,497			28.0			41,036			18.4			23,057			12.1
Executive Search:
North America		28,124			24.7			35,328			30.5			58,446			25.9			61,842			27.1			21,808			20.4			30,596			26.8			80,254			24.1			92,438			27.0
EMEA		6,511			16.4			7,319			16.3			13,822			16.0			14,288			15.6			4,644			10.5			7,525			16.4			18,466			14.1			21,813			15.9
Asia Pacific		5,803			22.4			6,767			24.2			12,796			24.0			13,408			24.7			5,070			20.2			5,929			23.1			17,866			22.8			19,337			24.2
Latin America		791			9.6			2,053			23.0			1,801			11.4			2,807			16.7			1,198			16.4			653			8.6			2,999			13.0			3,460			14.2
Total Executive Search		41,229			21.9			51,467			26.0			86,865			22.8			92,345			23.6			32,720			17.8			44,703			23.1			119,585			21.2			137,048			23.5
RPO & Professional Search		15,094			15.9			12,516			15.6			30,135			15.8			24,161			15.3			14,144			15.4			12,176			15.3			44,279			15.7			36,337			15.3
Corporate		(22,845	)					(22,422	)					(48,979	)					(46,985	)					(26,395	)					(23,475	)					(75,374	)					(70,460	)
Total operating income	$	61,869			12.6	%	$	70,987			14.3	%	$	122,203			12.5	%	$	15,868			1.7	%	$	31,595			6.1	%	$	62,683			13.2	%	$	153,798			10.3	%	$	78,551			5.5	%

	Three Months Ended January 31, 2020
							Executive Search
	Consulting			Digital			North America			EMEA			Asia Pacific			Latin America			Subtotal			RPO & Professional Search			Corporate			Consolidated
	(in thousands)
Fee revenue	$	140,525		$	99,389		$	106,888		$	44,301		$	25,089		$	7,283		$	183,561		$	91,850		$	—		$	515,325
Total revenue	$	144,298		$	100,663		$	110,230		$	45,077		$	25,365		$	7,351		$	188,023		$	94,995		$	—		$	527,979

Net income attributable to Korn Ferry																												$	19,993
Net income attributable to noncontrolling interest																													963
Other income, net																													(5,055	)
Interest expense, net																													6,919
Income tax provision																													8,775
Operating income (loss)	$	2,663		$	8,463		$	21,808		$	4,644		$	5,070		$	1,198		$	32,720		$	14,144		$	(26,395	)		31,595
Depreciation and amortization		4,417			5,832			847			422			329			295			1,893			979			1,742			14,863
Other income (loss), net		558			193			3,963			29			106			162			4,260			88			(44	)		5,055
EBITDA		7,638			14,488			26,618			5,095			5,505			1,655			38,873			15,211			(24,697	)		51,513
Integration/acquisition costs		—			4,332			—			—			—			—			—			—			2,372			6,704
Restructuring, charges, net		11,061			7,032			—			—			—			—			—			—			—			18,093
Separation costs		—			—			—			1,783			—			—			1,783			—			—			1,783
Adjusted EBITDA	$	18,699		$	25,852		$	26,618		$	6,878		$	5,505		$	1,655		$	40,656		$	15,211		$	(22,325	)	$	78,093
Operating margin		1.9	%		8.5	%		20.4	%		10.5	%		20.2	%		16.4	%		17.8	%		15.4	%					6.1	%
Adjusted EBITDA margin		13.3	%		26.0	%		24.9	%		15.5	%		21.9	%		22.7	%		22.1	%		16.6	%					15.2	%

	Three Months Ended January 31, 2019
							Executive Search
	Consulting			Digital			North America			EMEA			Asia Pacific			Latin America			Subtotal			RPO & Professional Search			Corporate			Consolidated
	(in thousands)
Fee revenue	$	139,029		$	62,473		$	114,215		$	45,940		$	25,687		$	7,554		$	193,396		$	79,606		$	—		$	474,504
Total revenue	$	143,204		$	62,473		$	117,725		$	46,639		$	26,046		$	7,573		$	197,983		$	82,512		$	—		$	486,172

Net income attributable to Korn Ferry																												$	44,964
Net income attributable to noncontrolling interest																													480
Other income, net																													(2,463	)
Interest expense, net																													4,282
Income tax provision																													15,420
Operating income (loss)	$	11,782		$	17,497		$	30,596		$	7,525		$	5,929		$	653		$	44,703		$	12,176		$	(23,475	)		62,683
Depreciation and amortization		4,001			3,306			970			402			338			97			1,807			803			1,824			11,741
Other income (loss), net		582			204			1,626			26			(134	)		133			1,651			77			(51	)		2,463
EBITDA		16,365			21,007			33,192			7,953			6,133			883			48,161			13,056			(21,702	)		76,887
Integration/acquisition costs		650			127			—			—			—			—			—			—			27			804
Adjusted EBITDA	$	17,015		$	21,134		$	33,192		$	7,953		$	6,133		$	883		$	48,161		$	13,056		$	(21,675	)	$	77,691
Operating margin		8.5	%		28.0	%		26.8	%		16.4	%		23.1	%		8.6	%		23.1	%		15.3	%					13.2	%
Adjusted EBITDA margin		12.2	%		33.8	%		29.1	%		17.3	%		23.9	%		11.7	%		24.9	%		16.4	%					16.4	%

	Three Months Ended October 31, 2019																											Nine Months Ended January 31, 2020
				Executive Search																														Executive Search
	Advisory			North America			EMEA			Asia Pacific			Latin America			Subtotal			RPO & Professional Search			Corporate			Consolidated			Consulting			Digital			North America			EMEA			Asia Pacific			Latin America			Subtotal			RPO & Professional Search			Corporate			Consolidated
	(in thousands)																											(in thousands)
Fee revenue	$	209,760		$	113,818		$	39,821		$	25,944		$	8,272		$	187,855		$	94,774		$	—		$	492,389		$	422,103		$	223,097		$	332,428		$	130,652		$	78,395		$	23,140		$	564,615		$	282,448		$	—		$	1,492,263
Total revenue	$	213,922		$	117,077		$	40,441		$	26,168		$	8,273		$	191,959		$	98,296		$	—		$	504,177		$	433,832		$	224,371		$	342,753		$	132,830		$	79,201		$	23,211		$	577,995		$	292,156		$	—		$	1,528,354

Net income attributable to Korn Ferry																									$	42,804																													$	105,748
Net income attributable to noncontrolling interest																										228																														1,890
Other income, net																										(1,133	)																													(8,014	)
Interest expense, net																										4,210																														15,186
Income tax provision																										15,760																														38,988
Operating income (loss)	$	28,391		$	28,124		$	6,511		$	5,803		$	791		$	41,229		$	15,094		$	(22,845	)		61,869		$	24,272		$	41,036		$	80,254		$	18,466		$	17,866		$	2,999		$	119,585		$	44,279		$	(75,374	)		153,798
Depreciation and amortization		8,042			869			450			329			315			1,963			990			1,720			12,715			13,188			13,156			2,617			1,328			1,004			938			5,887			2,961			5,163			40,355
Other income (loss), net		520			637			107			72			30			846			54			(287	)		1,133			1,469			528			5,740			148			193			249			6,330			216			(529	)		8,014
EBITDA		36,953			29,630			7,068			6,204			1,136			44,038			16,138			(21,412	)		75,717			38,929			54,720			88,611			19,942			19,063			4,186			131,802			47,456			(70,740	)		202,167
Integration/acquisition costs		—			—			—			—			—			—			—			2,615			2,615			—			4,332			—			—			—			—			—			—			4,987			9,319
Restructuring charges, net																													11,061			7,032			—			—			—			—			—			—			—			18,093
Separation costs																													—			—			—			1,783			—			—			1,783			—			—			1,783
Adjusted EBITDA	$	36,953		$	29,630		$	7,068		$	6,204		$	1,136		$	44,038		$	16,138		$	(18,797	)	$	78,332		$	49,990		$	66,084		$	88,611		$	21,725		$	19,063		$	4,186		$	133,585		$	47,456		$	(65,753	)	$	231,362
Operating margin		13.5	%		24.7	%		16.4	%		22.4	%		9.6	%		21.9	%		15.9	%					12.6	%		5.8	%		18.4	%		24.1	%		14.1	%		22.8	%		13.0	%		21.2	%		15.7	%					10.3	%
Adjusted EBITDA margin		17.6	%		26.0	%		17.7	%		23.9	%		13.7	%		23.4	%		17.0	%					15.9	%		11.8	%		29.6	%		26.7	%		16.6	%		24.3	%		18.1	%		23.7	%		16.8	%					15.5	%

Three Months Ended October 31, 2018

Executive Search

Advisory

North
America

EMEA

Asia Pacific

Latin
America

Subtotal

RPO & Professional Search

Corporate

Consolidated

(in thousands)

Fee revenue

$
217,089

$
115,863

$
44,928

$
27,936

$
8,907

$
197,634

$
80,482

$
—

$
495,205

Total revenue

$
221,419

$
119,322

$
45,636

$
28,146

$
8,912

$
202,016

$
83,358

$
—

$
506,793

Net income attributable to Korn Ferry

$
46,034

Net income attributable to noncontrolling interest

1,283

Other loss, net

4,500

Interest expense, net

4,337

Income tax provision

14,833

Operating income (loss)

$
29,426

$
35,328

$
7,319

$
6,767

$
2,053

$
51,467

$
12,516

$
(22,422
)

70,987

Depreciation and amortization

6,964

968

95

375

101

1,539

761

1,754

11,018

Other income (loss), net

265

(3,981
)

22

77

93

(3,789
)

(79
)

(897
)

(4,500
)
EBITDA

36,655

32,315

7,436

7,219

2,247

49,217

13,198

(21,565
)

77,505

Integration/acquisition costs

2,755

—

—

—

—

—

—

80

2,835

Adjusted EBITDA

$
39,410

$
32,315

$
7,436

$
7,219

$
2,247

$
49,217

$
13,198

$
(21,485
)

$
80,340

Operating margin

13.6
%

30.5
%

16.3
%

24.2
%

23.0
%

26.0
%

15.6
%

14.3
%
Adjusted EBITDA margin

18.2
%

27.9
%

16.6
%

25.8
%

25.2
%

24.9
%

16.4
%

16.2
%

	Six Months Ended October 31, 2018																											Nine Months Ended January 31, 2019
				Executive Search																														Executive Search
	Advisory			North America			EMEA			Asia Pacific			Latin America			Subtotal			RPO & Professional Search			Corporate			Consolidated			Consulting			Digital			North America			EMEA			Asia Pacific			Latin America			Subtotal			RPO & Professional Search			Corporate			Consolidated
	(in thousands)																											(in thousands)
Fee revenue	$	412,464		$	227,960		$	91,582		$	54,231		$	16,785		$	390,558		$	157,751		$	—		$	960,773		$	423,958		$	190,008		$	342,175		$	137,522		$	79,918		$	24,339		$	583,954		$	237,357		$	—		$	1,435,277
Total revenue	$	421,566		$	235,079		$	93,385		$	54,771		$	16,815		$	400,050		$	163,539		$	—		$	985,155		$	437,235		$	190,008		$	352,804		$	140,024		$	80,817		$	24,388		$	598,033		$	246,051		$	—		$	1,471,327

Net income attributable to Korn Ferry																									$	7,423																													$	52,387
Net income attributable to noncontrolling interest																										1,302																														1,782
Other income, net																										(20	)																													(2,483	)
Interest expense, net																										8,440																														12,722
Income tax benefit																										(1,277	)
Income tax provision																																																								14,143
Operating income (loss)	$	(53,653	)	$	61,842		$	14,288		$	13,408		$	2,807		$	92,345		$	24,161		$	(46,985	)		15,868		$	(47,431	)	$	23,057		$	92,438		$	21,813		$	19,337		$	3,460		$	137,048		$	36,337		$	(70,460	)		78,551
Depreciation and amortization		14,395			1,947			465			745			208			3,365			1,522			3,467			22,749			12,219			9,483			2,917			867			1,083			305			5,172			2,325			5,291			34,490
Other income (loss), net		835			(480	)		362			252			130			264			26			(1,105	)		20			1,107			514			1,146			388			118			263			1,915			103			(1,156	)		2,483
EBITDA		(38,423	)		63,309			15,115			14,405			3,145			95,974			25,709			(44,623	)		38,637			(34,105	)		33,054			96,501			23,068			20,538			4,028			144,135			38,765			(66,325	)		115,524
Integration/acquisition costs		5,782			—			—			—			—			—			—			160			5,942			5,304			1,255			—			—			—			—			—			—			187			6,746
Tradename write-offs		106,555			—			—			—			—			—			—			—			106,555			76,967			29,588			—			—			—			—			—			—			—			106,555
Adjusted EBITDA	$	73,914		$	63,309		$	15,115		$	14,405		$	3,145		$	95,974		$	25,709		$	(44,463	)	$	151,134		$	48,166		$	63,897		$	96,501		$	23,068		$	20,538		$	4,028		$	144,135		$	38,765		$	(66,138	)	$	228,825
Operating margin		(13.0	%)		27.1	%		15.6	%		24.7	%		16.7	%		23.6	%		15.3	%					1.7	%		(11.2	%)		12.1	%		27.0	%		15.9	%		24.2	%		14.2	%		23.5	%		15.3	%					5.5	%
Adjusted EBITDA margin		17.9	%		27.8	%		16.5	%		26.6	%		18.7	%		24.6	%		16.3	%					15.7	%		11.4	%		33.6	%		28.2	%		16.8	%		25.7	%		16.5	%		24.7	%		16.3	%					15.9	%

Three Months Ended ~~October~~January 31, ~~2019~~2020 Compared to Three Months Ended ~~October~~January 31, ~~2018~~2019

Fee Revenue. Fee revenue ~~decreased~~increased by ~~$2.8~~$40.8 million, or 1%9%, to ~~$492.4~~$515.3 million in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$495.2~~$474.5 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by ~~$9.4~~$3.1 million, or 2%1%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter. The ~~lower~~higher fee revenue was attributable to fee revenue generated by the Acquired Companies and the increase in fee revenue in RPO & Professional Search, partially offset by a decline in Executive Search ~~and Advisory offset by growth in RPO & Professional Search.~~fee revenue.

