8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 15, 2011

KORN/FERRY INTERNATIONAL

(Exact name of registrant as specified in its charter)

Delaware	001-14505	95-2623879
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1900 Avenue of the Stars, Suite 2600 Los Angeles, California	90067
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (310) 552-1834

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On June 15, 2011, Korn/Ferry International issued a press release announcing its fourth quarter fiscal year 2011 results. A copy of the press release is attached hereto as Exhibit 99.1. The information in this Item 2.02 and the exhibit hereto are furnished to, but not filed with, the Securities and Exchange Commission.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 Press Release, dated June 15, 2011.

SIGNATURES

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 hereunto duly authorized.

	KORN/FERRY INTERNATIONAL (Registrant)
Date: June 15, 2011
	/s/ Michael A. DiGregorio
	(Signature)
	Name:	Michael A. DiGregorio
	Title:	Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.		Description
	99.1	Press release, dated June 15, 2011.

EX-99.1

Exhibit 99.1

For Immediate Release

Contacts:
Investor Relations: Gregg Kvochak, (310) 556-8550
For Media: Mike Distefano, (310) 843-4199

Korn/Ferry International Announces Fourth Quarter Fiscal 2011 Results of Operations

Highlights

• Fourth quarter fiscal 2011 fee revenue increased 17% to $197.3 million, compared to $168.7 million in the same quarter last year.

• Q4 FY’11 diluted earnings per share was $0.43, compared to diluted earnings per share of $0.19 in Q4 FY’10. Excluding certain tax adjustments, Q4 FY’11 diluted earnings per share was $0.39.

• FY’11 fee revenue increased $171.9 million, or 30%, to $744.3 million, compared to $572.4 million last year.

• FY’11 diluted earnings per share was $1.27, compared to diluted earnings per share of $0.12 in FY’10. Excluding restructuring charges and certain tax adjustments, FY’11 and FY’10 diluted earnings per share was $1.25 and $0.35, respectively.

• Cash and marketable securities were $369 million at April 30, 2011 compared to $296 million at April 30, 2010.

Los Angeles, CA, June 15, 2011 - Korn/Ferry International (NYSE: KFY), a premier global provider of talent management solutions, announced fourth quarter fiscal 2011 diluted earnings per share of $0.43 compared to $0.19 in Q4 FY’10. Excluding certain tax adjustments, Q4 FY’11 diluted earnings per share was $0.39.

“I am enormously proud of the Korn/Ferry organization,” said Gary Burnison, Chief Executive Officer, Korn/Ferry International. “Once again, our growth was driven by the strength of our differentiated strategy. Thanks to the dedication of our colleagues in serving our clients, we achieved an operating margin of almost 12% for the full year. As we enter a new fiscal year, we will continue to build a Korn/Ferry brand that is synonymous with talent management, assisting our clients in linking their business and people strategies.”

Financial Results
(dollars in millions, except per share amounts)

	Fourth Quarter						Year to Date
	FY’11			FY’10			FY’11			FY’10
Fee revenue	$	197.3		$	168.7		$	744.3		$	572.4
Total revenue	$	205.8		$	176.9		$	776.3		$	599.6
Operating income (loss)	$	26.2		$	13.6		$	85.8		$	(2.7	)
Operating margin		13.3	%		8.1	%		11.5	%		(0.5	)%
Net income	$	20.4		$	8.9		$	58.9		$	5.3
Basic earnings per share	$	0.45		$	0.20		$	1.30		$	0.12
Diluted earnings per share	$	0.43		$	0.19		$	1.27		$	0.12

Adjusted Results (a):

	Fourth Quarter						Year to Date
	FY’11			FY’10			FY’11			FY’10
Operating income	$	26.2		$	13.7		$	87.9		$	17.9
Operating margin		13.3	%		8.1	%		11.8	%		3.1	%
Net income	$	18.3		$	9.0		$	58.1		$	15.8
Basic earnings per share	$	0.40		$	0.20		$	1.28		$	0.36
Diluted earnings per share	$	0.39		$	0.19		$	1.25		$	0.35

(a) Adjusted results are non-GAAP financial measures that exclude the following:

	Fourth Quarter					Year to Date
	FY’11			FY’10		FY’11			FY’10
Restructuring charges	$	—		$	0.1	$	2.1		$	20.6
Certain tax adjustments (b)	$	(2.1	)	$	—	$	(2.1	)	$	(2.8	)

(b) In fiscal year 2011 and 2010, adjusted results include reversal of reserves previously taken against an uncertain tax position and in fiscal 2010, adjustments include an increased valuation allowance related to cash repatriations and foreign tax credits.

