(Former name, former address and former fiscal year, if changed since last report)

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, 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

As of ~~July 30, 2021,~~April 29, 2022, there were ~~18,859,735~~18,793,455 shares outstanding of the registrant’s common stock.

(in thousands, except share and per share amounts)	June 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
ASSETS
Current Assets:
Cash and cash equivalents	$	9,603		$	13,841		$	7,392		$	8,254
Restricted cash		26,307			68,146
Restricted cash - current								1,681			12,179
Contract receivables, net		242,562			222,850			205,827			237,684
Contract assets		150,390			143,369			189,147			137,867
Prepaid expenses and other assets		25,784			25,492			41,176			42,354
Income tax receivable		8,717			1,977			8,288			10,825
Total Current Assets		463,363			475,675			453,511			449,163
Property and Equipment, net		53,083			62,434			62,886			52,053
Other Assets:
Goodwill		910,640			909,913			1,045,503			1,046,760
Other intangible assets, net		53,899			59,887			74,274			79,645
Operating lease - right-of-use assets		111,755			127,132			172,133			177,417
Other assets		40,049			32,249			49,416			44,496
Total Assets	$	1,632,789		$	1,667,290		$	1,857,723		$	1,849,534

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt	$	10,000		$	10,000		$	10,000		$	10,000
Accounts payable		94,939			91,365			95,706			105,652
Contract liabilities		35,700			42,050			31,491			39,665
Operating lease liabilities - current		35,128			23,350			30,530			34,901
Accrued salaries and benefits		82,297			80,512			94,931			85,517
Accrued subcontractors and other direct costs		41,610			78,842			40,165			39,400
Accrued expenses and other current liabilities		67,252			100,908			41,388			61,496
Total Current Liabilities		366,926			427,027			344,211			376,631
Long-term Liabilities:
Long-term debt		321,681			303,214			449,776			411,605
Operating lease liabilities - non-current		96,746			115,614			189,857			191,805
Deferred income taxes		37,790			34,330			47,684			41,913
Other long-term liabilities		38,135			40,144			22,893			24,110
Total Liabilities		861,278			920,329			1,054,421			1,046,064

Commitments and Contingencies (Note 18)
Commitments and Contingencies (Note 19)

Stockholders’ Equity:
Preferred stock, par value $.001; 5,000,000 shares authorized; NaN issued		—			—			—			—
Common stock, par value $.001; 70,000,000 shares authorized; 23,483,971 and 23,305,255 shares issued at June 30, 2021 and December 31, 2020, respectively; 18,859,735 and 18,909,983 shares outstanding at June 30, 2021 and December 31, 2020, respectively		23			23
Common stock, par value $.001; 70,000,000 shares authorized; 23,679,411 and 23,535,671 shares issued at March 31, 2022 and December 31, 2021, respectively; 18,793,455 and 18,876,490 shares outstanding at March 31, 2022 and December 31, 2021, respectively								23			23
Additional paid-in capital		376,622			369,058			388,639			384,984
Retained earnings		622,113			588,731			664,532			649,298
Treasury stock, 4,624,236 and 4,395,272 shares at June 30, 2021 and December 31, 2020, respectively		(216,353	)		(196,745	)
Treasury stock, 4,885,956 and 4,659,181 shares at March 31, 2022 and December 31, 2021, respectively								(241,516	)		(219,800	)
Accumulated other comprehensive loss		(10,894	)		(14,106	)		(8,376	)		(11,035	)
Total Stockholders’ Equity		771,511			746,961			803,302			803,470
Total Liabilities and Stockholders’ Equity	$	1,632,789		$	1,667,290		$	1,857,723		$	1,849,534

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

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
(in thousands, except per share amounts)	2021			2020			2021			2020			2022			2021
Revenue	$	392,525		$	353,987		$	771,003		$	712,225		$	413,468		$	378,478
Direct costs		246,646			223,407			478,728			454,023			258,158			232,082
Operating costs and expenses:
Indirect and selling expenses		106,178			99,255			216,160			202,526			117,452			109,982
Depreciation and amortization		4,728			5,064			9,998			10,243			4,838			5,270
Amortization of intangible assets		3,019			3,479			6,034			6,332			5,317			3,015
Total operating costs and expenses		113,925			107,798			232,192			219,101			127,607			118,267

Operating income		31,954			22,782			60,083			39,101			27,703			28,129
Interest expense		(2,612	)		(3,908	)		(5,295	)		(7,433	)		(2,697	)		(2,683	)
Other (expense) income		(46	)		349			(463	)		539
Other expense														(369	)		(417	)
Income before income taxes		29,296			19,223			54,325			32,207			24,637			25,029
Provision for income taxes		8,984			5,567			15,662			7,939			6,775			6,678
Net income	$	20,312		$	13,656		$	38,663		$	24,268		$	17,862		$	18,351

Earnings per Share:
Basic	$	1.08		$	0.73		$	2.05		$	1.29		$	0.95		$	0.97
Diluted	$	1.07		$	0.72		$	2.03		$	1.27		$	0.94		$	0.96

Weighted-average Shares:
Basic		18,843			18,829			18,864			18,835			18,795			18,885
Diluted		19,022			19,020			19,078			19,120			19,012			19,118

Cash dividends declared per common share	$	0.14		$	0.14		$	0.28		$	0.28		$	0.14		$	0.14

Other comprehensive income (loss), net of tax		432			(164	)		3,212			(11,287	)
Other comprehensive income, net of tax														2,659			2,780
Comprehensive income, net of tax	$	20,744		$	13,492		$	41,875		$	12,981		$	20,521		$	21,131

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

	Six Months Ended						Three Months Ended
	June 30,						March 31,
(in thousands)	2021			2020			2022			2021
Cash Flows from Operating Activities
Net income	$	38,663		$	24,268		$	17,862		$	18,351
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		7,782			1,153
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
(Recovery of) provision for credit losses								(170	)		5,334
Deferred income taxes		2,489			6,070			4,505			1,838
Non-cash equity compensation		6,163			6,344			3,563			3,275
Depreciation and amortization		16,032			16,575			10,154			8,285
Non-cash lease expense		(3,361	)		(783	)
Facilities consolidation reserve		(148	)		(141	)		(78	)		(75	)
Amortization of debt issuance costs		309			403			154			155
Impairment of long-lived assets		303			—			—			303
Other adjustments, net		1,365			(863	)		353			457
Changes in operating assets and liabilities, net of the effects of acquisitions:
Net contract assets and liabilities		(13,698	)		(15,050	)		(59,689	)		(19,750	)
Contract receivables		(29,070	)		54,729			31,473			2,531
Prepaid expenses and other assets		(3,108	)		(1,866	)		(11,708	)		2,016
Operating lease assets and liabilities, net								(532	)		(1,143	)
Accounts payable		3,667			(65,293	)		(9,815	)		(354	)
Accrued salaries and benefits		2,738			4,658			9,513			4,715
Accrued subcontractors and other direct costs		(37,035	)		(9,227	)		1,078			(33,466	)
Accrued expenses and other current liabilities		20,619			(8,685	)		(6,883	)		8,303
Income tax receivable and payable		(7,193	)		(8,158	)		2,621			3,924
Other liabilities		(176	)		6,667			544			262
Net Cash Provided by Operating Activities		6,341			10,801
Net Cash (Used in) Provided by Operating Activities								(7,055	)		4,961

Cash Flows from Investing Activities
Capital expenditures for property and equipment and capitalized software		(7,475	)		(9,015	)		(6,454	)		(3,595	)
Payments for business acquisitions, net of cash acquired		—			(253,090	)
Net Cash Used in Investing Activities		(7,475	)		(262,105	)

Cash Flows from Financing Activities
Advances from working capital facilities		382,552			914,507			329,690			185,755
Payments on working capital facilities		(364,395	)		(626,159	)		(291,662	)		(174,674	)
Payments on capital expenditure obligations		—			(1,712	)
Receipt of restricted contract funds		75,158			—			4,301			451
Payment of restricted contract funds		(117,399	)		—			(14,714	)		(27,081	)
Debt issue costs		—			(2,084	)
Proceeds from exercise of options		2,773			37			92			2,702
Dividends paid		(5,284	)		(5,275	)		(2,644	)		(2,642	)
Net payments for stock issuances and buybacks		(18,365	)		(23,024	)		(22,268	)		(17,104	)
Payments on business acquisition liabilities		(682	)		(1,924	)		(121	)		(682	)
Net Cash (Used in) Provided by Financing Activities		(45,642	)		254,366
Net Cash Provided by (Used in) Financing Activities								2,674			(33,275	)
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash		699			(480	)		(525	)		745

(Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash		(46,077	)		2,582
Decrease in Cash, Cash Equivalents, and Restricted Cash								(11,360	)		(31,164	)
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period		81,987			6,482			20,433			81,987
Cash, Cash Equivalents, and Restricted Cash, End of Period	$	35,910		$	9,064		$	9,073		$	50,823

Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Interest	$	5,319		$	7,875		$	2,760		$	2,637
Income taxes	$	20,714		$	10,123		$	949		$	961
Non-cash investing and financing transactions:
Tenant improvements funded by lessor							$	10,843		$	—

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

(dollar amounts in tables in thousands, except share and per share ~~amounts)~~data)

The accompanying consolidated financial statements include the accounts of ICF International, Inc. (“ICFI”) and its ~~subsidiaries (collectively,~~principal subsidiary, ICF Consulting Group, Inc. (“Consulting,” and together with ICFI, the “Company”), and have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”). Consulting is a wholly owned subsidiary of ICFI. ICFI is a holding company with no operations or assets other than its investment in the common stock of Consulting. All other subsidiaries of the Company are wholly owned by Consulting. All significant intercompany transactions and balances have been eliminated.

The Company provides professional services and technology-based solutions to government and commercial clients, including management, marketing, technology, and policy consulting and implementation services, in the areas of energy, environment, and infrastructure; health, education, and social programs; safety and security; and consumer and ~~financial services.~~financial. The Company offers a full range of services to these clients throughout the entire life cycle of a policy, program, project, or initiative, from research and analysis and assessment and advice to design and implementation of programs and technology-based solutions, and the provision of engagement services and programs.

The Company’s major clients are U.S. federal government departments and agencies, most significantly the Department of Health and Human Services, Department of State, and Department of Defense. The Company also serves U.S. state (including territories) and local government departments and agencies, international governments, and commercial clients worldwide. Commercial clients include airlines, airports, electric and gas utilities, health care companies, banks and other financial services companies, transportation, travel and hospitality firms, non-profits/associations, ~~law firms,~~ manufacturing firms, retail chains, and distribution companies. The term “federal” or “federal government” refers to the U.S. federal government, and “state and local” or “state and local government” refers to U.S. state (including territories) and local governments, unless otherwise indicated.

The Company, incorporated in Delaware, is headquartered in Fairfax, Virginia. The Company maintains additional offices throughout the world, including ~~more than~~over 50 offices in the U.S. and U.S. territories and 22more than 20 offices in key markets outside the U.S., including offices in the United Kingdom, Belgium, China, India, and Canada.

The preparation of consolidated financial statements in conformity with U.S. 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 periods. Areas of the consolidated financial statements where estimates may have the most significant effect include contractual and regulatory reserves, valuation and lives of tangible and intangible assets, contingent consideration related to business acquisitions, impairment of goodwill and long-lived assets, accrued liabilities, revenue recognition and costs to complete fixed-price contracts, bonus and other incentive compensation, stock-based compensation, reserves for tax benefits and valuation allowances on deferred tax assets, provisions for income taxes, collectability of receivables, and loss accruals for litigation. Actual results experienced by the Company may differ from management's estimates.

The unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These rules and regulations permit some of the information and footnote disclosures normally included in financial statements, prepared in accordance with U.S. GAAP, to be condensed or omitted. In management’s opinion, the unaudited consolidated financial statements contain all adjustments that are of a normal recurring nature, necessary for a fair presentation of the results of operations and financial position of the Company for the interim periods presented. The Company reports operating results and financial data in 1 operating segment and reporting unit. Operating results for the three ~~and six month~~months periods ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ are not necessarily indicative of the results that may be expected for the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, ~~2020~~2021 and the notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on February ~~26, 2021~~25, 2022 (the “Annual Report”).

~~At June 30, 2021 and December 31, 2020, accrued expenses and other current liabilities consisted of the following:~~

The Company has reclassified “Non-cash lease expense” which was previously part of “Other adjustments, net” on the consolidated statements of cash flows for the six months ended June 30, 2020 for consistency of presentation.

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The provisions of this ASU are elective and apply to all entities, subject to meeting certain criteria, that have debt or hedging contracts, among other contracts, that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The Company can elect to not apply certain modification accounting requirements to contracts affected by reference rate reform if certain criteria are met. Also, the Company can elect various optional expedients that would allow ~~for the Company~~it to continue to apply hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met. This guidance was effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact ~~this guidance may have on~~of the transition from LIBOR to alternative reference interest rates for the current Credit Facility (see Note 7—Long-Term Debt) and the related interest rate hedges (see Note 9—Derivative Instruments and Hedging Activities) but does not expect a significant impact to its ~~consolidated~~operating results, financial ~~statements.~~position, or cash flows.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets for the periods presented to the total of cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

	2021				2020				March 31, 2022				March 31, 2021
	Beginning		Ending		Beginning		Ending		Beginning		Ending		Beginning		Ending
Cash and cash equivalents	$	13,841	$	9,603	$	6,482	$	9,064	$	8,254	$	7,392	$	13,841	$	8,592
Restricted cash ⁽¹⁾		68,146		26,307		—		—
Restricted cash - current ⁽¹⁾										12,179		1,681		68,146		42,231
Total of cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows	$	81,987	$	35,910	$	6,482	$	9,064	$	20,433	$	9,073	$	81,987	$	50,823

	June 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
Billed and billable	$	257,548		$	230,466		$	211,827		$	245,425
Allowance for expected credit losses		(14,986	)		(7,616	)		(6,000	)		(7,741	)
Contract receivables, net	$	242,562		$	222,850		$	205,827		$	237,684

The changes in the carrying amount of goodwill during the ~~six-months~~three-months period ended ~~June 30, 2021~~March 31, 2022 were as follows:

The Company has operating leases for facilities and equipment which have remaining terms ranging from 1 to 1217 years. The leases may include options to extend the lease periods for up to 5 years at rates approximating market rates and/or options to terminate the leases within 1 year. The leases may include a residual value guarantee or a responsibility to return the property to its original state of use. A limited number of leases contain provisions that provide for rental increases based on consumer price indices. The change in rent expense resulting from changes in these indices are included within variable rent.