~~Advisory.~~Consulting. ~~Advisory~~Consulting reported fee revenue of ~~$209.8~~$140.5 million, ~~a decrease~~an increase of ~~$7.3~~$1.5 million, or 3%1%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$217.1~~$139.0 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by ~~$4.3~~$0.8 million, or 2%1%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter.

Digital. Digital reported fee revenue of $99.4 million, an increase of $36.9 million, or 59%, in the three months ended January 31, 2020 compared to $62.5 million in the year-ago quarter. The ~~decrease in~~higher fee revenue was primarily ~~due~~attributable to ~~lower~~ fee revenue ~~in digital and consulting services of $3.9~~generated by the Acquired Companies. Exchange rates unfavorably impacted fee revenue by $0.7 million, ~~and $3.4 million, respectively, during~~or 1%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter.

Executive Search. Executive Search reported fee revenue of ~~$187.9~~$183.6 million, a decrease of ~~$9.7~~$9.8 million, or 5%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$197.6~~$193.4 million in the year-ago quarter. Exchange rates unfavorably impacted

fee revenue by ~~$3.4~~$1.0 million, or 2%1%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter. As detailed below, there was lower fee revenue in all regions in the three months ended ~~October~~January 31, ~~2019~~2020 as compared to the year-ago quarter. The overall decrease in fee revenue was driven by decreases in fee revenue from the technology, financial services ~~industrial,~~ and ~~consumer~~industrial sectors.

North America reported fee revenue of ~~$113.8~~$106.9 million, a decrease of ~~$2.1~~$7.3 million, or 2%6%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$115.9~~$114.2 million in ~~the year-ago quarter. Exchange rates unfavorably impacted fee revenue by $0.2 million in three months ended October 31, 2019 compared to~~ the year-ago quarter. The decrease in fee revenue was due to a 1%4% decrease in the number of engagements billed and a 1%3% decrease in the weighted-average fee billed per engagement (calculated using local currency) during the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter.

Europe, the Middle East, and Africa (“EMEA”) reported fee revenue of ~~$39.8~~$44.3 million, a decrease of ~~$5.1~~$1.6 million, or ~~11%~~3%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$44.9~~$45.9 million in ~~the year-ago quarter. Exchange rates unfavorably impacted fee revenue by $2.1 million, or 5%, in the three months ended October 31, 2019 compared to~~ the year-ago quarter. The decrease in fee revenue was due to a 7%4% decrease in the weighted-average fee billed per engagement (calculated using local currency), partially offset by a 2% increase in the number of engagements billed during the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter. The performance in ~~the United Kingdom,~~ Germany and ~~France~~United Arab Emirates were the primary contributors to the decrease in fee revenue, partially offset by increases in ~~Ireland, and~~ the United ~~Arab Emirates~~Kingdom in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter.

Asia Pacific reported fee revenue of ~~$25.9~~$25.1 million, a decrease of ~~$2.0 million, or 7%, in the three months ended October 31, 2019 compared to $27.9 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by~~ $0.6 million, or 2%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to $25.7 million in the year-ago quarter. The decrease in fee revenue was due to ~~an 8%~~a 10% decrease in the number of engagements billed, offset by a 9% increase in the weighted-average fees billed per engagement (calculated using local currency)~~, offset by a 3% increase in the number of engagements billed~~ during the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter. The performance in Australia and ~~China~~Hong Kong were the primary contributors to the decrease in fee revenue, partially offset by an increase in fee revenue in ~~Singapore and India~~Japan in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter.

Latin America reported fee revenue of ~~$8.3~~$7.3 million, a decrease of ~~$0.6~~$0.3 million, or 7%4%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$8.9~~$7.6 million in ~~the year-ago quarter. Exchange rates unfavorably impacted fee revenue by $0.5 million, or 6%, in the three months ended October 31, 2019 compared to~~ the year-ago quarter. The decrease in fee revenue in the region was due to lower fee revenue in Brazil, ~~and Mexico,~~ partially offset by higher fee revenue in ~~Chile~~Mexico in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter.

RPO & Professional Search. RPO & Professional Search reported fee revenue of ~~$94.8~~$91.9 million, an increase of ~~$14.3~~$12.3 million, or ~~18%~~15%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$80.5~~$79.6 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by ~~$1.7~~$0.6 million, or 2%1%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter. Higher fee revenues in RPO &of $9.1 million and Professional Search of ~~$11.6 million and $2.7~~$3.2 million, respectively, drove the increase in fee revenue.

Compensation and benefits expense increased by ~~$1.6~~$26.8 million, or 8%, to ~~$337.4~~$348.6 million in the three months ended ~~October~~January 31, ~~2019~~2020 from ~~$335.8~~$321.8 million in the year-ago quarter. Exchange rates favorably impacted compensation and benefits by ~~$6.0~~$2.0 million, or 2%1%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter. The increase in compensation and benefits expense was primarily due to ~~an increase in~~higher salaries and related payroll taxes ~~related~~due to ana 10% increase in average headcount, ~~partially offset~~both of which were mainly due to the Acquired Companies, as well as an increase in amounts owed under certain deferred compensation and retirement plans. Those increases were driven by ~~a decrease~~increases in ~~performance-related bonus expense~~the fair value of participants’ accounts in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter.

~~Advisory~~Consulting compensation and benefits expense decreased by ~~$7.3~~$1.6 million, or 5%2%, to ~~$134.3~~$93.5 million in the three months ended ~~October~~January 31, ~~2019~~2020 from ~~$141.6~~$95.1 million in the year-ago quarter. Exchange rates favorably impacted compensation and benefits by ~~$2.6~~$0.7 million, or 2%1%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter. The decrease in compensation and benefits expense was due to a lower performance-related bonus expense ~~and a decrease in integration costs. The decreases in compensation and benefits expense was partially offset by higher salaries and related payroll taxes~~ in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter. ~~Advisory~~Consulting compensation and benefits expense, as a percentage of fee revenue, decreased to ~~64%~~67% in the three months ended ~~October~~January 31, ~~2019~~2020 from ~~65%~~68% in the year-ago quarter.

~~Executive Search~~Digital compensation and benefits expense~~was $124.2~~ increased by $15.4 million, or 47% to $48.2 million in the three months ended ~~October~~January 31, ~~2019 compared to $124.1~~2020 from $32.8 million in the year-ago quarter. Exchange rates favorably impacted compensation and benefits by ~~$2.1~~$0.2 million, or ~~2%,~~1% in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter. The increase in compensation and benefits expense was due to an increase in average headcount of 16% driven by the acquisition of the Acquired Companies. This was partially offset by a reduction in headcount from the elimination of redundant positions as part of the restructuring plan. Digital compensation and benefits expense, as a percentage of fee revenue, decreased to 49% in the three months ended January 31, 2020 from 53% in the year-ago quarter.

Executive Search compensation and benefits expense increased by $3.8 million, or 3%, to $128.7 million in the three months ended January 31, 2020 from $124.9 million in the year-ago quarter. Exchange rates favorably impacted compensation and benefits by $0.6 million, in the three months ended January 31, 2020 compared to the year-ago quarter. The increase in compensation and benefits expense was due to an increase in expenses associated with our deferred compensation and retirement plans (including the increases in the fair value of participants’ accounts) driven by increases in the fair value of participants’ accounts in the three months ended January 31, 2020 compared to the year-ago quarter.Executive Search compensation and benefits expense, as a percentage of fee revenue, increased to ~~66%~~70% in the three months ended ~~October~~January 31, ~~2019~~2020 from ~~63%~~65% in the year-ago quarter.

RPO & Professional Search compensation and benefits expense increased by ~~$9.5~~$9.6 million, or ~~16%~~17%, to ~~$67.3~~$65.9 million in the three months ended ~~October~~January 31, ~~2019~~2020 from ~~$57.8~~$56.3 million in the year-ago quarter. Exchange rates favorably impacted compensation and benefits by ~~$1.2~~$0.4 million, or 2%1%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter. The increase was due to ~~higher salaries and related payroll taxes resulting from~~ a ~~28%~~24% increase in the average headcount in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter. The higher average headcount was driven by the need to service an increase in fee revenue in the RPO business. ~~The increase in compensation and benefits expense was partially offset by lower performance-related bonus expense.~~ RPO & Professional Search compensation and benefits expense, as a percentage of fee revenue, ~~decreased~~increased to ~~71%~~72% in the three months ended ~~October~~January 31, ~~2019~~2020 from ~~72%~~71% in the year-ago quarter.

Corporate compensation and benefits expense ~~decreased by $0.8 million, or 7%, to $11.5 million~~was essentially flat in the three months ended ~~October~~January 31, ~~2019 from $12.3 million in the year-ago quarter. The decrease was primarily due to a lower performance-related bonus expense in the three months ended October 31, 2019~~2020 when compared to the year-ago quarter.

General and administrative expenses ~~was $62.0~~were $71.4 million, an increase of ~~$4.3~~$10.2 million, or 7%17%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$57.7 million in~~ the year-ago quarter. Exchange rates favorably impacted general and administrative expenses by ~~$1.4~~$0.8 million, or 2%1%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter.The increase in general and administrative expenses was due to higher marketing and business development expenses, premise and office expenses and ~~integration and~~ integration/acquisition costs. General and administrative expenses, as a percentage of fee revenue, ~~was 13%~~were 14% in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~12%~~13% in the year-ago quarter.

~~Advisory~~Consulting general and administrative expenses ~~was $25.4~~were $16.7 million in both the three months ended January 31, 2020 and 2019. Consulting general and administrative expenses, as a percentage of fee revenue, were 12% for both the three months ended January 31, 2020 and 2019.

Digital general and administrative expenses were $15.0 million in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$24.1~~$6.8 million in the year-ago quarter. The increase of ~~$1.3~~$8.2 million was mainly due to ~~an increase~~the Acquired Companies, which resulted in ~~marketing~~increases to premise and ~~business development expenses. Advisory~~office expenses and integration/acquisition costs. A portion of the premise and office expenses was due to the impairment of 16 office leases which were terminated in connection the integration plan of the Acquired Companies. Digital general and administrative expenses, as a percentage of fee revenue, increased to ~~12%~~15% in the three months ended ~~October~~January 31, ~~2019~~2020 from 11% in the year-ago quarter.

Executive Search general and administrative expenses ~~was $18.9~~were $19.2 million, a decrease of $2.4 million, or 11% in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$19.1~~$21.6 million in the year-ago quarter. The decrease was mainly due to decreases in bad debt expense, other travel related expenses and foreign exchange loss. Executive Search general and administrative expenses, as a percentage of fee revenue, ~~was~~decreased to 10% in ~~both~~ the three months ended ~~October~~January 31, ~~2019 and 2018.~~2020 from 11% in the year-ago quarter.

RPO & Professional Search general and administrative expenses ~~was $8.2~~were $8.0 million in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$6.1~~$7.1 million in the year-ago quarter. The increase was primarily due to ~~an increase in foreign exchange loss and~~ higher premise and office expenses and an increase in marketing and business development expenses. RPO & Professional Search general and administrative expenses, as a percentage of fee revenue, ~~increased to~~were 9% infor both the three months ended ~~October~~January 31, ~~2019 from 8% in the year-ago quarter.~~2020 and 2019.

Corporate general and administrative expenses increased ~~$1.2~~$3.5 million, or ~~14%~~39%, to ~~$9.6~~$12.4 million in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$8.4~~$8.9 million in the year-ago quarter. The increase was primarily due to an increase in marketing and business development expenses and integration/acquisition costs ~~offset by a decrease in legal and other professional fees~~related to the Acquired Companies during the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter.

Cost of services expense consists primarily of ~~non-billable~~ contractor and product costs related to the delivery of various services and products, primarily in RPO & Professional Search, Consulting and ~~Advisory.~~Digital. Cost of services expense ~~was $18.4~~increased by $13.7 million, or 80% to $30.8 million in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$19.6~~$17.1 million in the year-ago quarter. The increase was due to the Acquired Companies. Cost of services expense, as a percentage of fee revenue, ~~was 4%~~increased to 6% in ~~both~~ the three months ended ~~October~~January 31, ~~2019 and 2018.~~2020 from 4% in the three months ended January 31, 2019.