Fee revenue was $197.3 million in Q4 FY’11 compared to $168.7 million in Q4 FY’10, an increase of $28.6 million, or 17%, which reflects increases in fee revenue from all segments of the business driven primarily by a 15% increase in the overall number of engagements billed as well as a 2% increase in the weighted-average fee billed per engagement compared to the year-ago fiscal quarter. On a constant currency basis fee revenue increased $21.9 million, or 13%.

Compensation and benefits were $133.5 million in Q4 FY’11, an increase of $15.4 million, or 13%, compared to $118.1 million in Q4 FY’10. This increase is attributable mainly to an increase in the variable component of compensation when compared to the year-ago fiscal quarter and to a lesser extent to an increase in worldwide headcount. On a constant currency basis compensation and benefits increased $10.8 million, or 9%.

General and administrative expenses were $29.0 million in Q4 FY’11 and $28.4 million in Q4 FY’10, an increase of $0.6 million, or 2%. The increase is due primarily to an increase in bad debt provisions as a result of higher revenues and accounts receivable, an increase in premise and office expense and other general and administrative expenses, partially offset by a decrease in unrealized foreign exchange losses and a fair value contingent consideration adjustment from a prior acquisition. On a constant currency basis general and administrative expenses decreased $0.6 million, or 2%.

Operating income was $26.2 million in Q4 FY’11 compared to $13.6 million in Q4 FY’10 (or $13.7 million excluding restructuring charges in Q4 FY’10), an increase of $12.6 million (or $12.5 million excluding restructuring charges in Q4 FY’10).

Balance Sheet and Liquidity

Cash and marketable securities were $369.1 million at April 30, 2011 compared to $296.5 million at April 30, 2010. Cash and marketable securities included $71.4 million and $69.0 million, held in trust for deferred compensation plans, at April 30, 2011 and 2010, respectively. Cash and marketable securities increased by $72.6 million from April 30, 2010, mainly due to cash provided by operating activities partially offset by bonuses earned in FY’10 which were paid in FY’11.

Results by Segment

Selected Executive Recruitment Data
(dollars in millions)

	Fourth Quarter						Year to Date
	FY’11			FY’10			FY’11			FY’10
Fee revenue	$	172.0		$	150.6		$	654.1		$	504.4
Total revenue	$	178.8		$	157.4		$	680.3		$	526.6
Operating income	$	30.7		$	23.1		$	111.4		$	38.2
Operating margin		17.9	%		15.4	%		17.0	%		7.6	%
Ending number of consultants		471			473			471			473
Average number of consultants		472			479			474			482
Engagements billed		4,096			3,673			11,501			9,164
New engagements (a)		2,131			1,925			7,905			6,505

Adjusted Results (b):

	Fourth Quarter						Year to Date
	FY’11			FY’10			FY’11			FY’10
Operating income	$	30.7		$	23.1		$	113.6		$	61.6
Operating margin		17.9	%		15.4	%		17.4	%		12.2	%

(a)	Represents new engagements opened in the respective period.
(b)	Adjusted results are non-GAAP financial measures that exclude restructuring charges, net of recoveries, of $2.2 million and $23.4 million during the year ended April 30, 2011 and 2010, respectively (see attached reconciliations). There were no adjustments during the three months ended April 30, 2011 and 2010.

Fee revenue was $172.0 million in Q4 FY’11, an increase of $21.4 million, or 14%, when compared to fee revenue of $150.6 million in Q4 FY’10. Fee revenue increased in all regions due to a 12% increase in the number of executive recruitment engagements billed and a 2% increase in the weighted-average fee per engagement billed when compared to Q4 FY’10. Fee revenue increased $16.7 million on a constant currency basis.

Operating income was $30.7 million in Q4 FY’11 compared to $23.1 million in Q4 FY’10, an increase of $7.6 million. This increase is primarily attributed to the $21.4 million increase in executive recruitment fee revenue in Q4 FY’11 as compared to Q4 FY’10, which was partially offset by an $11.3 million and $2.5 million increase in compensation and benefits expense and general and administrative expenses, respectively. The increase in compensation and benefits expense primarily resulted from an increase in the variable component of compensation, and the increase in general and administrative expense was primarily driven by an increase in bad debt provisions and premise and office expense.