~~Rent expense~~The Company’s lease cost is recognized on a straight-line basis over the lease term. ~~Rent expense~~Lease cost consists of the following:

Future minimum lease payments under non-cancellable leases as of ~~June 30, 2021~~March 31, 2022 were as follows:

June 30, 2022	$	38,375
June 30, 2023		29,162
June 30, 2024		20,090
June 30, 2025		13,906
June 30, 2026		12,779
March 31, 2023				$	33,057
March 31, 2024					20,984
March 31, 2025					23,628
March 31, 2026					21,643
March 31, 2027					20,369
Thereafter		30,791			152,425
Total future minimum lease payments		145,103			272,106
Less: Interest		(13,229	)		(51,719	)
Total operating lease liabilities	$	131,874		$	220,387

Operating lease liabilities - current	$	35,128		$	30,530
Operating lease liabilities - non-current		96,746			189,857
Total operating lease liabilities	$	131,874		$	220,387

	June 30, 2021			June 30, 2020			March 31, 2022			March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8,779		$	19,086		$	10,110		$	4,130
Right-of-use assets obtained in exchange for operating lease liabilities	$	772		$	22,721		$	2,952		$	142
Weighted-average remaining lease term - operating leases		5.8			5.9			11.5			5.8
Weighted-average discount rate - operating leases		3.3	%		2.9	%		3.2	%		3.4	%

At ~~June 30,~~March 31, 2022 and December 31, 2021, ~~the Company had an additional operating lease that had not yet commenced with a potential lease liability of $115.3 million. The operating lease has a term of 18 years~~accrued expenses and ~~is anticipated to commence on March 1, 2022, when the Company takes possession~~other current liabilities consisted of the ~~property upon completion of buildouts.~~following:

At ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, debt consisted of:

	June 30, 2021				December 31, 2020				March 31, 2022				December 31, 2021
	Average Interest Rate	Outstanding Balance			Average Interest Rate	Outstanding Balance			Average Interest Rate	Outstanding Balance			Average Interest Rate	Outstanding Balance
Term Loan		$	187,500			$	192,500			$	180,000			$	182,500
Revolving Credit			146,439				123,281				281,583				241,055
Total before debt issuance costs	1.74%		333,939		2.35%		315,781		1.40%		461,583		1.65%		423,555
Unamortized debt issuance costs			(2,258	)			(2,567	)			(1,807	)			(1,950	)
		$	331,681			$	313,214			$	459,776			$	421,605

Current portion of long-term debt		$	10,000			$	10,000			$	10,000			$	10,000
Long-term debt - non-current			321,681				303,214				449,776				411,605
		$	331,681			$	313,214			$	459,776			$	421,605

On March 3, 2020, the Company entered into the First Amendment (the “First Amendment”) to the Fifth Amended and Restated Business Loan and Security Agreement with a group of 10 commercial banks (the “Credit Facility”). The First Amendment amended the Fifth Amended and Restated Business Loan and Security Agreement to, among other things, (i) add a new term loan facility in the original principal amount of $200.0 million; (ii) increase the swing line commitment amount by $25.0 million to $75.0 million; (iii) extend the maturity date; and (iv) modify certain definitions and certain covenants. As a result, the Credit Facility now consists of (i) a term loan facility of $200.0 million; (ii) a revolving line of credit of up to $600.0 million with additional revolving credit commitments of up to $300.0 million, subject to lenders’ approval (the “Accordion”); and (iii) a sub-limit of $75.0 million for swing line loans. The Credit Facility matures on March 3, 2025.

The Company has the option to borrow funds under the Credit Facility at interest rates based on both LIBOR (1, 3, or 6-month rates) and the Base Rate (as defined herein), at its discretion, plus their applicable margins. Base Rates are fluctuating per annum rates of interest equal to the highest of (i) the Overnight Bank Funding Rate, plus 0.5%, (ii) the Prime Rate (as defined under the Credit Facility) and (iii) the daily LIBOR rate, plus a LIBOR margin between 1.00% and 2.00% based on its Leverage Ratio (as defined under the Credit Facility). The interest accrued based on LIBOR rates is to be paid on the last business day of the interest period (1, 3, or 6 months), while interest accrued based on the Base Rate is to be paid in quarterly installments. The Credit Facility also provides for letters of credit aggregating up to $60.0 million which reduce the funds available under the Credit Facility when issued. The unused portion of the Credit Facility is subject to a commitment fee between 0.13% and 0.25% per annum based on the Leverage Ratio.

The Credit Facility is collateralized by substantially all the assets of the Company and requires that the Company remain in compliance with certain financial and non-financial covenants. The financial covenants require, among other things, that the Company maintain at all times an Interest Coverage Ratio (as defined under the Credit Facility) of not less than 3.00 to 1.00 and a Leverage Ratio of not more than 4.00 to 1.00 (subject to a step-up to 4.25 to 1.0 for a four quarter period following permitted acquisitions as

defined under the Credit Facility) for each fiscal quarter. As of ~~June 30, 2021,~~March 31, 2022, the Company was in compliance with its covenants under the Credit Facility. The Credit Facility also has a conforming dividend covenant that allows the Company to pay dividends as long as it remains in compliance with the financial covenants set forth in the Credit Facility.

As of ~~June 30, 2021,~~March 31, 2022, the Company had ~~$333.9~~$461.6 million of long-term debt outstanding from the Credit Facility (including the term loan of $180.0 million, exclusive of unamortized debt issuance ~~costs)~~costs of $1.8 million), and unused borrowing capacity under the $600.0 million revolving line of credit of $315.1 millionunder the Credit Facility. The unused borrowing capacity is inclusive of 9 outstanding letters of credit totaling $3.3 ~~million, net derivative obligations of $6.4 million and unused borrowing capacity of $450.3 millionunder the Credit Facility (excluding the Accordion and the term loan).~~million. Taking into account the financial, performance-based limitations, available borrowing capacity (excluding the Accordion and the term loan) was $~~292.0~~250.4 million as of ~~June 30, 2021.~~March 31, 2022.

Payments due by	Term Loan		Revolving Credit		Total		Term Loan		Revolving Credit		Total
June 30, 2022	$	10,000	$	—	$	10,000
June 30, 2023		11,250		—		11,250
June 30, 2024		15,000		—		15,000
March 31, 2023							$	10,000	$	—	$	10,000
March 30, 2024								15,000		—		15,000
March 3, 2025 (Maturity)		151,250		146,439		297,689		155,000		281,583		436,583
Total	$	187,500	$	146,439	$	333,939	$	180,000	$	281,583	$	461,583

The Company disaggregates revenue from clients, most of which is earned over time, into categories that depict how the nature, amount and uncertainty of revenue and cash flows are affected by economic and business factors. Those categories are client market, client type and contract mix. Client markets provide insight into the breadth of the Company’s expertise. In classifying revenue by client market, the Company attributes revenue from a client to the market that the Company believes is the client’s primary market. The Company also classifies revenue by the type of entity for which it does business, which is an indicator of the diversity of its client base. The Company attributes revenue generated ~~from being~~as a subcontractor to a commercial company as government revenue when the ultimate client is a government agency or department. Disaggregation by contract mix provides insight in terms of the degree of performance risk that the Company has assumed. Fixed-price contracts are considered to provide the highest amount of performance risk as the Company is required to deliver a scope of work or level of effort for a negotiated fixed price. Time-and-materials contracts require the Company to provide skilled employees on contracts for negotiated fixed hourly rates. Since the Company is not required to deliver a scope of work, but merely skilled employees, it considers these contracts to be less risky than a fixed-price agreement. Cost-based contracts are considered to provide the lowest amount of performance risk since the Company is generally reimbursed for all contract costs incurred in performance of contract deliverables with only the amount of incentive or award fees (if applicable) dependent on the achievement of negotiated performance ~~requirements.~~ requirements.

Changes in the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 compared to the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 were driven primarily by an increase of ~~revenue in the~~$39.4 million and $6.2 million from U.S. federal government’s health, education, and social programs and energy, environment, and infrastructure client ~~market, primarily led by revenue~~markets, respectively, $7.4 million and $0.5 million from U.S. state and local government’s health, education, and social programs and energy, environment, and infrastructure client markets, respectively, and $1.7 million from international ~~government clients, an increase in the~~government’s health, education, and social programs client market, ~~led~~offset by ~~revenue~~decreases of $11.1 million and $0.6 million from international government’s energy, environment, and infrastructure and safety and security client markets, respectively, $3.5 million, $2.6 million, and $1.2 million from commercial consumer and financial, energy, environment, and infrastructure, and health, education, and social programs client markets, respectively, and $1.2 million from U.S. federal government ~~and international government clients, and an increase in the consumer and financial services client market led by revenue from commercial clients. Revenue from~~ safety and security client market saw a slight decrease in the three months ended June 30, 2021 compared to 2020, mainly from U.S. federal government clients, and a slight increase in the six months ended June 30, 2021 compared to 2020, mainly from international government clients.market.

	Three Months Ended June 30,										Six Months Ended June 30,										Three Months Ended March 31,
	2021					2020					2021					2020					2022					2021
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Client Markets:
Energy, environment, and infrastructure	$	168,230		43	%	$	150,234		42	%	$	332,510		43	%	$	299,050		42	%	$	156,644		38	%	$	163,582		43	%
Health, education, and social programs		167,319		43	%		152,036		43	%		325,255		42	%		303,388		43	%		205,532		50	%		158,268		42	%
Safety and security		29,618		7	%		30,086		9	%		60,816		8	%		60,403		8	%		29,400		7	%		31,198		8	%
Consumer and financial services		27,358		7	%		21,631		6	%		52,422		7	%		49,384		7	%
Consumer and financial																						21,892		5	%		25,430		7	%
Total	$	392,525		100	%	$	353,987		100	%	$	771,003		100	%	$	712,225		100	%	$	413,468		100	%	$	378,478		100	%

	Three Months Ended June 30,										Six Months Ended June 30,										Three Months Ended March 31,
	2021					2020					2021					2020					2022					2021
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Client Type:
U.S. federal government	$	182,188		46	%	$	170,786		48	%	$	358,100		46	%	$	326,389		46	%	$	220,343		53	%	$	175,985		46	%
U.S. state and local government		58,058		15	%		57,388		16	%		114,961		15	%		118,280		16	%		64,833		16	%		56,878		15	%
International government		37,801		10	%		17,858		5	%		74,925		10	%		40,667		6	%		26,720		6	%		36,746		10	%
Total Government		278,047		71	%		246,032		69	%		547,986		71	%		485,336		68	%		311,896		75	%		269,609		71	%
Commercial		114,478		29	%		107,955		31	%		223,017		29	%		226,889		32	%		101,572		25	%		108,869		29	%
Total	$	392,525		100	%	$	353,987		100	%	$	771,003		100	%	$	712,225		100	%	$	413,468		100	%	$	378,478		100	%

	Three Months Ended June 30,										Six Months Ended June 30,										Three Months Ended March 31,
	2021					2020					2021					2020					2022					2021
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Contract Mix:
Time-and-materials	$	162,368		41	%	$	168,371		48	%	$	322,146		42	%	$	336,521		47	%	$	165,084		40	%	$	159,836		42	%
Fixed price		160,169		41	%		124,141		35	%		307,696		40	%		257,265		36	%		183,896		44	%		147,469		39	%
Cost-based		69,988		18	%		61,475		17	%		141,161		18	%		118,439		17	%		64,488		16	%		71,173		19	%
Total	$	392,525		100	%	$	353,987		100	%	$	771,003		100	%	$	712,225		100	%	$	413,468		100	%	$	378,478		100	%

Contract assets consist primarily of unbilled amounts resulting from long-term contracts when revenue recognized exceeds the amount billed often due to billing schedule timing. Contract liabilities result from advance payments received on a contract or from billings in excess of revenue recognized on long-term contracts due to billing schedule timing.

The following table summarizes the contract balances as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

	June 30, 2021			December 31, 2020			$ Change		% Change			March 31, 2022			December 31, 2021			$ Change		% Change
Contract assets	$	150,390		$	143,369		$	7,021		4.9	%	$	189,147		$	137,867		$	51,280		37.2	%
Contract liabilities		(35,700	)		(42,050	)		6,350		(15.1	%)		(31,491	)		(39,665	)		8,174		(20.6	%)
Net contract assets (liabilities)	$	114,690		$	101,319		$	13,371		13.2	%	$	157,656		$	98,202		$	59,454		60.5	%

The net contract assets (liabilities) as of ~~June 30, 2021~~March 31, 2022 increased by ~~$13.4~~$59.5 million as compared to December 31, ~~2020.~~2021. The increase in net contract assets (liabilities) is primarily due to the timing difference between the performance of services and billings to and payments from customers. There were no material changes to contract balances due to impairments or credit losses during the period. During the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company recognized ~~$20.1~~$20.9 million and ~~$19.8~~$15.1 million in revenue related to the contract liabilities balance at December 31, ~~2020~~2021 and ~~2019,~~2020, respectively.

The Company had ~~$1.6~~$1.1 billion in unfulfilled performance obligations as of ~~June 30, 2021~~March 31, 2022 which primarily entail the future delivery of services for which revenue will be recognized over time. The obligations relate to continued or additional services required on non-cancelable contracts and were generally valued using an estimated cost-plus margin approach, with variable consideration being estimated at the most likely amount. The amounts exclude marketing offers, which are negotiated but unexercised contract options and indefinite delivery/indefinite quantity (IDIQ) and similar arrangements that provided a framework for customers to issue specific tasks, delivery, or purchase orders in the future. The Company expects to satisfy these performance obligations, on average, in one to two years.

The Company ~~manages~~uses interest rate swap arrangements (the “Swaps”) to manage or hedge its ~~risk to changes in~~ interest ~~rates through~~rate risk. Notwithstanding the ~~use~~terms of ~~derivative instruments.~~the Swaps, the Company is ultimately obligated for all amounts due and payable under the Credit Facility. The Company does not ~~hold derivative~~use such instruments for speculative or trading ~~or speculative~~ purposes. ~~For variable rate borrowings,~~

The Company designated the ~~Company uses fixed interest rate swaps, effectively converting a portion of~~Swaps as cash flow hedges. Derivative instruments are recorded on the ~~variable interest rate payments to fixed interest rate payments. These swaps are~~consolidated balance sheets at fair value. Unrealized gains and losses on derivatives designated as cash flow ~~hedges.~~hedges are reported in other comprehensive income (loss) (“AOCI”) and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged

transactions. Management intends that the Swaps remain effective and, on a quarterly basis, evaluates them to determine their effectiveness or ineffectiveness and records the change in fair value as an adjustment to other comprehensive income or loss.

A summary of interest rate swap derivatives designated as cash flow hedges as of ~~June 30, 2021~~March 31, 2022 are as follows:

The Company’s effective tax rate for the three months ended ~~June 30,~~March 31, 2022 and 2021 was 27.5% and ~~2020 was 30.7% and 29.0%~~26.7%, ~~respectively, and 28.8% and 24.6% for the six months ended June 30, 2021 and 2020,~~ respectively.