Depreciation and amortization expenses were ~~$12.7~~$14.9 million, an increase of ~~$1.7~~$3.2 million, or ~~15%~~27%, in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$11.0~~$11.7 million in the year-ago quarter.The increase ~~relates~~related primarily to the Acquired Companies and technology investments made in the current and prior year in software and computer equipment, ~~in addition to~~as well as increases in leasehold improvements and furniture and fixtures.

During the three months ended January 31, 2020, we implemented a restructuring plan in order to eliminate redundant positions that were created due to the investments made in our digital business and the acquisition of the Acquired Companies. As a result, we recorded restructuring charges of $18.1 million of severance costs during the three months ended January 31, 2020. There were no restructuring charges, net during the three months ended January 31, 2019.

Operating income decreased by ~~$9.1~~$31.1 million, or ~~13%~~50%, to ~~$61.9~~$31.6 million in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$71.0~~$62.7 million in the year-ago quarter. The decrease in operating income was primarily driven by ~~decreases~~increases in restructuring charges, net, cost of services expense, compensation and benefits expense and general and administrative expenses, partially offset by an increase in fee ~~revenue and increases in marketing and business development expenses and premise and office expenses.~~revenue.

~~Advisory~~Consulting operating income was ~~$28.4~~$2.7 million in the three months ended ~~October~~January 31, ~~2019,~~2020, a decrease of ~~$1.0~~$9.1 million, or 3%77%, as compared to ~~$29.4~~$11.8 million in the year-ago quarter.~~Advisory~~ The decrease in Consulting operating income was mainly driven by restructuring charges, net incurred in the three months ended January 31, 2020. Consulting operating income, as a percentage of fee revenue, was ~~14%~~2% and 8% in ~~both~~ the three months ended ~~October~~January 31, 2020 and 2019, ~~and 2018.~~respectively.

~~Executive Search~~Digital operating income ~~decreased $10.3 million, or 20%, to $41.2~~was $8.5 million in the three months ended ~~October~~January 31, ~~2019~~2020, a decrease of $9.0 million, or 51%, as compared to ~~$51.5~~$17.5 million in the year-ago quarter. The decrease in Digital operating income was mainly driven by restructuring charges, net, and increases in compensation and benefits expense, cost of services expense and general and administrative expenses, offset by an increase in fee revenue, mainly due to the Acquired Companies. Digital operating income, as a percentage of fee revenue, was 9% and 28% in the three months ended January 31, 2020 and 2019, respectively.

Executive Search operating income decreased $12.0 million, or 27%, to $32.7 million in the three months ended January 31, 2020 as compared to $44.7 million in the year-ago quarter. The decrease in Executive Search operating income was mainly driven by lower fee ~~revenue.~~revenue and an increase in compensation and benefits expense, including $1.8 million in separation charges. Executive Search operating income, as a percentage of fee revenue, was ~~22%~~18% and ~~26%~~23% in the three months ended ~~October~~January 31, 2020 and 2019, ~~and 2018,~~ respectively.

RPO & Professional Search operating income was ~~$15.1~~$14.1 million, an increase of ~~$2.6~~$1.9 million, or ~~21%~~16%, in the three months ended ~~October~~January 31, ~~2019~~2020 as compared to ~~$12.5~~$12.2 million in the year-ago quarter. The increase in operating income was mainly driven by higher fee revenue, offset by increases in compensation and benefits expense and general and administrative expenses. RPO & Professional Search operating income, as a percentage of fee revenue, was ~~16%~~15% in both the three months ended ~~October~~January 31, ~~2019~~2020 and ~~2018.~~2019.

Net income attributable to Korn Ferry decreased by ~~$3.2~~$25.0 million, or 7%56%, to ~~$42.8~~$20.0 million in the three months ended ~~October~~January 31, ~~2019~~2020 as compared to ~~$46.0~~$45.0 million in the year-ago quarter. The decrease was primarily due to ~~higher~~restructuring charges, net of $18.1 million and increases in compensation and benefits expense, cost of service expense and general and administrative expenses of ~~$4.3~~$26.8 million, ~~lower fee revenue of $2.8~~$13.7 million and ~~an increase in compensation and benefits expense of $1.6 million.~~$10.2 million, respectively. This was partially offset by an increase in ~~other income (loss)~~fee revenue of ~~$5.6 million from other income, net of $1.1~~$40.8 million during the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~other loss, net of $4.5 million in~~ the year-ago quarter. Net income attributable to Korn Ferry, as a percentage of fee revenue, was 9%4% in ~~both~~ the three months ended ~~October~~January 31, ~~2019 and 2018.~~2020 as compared to 9% in the three months ended January 31, 2019.

Adjusted EBITDA ~~decreased~~increased by ~~$2.0~~$0.4 million, or 2%1%, to ~~$78.3~~$78.1 million in the three months ended ~~October~~January 31, ~~2019~~2020 as compared to ~~$80.3~~$77.7 million in the year-ago quarter. This decrease was driven by lower fee revenue, increases in compensation and benefits expense (excluding integration/acquisition costs) and general and administrative expenses (excluding integration/acquisition costs), offset by an increase in other income (loss), net due to gains generated from the change in the fair value of our marketable securities during the three months ended October 31, 2019 compared to other loss, net in the year-ago quarter. Adjusted EBITDA, as a percentage of fee revenue, was ~~16%~~15% in ~~both~~ the three months ended ~~October~~January 31, ~~2019 and 2018.~~2020 compared to 16% in the year-ago quarter.

~~Advisory~~Consulting Adjusted EBITDA was ~~$37.0~~$18.7 million in the three months ended ~~October~~January 31, ~~2019, a decrease~~2020, an increase of ~~$2.4~~$1.7 million, or 6%10%, as compared to ~~$39.4~~$17.0 million in the year-ago quarter. This ~~decrease~~increase was driven by ~~lower~~higher fee ~~revenue, partially offset by a decrease in compensation and benefits expense during the three months ended October 31, 2019 compared to the year-ago quarter. Advisory~~revenue. Consulting Adjusted EBITDA, as a percentage of fee revenue, was ~~18%~~13% and 12% in ~~both~~ the three months ended ~~October~~January 31, 2020 and 2019, respectively.

Digital Adjusted EBITDA was $25.9 million in the three months ended January 31, 2020, an increase of $4.8 million, or 23%, as compared to $21.1 million in the year-ago quarter. This increase was driven by higher fee revenue, partially offset by increases in compensation and ~~2018.~~benefits expense, cost of service expense and general and administrative expenses during the three months ended January 31, 2020 compared to the year-ago quarter. Digital Adjusted EBITDA, as a percentage of fee revenue, was 26% and 34% in the three months ended January 31, 2020 and 2019, respectively.

Executive Search Adjusted EBITDA decreased ~~$5.2~~$7.5 million, or ~~11%~~16%, to ~~$44.0~~$40.7 million in the three months ended ~~October~~January 31, ~~2019~~2020 as compared to ~~$49.2~~$48.2 million in the year-ago quarter. The decrease was mainly driven by a ~~decrease~~decline in fee revenue, partially offset by a decrease in general and administrative expenses during the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter.Executive Search Adjusted EBITDA, as a percentage of fee revenue, was ~~23%~~22% and 25% in the three months ended ~~October~~January 31, ~~2019~~2020 and ~~2018,~~2019, respectively.

RPO & Professional Search Adjusted EBITDA was ~~$16.1~~$15.2 million in the three months ended ~~October~~January 31, ~~2019,~~2020, an increase of ~~$2.9~~$2.1 million, or ~~22%~~16%, as compared to ~~$13.2~~$13.1 million in the year-ago quarter. The increase was driven by higher fee revenue, offset by increases in compensation and benefits expense and general and administrative expenses during the three months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago quarter.RPO & Professional Search Adjusted EBITDA, as a percentage of fee revenue, was 17% and 16% in the three months ended ~~October~~January 31, ~~2019~~2020 and ~~2018,~~2019, respectively.

Other income, net was ~~$1.1~~$5.1 million in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~other loss, net of $4.5~~$2.5 million in the year-ago quarter.The difference was primarily due to larger gains infrom the fair value of our marketable ~~securities~~securities. These gains were offset by the increases in our deferred compensation liability that are recorded in compensation and benefits expense during the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~losses in~~ the year-ago quarter.

Interest expense, net primarily relates to our 4.625% Senior Unsecured Notes due 2027 (the “Notes”) issued in December 2019, our prior credit agreement and borrowings under ~~COLI~~company-owned life insurance (“COLI”) policies, which are partially offset by interest earned on cash and cash equivalent balances. Interest expense, net was ~~$4.2~~$6.9 million in the three months ended ~~October~~January 31, ~~2019~~2020 compared to $4.3 million in the year-ago quarter. The increase in interest expense, net was related to the newly issued Notes, which have a higher interest rate and a higher principal balance than the revolver under our prior credit agreement.

The provision for income tax was ~~$15.8~~$8.8 million in the three months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$14.8~~$15.4 million in the year-ago quarter. This reflects a ~~26.8%~~29.5% and ~~23.9%~~25.3% effective tax rate for the three months ended ~~October~~January 31, ~~2019~~2020 and ~~2018,~~2019, respectively. In both periods, the Company’s effective tax rate was higher than the U.S. federal statutory rate of 21.0%,

primarily due to the impact of U.S. state income taxes and the recognition of taxable income outside the U.S. at higher statutory rates.

Net income attributable to noncontrolling interest represents the portion of a subsidiary’s net earnings that are attributable to shares of a subsidiary not held by Korn Ferry that are included in the consolidated results of operations. Net income attributable to noncontrolling interest for the three months ended ~~October~~January 31, ~~2019~~2020 was ~~$0.2~~$1.0 million as compared to ~~$1.3~~$0.5 million the three months ended ~~October~~January 31, ~~2018.~~2019.

~~Six~~Nine Months Ended ~~October~~January 31, ~~2019~~2020 Compared to ~~Six~~Nine Months Ended ~~October~~January 31, ~~2018~~2019

Fee Revenue. Fee revenue increased by ~~$16.1~~$57.0 million, or 2%4%, to ~~$976.9~~$1,492.3 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$960.8~~$1,435.3 million in the year-ago period. Exchange rates unfavorably impacted fee revenue by ~~$20.9~~$24.0 million, or 2%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. The higher fee revenue was attributable to fee revenue generated by the Acquired Companies and growth in RPO & Professional Search, offset by decreases in ~~Advisory~~Executive Search and ~~Executive Search.~~Consulting.

~~Advisory.~~Consulting. ~~Advisory~~Consulting reported fee revenue of ~~$405.3~~$422.1 million, a decrease of ~~$7.2~~$1.9 million, ~~or 2%,~~ in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$412.5~~$424.0 million in the year-ago period. Exchange rates unfavorably impacted fee revenue by ~~$10.0~~$7.2 million, or 2%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. ~~Fee~~

Digital. Digital reported fee revenue ~~from consulting services was lower by $4.7~~of $223.1 million, an increase of $33.1 million, or 17%, in the nine months ended January 31, 2020 compared to $190.0 million in the ~~six~~year-ago period. The higher fee revenue was primarily attributable to fee revenue generated by the Acquired Companies. Exchange rates unfavorably impacted fee revenue by $4.3 million, or 2%, in the nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago ~~period, with the remaining decrease of $2.5 million was generated by our digital business.~~period.

Executive Search. Executive Search reported fee revenue of ~~$381.1~~$564.6 million, a decrease of ~~$9.5~~$19.4 million, or 2%3%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$390.6~~$584.0 million in the year-ago period. Exchange rates unfavorably impacted fee revenue by ~~$7.1~~$8.0 million, or 2%1%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. As detailed below, Executive Search fee revenue was lower in all regions in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 as compared to the year-ago period. The overall decrease in fee revenue was driven by decreases in fee revenue from ~~consumer,~~technology, financial services, consumer, education/non-profit and ~~technology~~industrial sectors.

North America reported fee revenue of ~~$225.5~~$332.4 million, a decrease of ~~$2.5~~$9.8 million, or 1%3%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$228.0~~$342.2 million in the year-ago period.North America’s fee revenue was lower due to a 3%4% decrease in the number of engagements billed, offset by a 2%1% increase in the weighted-average fees billed per engagement (calculated using local currency) during the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period.

EMEA reported fee revenue of ~~$86.4~~$130.7 million, a decrease of ~~$5.2~~$6.8 million, or 6%5%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$91.6~~$137.5 million in the year-ago period. ~~Exchange rates unfavorably impacted fee revenue by $4.2 million, or 5%, in the six months ended October 31, 2019 compared to the year-ago period.~~The change in fee revenue was due to a 2% decrease in the weighted-average fees billed per engagement (calculated using local currency), offset by a 1% increase in the number of engagements billed during the six months ended October 31, 2019 compared to the year-ago period. The performance in the United Kingdom, Switzerland, Germany and Sweden were the primary contributors to the decrease in fee revenue, partially offset by increases in fee revenue in the United Arab Emirates in the six months ended October 31, 2019 compared to the year-ago period.

Asia Pacific reported fee revenue of $53.3 million, a decrease of $0.9 million, or 2%, in the six months ended October 31, 2019 compared to $54.2 million in the year-ago period. Exchange rates unfavorably impacted fee revenue by $1.5 million, or 3%, in the six months ended October 31, 2019 compared to the year-ago period.~~The decrease~~ in fee revenue was due to a 4% decrease in the weighted-average fees billed per engagement (calculated using local currency), offset by a 6%2% increase in the number of engagements billed during the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period.The performance in the United Kingdom, Germany, Sweden, Norway, and Switzerland were the primary contributors to the decrease in fee revenue, partially offset by increases in fee revenue in Italy in the nine months ended January 31, 2020 compared to the year-ago period.