The total number of consultants at April 30, 2011 and 2010 was 471 and 473, respectively.

Selected Futurestep Data
(dollars in millions)

	Fourth Quarter						Year to Date
	FY’11			FY’10			FY’11			FY’10
Fee revenue	$	25.3		$	18.1		$	90.2		$	68.0
Total revenue	$	27.0		$	19.5		$	96.0		$	73.0
Operating income (loss)	$	1.5		$	(1.1	)	$	5.0		$	1.3
Operating margin		6.0	%		(5.9	)%		5.5	%		1.9	%

Adjusted Results (a):

	Fourth Quarter						Year to Date
	FY’11			FY’10			FY’11			FY’10
Operating income (loss)	$	1.5		$	(1.0	)	$	4.9		$	(1.5	)
Operating margin		6.0	%		(5.5	)%		5.4	%		(2.2	)%

(a) Adjusted results are non-GAAP financial measures that exclude recoveries of restructuring charges of $0.1 million and $2.8 million during year ended April 30, 2011 and 2010, respectively. Adjusted results for the three months ended April 30, 2010 exclude restructuring charges of $0.1 million (see attached reconciliations). There were no adjustments during the three months ended April 30, 2011.

Fee revenue was $25.3 million in Q4 FY’11, an increase of $7.2 million, or 40%, from $18.1 million in Q4 FY’10. The improvement in fee revenue was driven by a 26% increase in the number of engagements billed, as well as an 11% increase in the weighted-average fee billed per engagement. On a constant currency basis fee revenue increased $5.2 million, or 29%.

Operating income was $1.5 million in Q4 FY’11 compared to an operating loss of $1.1 million in Q4 FY’10. Q4 FY’10 operating loss includes $1.2 million in severance costs and $0.1 million restructuring costs which primarily relates to facility lease costs; without such charges, operating income would have been $0.2 million.

Outlook

Assuming constant foreign exchange rates, stable economic conditions and steady financial markets, Q1 FY’12 fee revenue is likely to be in the range of $190 million to $205 million and diluted earnings per share is likely to be in the range of $0.30 to $0.36.

Earnings Conference Call Webcast

The earnings conference call will be held today at 5:00 PM (EDT) and hosted by CEO Gary Burnison, CFO Mike DiGregorio and SVP Finance Gregg Kvochak. The conference call will be webcast and available online at www.kornferry.com, accessible through the Investor Relations section.

Korn/Ferry International (NYSE: KFY), with a presence throughout the Americas, Asia Pacific, Europe, the Middle East and Africa, is a premier global provider of talent management solutions. Based in Los Angeles, the firm delivers an array of solutions that help clients to attract, deploy, develop and reward their talent. Visit www.kornferry.com for more information on the Korn/Ferry International family of companies, and www.kornferryinstitute.com for thought leadership, intellectual property and research.

Forward-Looking Statements

Statements in this press release and our conference call that relate to future results and events (“forward-looking statements”) are based on Korn/Ferry’s current expectations. These statements, which include words such as “believes”, “expects” or “likely” include references to our outlook. Readers are cautioned not to place undue reliance on such statements. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties that are beyond the control of Korn/Ferry. The potential risks and uncertainties include those relating to competition, the dependence on attracting and retaining qualified and experienced consultants, maintaining our brand name and professional reputation, potential legal liability, the portability of client relationships, global and local political or economic developments in or affecting countries where we have operations, currency fluctuations in our international operations, risks related to the growth, alignment of our cost structure with our growth, restrictions imposed by off-limits agreements, reliance on information processing systems, our ability to enhance and develop new technology, the successful integration of acquired businesses, our ability to develop new products and services, impairment of goodwill and other intangible assets, deferred tax assets and employment liability risk. For a detailed description of risks and uncertainties that could cause differences, please refer to Korn/Ferry’s periodic filings with the Securities and Exchange Commission. Korn/Ferry disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Use of Non-GAAP Financial Measures

This press release contains financial information calculated other than in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). These non-GAAP financial measures include the following:

• adjusted operating income (loss) and operating margin, adjusted to exclude charges (reductions) of restructuring charges, net;

• adjusted net income, adjusted to exclude restructuring charges (reductions), net and certain tax adjustments;

• adjusted basic and diluted earnings per share, adjusted to exclude restructuring charges (reductions) net, and certain tax adjustments; and

• constant currency amounts that represent the outcome that would have resulted had exchange rates in the reported period been the same as those in effect in the comparable prior year period.