The Company is subject to federal income tax as well as taxes in various state, local and foreign jurisdictions. Tax statutes and regulations within each jurisdiction are subject to interpretation and require the application of significant judgment. The Company’s ~~2017~~2018 through ~~2019~~2020 tax years remain subject to examination by the Internal Revenue Service for federal tax purposes. Certain significant state, local and foreign tax returns also remain open under the applicable statute of limitations and, as such, are subject to examination for the tax years from ~~2016~~2017 to ~~2019.~~2020.

The total amount of unrecognized tax benefits as of ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ was ~~$0.8~~$0.5 million and ~~$2.7~~$0.7 million, respectively, ~~resulting from tax positions taken in a prior period. Included in the balance as of June 30, 2021 and 2020, were $0.8 million and $0.3 million in unrecognized tax benefits, or tax positions~~ that ~~if recognized,~~ would impact the effective tax ~~rate.~~rate if recognized.

The Company’s policy is not to recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. The Company did 0t have any accrued penalty and interest at ~~June 30,~~March 31, 2022 and 2021, ~~but had $0.1 million in accrued penalty and interest at June 30, 2020,~~ respectively.

The Company has made no provision for deferred U.S. income taxes or additional foreign taxes on future unremitted earnings of its controlled foreign subsidiaries because the Company considers these earnings to be permanently invested.

~~During the year ended December 31, 2020, the Company elected to participate in several~~ ~~novel coronavirus disease (“COVID-19”)~~ ~~tax-relief programs for which it was eligible.~~ Pursuant to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, the Company exercised the option to defer payment of the employer portion of the Social Security tax, with 50% to be repaid by December 31, 2021 and the remainder by December 31, 2022. The Company deferred payment of approximately $20.9 million of employer Social Security taxes during the year ended December 31, ~~2020. The current portion~~2020 and repaid 50% during the third quarter of 2021. As of March 31, 2022 the remaining deferred ~~payments are~~payment is included in accrued salaries and benefits ~~and the remaining deferred payments are included in other long-term liabilities~~ in the Company’s consolidated balance ~~sheets.~~sheets.

Accumulated other comprehensive loss as of ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ included the following:

Three Months Ended June 30, 2021

Foreign
Currency
Translation
Adjustments

Gain on Sale
of Interest
Rate Hedge
Agreement ⁽¹⁾

Change in
Fair Value of
Interest Rate
Hedge
Agreements ⁽²⁾

Total

Accumulated other comprehensive (loss) income at March 31, 2021

$
(6,346
)

$
965

$
(5,945
)

$
(11,326
)
Current period other comprehensive (loss) income:

Other comprehensive income (loss) before reclassifications

182

—

(325
)

(143
)
Amounts reclassified from accumulated other comprehensive (loss) income ⁽³⁾

—

(180
)

928

748

Effect of taxes⁽⁴⁾

(61
)

48

(160
)

(173
)
Total current period other comprehensive income (loss)

121

(132
)

443

432

Accumulated other comprehensive (loss) income at June 30, 2021

$
(6,225
)

$
833

$
(5,502
)

$
(10,894
)

	Three Months Ended March 31, 2022
	Foreign Currency Translation Adjustments			Gain on Sale of Interest Rate Hedge Agreement ⁽¹⁾			Change in Fair Value of Interest Rate Hedge Agreements ⁽²⁾			Total
Accumulated other comprehensive (loss) income at December 31, 2021	$	(8,759	)	$	569		$	(2,845	)	$	(11,035	)
Current period other comprehensive (loss) income:
Other comprehensive (loss) income before reclassifications		(2,304	)		—			5,509			3,205
Amounts reclassified from accumulated other comprehensive (loss) income ⁽³⁾		—			(180	)		902			722
Effect of taxes⁽⁴⁾		363			48			(1,679	)		(1,268	)
Total current period other comprehensive (loss) income		(1,941	)		(132	)		4,732			2,659
Accumulated other comprehensive (loss) income at March 31, 2022	$	(10,700	)	$	437		$	1,887		$	(8,376	)

	Three Months Ended June 30, 2020												Three Months Ended March 31, 2021
	Foreign Currency Translation Adjustments			Gain on Sale of Interest Rate Hedge Agreement ⁽¹⁾			Change in Fair Value of Interest Rate Hedge Agreement ⁽²⁾			Total			Foreign Currency Translation Adjustments			Gain on Sale of Interest Rate Hedge Agreement ⁽¹⁾			Change in Fair Value of Interest Rate Hedge Agreement ⁽²⁾			Total
Accumulated other comprehensive (loss) income at March 31, 2020	$	(15,813	)	$	1,501		$	(8,955	)	$	(23,267	)
Accumulated other comprehensive (loss) income at December 31, 2020													$	(7,210	)	$	1,096		$	(7,992	)	$	(14,106	)
Current period other comprehensive income (loss):
Other comprehensive income (loss) before reclassifications		609			—			(1,582	)		(973	)
Other comprehensive income before reclassifications														968			—			1,882			2,850
Amounts reclassified from accumulated other comprehensive (loss) income ⁽³⁾		—			(180	)		721			541			—			(180	)		907			727
Effect of taxes⁽⁴⁾		(5	)		47			226			268			(104	)		49			(742	)		(797	)
Total current period other comprehensive income (loss)		604			(133	)		(635	)		(164	)		864			(131	)		2,047			2,780
Accumulated other comprehensive (loss) income at June 30, 2020	$	(15,209	)	$	1,368		$	(9,590	)	$	(23,431	)
Accumulated other comprehensive (loss) income at March 31, 2021													$	(6,346	)	$	965		$	(5,945	)	$	(11,326	)

Changes in stockholders’ equity for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ are as follows:

	Three Months Ended June 30, 2021																					Three Months Ended March 31, 2022
	Common Stock					Additional Paid-in		Retained			Treasury Stock					Accumulated Other Comprehensive						Common Stock					Additional Paid-in		Retained			Treasury Stock					Accumulated Other Comprehensive
	Shares			Amount		Capital		Earnings			Shares		Amount			Loss			Total			Shares			Amount		Capital		Earnings			Shares		Amount			Loss			Total
Balance at March 31, 2021		18,859		$	23	$	372,420	$	604,441			4,602	$	(214,325	)	$	(11,326	)	$	751,233
Balance at December 31, 2021																							18,876		$	23	$	384,984	$	649,298			4,659	$	(219,800	)	$	(11,035	)	$	803,470
Net income		—			—		—		20,312			—		—			—			20,312			—			—		—		17,862			—		—			—			17,862
Other comprehensive income		—			—		—		—			—		—			432			432			—			—		—		—			—		—			2,659			2,659
Equity compensation		—			—		2,888		—			—		—			—			2,888			—			—		3,563		—			—		—			—			3,563
Exercise of stock options		3			—		71		—			—		—			—			71			—			—		92		—			—		—			—			92
Issuance of shares pursuant to vesting of restricted stock units		20			—		—		—			—		—			—			—			144			—		—		—			—		—			—			—
Net payments for stock issuances and buybacks		(22	)		—		1,243		—			22		(2,028	)		—			(785	)		(227	)		—		—		—			227		(21,716	)		—			(21,716	)
Dividends declared		—			—		—		(2,640	)		—		—			—			(2,640	)		—			—		—		(2,628	)		—		—			—			(2,628	)
Balance at June 30, 2021		18,860		$	23	$	376,622	$	622,113			4,624	$	(216,353	)	$	(10,894	)	$	771,511
Balance at March 31, 2022																							18,793		$	23	$	388,639	$	664,532			4,886	$	(241,516	)	$	(8,376	)	$	803,302

	Three Months Ended June 30, 2020																				Three Months Ended March 31, 2021
	Common Stock				Additional Paid-in		Retained			Treasury Stock					Accumulated Other Comprehensive						Common Stock					Additional Paid-in		Retained			Treasury Stock					Accumulated Other Comprehensive
	Shares		Amount		Capital		Earnings			Shares		Amount			Loss			Total			Shares			Amount		Capital		Earnings			Shares		Amount			Loss			Total
Balance at March 31, 2020		18,827	$	23	$	350,658	$	552,303			4,289	$	(188,961	)	$	(23,267	)	$	690,756
Balance at December 31, 2020																						18,910		$	23	$	369,058	$	588,731			4,395	$	(196,745	)	$	(14,106	)	$	746,961
Net income		—		—		—		13,656			—		—			—			13,656			—			—		—		18,351			—		—			—			18,351
Other comprehensive loss		—		—		—		—			—		—			(164	)		(164	)		—			—		—		—			—		—			2,780			2,780
Equity compensation		—		—		2,518		—			—		—			—			2,518			—			—		3,275		—			—		—			—			3,275
Exercise of stock options		—		—		—		—			—		—			—			—			3			—		87		—			—		—			—			87
Issuance of shares pursuant to vesting of restricted stock units		22		—		—		—			—		—			—			—			153			—		—		—			—		—			—			—
Net payments for stock issuances and buybacks		—		—		1,024		—			—		(50	)		—			974			(207	)		—		—		—			207		(17,580	)		—			(17,580	)
Dividends declared		—		—		—		(2,637	)		—		—			—			(2,637	)		—			—		—		(2,641	)		—		—			—			(2,641	)
Balance at June 30, 2020		18,849	$	23	$	354,200	$	563,322			4,289	$	(189,011	)	$	(23,431	)	$	705,103
Balance at March 31, 2021																						18,859		$	23	$	372,420	$	604,441			4,602	$	(214,325	)	$	(11,326	)	$	751,233

Six Months Ended June 30, 2021

Common Stock

Additional
Paid-in

Retained

Treasury Stock

Accumulated
Other
Comprehensive

Shares

Amount

Capital

Earnings

Shares

Amount

Loss

Total

Balance at December 31, 2020

18,910

$
23

$
369,058

$
588,731

4,395

$
(196,745
)

$
(14,106
)

$
746,961

Net income

—

—

—

38,663

—

—

—

38,663

Other comprehensive income

—

—

—

—

—

—

3,212

3,212

Equity compensation

—

—

6,163

—

—

—

—

6,163

Exercise of stock options

6

—

158

—

—

—

—

158

Issuance of shares pursuant to vesting of restricted stock units

173

—

—

—

—

—

—

—

Net payments for stock issuances and buybacks

(229
)

—

1,243

—

229

(19,608
)

—

(18,365
)
Dividends declared

—

—

—

(5,281
)

—

—

—

(5,281
)
Balance at June 30, 2021

18,860

$
23

$
376,622

$
622,113

4,624

$
(216,353
)

$
(10,894
)

$
771,511

Six Months Ended June 30, 2020

Common Stock

Additional
Paid-in

Retained

Treasury Stock

Accumulated
Other
Comprehensive

Shares

Amount

Capital

Earnings

Shares

Amount

Loss

Total

Balance at December 31, 2019

18,868

$
23

$
346,795

$
544,840

3,978

$
(164,963
)

$
(12,144
)

$
714,551

Net income

—

—

—

24,268

—

—

—

24,268

Other comprehensive loss

—

—

—

—

—

—

(11,287
)

(11,287
)
Equity compensation

—

—

6,344

—

—

—

—

6,344

Exercise of stock options

1

—

37

—

—

—

—

37

Issuance of shares pursuant to vesting of restricted stock units

291

—

—

—

—

—

—

—

Net payments for stock issuances and buybacks

(311
)

—

1,024

—

311

(24,048
)

—

(23,024
)
Cumulative-effect adjustment for adoption of accounting principle

—

—

—

(513
)

—

—

—

(513
)
Dividends declared

—

—

—

(5,273
)

—

—

—

(5,273
)
Balance at June 30, 2020

18,849

$
23

$
354,200

$
563,322

4,289

$
(189,011
)

$
(23,431
)

$
705,103

On April 4, 2018, the Company’s board of directors (the “board”) approved the 2018 Omnibus Incentive Plan (the “2018 Omnibus Plan”), which was subsequently approved by the stockholders and became effective on May 31, 2018 (the “Effective Date”). The 2018 Omnibus Plan replaced the previous 2010 Omnibus Incentive Plan (the “Prior Plan”). The 2018 Omnibus Plan was amended on May 28, 2020 to increase the number of shares available for issuance.

The 2018 Omnibus Plan, as amended, allows the Company to grant 1,600,000 shares using stock options, stock appreciation rights, restricted stock, restricted stock units (“RSU”), performance units and performance share awards (“PSA”), cash-settled restricted stock units (“CSRSU”), and other stock-based awards to all officers, key employees, and non-employee directors of the Company. Outstanding shares granted under the Prior Plan, totaling ~~37,077~~26,120 as of ~~June 30, 2021,~~March 31, 2022, remain subject to its terms and conditions, and 0 additional awards from the Prior Plan are to be made after the Effective Date. As of ~~June 30, 2021,~~March 31, 2022, the Company had approximately ~~1,005,607~~789,147 shares available for grant under the 2018 Omnibus Plan. CSRSUs have no impact on the shares available for grant under the Omnibus Plan, nor on the calculated shares used in earnings per share calculations.

During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, the Company granted to its employees ~~78,218~~117,136 shares in the form of RSUs with an average grant date fair value of ~~$89.00,~~$91.79, and the equivalent value of ~~50,735~~56,718 shares in the form of CSRSUs with an average grant date fair value of ~~$89.12.~~$91.79. During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, the Company also granted ~~35,318~~35,705 shares in the form of PSAs to its employees with a grant date fair value of ~~$95.72~~$93.97 per share. The RSUs, CSRSUs and PSAs granted are generally subject to service-based vesting conditions, with the PSAs also having performance-based vesting conditions. The performance conditions for the PSAs granted in ~~2021~~2022 have a performance period from January 1, ~~2021~~2022 through December 31, ~~2023~~2024 and performance conditions that are consistent with the PSAs granted in prior years.

The Company recognized stock-based compensation expense of ~~$4.4~~$4.6 million and ~~$4.0~~$6.1 million for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $10.6 million and $9.1 million for the six months ended June 30, 2021 and 2020,~~ respectively. Unrecognized compensation expense of approximately ~~$12.6~~$19.7 million as of ~~June 30, 2021~~March 31, 2022 related to unsettled RSUs is expected to be recognized over a weighted-average period of ~~1.8~~2.1 years. The unrecognized compensation expense related to CSRSUs totaled approximately $9.3 million at ~~June 30, 2021~~March 31, 2022 and is expected to be recognized over a weighted-average period of ~~1.8~~2.0 years. Unrecognized compensation expense related to PSAs of approximately ~~$4.4~~$6.3 million as of ~~June 30, 2021~~March 31, 2022 is expected to be recognized over a weighted-average period of ~~1.4~~1.6 years.