Asia Pacific reported fee revenue of $78.4 million, a decrease of $1.5 million, or 2%, in the nine months ended January 31, 2020 compared to $79.9 million in the year-ago period. The rest of the change in fee revenue was due to a 1% increase in the number of engagements billed during the nine months ended January 31, 2020 compared to the year-ago period. Theperformance in Australia, China, and ~~Australia~~Taiwan were the primary contributors to the decrease in fee revenue, partially offset by increases in fee revenue in Singapore and ~~Hong Kong~~Japan in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period.

Latin America reported fee revenue of ~~$15.9~~$23.1 million, a decrease of ~~$0.9~~$1.2 million, or 5%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$16.8~~$24.3 million in ~~the year-ago period. Exchange rates unfavorably impacted fee revenue by $1.0 million, or 6%, in the six months ended October 31, 2019 compared to~~ the year-ago period. The decrease in fee revenue in the region was due to lower fee revenue in Brazil and Colombia in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period, partially offset by higher fee revenue in Chile.

RPO & Professional Search. RPO & Professional Search reported fee revenue of ~~$190.6~~$282.4 million, an increase of ~~$32.8~~$45.0 million, or ~~21%~~19%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$157.8~~$237.4 million in the year-ago period. Exchange rates unfavorably impacted fee revenue by ~~$3.8~~$4.4 million, or 2%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. Higher fee revenues in RPO &of $32.5 million and Professional Search of ~~$23.4 million and $9.4~~$12.5 million, respectively, drove the increase in fee revenue.

Compensation and benefits expense increased ~~$8.2~~$34.9 million, or 1%4%, to ~~$665.9~~$1,014.5 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 from ~~$657.7~~$979.6 million in the year-ago period.Exchange rates favorably impacted compensation and benefits by ~~$12.9~~$15.3 million, or 2%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. The increase in compensation and benefits was primarily due to a ~~12%~~11% increase in average headcount, which contributed to higher salaries and related payroll taxes and an increase in expenses associated with our deferred compensation and retirement plans driven by increases in the fair value of participants’ accounts, offset by a lower performance related bonus expense and a decrease in integration/acquisition costs for the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period.

~~Advisory~~Consulting compensation and benefits expense decreased by ~~$9.5~~$8.5 million, or 4%3%, to ~~$257.8~~$286.2 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 from ~~$267.3~~$294.7 million in the year-ago period. Exchange rates favorably impacted compensation and benefits by ~~$6.0~~$5.4 million, or 2%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. The change was primarily due to a lower performance-related bonus expense and a decrease in integration/acquisition costs, offset by ~~a 3% increase in average headcount, which contributed to~~ higher salaries and related payroll ~~taxes. Advisory~~taxes driven by a 3% increase in the average number of consultants. Consulting compensation and benefits expense as a percentage of fee revenue decreased to ~~64%~~68% in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 from ~~65%~~70% in the year-ago period.

~~Executive Search~~Digital compensation and benefits expense ~~decreased~~increased by ~~$3.9~~$12.9 million, or 2%13%, to ~~$249.2~~$113.4 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019 compared to $253.1~~2020 from $100.5 million in the year-ago period. Exchange rates favorably impacted compensation and benefits by ~~$4.5~~$1.9 million, or 2%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. The ~~decrease~~increase was primarily due to a ~~lower~~higher performance-related bonus expense ~~partially offset by~~and a 3%17% increase in average headcount ~~which contributed to higher salaries and related payroll taxes during~~mainly from the ~~six months ended October 31, 2019 compared to the year-ago period. Executive Search~~Acquired Companies. Digital compensation and benefits expense as a percentage of fee revenue ~~was 65%~~decreased to 51% in ~~both~~ the ~~six~~nine months ended ~~October~~January 31, ~~2019 and 2018.~~2020 from 53% in the year-ago period.

~~RPO & Professional~~Executive Search compensation and benefits expense ~~increased by $23.3 million, or 21%, to $136.0~~was $377.9 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019 from $112.7~~2020 compared to $378.0 million in the year-ago period. Exchange rates favorably impacted compensation and benefits by ~~$2.5~~$5.0 million, or 1%, in the nine months ended January 31, 2020 compared to the year-ago period. Executive Search compensation

and benefits expense, as a percentage of fee revenue, increased to 67% in the nine months ended January 31, 2020 from 65%.

RPO & Professional Search compensation and benefits expense increased by $32.9 million, or 19%, to $201.9 million in the nine months ended January 31, 2020 from $169.0 million in the year-ago period. Exchange rates favorably impacted compensation and benefits by $2.9 million, or 2%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. The increase was due to ~~higher salaries and related payroll taxes resulting from~~ a ~~31%~~26% increase in the average headcount in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. ~~Also contributing to the increase in compensation and benefits was a higher performance-related bonus expense.~~ RPO & Professional Search compensation and benefits expense, as a percentage of fee revenue, was 71% in both the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018.~~2019.

Corporate compensation and benefits expense decreased by ~~$1.8~~$2.3 million, or 7%6%, to ~~$22.8~~$35.1 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 from ~~$24.6~~$37.4 million in the year-ago period. The decrease was primarily due to lower performance related bonus expense and an increase in the ~~six~~change in the cash surrender value (“CSV”) of COLI that decreased compensation and benefits expense in the nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period.

General and administrative expenses decreased ~~$98.7~~$88.4 million, or ~~44%~~31%, to ~~$127.8~~$199.2 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$226.5~~$287.6 million in the year-ago period. Exchange rates favorably impacted general and administrative expenses by ~~$3.6~~$4.1 million, or 2%1%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. The decrease in general and administrative expenses was due to the write-off of tradenames of $106.6 million in the year-ago period related to the Plan, with no such charge in the current period. The decrease in general and administrative expense was partially offset by an increase in marketing and business development expenses and premise and office expenses.General and administrative expenses, as a percentage of fee revenue, ~~was~~were 13% in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 as compared to ~~24%~~20% in the ~~six~~nine months ended ~~October~~January 31, ~~2018.~~2019. Excluding the tradename write-offs, general and administrative expenses as a percentage of fee revenue were 13% in the nine months ended January 31, 2019.

~~Advisory~~Consulting general and administrative expenses decreased by ~~$104.6~~$75.5 million, or ~~67%~~59%, to ~~$50.5~~$52.6 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 from ~~$155.1~~$128.1 million in the year-ago period. The decrease in general and administrative expenses was mainly due to the write-off of tradenames related to the Plan of ~~$106.6~~$77.0 million in the ~~six~~nine months ended ~~October~~January 31, ~~2018~~2019 with no such charge in the current ~~period. Advisory~~period, partially offset by an increase in marketing and business development expense. Consulting general and administrative expenses, as a percentage of fee revenue, ~~was~~were 12% in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 as compared to ~~38%~~30% in the ~~six~~nine months ended ~~October~~January 31, ~~2018.~~2019. Excluding the tradename write-offs, general and administrative expenses as a percentage of fee revenue were 12% in the nine months ended January 31, 2019.

Digital general and administrative expenses decreased by $20.8 million, or 41%, to $29.7 million in the nine months ended January 31, 2020 from $50.5 million in the year-ago period. The decrease in general and administrative expenses was mainly due to the write-off of tradenames related to the Plan of $29.6 million in the nine months ended January 31, 2019 with no such charge in the current period, partially offset by an increase in premise and office expenses.Digital general and administrative expenses, as a percentage of fee revenue, were 13% in the nine months ended January 31, 2020 as compared to 27% in the nine months ended January 31, 2019. Excluding the tradename write-offs, general and administrative expenses as a percentage of fee revenue were 11% in the nine months ended January 31, 2019.

Executive Search general and administrative expenses ~~was $38.7~~decreased by $3.2 million, or 5% to $58.0 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019, a decrease of $0.9 million, compared to $39.6~~2020 from $61.2 million in the year-ago period. The decrease was primarily due to lower bad debt expense and decreases in legal and other professional fees and travel related expenses during the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. Executive Search general and administrative expenses, as a percentage of fee revenue, ~~was~~were 10% in both the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018.~~2019.

RPO & Professional Search general and administrative expenses increased by ~~$3.0~~$3.9 million, or ~~23%~~20%, to ~~$15.9~~$23.9 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~$12.9~~$20.0 million in the ~~six~~nine months ended ~~October~~January 31, ~~2018.~~2019. The increase was primarily due to an increase in premise and office ~~expense.~~expense and to a lesser extent increases in bad debt expense, marketing and business development and a foreign exchange loss in the nine months ended January 31, 2020 compared to a foreign exchange gain in the year-ago period. RPO & Professional Search general and administrative expenses, as a percentage of fee revenue, ~~was~~were 8% in both the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018.~~2019.

Corporate general and administrative expenses increased by ~~$3.8~~$7.3 million, or ~~20%~~26%, to ~~$22.7~~$35.1 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$18.9~~$27.8 million in the year-ago period. The increase in general and administrative expenses was mainly due to integration/acquisition costs and an increase in marketing and business development expenses during the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period.

Cost of services expense consists primarily of ~~non-billable~~ contractor and product costs related to the delivery of various services and products, primarily in RPO & Professional Search, Consulting and ~~Advisory.~~Digital. Cost of services expense ~~decreased~~increased by ~~$2.5~~$11.4 million, or 7%21%, to ~~$35.5~~$66.4 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$38.0~~$55.0 million in the year-ago period. The increase was due to the Acquired Companies. Cost of services expense, as a percentage of fee revenue was 4% in both the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018.~~2019.

Depreciation and amortization expenses were ~~$25.5~~$40.4 million, an increase of ~~$2.8~~$5.9 million, or ~~12%~~17%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$22.7~~$34.5 million in the year-ago period. The increase related primarily to the Acquired Companies and technology investments made in the current and prior year in software and computer equipment, in addition to increases in leasehold improvements and furniture and ~~fixtures~~fixtures.

During the nine months ended January 31, 2020, we implemented a restructuring plan in order to eliminate redundant positions that were created due to the investments made in our digital business and the acquisition of the Acquired Companies. As a result, we recorded restructuring charges of $18.1 million of severance costs during the nine months ended January 31, 2020. There were no restructuring charges, net during the nine months ended January 31, 2019.

Operating income increased by ~~$106.3~~$75.2 million to ~~$122.2~~$153.8 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~operating income of $15.9~~$78.6 million in the year-ago period. The increase in operating income was primarily driven by the write-off of tradenames of $106.6 million in the year-ago period and higher fee revenue of ~~$16.1~~$57.0 million, offset by an increase in compensation and benefits expense, restructuring charges, net, cost of services expense, marketing and business development expenses and premise and office expenses.

~~Advisory~~Consulting operating income was ~~$54.2~~$24.3 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019,~~2020, an increase of ~~$107.9~~$71.7 million, 151% as compared to an operating loss of ~~$53.7~~$47.4 million in the ~~year-ago.~~year-ago period. The change from operating loss to operating income was primarily due to the write-off of tradenames related to the Plan of ~~$106.6~~$77.0 million in year-ago period and a decrease in compensation and benefits expense, offset by ~~lower fee revenue.~~ ~~Advisory~~restructuring charges incurred in the nine months ended January 31, 2020. Consulting operating income, as a percentage of fee revenue, was ~~13%~~6% in the ~~six~~nine months ended ~~October~~January 31, ~~2018~~2020 compared to an operating loss, as a percentage fee revenue, of ~~13%~~11% in the year-ago period. Excluding the tradename write-offs, operating income as a percentage of fee revenue was ~~13%~~6% in ~~both~~ the ~~six~~nine months ended ~~October~~January 31, 2020 compared to 7% in the year-ago period.

Digital operating income was $41.0 million in the nine months ended January 31, 2020, an increase of $17.9 million, or 77%, as compared to $23.1 million in the year-ago period. The increase was primarily due to the write-off of tradenames related to the Plan of $29.6 million in the year-ago period and higher fee revenue, offset by increases in compensation and benefits expense, cost of services and restructuring charges, net. Digital operating income, as a percentage of fee revenue was 18% and 12% in the nine months ended January 31, 2020 and 2019, ~~and 2018~~.respectively. Excluding the tradename write-offs, operating income as a percentage of fee revenue was 18% in the nine months ended January 31, 2020 compared 28% in the year-ago period.

Executive Search operating income decreased by ~~$5.4~~$17.4 million, or 6%13%, to ~~$86.9~~$119.6 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 as compared to ~~$92.3~~$137.0 million in the year-ago period. The decrease in Executive Search operating income was driven by lower fee revenue, offset by a decrease in ~~compensation~~general and ~~benefits expense.~~administrative expenses. Executive Search operating income, as a percentage of fee revenue was ~~23%~~21% and ~~24%~~23% in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018,~~2019, respectively.

RPO & Professional Search operating income was ~~$30.1~~$44.3 million, an increase of ~~$5.9~~$8.0 million, or ~~24%~~22%, in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 as compared to ~~$24.2~~$36.3 million in the year-ago period. The increase in operating income was driven by higher fee revenue, offset by increases in compensation and benefits expense and general and administrative expenses.RPO & Professional Search operating income, as a percentage of fee revenue, was 16% in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to 15% in the year-ago period.