This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial information determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Management believes the presentation of non-GAAP financial measures in this press release provides meaningful supplemental information regarding Korn/Ferry’s performance by excluding certain charges that may not be indicative of Korn/Ferry’s ongoing operating results. The use of these non-GAAP financial measures facilitate comparisons to Korn/Ferry’s historical performance. Korn/Ferry includes these non-GAAP financial measures because management believes it is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its evaluation of Korn/Ferry’s ongoing operations and financial and operational decision-making.

[Tables attached]

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)

	Three Months Ended					Year Ended
	April 30,					April 30,
	2011		2010			2011		2010
	(unaudited)
Fee revenue	$	197,298	$	168,690		$	744,249	$	572,380
Reimbursed out-of-pocket engagement expenses		8,478		8,215			32,002		27,269
Total revenue		205,776		176,905			776,251		599,649
Compensation and benefits		133,554		118,225			507,405		413,340
General and administrative expenses		28,982		28,427			116,494		115,280
Out-of-pocket engagement expenses		13,674		13,495			51,766		41,585
Depreciation and amortization		3,320		3,049			12,671		11,493
Restructuring charges, net		—		80			2,130		20,673
Total operating expenses		179,530		163,276			690,466		602,371
Operating income (loss)		26,246		13,629			85,785		(2,722	)
Interest and other income, net		3,024		2,080			3,919		7,444
Income before provision (benefit) for income taxes and equity in earnings (loss) of unconsolidated subsidiaries		29,270		15,709			89,704		4,722
Income tax provision (benefit)		9,285		6,245			32,692		(485	)
Equity in earnings (loss) of unconsolidated subsidiaries, net		354		(548	)		1,862		91
Net income	$	20,339	$	8,916		$	58,874	$	5,298
Earnings per common share:
Basic	$	0.45	$	0.20		$	1.30	$	0.12
Diluted	$	0.43	$	0.19		$	1.27	$	0.12
Weighted-average common shares outstanding:
Basic		45,700		44,783			45,205		44,413
Diluted		47,165		46,220			46,280		45,457

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
FINANCIAL SUMMARY BY SEGMENT
(in thousands)
(unaudited)

	Three Months Ended												Year Ended
	April 30,												April 30,
	2011						2010			% Change			2011						2010			% Change
Fee Revenue:
Executive recruitment:
North America	$	96,939					$	85,037			14	%	$	375,971					$	278,746			35	%
EMEA (1)		42,022						36,257			16	%		155,782						137,497			13	%
Asia Pacific		24,661						21,695			14	%		90,346						64,132			41	%
South America		8,357						7,630			10	%		31,959						24,026			33	%
Total executive recruitment		171,979						150,619			14	%		654,058						504,401			30	%
Futurestep		25,319						18,071			40	%		90,191						67,979			33	%
Total fee revenue		197,298						168,690			17	%		744,249						572,380			30	%
Reimbursed out-of-pocket engagement expenses		8,478						8,215			3	%		32,002						27,269			17	%
Total revenue	$	205,776					$	176,905			16	%	$	776,251					$	599,649			29	%
				Margin						Margin						Margin						Margin
Adjusted Operating Income (Loss): (Excluding Restructuring Charges)
Executive recruitment:
North America	$	19,765			20.4	%	$	12,183			14.3	%	$	80,345			21.4	%	$	40,993			14.7	%
EMEA		5,131			12.2	%		3,514			9.7	%		14,197			9.1	%		9,423			6.8	%
Asia Pacific		4,494			18.2	%		5,826			26.9	%		11,611			12.9	%		8,065			12.6	%
South America		1,339			16.0	%		1,647			21.6	%		7,475			23.4	%		3,173			13.2	%
Total executive recruitment		30,729			17.9	%		23,170			15.4	%		113,628			17.4	%		61,654			12.2	%
Futurestep		1,515			6.0	%		(1,002	)		(5.5	%)		4,856			5.4	%		(1,485	)		(2.2	%)
Corporate (2)		(5,998	)					(8,459	)					(30,569	)					(42,218	)
Total adjusted operating income (loss)	$	26,246			13.3	%	$	13,709			8.1	%	$	87,915			11.8	%	$	17,951			3.1	%
Restructuring Charges (Reductions), net:
Executive recruitment:
North America	$	—			0.0	%	$	(332	)		(0.4	%)	$	(340	)		(0.1	%)	$	(1,611	)		(0.6	%)
EMEA		—			0.0	%		136			0.4	%		2,569			1.6	%		24,934			18.1	%
Asia Pacific		—			0.0	%		152			0.7	%		—			0.0	%		239			0.4	%
South America		—			0.0	%		60			0.8	%		—			0.0	%		(113	)		(0.5	%)
Total executive recruitment		—			0.0	%		16			0.0	%		2,229			0.4	%		23,449			4.6	%
Futurestep		—			0.0	%		64			0.4	%		(99	)		(0.1	%)		(2,776	)		(4.1	%)
Corporate		—						—						—						—
Total restructuring charges (reductions), net	$	—			0.0	%	$	80			0.0	%	$	2,130			0.3	%	$	20,673			3.6	%
				Margin						Margin						Margin						Margin
Operating Income (Loss):
Executive recruitment:
North America	$	19,765			20.4	%	$	12,515			14.7	%	$	80,685			21.5	%	$	42,604			15.3	%
EMEA		5,131			12.2	%		3,378			9.3	%		11,628			7.5	%		(15,511	)		(11.3	%)
Asia Pacific		4,494			18.2	%		5,674			26.2	%		11,611			12.9	%		7,826			12.2	%
South America		1,339			16.0	%		1,587			20.8	%		7,475			23.4	%		3,286			13.7	%
Total executive recruitment		30,729			17.9	%		23,154			15.4	%		111,399			17.0	%		38,205			7.6	%
Futurestep		1,515			6.0	%		(1,066	)		(5.9	%)		4,955			5.5	%		1,291			1.9	%
Corporate (2)		(5,998	)					(8,459	)					(30,569	)					(42,218	)
Total operating income (loss)	$	26,246			13.3	%	$	13,629			8.1	%	$	85,785			11.5	%	$	(2,722	)		(0.5	%)