On December 31, 2021, the Company acquired Creative Systems and Consulting, a premier provider of IT modernization and digital transformation solutions to federal agencies, for a cash purchase price of approximately $159.5 million, subject to working capital adjustments. The Company initially recorded working capital of $4.5 million and recognized fair value of the assets acquired and liabilities assumed and allocated $126.1 million to goodwill and $28.9 million to intangible assets. Intangible assets consist of $24.5 million in customer relationships, $3.7 million related to developed technology, $0.6 million related to trade names and trademarks, and $0.1 million related to non-compete agreements. The allocation of the total purchase price to the tangible and intangible assets and liabilities of Creative Systems and Consulting was based on management’s preliminary estimate of fair value, based on the best available information as of December 31, 2021 when the purchase price allocation was determined. The Company expects to complete the purchase accounting during the 2022 fiscal year as it finalizes the determination of both working capital, as well as its estimates of future cash flows underlying the valuation of customer-related intangible assets. The pro-forma impact of the acquisition is not material to the Company’s results of operations.

A prior acquisition’s purchase agreement included additional consideration in the form of warranty and indemnity hold back payments. As of ~~June 30, 2021,~~March 31, 2022, 1 payment remains outstanding for approximately ~~$1.3~~$1.2 million, which is scheduled to be released in the fourth quarter of ~~2022.~~2022 and is included in accrued expenses and other current liabilities. The remaining warranty and indemnity liability was recorded at its fair value at the date of the acquisition discounting the liability at 3.25%.

The Company’s earnings per share (“EPS”) is computed by dividing reported net income by the weighted-average number of shares outstanding. Diluted EPS considers the potential dilution that could occur if common stock equivalents of stock options, RSUs, and PSAs were exercised or converted into stock. The difference between the basic and diluted weighted-average equivalent shares with respect to the Company’s EPS calculation was due entirely to the assumed exercise of stock options and the vesting and settlement of RSUs and PSAs. PSAs are included in the computation of diluted shares only to the extent that the underlying performance conditions (i) are satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were ~~also~~ the end of the ~~applicable~~related performance period and the result would be dilutive under the treasury stock method.

As of ~~June 30, 2021,~~March 31, 2022, the PSAs granted during the year ended December 31, ~~2019~~2020 met the related performance conditions for the initial performance period and were included in the calculation of diluted EPS. However, the PSAs granted during the year ended December 31, ~~2020~~2021 and during the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 have not yet completed their initial two-year performance period and therefore were excluded in the calculation of diluted EPS. For the three months ended ~~June 30, 2021,~~March 31, 2022, there were 053,819 weighted-average shares excluded from the calculation of EPS because they were anti-dilutive. For the ~~six~~three months ended ~~June 30,~~March 31, 2021, there were ~~258~~10,327 weighted-average shares ~~that were anti-dilutive. For the three months and six months ended June 30, 2020, there were 19,755 and 19,881 weighted-average shares that were~~ excluded because they were anti-dilutive. The anti-dilutive shares in both years were associated with RSUs.

The dilutive effect of stock options, RSUs, and PSAs for each period reported is summarized below:

	Three Months Ended				Six Months Ended				Three Months Ended
	June 30,				June 30,				March 31,
	2021		2020		2021		2020		2022		2021
Net Income	$	20,312	$	13,656	$	38,663	$	24,268	$	17,862	$	18,351

Weighted-average number of basic shares outstanding during the period		18,843		18,829		18,864		18,835		18,795		18,885
Dilutive effect of stock options, RSUs, and performance shares		179		191		214		285		217		233
Weighted-average number of diluted shares outstanding during the period		19,022		19,020		19,078		19,120		19,012		19,118

Basic earnings per share	$	1.08	$	0.73	$	2.05	$	1.29	$	0.95	$	0.97
Diluted earnings per share	$	1.07	$	0.72	$	2.03	$	1.27	$	0.94	$	0.96

~~The Company’s~~In September 2017, the board approved a share repurchase program that allows for share repurchases in the aggregate up to $100.0 million under approved share repurchase plans ~~approved by the board of directors~~ pursuant to Rules 10b5-1 and 10b-18 under the Securities Exchange Act of ~~1934, as amended. The Company approved an updated Rule 10b5-1 plan element~~1934. In November 2021, the board amended and increased the limit under the previous authorization of ~~the share repurchase program as part of its normal process that commenced January 11, 2021.~~$100.0 million to $200.0 million. The Credit Facility permits unlimited share repurchases, provided the Company’s Leverage Ratio, prior to and after giving effect to such repurchases, is not greater than 3.50 to 1.00.

Purchases under this program may be made from time to time at prevailing market prices in open market purchases or in privately negotiated transactions pursuant to Rule 10b-18 under the Exchange Act and in accordance with applicable insider trading and other securities laws and regulations. The purchases are funded from existing cash balances and/or borrowings, and the repurchased shares are held in treasury and used for general corporate purposes. The timing and extent to which the Company repurchases its shares will depend on market conditions and other corporate considerations at the Company’s sole discretion.

During the fourth quarter of 2021, the board approved an updated Rule 10b5-1 plan element of the share repurchase program to repurchase a maximum of 165,000 shares, or a total of $20.0 million, under the current program starting on December 20, 2021 and ending no later than June 30, 2022. Under this approved plan, the Company repurchased 140,200 shares at an average price of $98.55 per share between January 1, 2022 and February 2, 2022. The repurchase plan was completed in the first quarter of 2022 with a total of 165,000 shares repurchased from December 20, 2021 to February 2, 2022 for a total of $16.3 million. The Company also used $3.1 million to repurchase an additional 36,175 shares in the open market during the first quarter of 2022 at an average price of $87.00 per share.

For the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company used ~~$14.7~~$17.0 million to repurchase ~~173,000~~176,375 shares and ~~$16.6~~$12.8 million to repurchase ~~206,820~~151,200 shares, respectively, under the repurchase program. As of ~~June 30, 2021, $31.3~~March 31, 2022, $111.9 million remained available for share repurchases under the repurchase program.

Financial instruments measured at fair value on a recurring basis and their location within the accompanying consolidated balance sheets are as follows:

	June 30, 2021									March 31, 2022
(in thousands)	Level 1		Level 2		Level 3		Total		Location on Balance Sheet	Level 1		Level 2		Level 3		Total		Location on Balance Sheet
Assets:
Forward contract agreements	$	—	$	9	$	—	$	9	Prepaid expenses and other assets
Interest rate swaps - long-term portion										$	—	$	3,005	$	—	$	3,005	Other assets
Deferred compensation investments in cash surrender life insurance		—		18,379		—		18,379	Other assets		—		19,026		—		19,026	Other assets
Total	$	—	$	18,388	$	—	$	18,388		$	—	$	22,031	$	—	$	22,031

Liabilities:
Forward contract agreements										$	—	$	182	$	—	$	182	Accrued expenses and other current liabilities
Deferred compensation plan liabilities	$	—	$	19,507	$	—	$	19,507	Other long-term liabilities		—		19,748		—		19,748	Other long-term liabilities
Interest rate swaps - current portion		—		3,700		—		3,700	Accrued expenses and other current liabilities		—		508		—		508	Accrued expenses and other current liabilities
Interest rate swaps - long-term portion		—		3,835		—		3,835	Other long-term liabilities
Total	$	—	$	27,042	$	—	$	27,042		$	—	$	20,438	$	—	$	20,438

	December 31, 2020									December 31, 2021
(in thousands)	Level 1		Level 2		Level 3		Total		Location on Balance Sheet	Level 1		Level 2		Level 3		Total		Location on Balance Sheet
Assets:
Forward contract agreements	$	—	$	103	$	—	$	103	Prepaid expenses and other assets	$	—	$	267	$	—	$	267	Prepaid expenses and other assets
Deferred compensation investments in cash surrender life insurance		—		16,796		—		16,796	Other assets		—		20,159		—		20,159	Other assets
Total	$	—	$	16,899	$	—	$	16,899		$	—	$	20,426	$	—	$	20,426

Liabilities:
Deferred compensation plan liabilities	$	—	$	17,276	$	—	$	17,276	Other long-term liabilities	$	—	$	20,129	$	—	$	20,129	Other long-term liabilities
Interest rate swaps - current portion		—		3,693		—		3,693	Accrued expenses and other current liabilities		—		3,026		—		3,026	Accrued expenses and other current liabilities
Interest rate swaps - long-term portion		—		7,234		—		7,234	Other long-term liabilities		—		888		—		888	Other long-term liabilities
Total	$	—	$	28,203	$	—	$	28,203		$	—	$	24,043	$	—	$	24,043

On ~~August 3, 2021,~~May 4, 2022, the ~~Company’s~~ board ~~of directors~~ approved a $0.14 per share cash dividend. The dividend will be paid on ~~October 13, 2021~~July 14, 2022 to shareholders of record as of the close of business on ~~September~~June 10, ~~2021.~~2022.

The Company is involved in various legal matters and proceedings arising in the ordinary course of business. While these matters and proceedings cause it to incur costs, including, but not limited to, attorneys’ fees, the Company currently believes that any ultimate liability arising out of these matters and proceedings will not have a material adverse effect on its financial position, results of operations, or cash flows.

On June 10, 2016, the Office of Community Development (the “OCD”) of the State of Louisiana filed a written administrative demand with the Louisiana Commissioner of Administration against ICF Emergency Management Services, L.L.C. (“ICF Emergency”), a subsidiary of the Company, in connection with ICF Emergency’s administration of the Road Home Program (“Program”). The Program contract was a three-year, $912 million contract awarded to the Company in 2006. The Program ended, as scheduled, in 2009.

The Program was primarily intended to help homeowners and landlords of small rental properties affected by Hurricanes Rita and Katrina. In its administrative demand, the OCD sought approximately $200.8 million in alleged overpayments to the Program’s grant recipients, and separately supplemented the amount of recovery it sought in total to approximately $220.2 million. The State of Louisiana, through the Division of Administration, also filed suit in Louisiana state court on June 10, 2016. The State of Louisiana broadly alleges and sought recoupment for the same claim made in the administrative proceeding submission before the Louisiana Commissioner of Administration. On September 21, 2016, the Commissioner of the Division of Administration notified OCD and the Company of his decision to defer jurisdiction of the administrative demand filed by the OCD. In so doing, the Commissioner declined to reach a decision on the merits, stated that his deferral would not be deemed to grant or deny any portion of the OCD’s claim, and authorized the parties to proceed on the matter in the previously filed judicial proceeding. The Company continues to believe that this claim has no merit, intends to vigorously defend its position, and has therefore not recorded a liability as of ~~June 30, 2021.~~March 31, 2022.

On November 15, 2020, the Company’s former Executive Chair gave notice of his retirement effective December 31, 2020. In connection with his retirement, the former Executive Chair is entitled to receive compensation and benefits as provided in his employment agreement for a termination of employment on the basis of “good reason.” As of ~~June 30, 2021, the Company had $1.9 million in unpaid severance expected to be paid to the former Executive Chair by July 2021. These amounts~~March 31, 2022, there were ~~expensed as part of the recording of the Executive Chair’s retirement in the fourth quarter of 2020.~~ PSAs totaling ~~34,276~~17,287 shares which were originally granted during ~~2019 and~~ 2020 ~~are~~ to be satisfied through the normal course of the PSA equity award plan (see Note ~~12—~~13—Accounting for Stock-Based Compensation), and subject to ~~adjustments~~adjustment from ~~EPS and~~ rTSR ~~performances.~~performance.

Some of the statements in this Quarterly Report on Form 10-Q (this “Quarterly Report”) constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by such forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will,” “would,” or similar words. You should read statements that contain these words carefully. The risk factors described in our filings with the Securities and Exchange Commission (the “SEC”), as well as any cautionary language in this Quarterly Report, provide examples of risks, uncertainties, and events that may cause actual results to differ materially from the expectations described in the forward-looking statements, including, but not limited to:

Our forward-looking statements are based on the beliefs and assumptions of our management and the information available to our management at the time these disclosures were prepared. Although we believe the expectations reflected in these statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly ~~Report on Form 10-Q.~~Report. We undertake no obligation to update these forward-looking statements, even if our situation changes in the future.

The terms “we,” “our,” “us,” and ~~“Company,~~“the Company,” as used throughout this Quarterly Report, refer to ICF International, Inc. and its subsidiaries, unless otherwise indicated. The term “federal” or “federal government” refers to the U.S. federal government, and “state and local” or “state and local government” refers to U.S. state and local governments and the governments of U.S. territories. The following discussion and analysis is intended to help the reader understand our business, financial condition, results of operations, and liquidity and capital resources. You should read this discussion in conjunction with our consolidated financial statements and the related notes contained elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 filed with the SEC on February ~~26, 2021~~25, 2022 (our “Annual Report”).

We provide professional services and technology-based solutions to government and commercial clients, including management, marketing, technology, and policy consulting and implementation services. We help our clients conceive, develop, implement, and improve solutions that address complex business, natural resource, social, technological, and public safety issues. Our services primarily support clients that operate in four key markets:

We provide services to our diverse client base that deliver value throughout the entire life cycle of a policy, program, project, or initiative. Our primary services include:

Our clients utilize our services because we combine diverse institutional knowledge and experience with the deep subject matter expertise of our highly educated staff, which we deploy in multi-disciplinary teams. We believe that our domain expertise and the program knowledge developed from our research and analytic, and assessment and advisory engagements further position us to provide a full suite of services.

We report operating results and financial data as a single segment based on the consolidated information used by our chief operating decision-maker in evaluating the financial performance of our business and allocating resources. Our single segment represents our core ~~business –~~business: professional services for government and commercial clients. Although we describe our multiple service offerings to clients that operate in four markets to provide a better understanding of the scope and scale of our business, we do not manage our business or allocate our resources based on those service offerings or client markets. Rather, on a project-by-project basis, we assemble the best team from throughout the enterprise to deliver highly customized solutions that are tailored to meet the needs of each client.

Notwithstanding the near-term impact of COVID-19 and its variants, we believe that, in the long-term, demand for our services will continue to grow as government, industry, and other stakeholders seek to address critical long-term societal and natural resource issues due to heightened concerns about the environment and use of clean energy and energy efficiency; health promotion, treatment, and cost control; the means by which healthcare can be delivered effectively on a cross-jurisdiction basis; natural disaster relief and rebuild efforts; and ongoing homeland security threats. In the wake of the major hurricanes (Harvey, Ida, Irma, Maria, Laura, and Michael) that devastated communities in Texas, Florida, North Carolina, Louisiana, the U.S. Virgin Islands, and Puerto Rico, the affected areas remain in various stages of relief and recovery efforts. We believe our prior and current experience with disaster relief and rebuild efforts, including those from Hurricanes Katrina and Rita and Superstorm Sandy, put us in a favorable position to continue to provide recovery and housing assistance, ~~housing,~~ and environmental and infrastructure solutions, including disaster mitigation, on behalf of federal departments and agencies, state, territorial and local ~~governments,~~jurisdictions, and regional agencies.