Net income attributable to Korn Ferry increased by ~~$78.4~~$53.3 million to ~~$85.8~~$105.7 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 as compared to ~~$7.4~~$52.4 million in the year-ago period. The increase was due to $57.1 million more in total revenue, an increase in other income, net of $5.5 million and a decrease in operating expenses of ~~$91.1~~$18.1 million, ~~and increases in total revenue of $15.2 million and other income (loss), net of $3.0 million,~~partially offset by an increase in income tax provision of ~~$31.5~~$24.9 million during the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. Net

income attributable to Korn Ferry, as a percentage of fee revenue, was 9%7% in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to 1%4% in the ~~six~~nine months ended ~~October~~January 31, ~~2018.~~2019.

Adjusted EBITDA increased by ~~$2.2~~$2.6 million to ~~$153.3~~$231.4 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 as compared to ~~$151.1~~$228.8 million in the year-ago period. This increase was driven by higher fee revenue and an increase in other income, ~~(loss),~~ net, offset by an ~~increase~~increases in compensation and benefits expense (excluding integration/acquisition costs and separation costs), cost of services expense and general and administrative expenses (excluding write-off on tradenames and integration/acquisition costs).Adjusted EBITDA, as a percentage of fee revenue, was 16% in both the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018.~~2019.

~~Advisory~~Consulting Adjusted EBITDA was ~~$71.5~~$50.0 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019, a decrease~~2020, an increase of ~~$2.4~~$1.8 million, or 3%4%, as compared to ~~$73.9~~$48.2 million in the year-ago period. The ~~decrease~~increase was driven ~~by lower fee revenue partially offset~~ by a decrease in compensation and benefits expense (excluding integration/acquisition costs), partially offset by lower fee revenue during the ~~six~~nine months ended ~~October~~January 31, ~~2019~~

2020 compared to the year-ago period.~~Advisory~~ Consulting Adjusted EBITDA, as a percentage of fee revenue, was ~~18%~~12% in ~~both~~ the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to 11% in the year-ago period.

Digital Adjusted EBITDA was $66.1 million in the nine months ended January 31, 2020, an increase of $2.2 million, or 3%, as compared to $63.9 million in the year-ago period. The increase was driven by higher fee revenue, partially offset by increases in compensation and ~~2018.~~benefits expense (excluding integration/acquisition costs), cost of services expense and general and administrative expenses (excluding write-off on tradenames and integration/acquisition costs) during the nine months ended January 31, 2020 compared to the year-ago period. Digital Adjusted EBITDA, as a percentage of fee revenue, was 30% in the nine months ended January 31, 2020 as compared to 34% in the nine months ended January 31, 2019.

Executive Search Adjusted EBITDA decreased by ~~$3.1~~$10.5 million, or 3%7%, to ~~$92.9~~$133.6 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 as compared to ~~$96.0~~$144.1 million in the ~~six~~nine months ended ~~October~~January 31, ~~2018.~~2019. The decrease in Executive Search was driven by lower fee revenue, partially offset by decreases in compensation and benefits expense (excluding separation costs) and general administrative expenses ~~as well as an increase in other income (loss)~~ during the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period. Executive Search Adjusted EBITDA, as a percentage of fee revenue, was 24% in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 as compared to 25% in the ~~six~~nine months ended ~~October~~January 31, ~~2018.~~2019.

RPO & Professional Search Adjusted EBITDA was ~~$32.2~~$47.5 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019,~~2020, an increase of ~~$6.5~~$8.7 million, or ~~25%~~22%, as compared to ~~$25.7~~$38.8 million in the year-ago period. The increase was driven by higher fee revenue, offset by increases in compensation and benefits expense and general and administrative expenses. RPO & Professional Search Adjusted EBITDA, as a percentage of fee revenue, was 17% in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to 16% in the year-ago period.

Other income, net was ~~$3.0~~$8.0 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~minimal income~~$2.5 million in the year-ago period. The increase was primarily due to larger gains in the fair value of our marketable ~~securities~~securities. These gains were offset by the increases in our deferred compensation liability that are recorded in compensation and benefits expense during the ~~six~~nine months ended ~~October~~January 31, ~~2019.~~2020 compared to the year-ago period.

Interest expense, net primarily relates to our Notes issued in December 2019, our prior credit agreement and borrowings under our COLI policies, which isare partially offset by interest earned on cash and cash equivalent balances. Interest expense, net was ~~$8.3~~$15.2 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$8.4~~$12.7 million in the year-ago period. The increase in interest expense, net was related to the newly issued Notes, which have a higher interest rate and a higher principal balance than the revolver under our prior credit agreement.

The provision for income tax was ~~an expense of $30.2~~$39.0 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~a benefit of $1.3~~$14.1 million in the year-ago period. This reflects a ~~25.8% (provision)~~26.6% and ~~17.1% (benefit)~~20.7% effective tax rate for the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018,~~2019, respectively. In the ~~six~~nine months ended ~~October~~January 31, ~~2019,~~2020, the Company’s effective tax rate was higher than the U.S. federal statutory rate of 21.0% primarily due to the impact of U.S. state income taxes and the recognition of taxable income outside the U.S. at higher statutory tax rates. The effective tax rate for the ~~six~~nine months ended ~~October~~January 31, ~~2018~~2019 was affected by the tradename impairment charge ~~related to the Plan~~ and the excess tax benefit on vested stock-based awards, both of which were recorded as discrete during the three months ended July 31, 2018. The excess tax benefit was the amount by which the Company’s tax deduction for these awards, based on the fair market value of the awards on the date of vesting, exceeded the expense recorded in the Company’s financial statements over the awards’ vesting period.

Net income attributable to noncontrolling interest represents the portion of a subsidiary’s net earnings that are attributable to shares of a subsidiary not held by Korn Ferry that are included in the consolidated results of operations. Net income attributable to noncontrolling interest for the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 was ~~$0.9~~$1.9 million as compared to ~~$1.3~~$1.8 million for the ~~six~~nine months ended ~~October~~January 31, ~~2018.~~2019.

The Company and its Board of Directors endorse a balanced approach to capital allocation. The Company’s priority is to invest in growth initiatives, such as the hiring of consultants, the continued development of IP and derivative products and services, and the investment in synergistic, accretive merger and acquisition transactions that earn a return that is superior to the Company's cost of capital. Next, the Company’s capital allocation approach contemplates the return of a portion of excess capital to stockholders in the form of a regular quarterly dividend, subject to the factors discussed below and in the “Risk Factors” section of ~~the Annual~~this Quarterly Report on Form ~~10-K for the fiscal year ended April 30, 2019.~~10-Q. Additionally, the Company considers share repurchases on an opportunistic basis and subject to the terms of our Credit Agreement (defined below) as well as using excess cash to repay the Notes.

On November 1, 2019, we completed the acquisition of the Acquired Companies in the leadership development area for $108.6 million, net of cash acquired. The acquisition contributed a world-class portfolio of learning, development and performance improvement offerings and expertise to Korn Ferry and bolsters our substantial leadership development capabilities. The Acquired Companies specialize in transforming sales performance and customer experience, offer frontline leadership development and provide organizational and project management training. These companies are included in the new Digital segment which, working closely with the new Consulting segment, will provide clients with direct access to data, insights and analytics from one of the world’s most comprehensive people and organizational databases. The addition of the Acquired Companies further expands our vast IP and content and leverages our digital delivery platforms. Actual results of operations of the Acquired Companies are included in our consolidated financial statements from November 1, 2019, the effective date of the acquisition.

We have invested in our digital business to digitize and harmonize the structure of our IP content and data and in building a technology platform for the efficient delivery of these assets directly to an end consumer or indirectly through a consulting engagement. These investments combined with the acquisition of the Acquired Companies resulted in reassessing how we manage and report the Advisory business. On November 1, 2019, we adopted a restructuring plan to rationalize our cost structure to realize the efficiencies and operational improvement that these investments have enabled us to, or positioned us to, realize. The plan impacts both Consulting and Digital and includes the elimination of redundant positions and consolidation of office space. During the three and nine months ended January 31, 2020 we recognized $18.1 million of restructuring charges associated with severance and recorded $2.8 million of integration/acquisition costs associated with abandonment of premises.

On December 16, 2019, we completed a private placement of the Notes with $400 million principal amount pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes were issued with a $4.5 million discount and will mature December 15, 2027 with interest payable semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2020. The Notes represent senior unsecured obligations that rank equally in right of payment to all existing and future senior unsecured indebtedness. We may redeem the Notes prior to maturity, subject to certain limitations and premiums defined in the indenture governing the Notes. The Notes are guaranteed by each of our existing and future wholly owned domestic subsidiaries to the extent such subsidiaries guarantee our revolving credit facility under the Credit Agreement (defined below). The indenture governing the Notes requires that, upon the occurrence of both a Change of Control and a Rating Decline (each as defined in the indenture), we shall make an offer to purchase all of the Notes at 101% of their principal amount, and accrued and unpaid interest. We used the proceeds from the offering of the Notes to repay $276.9 million outstanding under our prior revolving credit facility (the “Prior Credit Agreement”) and to pay expenses and fees in connection therewith. As of January 31, 2020, the fair value of the Notes is $402 million, which is based on borrowing rates currently required of notes with similar terms, maturity and credit risk.

On December ~~19, 2018,~~16, 2019, we entered into a senior secured $650.0 million ~~Amended and Restated~~ Credit Agreement (the “Credit Agreement”) with a syndicate of banks and ~~Wells Fargo~~ Bank of America, National Association as administrative agent to among other things, provide for enhanced financial flexibility. See Note 11—Long-Term Debt for a description of the Credit Agreement. We ~~drew down $226.9 million on the Revolver (defined below) and used the proceeds to pay-off the term loan under our prior credit facility that was outstanding as~~have a total of ~~December 19, 2018. On October 29, 2019, we drew down an additional $50.0 million on the Revolver along with cash on hand to finance the recently completed acquisitions. We have $369.9~~$646.0 million available under ~~the Revolver~~our $650.0 million five-year senior secured revolving credit facility (the “Revolver”) as of January 31, 2020 after ~~we drew down $276.9 million and after $3.2~~$4.0 million of standby letters of credit ~~were~~had been issued as of ~~October~~January 31, ~~2019~~2020. We had ~~$3.2~~$4.0 million and $2.9 million in standby letters of credit issued under our long-term debt arrangements as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively. We had a total of ~~$11.0~~$11.1 million and $8.5 million of standby letters of credits with other financial institutions as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively. The standby letters of credits were generally issued as a result of entering into office premise leases.

The Board of Directors has adopted a dividend policy to distribute to our stockholders a regular quarterly cash dividend of $0.10 per share. Every quarter since the adoption of the dividend policy, the Company has declared a quarterly dividend. The declaration and payment of future dividends under the quarterly dividend program will be at the discretion of the Board of Directors and will depend upon many factors, including our earnings, capital requirements, financial conditions, the terms of our indebtedness and other factors our Board of Directors may deem to be relevant. Our Board of Directors may, however, amend, revoke or suspend our dividend policy at any time and for any reason.

On March 6, 2019, our Board of Directors approved an increase to the share repurchase program of approximately $200 million, which ~~brings~~at the time brought our available capacity to repurchase shares in the open market or privately negotiated transactions to approximately $250 million. The Company repurchased approximately ~~$61.9~~$68.1 million and ~~$22.7~~$37.4 million of the Company’s stock during the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018,~~2019, respectively. As of ~~October~~January 31, ~~2019, $188.8~~2020, $182.7 million remained available for common stock repurchases under our share repurchase program. Any decision to continue to execute our currently outstanding share repurchase program will depend on our earnings, capital requirements, financial condition and other factors considered relevant by our Board of Directors. The Credit Agreement permits us to pay dividends to our stockholders and make share repurchases so long as ~~our pro forma~~there is no default under the Credit Agreement, the consolidated net leverage ratio, ~~defined as, the ratio of consolidated funded indebtedness minus up to $50 million of unrestricted cash and cash equivalents of the Company and domestic subsidiaries to consolidated Adjusted~~which used adjusted EBITDA is no greater than ~~3.25~~4.00 to 1.00, and ~~our~~the pro forma ~~domestic~~ liquidity is at least ~~$50.0~~$50 million,, including the revolving credit commitment minus amounts outstanding on the Revolver, issued letters of credit and swing loans. Furthermore, our Notes allow us to pay $25 million of dividends per fiscal year with no restrictions plus an unlimited amount of dividends so long as our consolidated total leverage ratio is not greater than 3.50 to 1.00, and there is no default under the indenture governing the Notes.

Our performance is subject to the general level of economic activity in the geographic regions and the industries we service. We believe, based on current economic conditions, that our cash on hand and funds from operations and the Credit Agreement will be sufficient to meet anticipated working capital, capital expenditures, general corporate requirements, repayment of the debt, share repurchases and dividend payments under our dividend policy during the next twelve months. However, if the national or global economy, credit market conditions and/or labor markets were to deteriorate in the future, such changes could put negative pressure on demand for our services and affect our operating cash flows. If these conditions were to persist over an extended period of time, we may incur negative cash flows and it might require us to access additional borrowings under the Credit Agreement to meet our capital needs and/or discontinue our share repurchases and dividend policy.