(1)

Includes revenues from acquisition of Whitehead Mann, closed on June 11, 2009.

(2)

Lower net expenses primarily related to the change in amounts due under deferred compensation plans determined by an increase (or decrease) in market values, and adjustment to the fair value of contingent consideration for a prior acquisition, totaling $2.8 million and $7.7 million during the three and twelve months ended April 30, 2011 compared to the three and twelve months ended April 30, 2010, respectively.

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)

	As of April 30,
	2011			2010
ASSETS
Cash and cash equivalents	$	246,856		$	219,233
Marketable securities		20,868			4,114
Receivables due from clients, net of allowance for doubtful accounts of $9,977 and $5,983, respectively		128,859			107,215
Income taxes and other receivables		5,138			6,292
Deferred income taxes		10,214			20,844
Prepaid expenses and other assets		29,662			23,166
Total current assets		441,597			380,864
Marketable securities, non-current		101,363			73,105
Property and equipment, net		43,142			24,963
Cash surrender value of company owned life insurance policies, net of loans		70,987			69,069
Deferred income taxes		64,418			59,742
Goodwill		183,952			172,273
Intangible assets, net		22,289			25,425
Investments and other assets		43,932			21,657
Total assets	$	971,680		$	827,098
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	12,504		$	11,148
Income taxes payable		4,674			6,323
Compensation and benefits payable		173,097			131,550
Other accrued liabilities		43,591			49,062
Total current liabilities		233,866			198,083
Deferred compensation and other retirement plans		139,558			123,794
Other liabilities		19,919			13,879
Total liabilities		393,343			335,756
Stockholders’ equity
Common stock: $0.01 par value, 150,000 shares authorized, 59,101 and 57,614 shares issued and 47,003 and 45,979 shares outstanding, respectively		404,703			388,717
Retained earnings		148,494			90,220
Accumulated other comprehensive income, net		25,660			12,934
Stockholders’ equity		578,857			491,871
Less: notes receivable from stockholders		(520	)		(529	)
Total stockholders’ equity		578,337			491,342
Total liabilities and stockholders’ equity	$	971,680		$	827,098

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
RECONCILIATION OF AS REPORTED (GAAP) TO AS ADJUSTED (NON-GAAP)
(in thousands, except per share amounts)
(unaudited)