We also see significant opportunity to further leverage our digital and client engagement capabilities across our commercial and government client base. Our future results will depend on the success of our strategy to enhance our client relationships and seek larger engagements ~~spanning all aspects of~~that span the entire program life cycle, ~~as well as completely~~and to complete and successfully ~~integrating~~integrate additional strategic acquisitions. We will continue to focus on building scale in our vertical and horizontal domain expertise, developing business with both our existing government and commercial clients as well as new customers, and replicating our business model in selective geographies. In doing so, we will continue to evaluate strategic acquisition opportunities, such as our ~~acquisition~~recent acquisitions of ~~Incentive Technology Group, LLC (“ITG”)~~ITG in 2020 and ESAC and Creative Systems and Consulting in 2021, that enhance our subject matter knowledge, broaden our service offerings, and/or provide scale in specific geographies.

Although we continue to see favorable long-term market opportunities, there are certain business challenges facing all government service providers. Administrative and legislative actions by the federal government to address changing priorities or in response to the budget deficit could have a negative impact on our business, which may result in a reduction to our revenue and profit and adversely affect cash flow. Similarly, the very nature of opportunities arising out of disaster recovery mean they can involve unusual challenges. Factors such as the overall stress on communities and people affected by disaster recovery situations, political complexities and challenges among involved government agencies, and a higher-than-normal risk of audits and investigations may

result in a reduction to our revenue and profit and adversely affect cash flow. However, we believe we are well positioned to provide a broad range of services in support of initiatives that will continue to be priorities to the federal government, as well as to state and local and international governments and commercial clients. We believe that the combination of internally generated funds, available bank borrowings, and cash and cash equivalents on hand will provide the required liquidity and capital resources necessary to fund on-going operations, potential acquisitions, customary capital expenditures, and other working capital requirements.

On March 11, 2020, the World Health Organization characterized the novel strain of coronavirus disease COVID-19 as a global pandemic. There continues to be significant uncertainty as to the effects of this pandemic on the global economy, which may impact, among other things, our operations, balance sheet, results of operations or cash flows. Adverse events such as health-related concerns about working in our offices or our client’s offices, the inability to travel, the potential impact on our employees, clients, subcontractors and other suppliers and business partners, a slow-down in customer decision-making that affects procurement cycles, a reprioritization of client spending, and other matters affecting the general work and business environment have harmed, and could continue to harm, our business and delay the implementation of our business strategy. We cannot fully anticipate all the ways in which the current global health crisis, economic ~~slowdown~~disruption, and financial market conditions could adversely impact our business in the future. The ~~longer the~~long duration of the pandemic, the advent of new strains of the virus, and challenges faced in the ~~rollout~~vaccination of ~~vaccines, the more likely it is that it~~eligible individuals, continue to create uncertainty, and could have an adverse effect on our business, financial position, results of operations and/or cash flows.

We are primarily a service business, and our staffing, and that of our subcontractors, has been maintained, substantially on a work from home basis, fortunately with little COVID-19 illness among our staff.

To date, we have experienced continuity in the majority of our work for our government clients, which accounted for approximately ~~70.8% and 71.1%~~75% of our revenues for the three months ~~and the six months~~ ended ~~June 30, 2021, respectively.~~March 31, 2022. There have been postponements of events and challenges around project work requiring travel and personal contact to perform services under the contracts, but overall, our government clients have continued to require our services. There has also been additional demand from federal agencies such as the Center for Disease Control and Prevention, the Department of Health and Human Services, and the Federal Emergency Management Agency, as well as state and local and international government agencies.

Of the remaining ~~29.2% and 28.9%~~25% of our total revenue for the three months ~~and the six months~~ ended ~~June 30, 2021, respectively,~~March 31, 2022, the majority was generated from commercial energy markets and commercial marketing services. In commercial energy, where we work primarily for utility clients, we have experienced trends similar to those with our government clients, although some aspects of energy efficiency programs have been ~~put on hold as they involve~~altered to reduce direct interaction with consumers. The commercial marketing services includes public event management and marketing technology, which was impacted based on the deferral or cancellation of marketing events. Some of our commercial clients perform work in travel-related markets and have been severely impacted by the COVID-19 pandemic and the restriction upon travel worldwide. As a result, we continue to monitor that business area closely. These elements of commercial marketing services represented ~~less than 9.7% and 9.6%~~7% of our total company-wide revenues for the three months ~~and the six months~~ ended ~~June 30, 2021, respectively.~~March 31, 2022.

We are monitoring the evolving situation related to the COVID-19 pandemic and continue to work with our stakeholders to assess further possible implications to our business and to take actions in an effort to mitigate adverse consequences. To protect employee health and safety while COVID-19 remains a threat, we plan to continue to deliver a majority of our services to clients ~~remotely. Based on the continued level of new cases and the estimated timing~~remotely until we are ready for ~~widespread access~~a transition to ~~vaccines, we now expect to begin~~an in-office environment. We started our phased return to ~~in-person operations at~~in-office work in the U.K. and China on a reduced capacity during the third quarter of 2021 and formally re-opened our ~~office locations no earlier than September 2021. While~~offices in North America starting on April 25, 2022. Additionally, in response to President Biden’s Executive Order 14042, which requires federal contractors to be vaccinated against COVID-19 by December 8, 2021 and later amended to January 4, 2022, we implemented a requirement for our U.S. employees to be fully vaccinated or receive an approved exemption/accommodation by November 30, 2021 regardless of employment type or work location—remote, hybrid, or on-site.

In 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act ~~contains~~ was passed; it contained a provision that allows federal contractors to seek specified reimbursement for certain employees who are unable to perform their contract requirements due to government ~~restrictions, we believe we have limited claims under the CARES Act, and reimbursements are also subject to limitations and did not extend past December 31, 2020. Additionally, we~~restrictions. We deferred payment of approximately $20.9 million of employer Social Security taxes during the twelve months ended December 31, ~~2020. We did not defer any additional Social Security taxes in 2021.~~2020, of which 50% has been repaid as of December 31, 2021 and the remaining 50% is expected to be repaid by the deadline of December 31, 2022.

As part of management actions to counter the impact of COVID-19, we have aligned our costs with anticipated revenues. In the U.S. and in our international operations, we ~~had~~ used staff reductions, furloughs, and other temporary wage reduction programs in response to the pandemic during 2020. However, ~~during the six months ended June 30, 2021~~ we did not have as many staff reductions, furloughs, or wage reductions as a result of COVID-19 asafter 2020. During 2020, we ~~had previously experienced in 2020. We~~ also ~~previously~~ participated in three international government subsidy programs whose objective is to encourage eligible companies to keep employees on the payroll during the COVID-19 pandemic. We minimally participated in two subsidy programs during the first quarter of 2021 but did not participate in such programs subsequently.

We have approximately ~~7,500~~8,000 full and part-time employees around the globe, including many recognized as thought leaders in their respective fields. We serve clients globally from our headquarters in the Washington, D.C. metropolitan area, our more than 50 regional offices throughout the U.S. and more than 2220 offices in key regions outside the U.S., including offices in the United Kingdom, Belgium, China, India and Canada.

Our discussion of our financial condition and results of operations is based on our consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The preparation of these consolidated financial statements requires us to make certain estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, revenue, and expenses and our application of critical accounting policies, including revenue recognition, impairment of goodwill and other intangible assets, and income ~~taxes, and stock-based compensation.~~taxes. If any of these estimates, assumptions or judgments prove to be incorrect, our reported results could be materially affected. Actual results may differ significantly from our estimates under different assumptions or conditions. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Note 2 – Summary of Significant Accounting Policies” in our Annual Report and “Note 1—Basis of Presentation and Nature of ~~Operations—Recent Accounting Pronouncements”~~Operations” in the “Notes to Consolidated Financial Statements” in this Quarterly Report for further discussions of our significant accounting policies and estimates.

We periodically evaluate our critical accounting policies and estimates based on changes in U.S. GAAP and the current environment that may have an effect on our financial statements.

Recent accounting standards are discussed in “Note 1—Basis of Presentation and Nature of Operations—Recent Accounting Pronouncements” in the “Notes to Consolidated Financial Statements” in this Quarterly Report.

In order to evaluate operations, we track revenue by key metrics that provide useful information about the nature of our operations. Client markets provide insight into the breadth of our expertise. Client type is an indicator of the diversity of our client base. Revenue by contract mix provides insight in terms of the degree of performance risk that we have assumed. Significant variances in the key metrics are discussed under the revenue section of the results of operations. For further discussion see “Note 7—8—Revenue Recognition” in the “Notes to Consolidated Financial Statements” in this Quarterly Report.

Three Months Ended ~~June 30, 2021~~March 31, 2022 Compared to Three Months Ended ~~June 30, 2020~~March 31, 2021

The table below sets forth certain items from our unaudited consolidated statements of comprehensive income, the percentage of revenue for such items in the periods provided, and the period-over-period rate of change and percentage of revenue for the periods indicated.

												Year-to-Year Change															Year-to-Year Change
	Three Months Ended June 30,											Three Months Ended				Three Months Ended March 31,											Three Months Ended
	Dollars						Percentages					June 30, 2020 and 2021				Dollars						Percentages					March 31, 2021 and 2022
(dollars in thousands)	2021			2020			2021		2020			Dollars			Percent	2022			2021			2022		2021			Dollars			Percent
Revenue	$	392,525		$	353,987		100.0%			100.0	%	$	38,538		10.9%	$	413,468		$	378,478		100.0%			100.0	%	$	34,990		9.2%
Direct Costs		246,646			223,407		62.8%			63.1	%		23,239		10.4%		258,158			232,082		62.4%			61.3	%		26,076		11.2%
Operating Costs and Expenses:
Indirect and selling expenses		106,178			99,255		27.0%			28.0	%		6,923		7.0%		117,452			109,982		28.4%			29.1	%		7,470		6.8%
Depreciation and amortization		4,728			5,064		1.2%			1.4	%		(336	)	(6.6%)		4,838			5,270		1.2%			1.4	%		(432	)	(8.2%)
Amortization of intangible assets		3,019			3,479		0.8%			1.0	%		(460	)	(13.2%)		5,317			3,015		1.3%			0.8	%		2,302		76.4%
Total Operating Costs and Expenses		113,925			107,798		29.0%			30.4	%		6,127		5.7%		127,607			118,267		30.9%			31.3	%		9,340		7.9%
Operating Income		31,954			22,782		8.2%			6.5	%		9,172		40.3%		27,703			28,129		6.7%			7.4	%		(426	)	(1.5%)
Interest expense		(2,612	)		(3,908	)	(0.7%)			(1.1	%)		1,296		(33.2%)		(2,697	)		(2,683	)	(0.7%)			(0.7	%)		(14	)	0.5%
Other (expense) income		(46	)		349			—		—			(395	)	(113.2%)
Other expense																	(369	)		(417	)		—		—			48		(11.5%)
Income before Income Taxes		29,296			19,223		7.5%			5.4	%		10,073		52.4%		24,637			25,029		6.0%			6.7	%		(392	)	(1.6%)
Provision for Income Taxes		8,984			5,567		2.3%			1.6	%		3,417		61.4%		6,775			6,678		1.6%			1.8	%		97		1.5%
Net Income	$	20,312		$	13,656		5.2%			3.8	%	$	6,656		48.7%	$	17,862		$	18,351		4.4%			4.9	%	$	(489	)	(2.7%)

Revenue. Revenue for the three months ended ~~June 30, 2021~~March 31, 2022 was ~~$392.5~~$413.5 million, compared to ~~$354.0~~$378.5 million for the three months ended ~~June 30, 2020,~~March 31, 2021, representing an increase of ~~$38.5~~$35.0 million or ~~10.9%~~9.2%. The increase in revenue was primarily from ~~international government clients~~an increase of ~~$19.9~~$39.4 million ~~or 111.7%,~~and $6.2 million from our U.S. federal ~~government clients of $11.4 million, or 6.7%,~~government’s health, education, and ~~commercial clients of $6.5 million, or 6.0%.See “Note 7—Revenue Recognition” in~~ ~~the “Notes to Consolidated Financial Statements.”~~ ~~The change in revenue from international government clients for the three months ended June 30, 2021 compared to 2020 was driven by increases of $12.5 million, or 251.9%, from our~~social programs and energy, environment, and infrastructure client ~~market~~markets, respectively, $7.4 million and ~~$6.7~~$0.5 million ~~or 59.3%,~~ from our U.S. state and local government’s health, education, and social programs and energy, environment, and infrastructure client ~~market. Our increase in revenue from U.S. federal government clients was mainly~~markets, respectively, and $1.7 million from our international government’s health, education, and social programs client market, ~~which increased $11.3~~offset by decreases of $11.1 million or

~~10.1%, during the three months ended June 30, 2021 compared to 2020. Increases in revenue~~and $0.6 million from ~~commercial clients include $6.0 million, or 37.9%, from U.S. consumer and financial services client market, $5.4 million, or 8.3%, from U.S.~~our international government’s energy, environment, and infrastructure and safety and security client ~~market,~~markets, respectively, $3.5 million, $2.6 million, and ~~$1.5~~$1.2 million ~~or 20.2%,~~ from ~~international~~our commercial consumer and financial, energy, ~~environmental,~~environment, and infrastructure, ~~client market, offset by a decrease of $6.6 million, or 50.9%, in revenue from U.S.~~and health, education, and social programs client markets, respectively, and $1.2 million from our U.S. federal government safety and security client market.

Direct Costs. Direct costs for the three months ended ~~June 30, 2021~~March 31, 2022 were ~~$246.6~~$258.2 million compared to ~~$223.4~~$232.1 million for the three months ended ~~June 30, 2020,~~March 31, 2021, an increase of ~~$23.2~~$26.1 million or ~~10.4%~~11.2%. The increase in direct costs was driven by ~~an increase~~increases of ~~$18.4 million in sub-contractor and other direct costs and $4.9~~$16.1 million in direct labor and associated fringe benefit ~~costs. The increase~~costs and $10.0 million in s~~ub-contractor~~subcontractor and other direct costs ~~was primarily due~~. The increases were attributable to ~~an increase in our~~additional work ~~for our international government clients that rely on sub-contract labor, as well as an increase in events and media buys that took place~~performed during the three months ended June 30, 2021. Sub-contractor and other direct costs for the three months ended June 30, 2021 was 45.1% of total direct costs compared to 41.5% for the three months ended June 30, 2020. The increase in direct labor and associated fringe benefit costs for the three months ended June 30, 2021 was also primarily driven by the increases in our work for our international government clients, with increases in headcounts and utilization asMarch 31, 2022 compared to the same period in ~~2020. Direct labor and fringe benefit costs for the three months ended June 30, 2021 was 54.9% of direct costs compared to 58.5% for the three months ended June 30, 2020.~~2021. Direct costs as a percent of revenue were ~~62.8%~~62.4% for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~63.1%~~61.3% for the three months ended ~~June 30, 2020.~~March 31, 2021. Direct labor and associated fringe benefit costs as a percentage of revenue was 36.1% and 35.2% for the three months ended March 31, 2022 and 2021, respectively, and subcontractor and other direct costs as a percentage of revenue was 26.3% and 26.1%, for the three months ended March 31, 2022 and 2021, respectively. Direct labor and associated fringe benefit costs as a percentage of direct costs was 57.8% and 57.4% for the three months ended March 31, 2022 and 2021, respectively, and subcontractor and other direct costs as a percentage of direct costs was 42.2% and 42.6% for the three months ended March 31, 2022 and 2021, respectively.