Cash and cash equivalents and marketable securities were ~~$609.0~~$748.5 million and $767.1 million as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively. Net of amounts held in trust for deferred compensation plans and accrued bonuses, cash and marketable securities were ~~$345.8~~$421.6 million and $382.1 million at ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively. As of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, we held ~~$224.4~~$262.1 million and $267.0 million, respectively of cash and cash equivalents in

foreign locations, net of amounts held in trust for deferred compensation plans and to pay fiscal 2020 and 2019 annual bonuses. Cash and cash equivalents consist of cash and highly liquid investments purchased with original maturities of three months or less. Marketable securities consist of mutual ~~funds.~~funds and investments in commercial paper and corporate notes/bonds. The primary objectives of our investment in mutual funds are to meet the obligations under certain of our deferred compensation ~~plans.~~plans, while the commercial paper and corporate notes/bonds are available for general corporate purposes.

As of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, marketable securities of ~~$144.6~~$184.8 million and $140.8 million, respectively, included trading securities of $151.6 million (net of gross unrealized gains of ~~$7.6~~$8.3 million and gross unrealized losses of ~~$0.6~~$0.7 million) and $140.8 million (net of gross unrealized gains of $6.3 million and gross unrealized losses of $1.0 million), respectively, were held in trust for settlement of our obligations under certain deferred compensation plans, of which ~~$138.1~~$143.8 million and $132.5 million, respectively, are classified as non-current. These marketable securities were held to satisfy vested obligations totaling ~~$131.5~~$135.7 million and $122.3 million as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively. Unvested obligations under the deferred compensation plans totaled $23.2 million and $24.6 million as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively.

The net increase in our working capital of ~~$13.1~~$50.8 million as of ~~October~~January 31, ~~2019~~2020 compared to April 30, 2019 is primarily attributable to ~~the~~increases in accounts receivable and marketable securities and a decrease in compensation and benefits payable, ~~and an increase in accounts receivable,~~partially offset by a decrease in cash and cash equivalents and an increase in operating lease liability, current as a result of implementing the new lease accounting standard. The increase in marketable securities was due to purchases of debt securities during the quarter, while the decrease in cash and cash equivalents and compensation and benefits was primarily due to the payment of annual bonuses earned in fiscal 2019 and paid during the first quarter of fiscal 2020. Cash and cash equivalents further declined due to the price paid for the acquisition of the Acquired Companies and sign-on and retention payments. These decreases in cash and cash equivalents, were partially offset by net proceeds from long-term debt. The increase in accounts receivable was due to an increase in days of sales outstanding, which went from 61 days to 7172 days (which is consistent with historical experience) from April 30, 2019 to ~~October~~January 31, ~~2019~~2020. Cash ~~used~~provided by operating activities was ~~$104.1~~$57.1 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019, an increase~~2020, a decrease of ~~$71.9~~$43.9 million, compared to ~~$32.2~~$101.0 million in the ~~six~~nine months ended ~~October~~January 31, ~~2018.~~2019.

Cash used in investing activities was ~~$22.8~~$191.1 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$53.4~~$59.5 million in the year-ago period. ~~A decrease~~An increase in cash used in investing activities was primarily due to ~~a decrease on premiums on COLI policies,~~cash paid for the acquisition of the Acquired Companies of $108.6 million and an increase in purchase of marketable securities net of sale/maturities of $40.7 million, partially offset by a decrease in ~~proceeds from~~premiums paid on the COLI policies of $19.2 million during the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to the year-ago period.

Cash ~~used in~~provided by financing activities was ~~$31.4~~$74.1 million in the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 compared to ~~$27.4~~cash used of $57.8 million in the ~~six~~nine months ended ~~October~~January 31, ~~2018.~~2019. The increase in cash ~~used in~~provided by financing activities was primarily due to the repurchase of common stock of $61.9 million in the six months ended October 31, 2019 compared to $22.7 million in the year-ago period and a decrease in borrowings under COLI policies of $31.9 million, partially offset by proceeds from long term debt of ~~$50.0~~$445.5 million ~~a decrease~~ in ~~cash used~~the nine months ended January 31, 2020 compared to ~~make principal payments on~~$226.9 million in the ~~term loan of $12.0 million~~year-ago period and lower cash used to repurchase shares of common stock to satisfy tax withholding requirements upon the vesting of restricted stock of ~~$4.5~~$11.6 million, partially offset by an increase of $38.0 million in cash used for principal payments on long term debt, $30.7 million more in repurchase of common stock and a decrease in borrowings under COLI policies of $31.9 million.

We had approximately $856.0 million of estimated remaining revenue under existing contracts as of January 31, 2020. However, this should not be considered the ~~six months ended October 31, 2019 compared~~amount of our future revenue as it does not take into consideration contracts that will be originated and recognized within the same future reporting periods. Further, our contract terms and conditions allow for clients to increase or decrease the ~~year-ago period.~~scope of services and such changes do not increase or decrease the estimated remaining revenue under contract until we have an enforceable right to payment.

We purchased COLI policies or contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans. As of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, we held contracts with gross CSV of ~~$220.9~~$237.6 million and $219.2 million, respectively. Total outstanding borrowings against the CSV of COLI contracts were $92.3 million and $93.2 million as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively. Such borrowings do not require annual principal repayments, bear interest primarily at variable rates and are secured by the CSV of COLI contracts. At ~~October~~January 31, ~~2019~~2020 and April 30, 2019, the net cash value of these policies was ~~$128.6~~$145.3 million and $126.0 million, respectively.

On December ~~19, 2018,~~16, 2019, we ~~entered into~~completed a private placement of the ~~Credit Agreement~~Notes with $400 million principal amount. We may redeem the Notes prior to ~~among other things, provide for enhanced financial flexibility. The Credit Agreement provides for, among other things: (a)~~maturity, subject to certain limitations and premiums defined in the indenture governing the Notes. At any time prior to December 15, 2022, we may redeem at a $650.0 million five-year senior secured revolving credit facility (the “Revolver”) and (b) certain customary affirmative and negative covenants, including a maximum consolidated total leverage ratioredemption price equal to 100% of the principal plus the Applicable Premium (as defined ~~below)~~in the indenture), and ~~a minimum interest coverage ratio. Our Credit Agreement permits payment of dividends~~accrued and unpaid interest. At any time prior to stockholders and share repurchases so long as the pro forma net leverage ratio is no greater than 3.25 to 1.00, and the pro forma domestic liquidity is at least $50.0 million. We drew down $226.9 million on the Revolver and usedDecember 15, 2022, we may use the proceeds of certain equity offerings to ~~pay-off~~redeem up to 35% of the ~~term loan that was outstanding~~aggregate principal amount of the Notes, including any permitted additional Notes, at a redemption price equal to 104.625% of the principal amount and accrued and unpaid interest. At any time and from time to time on or after December 15, 2022, we may redeem the Notes at the applicable redemption prices set forth in the table below, plus accrued and unpaid interest, if redeemed during the twelve-month period beginning on December 15 of each of the years indicated:

The fair value of the Notes is classified as ~~of December 19, 2018.~~ a Level 2 measurement in the fair value hierarchy.

The pay-off of the term loan outstanding under our ~~prior credit facility and draw-down on the Revolver~~Prior Credit Agreement is considered a debt modification and therefore, the previously incurred unamortized and current debt issuance costs will be amortized over the life of the new issuance. ~~On October 29, 2019, we drew down an additional $50.0 million on the Revolver along with cash on hand to finance the recently completed acquisitions.~~

The principal balance of the Revolver is due on the date of its termination. The Revolver matures on December ~~19, 2023~~16, 2024 and any unpaid principal balance is payable on this date. The Revolver may also be prepaid and terminated early by us at any time without premium or penalty (subject to customary LIBOR breakage fees).

At our option, loans issued under the Credit Agreement will bear interest at either LIBOR or an alternate base rate, in each case plus the applicable interest rate margin. The interest rate applicable to loans outstanding under the Credit Agreement may fluctuate between LIBOR plus 1.25% per annum to LIBOR plus 2.00% per annum, in the case of LIBOR borrowings (or

between the alternate base rate plus ~~0.25%~~0.125% per annum and the alternate base rate plus 1.00% per annum, in the alternative), based upon our total funded debt to ~~Adjusted~~adjusted EBITDA ratio (as set forth in the Credit Agreement, the “consolidated net leverage ratio”) at such time. In addition, we will be required to pay to the lenders a quarterly commitment fee ranging from ~~0.20%~~0.175% to 0.35% per annum on the average daily unused amount of the Revolver, based upon our consolidated net leverage ratio at such time, and fees relating to the issuance of letters of credit. During the three and ~~six~~nine months ended ~~October~~January 31, ~~2019,~~2020, the average interest rate on ~~our long-term debt arrangements~~amounts outstanding under the prior revolver was ~~3.37%~~2.94% and ~~3.53%~~3.44%, respectively. During the three and ~~six~~nine months ended ~~October~~January 31, ~~2018,~~2019, the average interest rate on ~~our long-term debt arrangements~~ amounts outstanding under the prior revolver was ~~3.39%~~3.64% and ~~3.31%~~3.42%, respectively.

As of ~~October~~January 31, ~~2019 and~~2020, there was no outstanding liability under the Revolver compared to $226.9 million as of April 30, 2019 ~~$276.9 million and $226.9 million was outstanding~~ under the ~~Revolver.~~ prior revolver. The unamortized debt issuance costs associated with the long-term debt were ~~$3.6~~$4.5 million and $4.0

million as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively. The fair value of our Revolver is based on borrowing rates currently required of loans with similar terms, maturity and credit risk. The carrying amount of the Revolver approximates fair value because the base interest rate charged varies with market conditions and the credit spread is commensurate with current market spreads for issuers of similar risk. The fair value of the Revolver is classified as a Level 2 liability in the fair value hierarchy. As of ~~October~~January 31, ~~2019,~~2020, we were in compliance with our debt covenants.

We had a total of ~~$369.9~~$646.0 million available under the Revolver after ~~we drew down $276.9 million and after $3.2~~$4.0 million of standby letters of credit ~~were~~had been issued as of ~~October~~January 31, ~~2019~~2020. We had a total of $420.2 million available under the ~~Revolver~~Prior Credit Agreement after we drew down $226.9 million and after $2.9 million of standby letters of credit ~~were~~had been issued as of April 30, 2019. We had a total of ~~$11.0~~$11.1 million and $8.5 million of standby letters of credits with other financial institutions as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively. The standby letters of credits were generally issued as a result of entering into office premise leases.

WeOther than the factors discussed in this section and the potential impacts of the coronavirus on our business, we are not aware of any other trends, demands or commitments that would materially affect liquidity or those that relate to our resources as of ~~October~~January 31, ~~2019~~2020.

We have no off-balance sheet arrangements and have not entered into any transactions involving unconsolidated, special purpose entities. We had no material changes in contractual obligations as of ~~October~~January 31, ~~2019,~~2020, as compared to those disclosed in our table of contractual obligations included in our Annual Report.

Preparation of this Quarterly Report on Form 10-Q requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates and assumptions and changes in the estimates are reported in current operations as new information is learned or upon the amounts becoming fixed or determinable. In preparing our interim consolidated financial statements and accounting for the underlying transactions and balances, we apply our accounting policies as disclosed in the notes to our consolidated financial statements. We consider the policies related to revenue recognition, performance related bonuses, deferred compensation, carrying values of receivables, goodwill, intangible assets and recoverability of deferred income taxes as critical to an understanding of our interim consolidated financial statements because their application places the most significant demands on management’s judgment and estimates. Specific risks for these critical accounting policies are described in our Form 10-K filed with the Securities Exchange Commission. There have been no material changes in our critical accounting policies since fiscal 2019.

As a result of our global operating activities, we are exposed to certain market risks, including foreign currency exchange fluctuations and fluctuations in interest rates. We manage our exposure to these risks in the normal course of our business as described below.

Substantially all our foreign subsidiaries’ operations are measured in their local currencies. Assets and liabilities are translated into U.S. dollars at the rates of exchange in effect at the end of each reporting period, and revenue and expenses are translated at average rates of exchange during the reporting period. Resulting translation adjustments are reported as a component of accumulated other comprehensive loss, net on our consolidated balance sheets.

Transactions denominated in a currency other than the reporting entity’s functional currency may give rise to foreign currency gains or losses that impact our results of operations. Historically, we have not realized significant foreign currency gains or losses on such transactions. During the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018,~~2019, we recorded foreign currency losses of ~~$1.6~~$2.8 million and ~~$1.1~~$1.4 million, respectively, in general and administrative expenses in the consolidated statements of income.

Our exposure to foreign currency exchange rates is primarily driven by fluctuations involving the following currencies — U.S. Dollar, Pound Sterling, Canadian Dollar, Euro, Singapore Dollar, Swiss Franc, ~~Euro, Canadian Dollar, Singapore Dollar,~~and Brazilian ~~Real and South Korean Won.~~Real. Based on balances exposed to fluctuation in exchange rates between these currencies as of ~~October~~January 31, ~~2019,~~2020, a 10% increase or decrease in the value of these currencies could result in a foreign exchange gain or loss of ~~$10.9~~$13.8 million. We have a program that primarily utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures. These foreign currency forward contracts are neither used for trading purposes nor are they designated as hedging instruments pursuant to Accounting Standards Codification 815, Derivatives and Hedging.