	Three Months Ended
	April 30, 2011							April 30, 2010
	As Reported		Adjustments			As Adjusted		As Reported			Adjustments			As Adjusted
Fee revenue	$	197,298				$	197,298	$	168,690					$	168,690
Reimbursed out-of-pocket engagement expenses		8,478					8,478		8,215						8,215
Total revenue		205,776					205,776		176,905						176,905
Compensation and benefits		133,554					133,554		118,225						118,225
General and administrative expenses		28,982					28,982		28,427						28,427
Out-of-pocket engagement expenses		13,674					13,674		13,495						13,495
Depreciation and amortization		3,320					3,320		3,049						3,049
Restructuring charges (reductions), net		—		—			—		80			(80	)		—
Total operating expenses		179,530		—			179,530		163,276			(80	)		163,196
Operating income		26,246		—			26,246		13,629			80			13,709
Interest and other income, net		3,024					3,024		2,080						2,080
Income before provision for income taxes and equity in earnings (loss) of unconsolidated subsidiaries		29,270		—			29,270		15,709			80			15,789
Income tax provision (1) (2)		9,285		2,131			11,416		6,245			32			6,277
Equity in earnings (loss) of unconsolidated subsidiaries, net		354					354		(548	)					(548	)
Net income	$	20,339	$	(2,131	)	$	18,208	$	8,916		$	48		$	8,964
Earnings per common share:
Basic	$	0.45				$	0.40	$	0.20					$	0.20
Diluted	$	0.43				$	0.39	$	0.19					$	0.19
Weighted-average common shares outstanding:
Basic		45,700					45,700		44,783						44,783
Diluted		47,165					47,165		46,220						46,220

Explanation of Non-GAAP Adjustments

(1)	Calculated using an annual effective tax rate of 39% and 40%, adjusted for the three months ended April 30, 2011 and 2010, respectively.
(2)	The quarter ended April 30, 2011 includes a $2.1 million reversal of a reserve previously taken against an uncertain tax position.

KORN/FERRY INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
RECONCILIATION OF AS REPORTED (GAAP) TO AS ADJUSTED (NON-GAAP)
(in thousands, except per share amounts)
(unaudited)

	Year Ended
	April 30, 2011							April 30, 2010
	As Reported		Adjustments			As Adjusted		As Reported			Adjustments			As Adjusted
Fee revenue	$	744,249				$	744,249	$	572,380					$	572,380
Reimbursed out-of-pocket engagement expenses		32,002					32,002		27,269						27,269
Total revenue		776,251					776,251		599,649						599,649
Compensation and benefits		507,405					507,405		413,340						413,340
General and administrative expenses		116,494					116,494		115,280						115,280
Out-of-pocket engagement expenses		51,766					51,766		41,585						41,585
Depreciation and amortization		12,671					12,671		11,493						11,493
Restructuring charges (reductions), net		2,130		(2,130	)		—		20,673			(20,673	)		—
Total operating expenses		690,466		(2,130	)		688,336		602,371			(20,673	)		581,698
Operating income (loss)		85,785		2,130			87,915		(2,722	)		20,673			17,951
Interest and other income, net		3,919					3,919		7,444						7,444
Income before provision (benefit) for income taxes and equity in earnings of unconsolidated subsidiaries		89,704		2,130			91,834		4,722			20,673			25,395
Income tax provision (benefit) (1) (2) (3)		32,692		2,952			35,644		(485	)		10,172			9,687
Equity in earnings of unconsolidated subsidiaries, net		1,862					1,862		91						91
Net income	$	58,874	$	(822	)	$	58,052	$	5,298		$	10,501		$	15,799
Earnings per common share:
Basic	$	1.30				$	1.28	$	0.12					$	0.36
Diluted	$	1.27				$	1.25	$	0.12					$	0.35
Weighted-average common shares outstanding:
Basic		45,205					45,205		44,413						44,413
Diluted		46,280					46,280		45,457						45,457

Explanation of Non-GAAP Adjustments

(1)	Calculated using an annual effective tax rate of 39% and 38%, adjusted for the year ended April 30, 2011 and 2010, respectively.
(2)	The year ended April 30, 2011 includes a $2.1 million reversal which is the net of a reserve previously taken against an uncertain tax position and the tax effect of restructuring charges.
(3)	The year ended April 30, 2010 includes a $10.3 million reversal of a reserve which is the net of previously taken against an uncertain tax position, tax effect of restructuring charges and an increased valuation allowance related to cash repatriations and foreign tax credits.