Indirect and selling expenses. Indirect and selling expenses for the three months ended ~~June 30, 2021~~March 31, 2022 was ~~$106.2~~$117.5 million compared to ~~$99.3~~$110.0 million for the three months ended ~~June 30, 2020,~~March 31, 2021, an increase of ~~$6.9~~$7.5 million or ~~7.0%~~6.8%. The increase in indirect and selling expenses was primarily due to an increase in ~~general and administrative costs of $3.7 million and~~ indirect labor and associated fringe benefit costs of ~~$3.2~~$9.1 million, offset by a decrease in general and administrative costs of $1.6 million. Indirect labor and associated fringe benefit costs increased due to higher ~~headcounts~~headcounts. The decrease in general and administrative costs was due to a decrease in the provision for credit losses of $5.5 million that offset increases in expenses such as ~~well as an increase in compensation~~contract labor and professional fees of $0.9 million, software licenses of $0.8 million, insurance of $0.7 million, travel of $0.3 million, and recruiting of $0.3 million which were the major drivers for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~the same period in 2020.~~2021. Indirect and selling expenses as a percent of revenue decreased to ~~27.0%~~28.4% for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~28.0%~~29.1% for the three months ended ~~June 30, 2020.~~March 31, 2021.

Depreciation and amortization. Depreciation and amortization was ~~$4.7~~$4.8 million for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$5.1~~$5.3 million for the three months ended ~~June 30, 2020.~~March 31, 2021. The decrease in depreciation and amortization is the result of certain assets becoming fully depreciated and amortized.

Amortization of intangible assets. Amortization of intangible assets for the three months ended ~~June 30, 2021~~March 31, 2022 was ~~$3.0~~$5.3 million compared to ~~$3.5~~$3.0 million for the three months ended ~~June 30, 2020.~~March 31, 2021. The ~~$0.5~~$2.3 million ~~decrease~~increase was primarily due to ~~intangible assets associated with prior acquisitions becoming fully amortized offset by~~ amortization of intangible assets acquired in our ~~2020 acquisition~~acquisitions of ~~ITG.~~ESAC and Creative Systems and Consulting in the fourth quarter of 2021.

Operating Income. Operating income was ~~$32.0~~$27.7 million for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$22.8~~$28.1 million for the three months ended ~~June 30, 2020, an increase~~March 31, 2021, a decrease of ~~$9.2~~$0.4 million or ~~40.3%~~1.5%. The ~~increase~~decrease in operating income was ~~largely~~ due to an increase in ~~revenue~~direct costs of ~~$38.5~~$26.1 million, indirect and selling expenses of $7.5 million, and amortization of intangible assets by $2.3 million, offset by an increase ~~direct costs~~in revenue of ~~$23.2~~$35.0 million and ~~in indirect~~a decrease of depreciation and ~~selling expenses of $2.4~~amortization by $0.5 million. Operating income as a percentage of revenue was ~~8.2%~~6.7% for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~6.5%~~7.4% for the three months ended ~~June 30, 2020.~~March 31, 2021.

Interest expense. ~~For the three months ended June 30, 2021 and 2020, interest~~Interest expense was ~~$2.6 million and $3.9 million resulting in a decrease of $1.3 million, or 33.2%. The decrease in interest expense was primarily due to our average debt balance of $363.5~~$2.7 million for the three months ended ~~June 30,~~March 31, 2022 and 2021. The comparable interest expense was due to our average interest rate for the three months ended March 31, 2022 of 1.4% compared to 1.9% for the same period in 2021 ~~compared to~~and our average debt balance of ~~$493.5~~$461.2 million for the three months ended ~~June 30, 2020.~~

~~Other (expense) income~~. ~~For the three months ended June 30, 2021, other expense was less~~March 31, 2022 being higher than ~~$0.1 million compared to other income~~our average debt balance of ~~$0.3~~$325.6 million for the three months ended ~~June 30, 2020. The change~~March 31, 2021.

Other expense. Other expense was ~~primarily due to net unrealized and realized foreign currency losses, net of the change in the value of foreign currency swaps,~~flat at $0.4 million for the three months ended ~~June 30, 2021 compared to net unrealized~~March 31, 2022 and ~~realized foreign currency gains, net of the change in the value of foreign currency swaps, for the three months ended June 30, 2020.~~2021.

Provision for Income Taxes. For the three months ended ~~June 30, 2021,~~March 31, 2022, provision for income taxes was ~~$9.0~~$6.8 million compared to ~~$5.6~~$6.7 million for the three months ended ~~June 30, 2020,~~March 31, 2021, an increase of ~~$3.4~~$0.1 million or ~~61.4%~~1.5%. The effective income tax rate for the three months ended ~~June 30,~~March 31, 2022 and 2021 was 27.5% and ~~2020 was 30.7% and 29.0%~~26.7%, respectively. The increase in the effective income tax rate was primarily due to ~~increased~~the impact of non-deductible executive compensation, non-deductible losses on insurance assets, and additional valuation allowance on excess foreign tax credits ~~and refinements to prior year provisions for return filings~~ compared with ~~2020, partially offset by non-taxable investment income and additional windfall tax benefit from equity-based compensation.~~2021.

Year-to-Year Change

Six Months Ended June 30,

Six Months Ended

Dollars

Percentages

June 30, 2020 and 2021
(dollars in thousands)

2021

2020

2021

2020

Dollars

Percent
Revenue

$
771,003

$
712,225

100.0%

100.0
%

$
58,778

8.3%
Direct Costs

478,728

454,023

62.1%

63.7
%

24,705

5.4%
Operating Costs and Expenses:

Indirect and selling expenses

216,160

202,526

28.0%

28.4
%

13,634

6.7%
Depreciation and amortization

9,998

10,243

1.3%

1.4
%

(245
)

(2.4%)
Amortization of intangible assets

6,034

6,332

0.8%

0.9
%

(298
)

(4.7%)
Total Operating Costs and Expenses

232,192

219,101

30.1%

30.7
%

13,091

6.0%
Operating Income

60,083

39,101

7.8%

5.6
%

20,982

53.7%
Interest expense

(5,295
)

(7,433
)

(0.6%)

(1.0
%)

2,138

(28.8%)
Other (expense) income

(463
)

539

(0.1%)

0.1
%

(1,002
)

(185.9%)
Income before Income Taxes

54,325

32,207

7.1%

4.7
%

22,118

68.7%
Provision for Income Taxes

15,662

7,939

2.0%

1.1
%

7,723

97.3%
Net Income

$
38,663

$
24,268

5.1%

3.6
%

$
14,395

59.3%

~~Revenue.~~ Revenue for the six months ended June 30, 2021 was $771.0 million, compared to $712.2 million for the six months ended June 30, 2020, representing an increase of $58.8 million or 8.3%. The increase in revenue was from international government clients of $34.3 million, or 84.2%, and U.S. federal government clients of $31.7 million, or 9.7%, offset by decreases in revenue from commercial clients of $3.9 million, or 1.7%, and from U.S. state and local government clients of $3.3 million, or 2.8%. The increase in revenue from international government clients was driven by $26.3 million, or 273.7%, from our energy, environment, and infrastructure client market, $6.7 million, or 24.3%, from our health, education, and social programs client market, and $1.2 million, or 37.4%, from our safety and security client market. Our revenue from U.S. federal government clients increased due to $27.0 million, or 12.7%, from our health, education, and social programs client market and $5.4 million, or 9.4%, from our energy, environment, and infrastructure client market. Decreases in revenue from commercial clients was mainly from a decrease in revenue from our U.S. health, education, and social programs client market of $19.4 million, or 63.0%, $1.0 million, or 7.8%, from our international consumer and financial services client market, offset by increases of $11.7 million or 9.3% from U.S. energy, environment, and infrastructure client market, $4.0 million, or 10.9%, from U.S. consumer and financial services client market, and $0.5 million, or 3.0%, from our international energy, environment, and infrastructure client market. Revenue from our U.S. state and local government clients decreased primarily due to a $10.5 million, or 11.9%, as a result of a decrease from our energy, environment, and infrastructure client market and $0.4 million, or 49.4%, from our safety and security client market, offset by increase of $7.6 million, or 26.1%, from our health, education, and social programs client market.

~~Direct Costs~~. Direct costs for the six months ended June 30, 2021 was $478.7 million compared to $454.0 million for the six months ended June 30, 2020, an increase of $24.7 million or 5.4%. The increase in direct costs was driven by an increase of $14.4 million in sub-contractor and other direct costs and $10.3 million in direct labor and associated fringe benefit costs. The increase in sub-contractor and other direct costs was primarily due to additional work for our international government clients and additional events and media buys occurring during the six months ended June 30, 2021 compared to 2020. Sub-contractor and other direct costs as a percentage of total direct costs was 43.9% for the six months ended June 30, 2021 compared to 43.1% for the same period in 2020. Direct labor and associated fringe costs increased primarily due to additional headcounts and higher utilization from our employees in support of our work for our international government clients. Direct labor and fringe benefit costs for the six months ended June 30, 2021 was 56.1% of direct costs compared to 56.9% for the six months ended June 30, 2020. Direct costs as a percent of revenue decreased to 62.1% for the six months ended June 30, 2021, compared to 63.7% for the six months ended June 30, 2020.

~~Indirect and selling expenses.~~ Indirect and selling expenses for the six months ended June 30, 2021 were $216.2 million compared to $202.5 million for the six months ended June 30, 2020, an increase of $13.6 million or 6.7%. The increase in indirect and selling expenses was primarily due to increases in indirect labor and associated fringe benefit costs of $10.2 million and $3.4 million in general and administrative expenses. The main drivers for the increase in indirect labor and associated fringe benefit costs was a slightly higher headcount at June 30, 2021 as well as additional compensation for the six months ended June 30, 2021 compared to the same period in 2020. The main drivers for the increase in general and administrative expenses were increases to credit losses of $6.6 million and software licenses of $1.7 million, offset by decreases to travel expense of $1.7 million, facilities expense of $0.9 million, and contract labor expense of $0.8 million. Indirect and selling expenses as a percent of revenue decreased~~to 28.0% for the six months ended June 30, 2021, compared to 28.4% for the six months ended June 30, 2020.~~

~~Depreciation and amortization~~. Depreciation and amortization was $10.0 million for the six months ended June 30, 2021 compared to $10.2 million for the six months ended June 30, 2020. The $0.2 million decrease is the result of certain assets becoming fully depreciated and amortized.

~~Amortization of intangible assets~~. Amortization of intangible assets for the six months ended June 30, 2021 was $6.0 million compared to $6.3 million for the six months ended June 30, 2020. The $0.3 million decrease was primarily due to reduced levels of amortization of intangible assets associated with prior acquisitions offset by amortization of intangible assets acquired in our 2020 acquisition of ITG.

~~Operating Income~~. Operating income was $60.1 million for the six months ended June 30, 2021 compared to $39.1 million for the six months ended June 30, 2020, an increase of $21.0 million or 53.7%. The change was largely due to an increase in revenue of $58.8 million, offset by an increase in direct costs of $24.7 million and indirect and selling expenses of $13.7 million. Operating income as a percentage of revenue increased to 7.8% for the six months ended June 30, 2021, compared to 5.6% for the six months ended June 30, 2020.

~~Interest expense.~~ For the six months ended June 30, 2021, interest expense was $5.3 million compared to $7.4 million for the six months ended June 30, 2020, a decrease of $2.1 million or 28.8%. The decrease in interest expense was due to our average debt balance of $344.6 million during the six months ended June 30, 2021 compared to $449.0 million during the same period in 2020.

~~Other (expense) income.~~ For the six months ended June 30, 2021 other expense was $0.5 million compared to other income of $0.5 million for the six months ended June 30, 2020. The change was primarily due to net unrealized and realized foreign currency losses, net of the change in the value of foreign currency swaps, for the six months ended June 30, 2021 compared to net unrealized and realized foreign currency gains, net of the change in the value of foreign currency swaps, for the six months ended June 30, 2020.

~~Provision for Income Taxes~~. For the six months ended June 30, 2021, provision for income taxes was $15.7 million compared to $7.9 million for the six months ended June 30, 2020, an increase of $7.7 million or 97.3%. The effective income tax rate for the six months ended June 30, 2021 and 2020 was 28.8% and 24.6%, respectively. The increase in the effective income tax rate was primarily due to increased non-deductible executive compensation, valuation allowance on excess foreign tax credits, and refinements to prior year provisions for return filings compared with 2020, partially offset by non-taxable investment income and additional windfall tax benefit from equity-based compensation.

These following tables provide reconciliations of financial measures that are not U.S. GAAP (“non-GAAP”) to the most applicable U.S. GAAP measures. While we believe that these non-GAAP financial measures may be useful in evaluating our financial information, they should be considered supplemental in nature and not as a substitute for financial information prepared in accordance with U.S. GAAP. Other companies may define similarly titled non-GAAP measures differently and, accordingly, care should be exercised in understanding how we define these measures.

Service revenue represents revenue less subcontractor and other direct costs ~~which, among other things,~~(which include third-party materials and travel ~~expenses.~~expenses). Service revenue is not a recognized term under U.S. GAAP and should not be considered an alternative to revenue as a measure of operating performance. This presentation of service revenue may not be comparable to other similarly titled measures used by other companies because other companies may use different methods to prepare similarly titled measures. We believe service revenue is a useful measure to investors since, as a consulting firm, a key source of our profit is revenue obtained from the services that we provide to our clients through our employees. For the three months ended ~~June 30, 2021,~~March 31, 2022, service revenue was ~~$281.4~~$304.6 million compared to ~~$261.2~~$279.6 million for the three months ended ~~June 30, 2020,~~March 31, 2021, an increase of ~~$20.2~~$25.0 million or ~~7.7%. For the six months ended June 30, 2021, service revenue was $561.0 million compared to $516.6 million, for the six months ended June 30, 2020, an increase of $44.4 million or 8.6%~~8.9%. Service revenue was ~~71.7%~~73.7% and ~~73.8%~~73.9% of total revenue for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020, respectively, and 72.8% and 72.5% of total revenue for the six months ended June 30, 2021 and 2020, respectively.~~ 2021.

The table below presents a reconciliation of revenue to service revenue for the periods indicated:

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
(in thousands)	2021			2020			2021			2020			2022			2021
Revenue	$	392,525		$	353,987		$	771,003		$	712,225		$	413,468		$	378,478
Subcontractor and other direct costs		(111,140	)		(92,789	)		(210,051	)		(195,625	)		(108,898	)		(98,911	)
Service revenue	$	281,385		$	261,198		$	560,952		$	516,600		$	304,570		$	279,567

Earnings before interest and other income and/or expense, tax, and depreciation and amortization (“EBITDA”) is a measure we use to evaluate operating performance. We believe EBITDA is useful in assessing ongoing trends and, as a result, may provide greater visibility in understanding our operations.