Our exposure to interest rate risk is limited to our Revolver and borrowings against the CSV of COLI contracts. As of ~~October~~January 31, ~~2019,~~2020, there ~~was $276.9 million~~were no amounts outstanding under the Revolver. At our option, loans issued under the Credit Agreement bear interest at either LIBOR or an alternate base rate, in each case plus the applicable interest rate margin. The interest rate

applicable to loans outstanding under the Credit Agreement may fluctuate between LIBOR plus ~~1.25%~~1.125% per annum to LIBOR plus 2.00% per annum, in the case of LIBOR borrowings (or between the alternate base rate plus ~~0.25%~~0.125% per annum and the alternate base rate plus 1.00% per annum, in the alternative), based upon our total funded debt to ~~Adjusted~~adjusted EBITDA ratio (as set forth in the Credit Agreement, the “consolidated net leverage ratio”) at such time. ~~A 100-basis point increase in LIBOR rates would have increased our interest expense by approximately $0.6 million and $1.2 million for the three and six months ended October 31, 2019.~~ During the three and ~~six~~nine months ended ~~October~~January 31, 2020, the average interest rate on amounts outstanding under the prior revolver was 2.94% and 3.44%, respectively. During the three and nine months ended January 31, 2019, the average interest rate on ~~our long-term debt arrangements~~amounts outstanding under the prior revolver was ~~3.37%~~3.64% and ~~3.53% respectively. During the three and six months ended October 31, 2018, the average interest rate on our long-term debt arrangements was 3.39% and 3.31%~~3.42%, respectively.

To mitigate this interest rate risk, we entered into an interest rate swap contract in March 2017 with an initial notional amount of $129.8 million to hedge the variability to changes in cash flows attributable to interest rate risks caused by changes in interest rates related to our variable rate debt. We have designated the swap as a cash flow hedge. AsOn December 16, 2019, in conjunction with the payoff of ~~October 31, 2019,~~ the ~~notional amount was $99.7 million. The~~Prior Credit Agreement, the Company terminated the interest rate swap ~~agreement matures on June 15, 2021~~ and ~~locks the~~recorded $0.5 million in interest ~~rates on a portion of our outstanding debt at 1.919%, exclusive of the credit spread on the debt.~~expense, net.

We had $92.3 million and $93.2 million of borrowings against the CSV of COLI contracts as of ~~October~~January 31, ~~2019~~2020 and April 30, 2019, respectively, bearing interest primarily at variable rates. The risk of fluctuations in these variable rates is minimized by the fact that we receive a corresponding adjustment to our borrowed funds crediting rate, which has the effect of increasing the CSV on our COLI contracts.

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

There were no changes in our internal control over financial reporting during the three months ended ~~October~~January 31, ~~2019~~2020 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

From time to time, we are involved in litigation both as a plaintiff and a defendant, relating to claims arising out of our operations. As of the date of this report, we are not engaged in any legal proceedings that are expected, individually or in the aggregate, to have a material adverse effect on our business, financial condition or results of operations.

In our Form 10-K for the year ended April 30, 2019, we described material risk factors facing our business. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. AsExcept as set forth below, as of the date of this report, there have been no material changes to the risk factors described in our Form 10-K.

Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability.

Should we experience a disaster or other business continuity problem, such as an earthquake, hurricane, terrorist attack, pandemic, security breach, power loss, telecommunications failure or other natural or man-made disaster, our continued success will depend, in part, on the availability of our personnel, our office facilities, and the proper functioning of our computer, telecommunication and other related systems and operations. In such an event, we could experience near-term operational challenges with regard to particular areas of our operations. In particular, our ability to recover from any disaster, pandemic or other business continuity problem will depend on our ability to protect our technology infrastructure against damage from business continuity events that could have a significant disruptive effect on our operations. We could potentially lose client data or experience material adverse interruptions to our operations or delivery of services to our clients in a disaster. A disaster, or pandemic, on a significant scale or affecting certain of our key operating areas within or across regions, or our inability to successfully recover should we experience a disaster, pandemic or other business continuity problem, could materially interrupt our business operations and cause material financial loss, loss of human capital, regulatory actions, reputational harm, damaged client relationships or legal liability. For example, we are evaluating the potential impact of the coronavirus (COVID-19) outbreak that originated in China, including the impact on our employees, customers and third-party providers and of governmental actions being taken to curtail the spread of the virus. The outbreak has severely restricted the level of economic activity in affected areas and may have an adverse impact on sales of certain of our products and services, especially in China. Approximately 5% of our fee revenue in the nine months ended January 31, 2020 came from greater China.

Our indebtedness could adversely affect our financial condition, our ability to operate our business, react to changes in the economy or our industry, prevent us from fulfilling our obligations under our indebtedness and could divert our cash flow from operations for debt payments.

As of January 31, 2020, we had approximately $400.0 million in total indebtedness outstanding, and $646.0 million of availability under our $650.0 million five-year senior secured revolving credit facility (the “Revolver”) provided for under our Credit Agreement (the “Credit Agreement”) that we entered into on December 16, 2019, with a syndicate of banks and Bank of America., National Association as administrative agent. Subject to the limits contained in the Credit Agreement that govern our Revolver and the indenture governing our $400.0 million principal amount of the Notes we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisition, or for other purposes. If we do so, the risks related to our high level of debt could increase.

Specifically, our level of debt could have important consequences to us, including the following:

Despite our indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt, which could further exacerbate the risks associated with our substantial leverage.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although the Credit Agreement and the indenture governing our Notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness that may be incurred in compliance with these restrictions could be substantial. If we incur additional debt, the risks associated with our leverage, including those described above, would increase. Further, the restrictions in the indenture governing the Notes and the Credit Agreement will not prevent us from incurring obligations, such as trade payables, that do not constitute indebtedness as defined in such debt instruments. As of January 31, 2020, we had $646.0 million of availability to incur additional secured indebtedness under our Revolver.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly.

Interest rates may fluctuate in the future. As a result, interest rates on the Revolver or other variable rate debt offerings could be higher or lower than current levels. If interest rates increase, our debt service obligations on our variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease. In addition, a transition away from the London Interbank Offered Rate (“LIBOR”) as a benchmark for establishing the applicable interest rate may affect the cost of servicing our debt under the Revolver. The Financial Conduct Authority of the U.K. has announced that it plans to phase out LIBOR by the end of calendar year 2021. Although these borrowing arrangements provide for alternative base rates, such alternative base rates may or may not be related to LIBOR, and the consequences of the phase out of LIBOR cannot be entirely predicted at this time. For example, if any alternative base rate or means of calculating interest with respect to our outstanding variable rate indebtedness leads to an increase in the interest rates charged, it could result in an increase in the cost of such indebtedness, impact our ability to refinance some or all of our existing indebtedness or otherwise have a material adverse impact on our business, financial condition and results of operations.

Our ability to make scheduled payments on and to refinance our indebtedness depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors, all of which are beyond our control, including the availability of financing in the international banking and capital markets. Lower total revenue generally will reduce our cash flow. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our debt, to refinance our debt or to fund our other liquidity needs.

If we are unable to meet our debt service obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could cause us to default on our debt obligations and impair our liquidity. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our business operations.

Moreover, in the event of a default, the holders of our indebtedness, including the Notes, could elect to declare all the funds borrowed to be due and payable, together with accrued and unpaid interest, if any. The lenders under the Revolver could also elect to terminate their commitments thereunder, cease making further loans, and institute foreclosure proceedings against their collateral, and we could be forced into bankruptcy or liquidation. If we breach our covenants under the Revolver, we would be in default thereunder. The lenders could exercise their rights, as described above, and we could be forced into bankruptcy or liquidation.

The agreements governing our debt impose significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities.

The Credit Agreement and the indenture governing the Notes impose significant operating and financial restrictions on us. These restrictions will limit our ability and the ability of our subsidiaries to, among other things:

We and our subsidiaries are subject to covenants, representations and warranties in respect of the Revolver, including financial covenants as defined in the Credit Agreement. See “Note 11 – Long-Term Debt” of our notes to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

As a result of these restrictions, we will be limited as to how we conduct our business and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include more restrictive covenants. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.

Our failure to comply with the restrictive covenants described above and/or the terms of any future indebtedness from time to time could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings before their due date. If we are forced to refinance these borrowings on less favorable terms or cannot refinance these borrowings, our results of operations and financial condition could be adversely affected.

A decline in our operating results or available cash could cause us to experience difficulties in complying with covenants contained in more than one agreement, which could result in our bankruptcy or liquidation.

If we were to sustain a decline in our operating results or available cash, we could experience difficulties in complying with the financial covenants contained in the Credit Agreement. The failure to comply with such covenants could result in an event of default under the Revolver and by reason of cross-acceleration or cross-default provisions, other indebtedness may then become immediately due and payable. In addition, should an event of default occur, the lenders under our Revolver could elect to terminate their commitments thereunder, cease making loans and institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation. If our operating performance declines, we may in the future need to obtain waivers from the lenders under our Revolver to avoid being in default. If we breach our covenants under our Revolver and seek a waiver, we may not be able to obtain a waiver from the lenders thereunder. If this occurs, we would be in default under our Revolver, the lenders could exercise their rights, as described above, and we could be forced into bankruptcy or liquidation.

You may not receive the level of dividends provided for in the dividend policy our Board of Directors has adopted or any dividends at all.

We are not obligated to pay dividends on our common stock. Our Board of Directors adopted a dividend policy on December 8, 2014, that reflects an intention to distribute to our stockholders a regular quarterly cash dividend of $0.10 per share of common stock. Although the Company paid our first dividend under this program on April 9, 2015 and has declared a quarterly dividend every quarter since the adoption of the dividend policy, the declaration and payment of all future dividends to holders of our common stock are subject to the discretion of our Board of Directors, which may amend, revoke or suspend our dividend policy at any time and for any reason, including earnings, capital requirements, financial conditions and other factors our Board of Directors may deem relevant. The terms of our indebtedness may also restrict us from paying cash dividends on our common stock under certain circumstances. See below “—Our ability to pay dividends is restricted by agreements governing our debt, including our credit agreement and the indenture governing our Notes, and by Delaware law.”

Over time, our capital and other cash needs may change significantly from our current needs, which could affect whether we pay dividends and the level of any dividends we may pay in the future. If we were to use borrowings under our credit facility to fund our payment of dividends, we would have less cash and/or borrowing capacity available for future dividends and other purposes, which could negatively affect our financial condition, our results of operations, our liquidity and our ability to maintain and expand our business. Accordingly, you may not receive dividends in the intended amounts, or at all. Any reduction or elimination of dividends may negatively affect the market price of our common stock

Our ability to pay dividends is restricted by agreements governing our debt, including our credit agreement and indenture governing our Notes, and by Delaware law.

Both our credit agreement and indenture governing our Notes restrict our ability to pay dividends. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources,” where we describe the terms of our indebtedness, including provisions limiting our ability to declare and pay dividends. As a result of such restrictions, we may be limited in our ability to pay dividends unless we redeem our Notes and amend our credit agreement or otherwise obtain a waiver from our lenders. In addition, as a result of general economic conditions, conditions in the lending markets, the results of our business or for any other reason, we may elect or be required to amend or refinance our senior credit facility, at or prior to maturity, or enter into additional agreements for indebtedness. Any such amendment, refinancing or additional agreement may contain covenants which could limit in a significant manner or entirely our ability to pay dividends to you.

Additionally, under the Delaware General Corporation Law (“DGCL”), our Board of Directors may not authorize payment of a dividend unless it is either paid out of surplus, as calculated in accordance with the DGCL, or if we do not have a surplus, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.

If, as a result of these restrictions, we are required to reduce or eliminate the payment of dividends, a decline in the market price or liquidity, or both, of our common stock could result. This may in turn result in losses by you.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuers Purchases of Equity Securities

The following table summarizes common stock repurchased by us during the quarter ended ~~October~~January 31, ~~2019:~~2020:

Our Credit Agreement, dated December ~~19, 2018,~~16, 2019, permits us to pay dividends to our stockholders and make share repurchases so long as there is no default under our ~~pro forma~~Credit Agreement, the consolidated net leverage ratio, ~~defined as, the ratio of consolidated funded indebtedness minus up to $50 million of unrestricted cash and cash equivalents of the Company and domestic subsidiaries to consolidated Adjusted~~which uses adjusted EBITDA is no greater than ~~3.25~~4.00 to 1.00 and ~~our~~the pro forma ~~domestic~~ liquidity is at least $50.0 ~~million~~, ~~including~~million. Furthermore, our Notes allow the ~~revolving credit commitment minus amounts outstanding on~~Company to pay $25 million of dividends per fiscal year with no restrictions plus an unlimited amount of dividends so long as the ~~revolver, issued letters of credit~~Company’s consolidated total leverage ratio is not greater than 3.50 to 1.00 and ~~swing loans.~~the Company is not in default under the indenture governing the Notes.