Adjusted EBITDA is EBITDA further adjusted to eliminate the impact of certain items that we do not consider to be indicative of the performance of our ongoing operations. We evaluate these adjustments on an individual basis based on both the quantitative and qualitative aspects of the item, including their size and nature as well as whether or not we expect them to occur as part of our normal business on a regular basis. We believe that the adjustments applied in calculating adjusted EBITDA are reasonable and appropriate to provide additional information to investors.

EBITDA and adjusted EBITDA are not recognized terms under U.S. GAAP and should not be used as alternatives to net income as a measure of operating performance. This presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures used by other companies because other companies may use different methods to prepare similarly titled measures. EBITDA and adjusted EBITDA are not intended to be measures of free cash flow for management’s discretionary use as these measures do not include certain cash requirements such as interest payments, tax payments, capital expenditures and debt service.

The following table presents a reconciliation of net income to EBITDA and adjusted EBITDA for the periods indicated. ~~Certain immaterial amounts in the prior year have been revised to conform with the current presentation of adjusted EBITDA:~~

	Three Months Ended						Six Months Ended					Three Months Ended
	June 30,						June 30,					March 31,
(in thousands)	2021			2020			2021		2020			2022		2021
Net income	$	20,312		$	13,656		$	38,663	$	24,268		$	17,862	$	18,351
Other expense (income)		46			(349	)		463		(539	)
Other expense													369		417
Interest expense		2,612			3,908			5,295		7,433			2,697		2,683
Provision for income taxes		8,984			5,567			15,662		7,939			6,775		6,678
Depreciation and amortization		7,747			8,543			16,032		16,575			10,155		8,285
EBITDA		39,701			31,325			76,115		55,676			37,858		36,414
Adjustment related to impairment of long-lived assets ⁽¹⁾		—			—			303		—			—		303
Special charges related to acquisitions ⁽²⁾		54			98			149		1,942			1,319		95
Special charges related to severance for staff realignment ⁽³⁾		318			1,078			809		2,848			1,226		491
Special charges related to facilities consolidations and office closures⁽⁴⁾		(61	)		—			139		—			—		200
Special charges related to retirement of the former Executive Chair ⁽⁵⁾		—			—			224		—
Total special charges		311			1,176			1,624		4,790
Special charges related to the transfer to our new corporate headquarters ⁽⁵⁾													1,882		—
Special charges related to retirement of the Executive Chair ⁽⁶⁾													—		224
Total special charges and adjustments													4,427		1,313
Adjusted EBITDA	$	40,012		$	32,501		$	77,739	$	60,466		$	42,285	$	37,727

Non-GAAP diluted earnings per share (“EPS”) represents diluted EPS excluding the impact of certain items such as impairment of intangible assets, acquisition expenses, severance for staff realignment, facility consolidations and office closures, and an adjustment related to the retirement of the former Executive Chair (which are also excluded from adjusted EBITDA, as described further above), as well as the impact of amortization of intangible assets related to our acquisitions and income tax effects. While these adjustments may be recurring and not infrequent or unusual, we do not consider these adjustments to be indicative of the performance of our ongoing operations. Non-GAAP diluted EPS is not a recognized term under U.S. GAAP and is not an alternative to basic or diluted EPS as a measure of performance. This presentation of non-GAAP diluted EPS may not be comparable to other similarly titled measures used by other companies because other companies may use different methods to prepare similarly titled measures. We believe that the supplemental adjustments applied in calculating non-GAAP diluted EPS are reasonable and appropriate to provide additional information to investors.

The following table presents a reconciliation of diluted EPS to non-GAAP diluted EPS for the periods indicated:

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2021			2020			2021			2020			2022			2021
Diluted EPS	$	1.07		$	0.72		$	2.03		$	1.27		$	0.94		$	0.96
Adjustment related to impairment of long-lived assets		—			—			0.02			—			—			0.02
Special charges related to acquisitions		—			—			0.01			0.10			0.07			—
Special charges related to severance for staff realignment		0.02			0.06			0.04			0.15			0.06			0.03
Special charges related to facilities consolidations and office closures		—			—			0.01			—			—			0.01
Special charges related to retirement of the former Executive Chair		—			—			0.01			—
Special charges related to the transfer to our new corporate headquarters														0.10			—
Special charges related to retirement of Executive Chair														—			0.01
Amortization of intangibles		0.16			0.18			0.32			0.33			0.28			0.16
Income tax effects ⁽¹⁾		(0.06	)		(0.07	)		(0.12	)		(0.14	)
Income tax effects on amortization, special charges, and adjustments ⁽¹⁾														(0.14	)		(0.06	)
Non-GAAP EPS	$	1.19		$	0.89		$	2.32		$	1.71		$	1.31		$	1.13

Liquidity and Borrowing Capacity. On March 3, 2020, we entered into the First Amendment (the “First Amendment”) to the Fifth Amended and Restated Business Loan and Security Agreement with a group of 10 lenders (the “Credit Facility”). The First Amendment amended the Fifth Amended and Restated Business Loan and Security Agreement, entered into on May 17, 2017. As a result of the First Amendment, we increased our borrowing capacity by $200.0 million through the addition of a $200.0 million term loan to the Credit Facility. The First Amendment also made certain other changes to the Credit Facility as described in “Note 6—Long-Term Debt” in the “Notes to Consolidated Financial Statements” in this Quarterly Report.

Short-term liquidity requirements are created by our use of funds for working capital, capital expenditures, debt service, dividends and share repurchases. We expect to meet these requirements through a combination of cash flow from operations and borrowings. Our primary source of borrowings is from our Credit Facility, as described in “Note 6—7—Long-Term Debt” in the “Notes to Consolidated Financial Statements” in this Quarterly Report. As of March 31, 2022, we had $315.1 million, or $250.4 million after taking into account the financial and performance-based limitations, available under the Credit Facility to fund our ongoing operations, future acquisitions, dividend payments, and share repurchase program. Should the need arise, we intend to further increase our borrowing capacity in the future to provide us with adequate working capital to continue our ongoing operations.

~~There is continued uncertainty as to effects of~~In March 2020, the World Health Organization characterized the novel COVID-19 virus as a global pandemic. Although we continue to face risks and uncertainties related to COVID-19 and its variants, to date we have not experienced any significant impacts on our liquidity and capital resources which remain available to us.

In addition to the continued COVID-19 pandemic, there are other conditions, such as the ongoing war in Ukraine and the recent rise in the U.S. inflation, that create uncertainty in the global economy, which in turn may impact, among other things, our ability to generate ~~historical levels of~~ positive cash flows from operations and our ability to successfully execute and fund key ~~initiatives.~~initiatives in the near future. However, our current belief is that the combination of internally generated funds, available bank borrowings, and cash and cash equivalents on hand will provide the required liquidity and capital resources necessary to fund on-going operations, customary capital expenditures and acquisitions, quarterly cash dividends, share repurchases and organic growth. Additionally, we continuously analyze our capital structure to ensure we have capital to fund future strategic acquisitions. We monitor the state of the financial markets on a regular basis to assess the availability and cost of additional capital resources from both debt and equity sources. We believe that we will be able to access these markets at commercially reasonable terms and conditions if, in the future, we need additional borrowings or capital.

Financial Condition. There were several changes in our consolidated balance sheet as of ~~June 30, 2021~~March 31, 2022 compared to the consolidated balance sheet as of December 31, ~~2020.~~2021. The more significant changes are discussed below.

Cash and cash equivalents decreased to ~~$9.6~~$7.4 million as of ~~June 30, 2021,~~March 31, 2022, from ~~$13.8~~$8.3 million on December 31, ~~2020~~2021 and restricted cash decreased to ~~$26.3~~$1.7 million as of ~~June 30, 2021~~March 31, 2022 from ~~$68.1~~$12.2 million on December 31, ~~2020.~~2021. These balances and the changes to the balances of cash and cash equivalents and restricted cash are further discussed in “Cash Flow” below and discussed in “Note 2—Restricted Cash” in the “Notes to Consolidated Financial ~~Statements.”~~Statements” in this Quarterly Report.

Contract receivables, net of allowance for expected credit losses, as of ~~June 30, 2021 increased~~March 31, 2022, decreased to ~~$242.6~~$205.8 million ~~compared to $222.9~~from $237.7 million on December 31, ~~2020,~~2021, primarily due to ~~an increase in~~the timing of our billings ~~as a result~~and collection of ~~an increase in revenue generated in 2021~~

~~compared to the prior year.~~clients’ invoices. Contract receivables are a significant component of our working capital and may be favorably or unfavorably impacted by our collection efforts, including timing from new contract startups, and other short-term fluctuations related to the payment practices of our clients. Contract assets and contract liabilities represent revenue in excess of billings and billings in excess of revenue, respectively, both of which generally arise from revenue recognition timing and contractually stipulated billing schedules or billing complexity. At ~~June 30, 2021,~~March 31, 2022, contract assets and contract liabilities were ~~$150.4~~$189.1 million and ~~$35.7~~$31.5 million, respectively, compared to ~~$143.4~~$137.9 million and ~~$42.1~~$39.7 million, respectively, at December 31, ~~2020.~~2021.

We evaluate our collections efforts using the days-sales-outstanding ratio (“DSO”), which we calculate by dividing total accounts receivable (contract receivables, net and contract assets, less contract liabilities), by revenue per day for the trailing 90-day period. DSO was 8279 days for the quarter ended ~~June 30, 2021~~March 31, 2022 compared to 8880 days for the quarter ended ~~June 30, 2020.~~ ~~We continue to be impacted by the Puerto Rico disaster relief and rebuild efforts which have complex reporting and billing requirements and have been slow to pay our invoices~~.March 31, 2021. The DSO, excluding the Puerto Rico disaster relief and rebuild efforts due to complex reporting and billing requirements and therefore slow to pay our invoices, was 74 days for the quarter ended ~~June 30, 2021~~March 31, 2022 compared to 7770 days for the quarter ended ~~June 30, 2020.~~March 31, 2021.

Goodwill, as discussed in “Note 4—Goodwill” in the “Notes to Consolidated Financial Statements” in this Quarterly Report, ~~increased~~decreased slightly mainly due to the impact of foreign currency translation. Other intangible assets decreased to ~~$53.9~~$74.3 million at ~~June 30, 2021~~March 31, 2022 from ~~$59.9~~$79.6 million on December 31, ~~2020~~2021 due to ~~continued~~ amortization of intangible assets related to prior acquisitions that we had made.

The decrease in right-of-use assets and lease liabilities are primarily due to the amortization of right-of-use assets and operating lease liabilities through rent payments. ~~In the first quarter of~~

Accounts payable decreased to $95.7 million at March 31, 2022 from $105.7 million at December 31, 2021, ~~we incurred a $0.3~~and our accrued expenses totaled $176.5 million ~~charge for the impairment of a lease for our discontinued use of the property~~at March 31, 2022 as compared to $186.4 million at December 31, 2021. The changes in our ~~operations~~accounts payable and ~~in anticipation~~accrued expenses are primarily due to the timing of ~~subleasing the property. While we believe that the property will be subleased to a new tenant, we may incur additional impairment charges in the event~~invoices from our vendors and subcontractors for services rendered and subsequent payments of ~~a delay in subleasing the space or a tenant cannot be found.~~those invoices.

Long-term debt (exclusive of unamortized debt issuance costs) increased to ~~$333.9~~$461.6 million on ~~June 30, 2021~~March 31, 2022 from ~~$315.8~~$423.6 million on December 31, ~~2020,~~2021, primarily due to the net advance on our Credit Facility of ~~$18.2~~$38.0 million. The average debt balances on the Credit Facility for the three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ were ~~$363.5~~$461.2 million and ~~$493.5~~$325.6 million, ~~respectively, and $344.6 million and $449.0 million for the six months ended June 30, 2021 and 2020,~~ respectively. The average interest rate on the Credit Facility, excluding any fees and unamortized debt issuance costs, for the three months ended ~~June 30,~~March 31, 2022 and 2021 was 1.4% and ~~2020 was 1.6% and 2.4%~~1.9%, ~~respectively, and 1.7% and 2.7% for the six months ended June 30, 2021,~~ respectively. We generally utilize cash flow from operations as our primary source of funding and turn to our Credit Facility to fund any temporary fluctuations, such as increases in contract receivables, reductions in accounts payable and accrued expenses, purchase of treasury stock, payment of declared dividends, additional capital expenditures, and to meet funding requirements for new acquisitions.

The decrease in accumulated other comprehensive loss of ~~$3.2~~$2.7 million, net of taxes, was driven by a change in unrealized gains of ~~$1.6~~$5.5 million in the fair value of the interest rate hedging instruments, before taxes, ~~$1.8~~and $0.9 million in previously unrealized net losses reclassified to comprehensive income related to hedging instruments, before taxes, ~~$1.1~~a $2.3 million change, before taxes, in the value of certain foreign currencies relative to the U.S. dollar (primarily the British Pound, Euro and Canadian dollar), and ~~$0.4~~$0.2 million in gains from the previous sale of an interest rate hedge reclassified to income. The net tax effects of the transactions totaled ~~$1.0~~$1.2 million. See “Note ~~10—~~11—Accumulated Other Comprehensive Loss” in the “Notes to Consolidated Financial ~~Statements.”~~Statements” in this Quarterly Report.

We have entered into floating-to-fixed interest rate swap agreements (the “Swaps”) with expiration dates through August 2023 and February 2025 for a total notional amount of $200.0 million in order to hedge a portion of our floating rate Credit Facility. As of ~~June 30, 2021,~~March 31, 2022, the fair value of the Swaps was an unrealized loss of ~~$7.5~~$0.5 million ~~before tax,~~included current liabilities and is$3.0 million unrealized gain included in ~~current and long-term liabilities.~~non-current asset. See “Note 8—9—Derivative Instruments and Hedging Activities” and “Note ~~16—~~17—Fair Value” in the “Notes to Consolidated Financial ~~Statements.”~~Statements” in this Quarterly Report. On a quarterly basis, management evaluates the Swaps to determine their effectiveness and record the change in fair value of the Swaps as an adjustment to accumulated other comprehensive loss. Management intends that the Swaps remain effective.

We have explored various options for mitigating the risk associated with potential fluctuations in the foreign currencies in which we conduct transactions. We currently have forward contract agreements (“currency hedges”) in an amount proportionate to work anticipated to be performed under certain contracts in Europe. We recognize changes in the fair value of the currency hedges in our results of operations. We may increase the number, size, and scope of our currency hedges as we analyze options for mitigating our

foreign exchange and interest rate risk. The current impact of the foreign currency hedges to the consolidated financial statements is immaterial.

Inflation. Our business and results of operations have not been materially affected by inflation and changing prices during the period presented and we do not expect to be materially affected in the future due to the nature of our business as a provider of professional services with contracts that can be negotiated with new prices.

Share Repurchase Program. The objective of ~~the~~our share repurchase program has been to offset dilution resulting from employee stock compensation. ~~We meet our objective to offset dilution via our 10b5-1 and 10b-18 trading plans.~~ ~~In September 2017~~Under the ~~board of directors approved a share repurchase~~ program, ~~that authorizes share repurchases in the aggregate up to $100.0 million. Our total repurchases are also limited by the Credit Facility as described in “Note 15~~—Share Repurchase Program” in the “Notes to Consolidated Financial Statements” in this Quarterly Report. Our overall repurchase limit is the lower of the amount imposed by our board of directors and by the Credit Facility. Previously, purchases ~~under the repurchase program would~~could be made from time to time at prevailing market prices in open market purchases or in privately negotiated transactions pursuant to Rules 10b5-1 and 10b-18 under

the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and in accordance with applicable insider trading and other securities laws and regulations. ~~On January 11, 2021, we approved~~ ~~an updated Rule 10b5-1 plan element of the share repurchase program, as part of our normal process, that commenced in January 2021.~~ ~~The purchases are funded from existing cash balances and/or borrowings, and the repurchased shares will be held in treasury and used for general corporate purposes.~~ The timing and extent to which we repurchase our shares will depend upon market conditions and other corporate considerations, as may be considered in our sole discretion. ~~During~~The purchases will be funded from existing cash balances and/or borrowings, and the ~~six months ended June 30, 2021, we~~ repurchased ~~173,000~~ shares ~~under this program at an average price of $85.21 per share.~~will be held in treasury and used for general corporate purposes. The Credit Facility permits ~~unlimited~~ share repurchases, provided ~~our~~the Company’s Leverage Ratio, prior to and after giving effect to such repurchases, is not greater than 3.50 to 1.00.

In September 2017, the Company’s board of directors (the “board”) approved a share repurchase program that authorizes share repurchases in the aggregate up to $100.0 million. In November 2021, the board approved an increase to the share repurchase program to a new limit of $200.0 million, inclusive of the prior limit. During the fourth quarter of 2021, the board approved an updated Rule 10b5-1 plan element of the share repurchase program to repurchase a maximum of 165,000 shares or a total of $20.0 million, whichever is reached first. The plan commenced on December 20, 2021 and ended during the first quarter of 2022 with a total of 165,000 shares repurchased from December 20, 2021 to February 2, 2022 for a total of $16.3 million.

During the three months ended March 31, 2022, we repurchased 176,375 shares under this program at an average price of $96.18 per share. As of ~~June 30, 2021, $31.3~~March 31, 2022, $111.9 million remained available for share ~~repurchases under the Credit Facility.~~repurchases.

Cash Flow. We consider cash on deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. The following table sets forth our sources and uses of cash for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

	Six Months Ended						Three Months Ended
	June 30,						March 31,
(in thousands)	2021			2020			2022			2021
Net Cash Provided by Operating Activities	$	6,341		$	10,801
Net Cash (Used in) Provided by Operating Activities							$	(7,055	)	$	4,961
Net Cash Used in Investing Activities		(7,475	)		(262,105	)		(6,454	)		(3,595	)
Net Cash (Used in) Provided by Financing Activities		(45,642	)		254,366
Net Cash Provided by (Used in) Financing Activities								2,674			(33,275	)
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash		699			(480	)		(525	)		745
(Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash	$	(46,077	)	$	2,582
Decrease in Cash, Cash Equivalents, and Restricted Cash							$	(11,360	)	$	(31,164	)

Our operating cash flows are primarily affected by the overall profitability of our contracts, our ability to invoice and collect from our clients in a timely manner, and the timing of vendor and subcontractor payments in accordance with negotiated payment terms. We bill most of our clients on a monthly basis after services are rendered.

Operating activities ~~provided $6.3~~used $7.1 million in cash for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$10.8~~providing $5.0 million for the ~~six~~three months ended ~~June 30, 2020.~~March 31, 2021, a change of $12.1 million. The decrease in cash flows from operations for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to the prior year was primarily due to ~~an increase~~a net decrease of $11.0 million in ~~net income, inclusive~~billings and collections of ~~adjustments for non-cash expenses, and an increase~~receivables in ~~cash flows from our net contract assets and liabilities and our accounts payable and other operating liabilities due~~2022 compared to ~~timing of payments, offset by a decrease in cash flows from~~ the ~~change in contract receivables. The decrease in contract receivables is primarily due to slower collection related to our disaster relief and rebuild efforts as well as in our international business.~~prior year.

Investing activities used cash of ~~$7.5~~$6.5 million for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$262.1~~$3.6 million for the ~~six~~three months ended ~~June 30, 2020.~~March 31, 2021. Our cash flows used in investing activities during the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 were for capital expenditures for property and equipment and capitalized software, and for the six months ended June 30, 2020 we used $253.1 million for payments of a business acquisition, net of cash acquired, and $9.0 million for capital expenditures for property and equipment and capitalized software.

Our cash flows provided by or used in financing activities consists primarily of debt and equity transactions. For the ~~six~~three months ended ~~June 30,~~March 31, 2022, cash flows provided by financing activities was $2.7 million, consisting of net advances and payments on our Credit Facility totaling $38.0 million, offset by net payments for stock issuances and buybacks of $22.3 million, primarily representing shares repurchased under our share repurchase program, net receipts and payments of restricted contract funds of $10.4 million, and payments of cash dividends totaling $2.6 million. For the three months ended March 31, 2021, cash flows used in financing activities was ~~$45.6 million, consisting net~~$33.3 million. The cash ~~proceeds~~flow was primarily from net advances ~~from~~and payments on our Credit Facility ~~totaling $18.2~~of $11.1 million and proceeds from ~~exercises~~exercise of ~~stock~~ options of ~~$2.8~~$2.7 million,, offset by net receipts and payments of restricted contract funds of ~~$42.2~~$26.6 million, cash used for net payments for stock issuances and buybacks of ~~$18.4~~$17.1 million, primarily representing shares repurchased under our share repurchase program, payments of cash dividends totaling ~~$5.3~~$2.6 million, and ~~payments~~ payment on business acquisition liabilities of $0.7 ~~million~~million.~~. For the six months ended June 30, 2020, cash flows provided by financing activities was $254.4 million. This was primarily from~~ cash provided by net advances on our Credit Facility of $288.4 million to fund the ITG acquisition, offset by cash used for net payments for stock issuances and buybacks of $23.0 million, primarily representing shares repurchased under our share repurchase program, payments of cash dividends totaling $5.3 million, ~~payment of debt issuance costs of $2.1 million, payment on business acquisition liabilities of $1.9 million, and payment of capital expenditure obligations of $1.7 million.~~

There have been no material changes in the disclosures discussed in the section entitled “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of our Annual Report.

Disclosure Controls and Procedures and Internal Controls Over Financial Reporting. As of the period covered by this report, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act. We performed the evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in our reports filed with the SEC under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (2) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. There have been no significant changes in our internal controls over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f), during the periods covered by this Quarterly Report or, to our knowledge, in other factors that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Limitations on the Effectiveness of Controls. Control systems, no matter how well conceived and operated, are designed to provide a reasonable, but not an absolute, level of assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been or will be detected. Because of the inherent limitations in any control system, misstatements due to error or fraud may occur and may not be detected.

We are involved in various legal matters and proceedings arising in the ordinary course of business. While these matters and proceedings cause us to incur costs, including, but not limited to, attorneys’ fees, we currently believe that any ultimate liability arising out of these matters and proceedings will not have a material adverse effect on our financial position, results of operations, or cash flows.

There have been no material changes in the risk factors discussed in the section entitled “Risk Factors” disclosed in Part I, Item 1A of our Annual Report.

The risks described in our Annual Report are not the only risks that we encounter. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also materially adversely affect our business, financial condition, and/or operating results.

Purchase of Equity Securities by Issuer. The following table summarizes our share repurchase activity for the three months ended ~~June 30, 2021:~~March 31, 2022:

Period

Total Number
of Shares
Purchased ⁽¹⁾⁽²⁾

Average Price
Paid per
Share

Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs

Maximum Number
(or Approximate
Dollar Value) of
Shares that May
Yet Be Purchased
Under the Plans
or Programs ⁽³⁾

April 1 - April 30

21,809

$
91.06

21,800

$
31,356,499

May 1 - May 31

448

$
93.02

—

$
31,356,499

June 1 - June 30

—

$
—

—

$
31,356,499

Total

22,257

$
91.10

21,800

Period	Total Number of Shares Purchased ⁽¹⁾⁽²⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs ⁽³⁾
January 1 - January 31		147,032	$	99.26		129,765	$	115,991,949
February 1 - February 28		10,435	$	93.33		10,435	$	115,017,880
March 1 - March 31		69,308	$	88.71		36,175	$	111,869,762
Total		226,775	$	95.76		176,375

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

Delaware		22-3661438
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

9300 Lee Highway, Fairfax, VA		22031
(Address of Principal Executive Offices)		(Zip Code)

Title of each class	Trading Symbols(s)	Name of each exchange on which registered
Common Stock	ICFI	NASDAQ

PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

	Consolidated Balance Sheets at ~~June 30, 2021~~March 31, 2022 (Unaudited) and December 31, ~~2020~~2021	3

	Consolidated Statements of Comprehensive Income (Unaudited) for the Three Months Ended March 31, 2022 and ~~Six Months Ended June 30,~~ 2021 ~~and 2020~~	4

	Consolidated Statements of Cash Flows (Unaudited) for the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~	5

	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1918

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3029

Item 4.	Controls and Procedures	3029

PART II. OTHER INFORMATION		3130

Item 1.	Legal Proceedings	3130

Item 1A.	Risk Factors	3130

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3130

Item 3.	Defaults Upon Senior Securities	3130

Item 4.	Mine Safety Disclosures	3130

Item 5.	Other Information	3130

Item 6.	Exhibits	3231

	June 30, 2021		December 31, 2020
Deposits	$	17,048	$	9,881
Restricted deposits		26,292		68,138
Accrued IT and software licensing costs		1,605		2,157
Accrued taxes and insurance premiums		5,027		4,327
Accrued facilities rental and lease exit costs		1,483		780
Accrued interest		226		214
Accrued professional services		2,467		2,094
Accrued dividends		2,638		2,641
Contingent liabilities from acquisitions		—		683
Interest rate swap liability - current		3,700		3,693
Other accrued expenses and current liabilities		6,766		6,300
Total accrued expenses and other current liabilities	$	67,252	$	100,908

Balance as of December 31, 2021	$	1,046,760
Measurement period adjustments - ESAC acquisition		87
Measurement period adjustments - Creative Systems and Consulting acquisition		(1	)
Effect of foreign currency translation		(1,343	)
Balance as of March 31, 2022	$	1,045,503

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

Balance as of December 31, 2020	$	909,913
Effect of foreign currency translation		727
Balance as of June 30, 2021	$	910,640

	June 30, 2021			December 31, 2020
Real estate facilities	$	156,436		$	157,010
Office equipment		2,120			1,864
Other		612			580
		159,168			159,454
Amortization of right-of-use assets		(47,413	)		(32,322	)
Total operating lease right-of-use assets	$	111,755		$	127,132

					Dates of Effected Cash Flows
Date of Interest Rate Swap Agreement	Notional Amount ($million)		Paid Fixed Interest Rate%		Beginning	Ending
September 30, 2016 ⁽¹⁾	$	100.0	-		January 31, 2018	January 31, 2023
August 31, 2017	$	25.0	1.8475%		August 31, 2018	August 31, 2023
August 8, 2018	$	50.0	2.8540%		August 31, 2018	August 31, 2023
August 8, 2018	$	25.0	2.8510%		August 31, 2018	August 31, 2023
February 20, 2020	$	100.0	1.2940%	��	February 28, 2020	February 28, 2025

	Six Months Ended June 30, 2021
	Foreign Currency Translation Adjustments			Gain on Sale of Interest Rate Hedge Agreement ⁽¹⁾			Change in Fair Value of Interest Rate Hedge Agreements ⁽²⁾			Total
Accumulated other comprehensive (loss) income at December 31, 2020	$	(7,210	)	$	1,096		$	(7,992	)	$	(14,106	)
Current period other comprehensive (loss) income:
Other comprehensive income before reclassifications		1,150			—			1,557			2,707
Amounts reclassified from accumulated other comprehensive (loss) income ⁽³⁾		—			(360	)		1,835			1,475
Effect of taxes⁽⁴⁾		(165	)		97			(902	)		(970	)
Total current period other comprehensive income (loss)		985			(263	)		2,490			3,212
Accumulated other comprehensive (loss) income at June 30, 2021	$	(6,225	)	$	833		$	(5,502	)	$	(10,894	)

	Six Months Ended June 30, 2020
	Foreign Currency Translation Adjustments			Gain on Sale of Interest Rate Hedge Agreement ⁽¹⁾			Change in Fair Value of Interest Rate Hedge Agreement ⁽²⁾			Total
Accumulated other comprehensive (loss) income at December 31, 2019	$	(10,995	)	$	1,634		$	(2,783	)	$	(12,144	)
Current period other comprehensive (loss) income:
Other comprehensive (loss) income before reclassifications		(4,821	)		—			(10,155	)		(14,976	)
Amounts reclassified from accumulated other comprehensive (loss) income ⁽³⁾		—			(360	)		923			563
Effect of taxes⁽⁴⁾		607			94			2,425			3,126
Total current period other comprehensive (loss) income		(4,214	)		(266	)		(6,807	)		(11,287	)
Accumulated other comprehensive (loss) income at June 30, 2020	$	(15,209	)	$	1,368		$	(9,590	)	$	(23,431	)

Dividend Declaration Date	Dividend Per Share		Record Date	Payment Date
February 25, 2021	$	0.14	March 26, 2021	April 13, 2021
May 4, 2021	$	0.14	June 11, 2021	July 14, 2021
August 3, 2021	$	0.14	September 10, 2021	October 13, 2021

Exhibit Number		Exhibit


31.1		Certificate of the Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a) and 15d-14(a). *

31.2		Certificate of the Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a) and 15d-14(a). *

32.1		Certification of the Executive Chairman pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

101		The following materials from the ICF International, Inc. Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2021~~March 31, 2022 formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Cash Flows and (iv) Notes to Consolidated Financial Statements.*
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

	ICF INTERNATIONAL, INC.

~~August 4, 2021~~May 5, 2022	By:	/s/ John Wasson
		John Wasson
		President and Chief Executive Officer
		(Principal Executive Officer)

~~August 4, 2021~~May 5, 2022	By:	/s/ ~~Bettina Welsh~~Barry Broadus
		~~Bettina Welsh~~Barry Broadus
		~~Senior Vice President and~~ Chief Financial Officer (Principal Financial Officer)