Pursuant to the requirements of the Securities Exchange Act of 1934, ~~as amended,~~ the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		95-2623879
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	KFY	New York Stock Exchange

Large accelerated filer ☑			Accelerated filer ☐

Non-accelerated filer ☐			Smaller reporting company ☐
			Emerging growth company ☐

Item #	Description	Page

	Part I. Financial Information

Item 1.	Consolidated Financial Statements

	Consolidated Balance Sheets as of ~~October~~January 31, ~~2019~~2020 (unaudited) and April 30, 2019	1

	Consolidated Statements of Income (unaudited) for the three and ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018~~2019	2

	Consolidated Statements of Comprehensive Income ~~(Loss)~~ (unaudited) for the three and ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018~~2019	3

	Consolidated Statements of Stockholders’ Equity (unaudited) for three and ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018~~2019	4

	Consolidated Statements of Cash Flows (unaudited) for the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018~~2019	56

	Notes to Consolidated Unaudited Financial Statements	67

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2530

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4049

Item 4.	Controls and Procedures	4150

	Part II. Other Information

Item 1.	Legal Proceedings	4251

Item 1A.	Risk Factors	4251

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	4254

Item 6.	Exhibits	4355

	Signatures	4456

	Three Months Ended October 31, 2019			Six Months Ended October 31, 2019
	(in thousands)
Finance lease cost
Amortization of ROU assets	$	473		$	943
Interest on lease liabilities		39			79
		512			1,022
Operating lease cost		14,166			28,393
Short-term lease cost		277			556
Variable lease cost		3,183			6,076
Sublease income		(53	)		(107	)
Total lease cost	$	18,085		$	35,940

										Accumulated			Total
										Other			Korn Ferry						Total
	Common Stock						Retained			Comprehensive			Stockholders'			Noncontrolling			Stockholder's
	Shares			Amount			Earnings			Loss, Net			Equity			Interest			Equity
	(in thousands)
Balance as of April 30, 2018		56,517		$	683,942		$	572,800		$	(40,135	)	$	1,216,607		$	3,008		$	1,219,615
Net loss		—			—			(38,611	)		—			(38,611	)		19			(38,592	)
Other comprehensive (loss) income		—			—			—			(14,156	)		(14,156	)		6			(14,150	)
Effect of adopting new accounting standards		—			—			8,853			(2,197	)		6,656			—			6,656
Dividends paid to shareholders		—			—			(6,027	)		—			(6,027	)		—			(6,027	)
Purchase of stock		(200	)		(13,054	)		—			—			(13,054	)		—			(13,054	)
Issuance of stock		621			4,803			—			—			4,803			—			4,803
Stock-based compensation		—			5,369			—			—			5,369			—			5,369
Balance as of July 31, 2018		56,938			681,060			537,015			(56,488	)		1,161,587			3,033			1,164,620
Net income		—			—			46,034			—			46,034			1,283			47,317
Other comprehensive loss		—			—			—			(12,093	)		(12,093	)		(267	)		(12,360	)
Dividends paid to shareholders		—			—			(5,716	)		—			(5,716	)		—			(5,716	)
Dividends paid to noncontrolling interest		—			—			—			—			—			(690	)		(690	)
Purchase of stock		(459	)		(22,875	)		—			—			(22,875	)		—			(22,875	)
Issuance of stock		32			—			—			—			—			—			—
Stock-based compensation		—			6,301			—			—			6,301			—			6,301
Balance as of October 31, 2018		56,511		$	664,486		$	577,333		$	(68,581	)	$	1,173,238		$	3,359		$	1,176,597

	Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized Losses on Marketable Securities			Unrealized (Losses) Gains on Interest Rate Swap (2)			Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance as of October 31, 2019	$	(64,303	)	$	(15,848	)	$	—		$	(495	)	$	(80,646	)
Unrealized gains (losses) arising during the period		403			450			(5	)		128			976
Reclassification of realized net losses to net income		—			493			—			367			860
Balance as of January 31, 2020	$	(63,900	)	$	(14,905	)	$	(5	)	$	—		$	(78,810	)

	Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized Losses on Interest Rate Swap (2)			Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance as of July 31, 2019	$	(65,632	)	$	(16,343	)	$	(139	)	$	(82,114	)
Unrealized gains (losses) arising during the period		1,329			—			(315	)		1,014
Reclassification of realized net losses (gains) to net income		—			495			(41	)		454
Balance as of October 31, 2019	$	(64,303	)	$	(15,848	)	$	(495	)	$	(80,646	)

	Foreign Currency Translation			Deferred Compensation and Pension Plan (1)			Unrealized (Losses) Gains on Interest Rate Swap (2)			Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance as of April 30, 2019	$	(60,270	)	$	(16,838	)	$	456		$	(76,652	)
Unrealized losses arising during the period		(4,033	)		—			(806	)		(4,839	)
Reclassification of realized net losses (gains) to net income		—			990			(145	)		845
Balance as of October 31, 2019	$	(64,303	)	$	(15,848	)	$	(495	)	$	(80,646	)

	Six Months Ended October 31, 2019
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	30,351
Financing cash flows from finance leases	$	927

ROU assets obtained in exchange for lease obligations:
Operating leases	$	6,054
Finance leases	$	732

	October 31, 2019
	(in thousands)
Finance Leases:

Property and equipment, at cost	$	4,586
Accumulated depreciation		(930	)
Property and equipment, net	$	3,656

Other accrued liabilities	$	1,597
Other liabilities		2,107
Total finance lease liabilities	$	3,704

Weighted average remaining lease terms:
Operating leases	6.0 years
Finance leases	2.7 years

Weighted average discount rate:
Operating leases		4.9	%
Finance leases		4.2	%

Year Ending April 30,	Operating		Financing
	(in thousands)
2020 (excluding the six months ended October 31, 2019)	$	30,609	$	930
2021		55,843		1,466
2022		48,661		1,003
2023		41,648		365
2024		35,904		132
Thereafter		75,748		18
Total lease payments		288,413		3,914
Less: imputed interest		39,654		210
Total	$	248,759	$	3,704

	Three Months Ended October 31,
	2019					2018
	Dollars		%			Dollars		%
	(dollars in thousands)
Industrial	$	139,010		28.2	%	$	143,969		29.1	%
Financial Services		85,457		17.4			93,015		18.8
Life Sciences/Healthcare		88,807		18.0			83,611		16.9
Consumer Goods		75,227		15.3			79,076		15.9
Technology		70,355		14.3			60,148		12.1
Education/Non-Profit		29,702		6.0			31,061		6.3
General		3,831		0.8			4,325		0.9
Fee Revenue	$	492,389		100.0	%	$	495,205		100.0	%

	Nine Months Ended January 31,
	2020					2019
	Dollars		%			Dollars		%
	(dollars in thousands)
Industrial	$	427,469		28.6	%	$	418,159		29.1	%
Financial Services		260,250		17.4			260,975		18.2
Life Sciences/Healthcare		259,845		17.4			239,425		16.7
Consumer Goods		223,779		15.0			224,848		15.7
Technology		218,273		14.6			189,155		13.2
Education/Non-Profit		92,605		6.3			90,748		6.3
General		10,042		0.7			11,967		0.8
Fee Revenue	$	1,492,263		100.0	%	$	1,435,277		100.0	%

	Restructuring Liability
	(in thousands)
As of October 31, 2019	$	528
Restructuring charges, net		18,093
Reductions for cash payments		(11,075	)
Non-cash payments		(1,284	)
Exchange rate fluctuations		12
As of January 31, 2020	$	6,274

	Restructuring Liability
	(in thousands)
As of April 30, 2019	$	531
Restructuring charges, net		18,093
Reductions for cash payments		(11,075	)
Non-cash payments		(1,284	)
Exchange rate fluctuations		9
As of January 31, 2020	$	6,274

	Six Months Ended October 31, 2019
			Executive Search
	Advisory		North America		EMEA		Asia Pacific		Latin America		Subtotal		RPO & Professional Search		Corporate			Consolidated
	(in thousands)
Fee revenue	$	405,286	$	225,540	$	86,351	$	53,306	$	15,857	$	381,054	$	190,598	$	—		$	976,938
Total revenue	$	413,242	$	232,523	$	87,753	$	53,836	$	15,860	$	389,972	$	197,161	$	—		$	1,000,375

Net income attributable to Korn Ferry																		$	85,755
Net income attributable to noncontrolling interest																			927
Other income, net																			(2,959	)
Interest expense, net																			8,267
Income tax provision																			30,213
Operating income (loss)	$	54,182	$	58,446	$	13,822	$	12,796	$	1,801	$	86,865	$	30,135	$	(48,979	)		122,203
Depreciation and amortization		16,095		1,770		906		675		643		3,994		1,982		3,421			25,492
Other income (loss), net		1,246		1,777		119		87		87		2,070		128		(485	)		2,959
EBITDA		71,523		61,993		14,847		13,558		2,531		92,929		32,245		(46,043	)		150,654
Integration/acquisition costs		—		—		—		—		—		—		—		2,615			2,615
Adjusted EBITDA	$	71,523	$	61,993	$	14,847	$	13,558	$	2,531	$	92,929	$	32,245	$	(43,428	)	$	153,269

Year		Percentage
2022		102.313%
2023		101.156%
2024 and thereafter		100.000%

In thousands	January 31, 2020			April 30, 2019
Senior Unsecured Notes	$	400,000		$	—
Revolver		—			226,875
Less: Unamortized discount and issuance costs		(6,014	)		(3,997	)
Long-term borrowings, net of unamortized discount and debt issuance costs	$	393,986		$	222,878

	Three Months Ended January 31, 2020			Nine Months Ended January 31, 2020
	(in thousands)
Finance lease cost
Amortization of ROU assets	$	467		$	1,410
Interest on lease liabilities		38			117
		505			1,527
Operating lease cost		15,035			43,428
Short-term lease cost		335			891
Variable lease cost		3,988			10,064
Lease impairment cost		2,282			2,282
Sublease income		(217	)		(324	)
Total lease cost	$	21,928		$	57,868

	(in thousands)
Current assets⁽¹⁾	$	44,475
Long-term assets		16,413
Intangibles assets⁽²⁾		45,400
Current liabilities		29,502
Long-term liabilities		5,720
Net assets acquired		71,066
Purchase price		108,602
Goodwill⁽³⁾	$	37,536

Organizational Strategy	We map talent strategy to business strategy by designing operating models and organizational structures that align to them, helping organizations put their plans into action. We make sure they have the right people, in the right roles, engaged and enabled to do the right things.
Assessment and Succession	We provide actionable, research-backed insights that allow organizations to understand the true capabilities of their people so they can make decisions that ensure the right leaders are ready—when and where they are needed—in the future.
Talent Acquisition	From executive search to RPO, we integrate scientific research with our practical experience and industry-specific expertise to recruit professionals of all levels and functions for client organizations.
Leadership Development	We help leaders at all levels of an organization achieve their vision, purpose and strategy. We combine expertise, science and proven techniques with forward thinking and creativity to build leadership experiences that help entry- to senior-level leaders grow and deliver superior results.
Rewards and Benefits	We help organizations design rewards to achieve their strategic objectives. We help them pay their people fairly for doing the right things—with rewards they value—at a cost the organization can afford.

	Shares Purchased (1)		Average Price Paid Per Share		Shares Purchased as Part of Publicly- Announced Programs (2)		Approximate Dollar Value of Shares That May Yet be Purchased Under the Programs (2)

August 1, 2019 — August 31, 2019		598,592	$	38.06		598,592	$215.2 million
September 1, 2019— September 30, 2019		369,096	$	38.13		367,500	$201.2 million
October 1, 2019— October 31, 2019		344,986	$	36.15		343,000	$188.8 million
Total		1,312,674	$	37.58		1,309,092

Exhibit Number		Description
3.1*		Certificate of Amendment of Restated Certificate of Incorporation of the Company, effective January 1, 2019, filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed December 13, 2018.
3.2*		Seventh Amended and Restated Bylaws, effective January 1, 2019, filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed December 13, 2018.
3.3*		Restated Certificate of Incorporation of the Company, effective January 7, 2019, filed as Exhibit 3.3 to the Company’s Quarterly Report on Form 10-Q, filed March 11, 2019.
10.14.1		~~Fourth Amendment~~Indenture, dated as of December 16, 2019, by and among Korn Ferry, an issuer, certain subsidiaries of Korn Ferry, as guarantors thereto, and Wells Fargo Bank, National Association, as trustee, filed as Exhibit 4.1 to the Company's Form 8-K, filed December 16, 2019.
10.1+		Korn Ferry Amended and Restated Executive Capital Accumulation Plan, effective December 4,2019.
10.2+		Korn Ferry ~~2008 Stock Incentive~~Amended and Restated Long Term Performance Unit Plan, effective ~~August 19,~~December 4,2019.
10.3*		Credit Agreement, dated December 16, 2019, by and among Korn Ferry, Bank of America, N.A., as administrative agent, and other lender parties thereto, filed as Exhibit 10.1 to the Company’s ~~Current Report on~~ Form 8-K, filed ~~October 7,~~December 16, 2019.
31.1		Chief Executive Officer Certification pursuant to Rule 13a-14(a) under the Exchange Act.
31.2		Chief Financial Officer Certification pursuant to Rule 13a-14(a) under the Exchange Act.
32.1		Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~October~~January 31, ~~2019,~~2020, has been formatted in Inline XBRL and included as Exhibit 101.

	Korn Ferry

	By:		/s/ Robert P. Rozek
			Robert P. Rozek
			Executive Vice President, Chief Financial Officer and Chief Corporate Officer (Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer)