ICF International, Inc. Annual Report 2015

FY2015 Annual Report · ICF International, Inc.

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2015 ANNUAL REPORT

Message from Chairman and CEO Sudhakar Kesavan

2015 was a year of consolidation for ICF. We focused on integrating our acquired companies and improving our
systems and processes. Our revenue increased 8 percent to $1.13 billion as we continued to expand our presence
in our key markets. We achieved record contract awards in 2015 of over $1.3 billion, expanded our profit
margins and delivered $2 in diluted earnings per share. We remain focused on delivering value for our clients,
our shareholders, and our people in an increasingly complex world.

The ICF team made substantial progress in planning for the rollout of the newly integrated ICF Olson,
announced in early 2016. This new integrated full-service marketing agency is uniquely focused on the
intersection of creativity, technology and strategy in areas such as experience management, loyalty and
Customer Relationship Management (CRM), digital platforms and strategic communications. In addition, ICF
Olson’s deep expertise in data analytics is able to inform strategies in ways that make those capabilities even
more potent.

As we were busy creating ICF Olson, we also endeavored to judiciously combine the capabilities represented by
ICF Olson and by Mostra (acquired in 2014) with ICF’s existing marketing and communication capabilities to
serve our clients in a more comprehensive way. We have seen some early success with these combined
capabilities (e.g., California Lottery, described below) and look forward to many more market successes in 2016
and beyond.

ICF’s Market Position

ICF is well-positioned to thrive in a rapidly changing world. From cybersecurity, aging populations, and
infrastructure challenges to climate change and digital transformation, ICF has positioned itself to engage in and
benefit from some of the most important trends in our world. Continuing economic and political uncertainty
makes our revenue base balanced between government and private sector clients a source of strength. That same
uncertainty drives demand for our diverse and synergistic mix of professionals as our clients ask for support on
topics ranging from regulatory change in the electric utility space to digital marketing strategy and systems, to
rapid response, and to changing global health threats like the Zika virus. In all of these areas, ICF brings a
combination of deep domain expertise, analytics, program delivery, technological sophistication, and world-class
citizen/customer engagement.

Work that makes us proud

ICF is proud of the work we do in all its forms. As we described last year, we excel both at delivering highly
specific and focused services and at delivering multiple aspects of our value proposition to clients with more
complex requirements. Whatever the scope of our work, we are continually reminded of its importance and of
the broad impact the Company has through the work we do for clients. Some recent examples of salient work
include:

 Providing technical, analytic and programmatic support services to the U.S. Global Change Research

Program (USGCRP) National Coordination Office. This contract represents the culmination of our 30+
years of experience in climate change, ozone depletion and other global environmental challenges and
helps solidify ICF’s position as one of the world’s pre-eminent climate consultancies.

 Winning the Office of Management and Budget (OMB) Digital Service Contracting Professional

Training and Development Program challenge. The pilot program will help transform the way the U.S.
federal government builds and buys digital services. This project is an innovative step in the
government’s effort to transform itself into a more nimble and responsive enterprise through the use of
digital technologies.

 Providing training and technical assistance, program management, fiscal operation and quality

improvement services to the Administration for Children and Families (ACF), Office of Head Start. We
support 22 states as well as the American Indian and Alaska Native populations in 26 states. This work
continues to enhance the quality of services that children and families receive to improve outcomes for
children as they prepare to enter school.

 Serving the California Lottery as the organization’s digital agency of record (AOR). ICF Olson will

provide strategic, creative and technology leadership, as well as ongoing support and client service to
one of the largest lottery organizations (in sales) in the nation.

 Providing comprehensive program development, technical, operational and outreach services to support

the integrated regional and statewide travel demand management (TDM) and active transportation and
demand management (ATDM) programs of the New York State Department of Transportation
(NYSDOT).

 Assisting the Directorate General Employment, Social Affairs, Skills and Labour Mobility (DG EMPL)
of the European Commission and the European Network for Public Employment Services (PES) in
strengthening the cooperation between the 28 Member States of the European Union (EU). ICF is also
responsible for the enhancement of the PES Network website in order to communicate the PES results
and good practice to wider audiences.

 Administering the residential energy efficiency portfolios and commercial multifamily programs for

Pepco and Delmarva Power with a comprehensive suite of energy efficiency implementation services.

Beyond these examples we continue to provide assistance to the wide range of critical missions that we have
always supported, for our balanced array of customers from governments and private sector companies around
the world.

Corporate citizenship

Our commitment to philanthropy and the causes important to our employees remain strong. During 2015, ICF
employees engaged more than ever with our charity partners: American Cancer Society, Red Cross, and Water
For People. In keeping with ICF’s growth and our employees’ philanthropic commitment, we increased
corporate donations by 8 percent in 2015, and our employees’ generosity continues to provide inspiration for us
all.

As I announced previously, we are working to reduce ICF’s overall carbon footprint by 10 percent by 2018. In
our most recent carbon inventory, we made progress toward our goal in regard to ICF’s facilities. While this
reduction is encouraging, business travel and commuting generate ICF’s largest environmental impact, and
we’re employing a number of tactics to reduce our footprint. Since 2006, ICF has offset our carbon emissions by
investing in high-quality green projects; in 2015, these were sustainable projects in impoverished communities.
In rural Vietnam, we invested in household biodigesters — a sanitation technology that converts waste from a
health hazard to a safe fertilizer and a source of free energy. In Honduras, we invested in a wind power project
that adds affordable renewable electricity to the grid and created jobs. In poor rural villages in China, we
invested in solar cookers that replace the use of coal-fired stoves, resulting in clean energy at a cost saving of
about 10 percent of residents’ annual income.

Our people

I continue to be honored to lead our diverse, committed and highly professional workforce. Every day I am
renewed and invigorated by their commitment and their ability to craft unique combinations of capabilities that
deliver value to our clients and to society. As we expand our market footprint, we add still more distinctive
professional voices, and so we remain committed to being a distinctive home for them to build their careers and
to make the world a better and more interesting place.

Sudhakar Kesavan

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)
☒

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2015

Commission File Number: 001-33045

ICF INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

22-3661438
(IRS Employer Identification Number)

9300 Lee Highway
Fairfax, VA
(Address of principal executive offices)

22031
(Zip Code)

Registrant’s telephone number, including area code:
(703) 934-3000

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class
Common Stock, $0.001 par value

Name of Exchange on which Registered
The NASDAQ Stock Market LLC

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

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

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

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

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

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

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

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant as of the last
business day of the Registrant’s most recently completed second fiscal quarter was approximately $655 million based upon the closing
price per share of $34.86, as quoted on the NASDAQ Global Select Market on June 30, 2015. Shares of the outstanding common stock
held by each executive officer and director have been excluded in that such persons may be deemed to be affiliates. This determination of
affiliate status is not necessarily a conclusive determination for other purposes.

As of February 29, 2016, 18,963,141 shares of the Registrant’s common stock, $0.001 par value, were outstanding.

Part III incorporates information by reference from the Proxy Statement for the 2016 Annual Meeting of Stockholders expected to

DOCUMENTS INCORPORATED BY REFERENCE

be held in June 2016.

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TABLE OF CONTENTS

PART I ...............................................................................................................................................................................
ITEM 1.
Business .........................................................................................................................................................
ITEM 1A. Risk Factors ...................................................................................................................................................
ITEM 1B. Unresolved Staff Comments ..........................................................................................................................
Properties .......................................................................................................................................................
ITEM 2.
ITEM 3.
Legal Proceedings ..........................................................................................................................................
ITEM 4. Mine Safety Disclosures ................................................................................................................................

PART II ..............................................................................................................................................................................
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities ....................................................................................................................................................
ITEM 6.
Selected Financial Data ..................................................................................................................................
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations .........................
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk ........................................................................
Financial Statements and Supplementary Data ..............................................................................................
ITEM 8.
ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ........................
ITEM 9A. Controls and Procedures ................................................................................................................................
ITEM 9B. Other Information ..........................................................................................................................................

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48

PART III ............................................................................................................................................................................
ITEM 10. Directors, Executive Officers, and Corporate Governance ............................................................................
ITEM 11. Executive Compensation ................................................................................................................................
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.......
ITEM 13. Certain Relationships and Related Transactions, and Director Independence ...............................................
ITEM 14. Principal Accountant Fees and Services ........................................................................................................

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PART IV ............................................................................................................................................................................
ITEM 15. Exhibits and Financial Statement Schedules ..................................................................................................

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FORWARD-LOOKING STATEMENTS

Some of the statements in this Annual Report on Form 10-K 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 Item 1A of Part I of this Annual
Report on Form 10-K captioned “Risk Factors,” or otherwise described in our filings with the Securities and Exchange
Commission (“SEC”), as well as any cautionary language in this Annual Report on Form 10-K, provide examples of risks,
uncertainties, and events that may cause our actual results to differ materially from the expectations we describe in our
forward-looking statements, including, but not limited to:

•

our dependence on contracts with United States (“U.S.”) federal, state and local, and international
governments, agencies and departments for the majority of our revenue;

failure by Congress or other governmental bodies to approve budgets in a timely fashion and reductions in
government spending including, but not limited to, budgetary cuts resulting from automatic sequestration
under the Budget Control Act of 2011;

results of routine and non-routine government audits and investigations;

dependence of our commercial work on certain sectors of the global economy that are highly cyclical;

failure to receive the full amount of our backlog;

difficulties in integrating acquisitions generally;

risks resulting from expanding our service offerings and client base;

the claim arising from our completed Road Home contract with the State of Louisiana; and

additional risks as a result of having international operations.

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 Annual Report
on Form 10-K. We undertake no obligation to update these forward-looking statements, even if our situation changes in the
future.

The terms “we,” “our,” “us,” and “the Company,” as used throughout this Annual Report on Form 10-K, refer to ICF
International, Inc. and its consolidated 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
government, unless otherwise indicated.

ITEM 1. BUSINESS

COMPANY OVERVIEW

PART I

•

Energy, Environment, and Infrastructure

Health, Education and Social Programs

Safety and Security

Consumer and Financial

We categorize the revenue from our clients by key market based on what we consider to be the client’s primary market.
Near the end of fiscal year 2014, we acquired OCO Holdings, Inc. and its various subsidiaries, including Olson + Co., Inc.
(collectively, “Olson”). This acquisition broadened our consumer and financial market revenue. As a result, in the first quarter
of 2015, we made certain changes to our then existing three key markets to better reflect our current business. First, we began
to break out our revenues into four markets instead of three by adding a new market related to our consumer and financial
client revenue, which was previously included in the health, social programs, and consumer/financial market. Second, we
changed the name of the health, social programs, and consumer/financial market to health, education and social programs.
Finally, we changed the name of our public safety and defense market and renamed it safety and security to more accurately
reflect the nature of our client base.

We provide services across these four markets that deliver value 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. Our primary services include:

•

Research and Analytic Services. We research critical policy, industry, and stakeholder issues, trends, and
behavior. We collect and analyze wide varieties of data to understand critical issues and options for our
clients.

Assessment and Advisory Services. We measure and evaluate results and their impact and, based on those
assessments, we provide advice to our clients on how to navigate societal, market, business, communication,
and technology challenges.

Design and Management Services. We design, develop, and manage plans, frameworks, programs and tools
that are key to our clients’ mission or business performance. These programs often relate to the analytics
and advice we provide.

Solution Identification and Implementation Services. We identify, define, and implement technology-based
systems and business tools that make our clients’ organizations more effective and efficient. These solutions
are implemented through a wide range of standard and customized methodologies designed to match our
clients’ business context.

Engagement Services. We inform and engage our clients’ constituents, customers, and employees through
public relations, branding and marketing, multichannel and strategic communications, and enterprise
training and communications programs. Our engagement services frequently rely on our digital design and
implementation skills.

Within our four markets, we perform work for both government and commercial clients. Our government clients include
federal clients, state and local clients, as well as governments outside the U.S. Our commercial clients include both U.S. and
international clients. Our clients utilize our services because we offer a combination of deep subject-matter expertise,
technical solutions, and institutional experience in our market areas. We believe that our domain expertise and the program
knowledge developed from our research and analytic and assessment and advisory engagements (which we refer to hereafter
as “research and advisory services”) further position us to provide our full suite of services.

We generated revenue of $1,132.2 million, $1,050.1 million, and $949.3 million in 2015, 2014, and 2013, respectively.
Our total backlog was approximately $1.8 billion, $1.9 billion, and $1.7 billion as of December 31, 2015, 2014, and 2013,
respectively. See further discussion in “Contract Backlog.”

As of December 31, 2015, we had more than 5,000 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 55 regional offices throughout the U.S., and more than 10 offices outside the U.S., including offices in the
United Kingdom (“UK”), Belgium, China, India and Canada.

We report operating results and financial data in one operating and reportable segment. See our revenue, net income
and total assets as presented in the consolidated financial statements and the related notes included elsewhere in this Annual
Report.

OUR COMPANY INFORMATION

ICF International, Inc. began as a Delaware limited liability company formed in 1999 under the name ICF Consulting
Group Holdings, LLC. It was formed to purchase our principal operating subsidiary, which was founded in 1969, from a
larger services organization. A number of our current senior managers participated in this transaction, along with private
equity investors. We converted to a Delaware corporation in 2003 and changed our name to ICF International, Inc. in 2006.
We completed our initial public offering in October 2006 and filed a shelf registration statement on Form S-3 in September
2009, pursuant to which we sold additional shares of our common stock to the public in December 2009.

Our principal executive office is located at 9300 Lee Highway, Fairfax, Virginia 22031, and our telephone number is
(703) 934-3000. We maintain an internet website at www.icfi.com. We make available our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to such reports filed or furnished pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other information
related to us, free of charge, on this site as soon as reasonably practicable after we electronically file those documents with,
or otherwise furnish them to, the SEC. Our internet website and the information contained therein or connected thereto are
not intended to be incorporated into this Annual Report on Form 10-K.

MARKET OPPORTUNITY, SERVICES, AND SOLUTIONS

Complex, long-term market factors, as well as secular trends, are changing the way we live and the way government

and industry operate and interact. Some of the most critical factors are centered firmly in our four key market areas.

In the energy, environment, and infrastructure market, these factors include: the changing mix of sources used to
generate electricity and the related policy and infrastructure issues resulting from those changes; the changing position of the
U.S. in the world’s energy markets overall; an increasing focus on renewables, energy efficiency, and climate change; an
aging transportation infrastructure; increasing drought and need to invest in water infrastructure and conservation; and
environmental degradation.

In the health, education and social programs market, these factors include: the increasing level of healthcare
expenditures and efforts at healthcare reform; global public health and health security issues, including potential global
epidemics; aging populations across the globe; increasing military and veteran health demands; continued focus on disease
prevention; the perceived declining performance of the U.S. educational system compared to other countries; and the desire
to find more efficient means to deliver social and educational programs.

In the safety and security market, these factors include: the continuing spectrum of all-hazard threats, including

cybersecurity threats, terrorism, severe weather and climatological changes, as well as infrastructure protection.

In the consumer and financial market, these factors include increased use of interactive data technologies to link
organizations with consumers and other stakeholders in more varied and personalized ways, and less reliance on traditional
print and television marketing; changing industry structures in marketing and advertising services; the desire for greater
return on marketing investment; and the continued elevation of data analytics as a business management and marketing tool.

In addition to these market-based factors, secular trends across all of our markets are increasing the demand for research
and advisory services that drive our business. These trends include: increased government focus on efficiency and mission
performance management; generational changes; the emphasis on transparency and accountability; and an increased demand
for combining domain knowledge of client mission and programs with innovative technology-enabled solutions. We see
growth opportunities for technology-based solutions involving digital services and strategic communications across all of our
markets.

We believe that demand for our services will continue as government, industry, and other stakeholders seek to
understand and respond to these and other factors. We expect that our government clients will continue to utilize professional
services firms with relevant domain expertise to assist with designing new programs, enhancing existing ones, and offering
transformational solutions based on applicable experience evaluating and improving such programs, and to deploy innovative
information and communications technology. In addition, commercial organizations affected by these programs will need to
understand such changes, as well as their implications, in order for them to plan appropriately. More broadly, we believe our
commercial clients will demand innovative services and solutions that can help them connect with customers and stakeholders
in an increasingly connected and crowded marketplace. We believe that our institutional knowledge and subject-matter
expertise in our four key markets are distinct competitive advantages in providing our clients with practical, innovative
solutions, which are directly applicable to their mission or business, with a faster deployment of the right resources. Moreover,
we believe we will be able to leverage the domain expertise and program knowledge we have developed through our research
and advisory assignments and our experience with program management, technology-based solutions, and engagement
projects to win larger engagements, thereby increasing returns on business development investment and driving higher
employee utilization. Rapid changes in technology, including the omnipresent influence of mobile, social, and cloud
technologies, also demand new ways of communicating, evaluating and implementing programs across all of our markets,
and we are focused on leveraging our expertise in technology to capitalize on those changes.

Our future results will depend on the success of our strategy to capitalize on our competitive strengths, including our
success in maintaining our long-standing client relationships, to seek larger engagements across the program life cycle in our
four key markets and to complete and successfully integrate strategic acquisitions. In our four key markets, we will continue
to focus on building scale in vertical and horizontal domain expertise; developing business with both our government and
commercial clients; and replicating our business model geographically in selective regions of the world. In doing so, we will
continue to evaluate strategic acquisition opportunities that enhance our subject matter knowledge, broaden our service
offerings, and/or provide scale in specific geographies.

Energy, Environment, and Infrastructure

For decades, we have advised on energy and environmental issues, including the impact of human activity on natural
resources, and have helped develop solutions for infrastructure-related challenges. In addition to addressing government
policy and regulation in these areas, our work focuses on industries that are affected by these policies and regulations,
particularly those industries most heavily involved in the use and delivery of energy. Significant factors affecting suppliers,
users, and regulators of energy are driving private and public sector demand for professional services firms, including:

•

Changing power markets, sources of supply, the U.S. EPA’s Clean Power Plan, and an increased demand
for alternative sources of energy;

Ongoing efforts to upgrade energy infrastructure to meet new power, transmission, environmental, and
cybersecurity requirements and to enable more distributed forms of generation; and

The need to manage energy demand and increase efficient energy use in an era of environmental concerns,
especially regarding carbon and other emissions.

We assist energy enterprises worldwide in their efforts to analyze, develop, and implement strategies related to their
business operations and the interrelationships of those operations with the environment and applicable government
regulations. We utilize our policy expertise, deep industry knowledge, and proprietary modeling tools to advise government
and commercial clients on key topics related to electric power, traditional fuels, and renewable sources of energy. Our areas
of expertise include power market analysis and modeling, transmissions analysis, electric system reliability standards, energy
asset valuation and due diligence, regulatory and litigation support, fuels market analysis, air regulatory strategy, and
renewable energy and green power.

We also assist commercial and government clients in designing, implementing, and evaluating energy efficiency
programs both for residential and for commercial and industrial sectors. Utility companies must balance the changing demand
for energy with a price-sensitive, environmentally conscious consumer base. We help utilities meet these needs, guiding them
through the entire life cycle of energy efficiency programs, including policy and planning, technical requirements,
implementation and improvement.

Carbon emissions are an important focus of federal government regulation, international governments, many state and
local governments, and multinational corporations around the world. Reducing or offsetting greenhouse gas (“GHG”)
emissions continues to be the subject of both public and private sector interest, and the regulatory landscape in this area is
still evolving. The need to address carbon and other harmful emissions has significantly changed the way the world’s
governments and industries interact and continues to be one of the drivers of interest in energy efficiency. Moreover, how
government and business adapt to the effects of climate change is growing in importance. We support governments at the
federal and state and local level, including providing comprehensive support to NASA’s Global Climate Research Program.
Additionally, we support ministries and agencies of the government of the UK and European Commission, as well as
commercial clients, on these and related issues.

We also have decades of experience in designing, evaluating, and implementing environmental policies and
transportation infrastructure projects. A number of key issues are driving increased demand for the services we provide in
these areas, including:

•

Increased focus on the proper stewardship of natural resources;

Aging water, energy, and transportation infrastructure, particularly in the U.S.;

The increasing exposure of infrastructure to damage and interference by severe weather events influenced
by a changing climate;

Under-investment historically in U.S. transportation infrastructure; and

Changing patterns of economic development that require transportation systems and energy infrastructure
to adapt to new patterns of demand.

By leveraging our interdisciplinary skills, which range from finance and economics to earth and life sciences,
information technology, and program management, we are able to provide a wide range of services that include complex
environmental impact assessments, environmental management information systems, air quality assessments, program
evaluation, transportation planning and operational improvement, strategic communications, and regulatory reinvention. We
help clients deal specifically with the interrelated environmental, business, and social implications of issues surrounding all
transportation modes and infrastructure. From the environmental management of complex infrastructure engagements to
strategic and operational concerns of airlines and airports, our solutions draw upon our expertise and institutional knowledge
in transportation, urban and land use planning, industry management practices, financial analysis, environmental sciences,
and economics.

Health, Education and Social Programs

We also apply our expertise across our full suite of services in the areas of health, education and social programs. We
believe that a confluence of factors will drive an increased need for public and private focus on these areas, including, among
others:

•

Expanded healthcare services to underserved segments of the population;

Rising healthcare expenditures, which require the evaluation of the effectiveness and efficiency of current
and new programs;

Growing awareness of the threats from the global spread of disease;

The emphasis on improving the effectiveness of the U.S. and other countries’ educational systems;

The need for greater transparency and accountability of public sector programs;

A continued high need for social support systems;

A changing regulatory environment; and

Military personnel returning home from active duty with health and social service needs.

We believe we are well positioned to provide our services to help our clients develop and manage effective programs
in the areas of health, education and social programs at the international, national, regional, and local levels. Our subject-
matter expertise includes public health, mental health, international health and development, health communications and
associated interactive technologies, education, child and family welfare needs, housing and communities, and substance
abuse. Our combination of domain knowledge and our experience in information technology-based applications provides us
with strong capabilities in health and social programs informatics and analytics, which we believe will be of increasing
importance as the need to manage information grows. We partner with our clients in the government and commercial sectors
to increase their knowledge base, support program development, enhance program operations, evaluate program results, and
improve program effectiveness.

In the area of public health, we support many agencies and programs within the Department of Health and Human
Services (“HHS”), including the National Institutes of Health (“NIH”) and the Centers for Disease Control and Prevention
(“CDC”), conducting primary data collection and analyses, assisting in designing, delivering, and evaluating programs,
managing technical assistance centers, providing instructional systems, developing information technology applications, and
managing information clearinghouse operations. Increasingly, we provide multichannel communications and messaging for
public health programs using capabilities similar to our commercial marketing business. We also provide training and
technical assistance for early care and educational programs (such as Head Start), and health and demographic surveys in
developing countries for the Department of State (“DOS”). In the area of social programs, we provide extensive training,
technical assistance, and program analysis and support services for a number of the housing and disaster recovery programs
of the Department of Housing and Urban Development (“HUD”) and state and local governments. In addition, we provide
research, program design, evaluation, and training for educational initiatives at the federal and state level. We provide similar
services to a variety of UK ministries, as well as several Directorates-General of the European Commission.

Safety and Security

Safety and security programs continue to be a critical priority of the federal government, state and local governments,
international governments (especially in Europe), and in the commercial sector. We believe we are positioned to meet the
following key safety concerns:

•

Vulnerability of critical infrastructure to cyber and terrorist threats;

Increasing risks to enterprises’ reputations in the wake of a cyber-attack;

Broadened homeland security concerns that include areas such as health, food, energy, water, and
transportation;

Reassessment of the emergency management functions of homeland security in the face of natural disasters;

Safety issues around crime and at-risk behavior;

Increased dependence on private sector personnel and organizations in emergency response; and

The need to ensure that critical functions and sectors are resilient and able to recover quickly after attacks
or disasters.

These security concerns create demand for government programs that can identify, prevent, and mitigate key

cybersecurity and disaster impacts and the societal issues they cause.

In addition, the Department of Defense (“DoD”) is undergoing major transformations in its approach to strategies,

processes, organizational structures, and business practices due to several complex, long-term factors, including:

•

The changing nature of global security threats, including cybersecurity threats;

Family issues associated with globally-deployed armed forces; and

The increasing need for real-time information sharing and logistics modernization and network-centric
planning requirements, and the global nature of conflict arenas.

We provide key services to the Department of Homeland Security (“DHS”), Department of Justice (“DOJ”), DoD, and
analogous Directorates-General at the European Commission. At DHS, we assist in shaping and managing critical programs
to ensure the safety of communities, developing critical infrastructure protection plans and processes, establishing goals and
capabilities for national preparedness at all levels of government in the U.S., and managing the national program to test
radiological emergency preparedness at the state and local government levels in communities adjacent to nuclear power
facilities. At DOJ, we provide technical and communications assistance to programs that help victims of crime and at-risk
youths. We support DoD by providing high-end strategic planning, analysis, and technology-based solutions in the areas of
logistics management, operational support, command and control, and cybersecurity. We also provide the defense sector with
environmental management, human capital assessment, military community research, and technology-enabled solutions. At
the European Commission, we provide support and analytical services related to justice and home affairs issues within the
European context.

Consumer and Financial

In the area of consumer and financial, we combine our expertise in strategic communications, marketing and creative
services and public relations with our strengths in interactive and mobile technologies to help companies develop stronger
relationships and engage with their customers and stakeholders across all channels, whether via traditional or digital media,
to drive better business results. In an effort to enhance our positioning and build awareness outside of our traditional client
set, we have combined capabilities from our recent acquisitions to create a full-service, technology-rooted agency that guides
brands digitally through informed strategy, inspired creative design, and technical know-how. We have the capability to
complete projects big or small across all channels, such as web, social, mobile, intranets and emerging platforms, through
end-to-end technology-based implementations for local and global clients. Target customer areas include airlines, airports,
electric and gas utilities, oil companies, banks and other financial services companies, transportation, travel and hospitality
firms, non-profits/associations, law firms, manufacturing firms, retail chains, and distribution companies.

COMPETITIVE STRENGTHS

We possess the following key business strengths:

We have a highly-educated professional staff with deep subject-matter knowledge

We possess strong intellectual capital that provides us with a deep understanding of policies, processes, and programs
across our major markets. Our thought leadership is based on years of training, experience, and education. We are able to
apply our in-depth knowledge of our subject-matter experts and our experience developed over 40 years of providing research
and advisory services to address the problems and issues our clients are facing. As of December 31, 2015, approximately
32% of our benefits-eligible staff held post-graduate degrees in diverse fields such as the social sciences, business and
management, physical sciences, public policy, human capital, information technology, mathematics, engineering, planning,
economics, life sciences, and law. These qualifications, and the complementary nature of our markets, enable us to deploy
multi-disciplinary teams to identify, develop, and implement solutions that are creative, pragmatic, and tailored to our clients’
specific needs.

We believe our diverse range of markets, services, and projects provide a stimulating work environment for our
employees that enhances their professional development. The use of multi-disciplinary teams provides our staff the
opportunity to develop and refine common skills required in many types of engagements. Our approach to managing human
resources fosters collaboration and significant cross-utilization of the skills and experience of both industry experts and other
personnel who can develop creative solutions by drawing upon their different experiences. The types of services we provide,
and the manner in which we do so, enable us to attract and retain talented professionals from a variety of backgrounds while
maintaining a culture that fosters teamwork and excellence.

We have strong, long-standing relationships with clients across a diverse set of markets

The long-term relationships we maintain with many of our clients reflect our successful track record of fulfilling our
clients’ needs. We have advised both the Environmental Protection Agency (“EPA”) and HHS for more than 30 years, the
Department of Energy (“DOE”) for more than 25 years, DoD for more than 20 years, certain commercial clients in our energy
markets for more than 20 years, the European Commission for more than 10 years, and we have multi-year relationships with
many of our other clients in both our government and commercial client base. We have numerous contacts at various levels
within our clients’ organizations, ranging from key decision-makers to functional managers. The long-standing nature and
breadth of our client relationships adds greatly to our institutional knowledge, which, in turn, helps us carry out our client
engagements more effectively and maintain and expand such relationships. Our extensive experience and client contacts,
together with our prime-contractor position on a substantial majority of our contracts and onsite presence, gives us clearer
visibility into future opportunities and emerging requirements. We believe our balance between civilian and defense agencies,
our commercial presence, and the diversity of the markets we serve help mitigate the impact of annual shifts in our clients’
budgets and priorities.

Our research and advisory services position us to capture a full range of engagements

We believe our research and advisory approach, which is based on our subject-matter expertise combined with an
understanding of our clients’ requirements and objectives, is a significant competitive differentiator that helps us gain access
to key client decision-makers during the initial phases of a policy, program, project, or initiative. We use our expertise and
understanding to formulate customized recommendations for our clients. We believe this domain expertise and the program
knowledge developed from our research and advisory engagements further position us to provide a full suite of services
across the entire life cycle of a particular policy, program, project, or initiative. As a result, we are able to understand our
clients’ requirements and objectives as they evolve over time. We then use this knowledge to provide continuous
improvement across our entire range of services, which maintains the relevance of our recommendations.

Our technology-enabled solutions are driven by our subject-matter expertise and creativity

Government and commercial decision-makers have become increasingly aware that, to be effective, technology-based
solutions need to be seamlessly integrated with people and processes. We possess strong knowledge in information
technology and a thorough understanding of organizational behavior and human decision processes. This combination of
skills, along with our domain knowledge, allows us to deliver technology-enabled solutions tailored to our clients’ business
and organizational needs with less start-up time required to understand client issues. In addition, many of our clients seek to
deploy cutting-edge solutions to communicate and transact with citizens, stakeholders, and customers in a multichannel
environment, and doing so takes both our constantly-refreshed technical know-how and world-class creativity.

Our proprietary tools, analytics and methods allow us to deliver superior solutions to our clients

We believe our innovative, and often proprietary, analytics and methods are key competitive differentiators because
they enhance our ability to deliver customized solutions to our clients, and enable us to deliver services in a more cost-
effective manner than our competitors. For example, we have developed industry-standard energy and environmental models
that are used by governments and commercial entities around the world for energy planning and air quality analyses, and
have also developed a suite of proprietary climate change tools to help the private sector develop strategies for complying
with GHG emission reduction requirements. Our loyalty marketing services are often provided via our proprietary Tally
software. We maintain proprietary databases that we continually refine and that are available to be incorporated quickly into
our analyses on client engagements. In addition, we also have proprietary program management methodologies and services
that we believe can help governments improve performance measurement, support chief information officer and science and
engineering program activities, and reduce security risks.

We are led by an experienced management team

Our management team, consisting of approximately 260 officers with the title of vice president or higher, possesses
extensive industry experience and had an average tenure of 13 years with us as of December 31, 2015 (including prior service
with companies we have acquired). This low turnover allows us to retain institutional knowledge. Our managers are
experienced both in marketing efforts and in successfully managing and executing our key services. Our management team
also has experience in acquiring other businesses and integrating those operations with our own. A number of our managers
are industry-recognized thought leaders. We believe that our management’s successful past performance and deep
understanding of our clients’ needs have been differentiating factors in competitive situations.

We have a broad global presence

We have significantly broadened our geographic presence in recent years through strategic acquisitions and internal
growth and now serve our clients with a global network of more than 55 regional offices throughout the U.S., and more than
10 offices in key markets outside the U.S., including offices in the UK, Belgium, China, India and Canada. Our global
presence also gives us access to many of the leading experts on a variety of issues around the world, allowing us to expand
our knowledge base and areas of functional expertise. Over the past year, we worked in dozens of countries, helping
government and commercial clients with energy, environment, infrastructure, healthcare, marketing, interactive
technology/e-commerce, and air transport matters.

STRATEGY

Our strategy to increase our revenue and shareholder value involves the following key elements:

Expand our commercial businesses

We plan to pursue higher-margin commercial projects. We believe we have strong, global client relationships in both
the commercial energy and air transport markets, where our margins have historically been higher than those in our
government market. We continue to see growth opportunities in our current commercial business in the utility sector, as well
as significant potential for us to expand our business in other commercial areas, such as aviation and digital marketing and
strategic communications services, both domestically and internationally.

We view the energy industry as a particularly attractive market for us over the next decade due to concerns over
controlling energy costs and limiting climate and environmental impacts, increased state and federal regulation, the need for
cleaner and more diverse sources of energy, and the concomitant need for additional infrastructure to transport and/or convert
those new energy sources. We also believe that the combination of our vertical domain expertise with our digital marketing
expertise makes us a provider of choice for high value-added assignments in that arena. Although we believe the utility
industry will continue to be a strong market for research and advisory services, particularly in light of the growing focus on
regulatory actions and alternative energy sources, we intend to leverage our existing relationships and institutional expertise
to pursue and capture additional, typically higher-margin opportunities. For example, we believe we can continue to expand
our program and technology-based services in areas such as assisting with the implementation of energy efficiency programs,
information technology applications, and environmental management services for larger utilities. In addition, the growth of
interest in sustainability and energy efficiency issues has created opportunities to offer these types of services to new clients
beyond our traditional sectors. We believe these factors, coupled with our expansive national and global footprint, will result
in a greater number of engagements that will also be larger in size and scope.

We expect other sectors, such as information service providers and travel and tourism, to continue to expand their
interest in these services as these industries better understand their energy consumption options and the positive benefits of
demonstrating environmental stewardship. Our broad range of services to the aviation industry make us well positioned to
capitalize on significant industry changes, including substantial airline equipment upgrades to newer, more efficient aircraft
models in a cost-constrained environment; renovations of older airports to adapt to newer aircraft; and the development of
concession strategies to attract more customers.

Our engagement services, including marketing, interactive technology, and strategic communications offerings, are
well-positioned to support the continuing growth of multichannel engagement and e-commerce. Our acquisitions of CityTech,
Inc. (“CityTech”) and Olson in 2014 broadened our client offerings, particularly in the areas of content management,
marketing and digital services. We can now offer complete end-to-end solutions for chief marketing officers, chief
communications officers, and chief technology officers as they invest in digital marketing platforms and solutions. We deliver
cutting-edge digital strategy support, as well as the creative services that help brands, products and services succeed in a
crowded marketplace.

Replicate our business model across government and industry in selective geographies

We believe the services we provide to our energy, environment, and infrastructure market have especially strong growth
potential throughout the world. Europe’s growing need for cutting-edge climate change, energy, and environmental solutions
is well suited to our domain expertise and our acquisitions of GHK Holdings Limited (“GHK”) in early 2012 and Mostra SA
(“Mostra”) in 2014 have increased our offerings to the UK government and to the European Commission. Moreover, our
offices in Asia represent substantial markets for new sources of energy, clean energy and energy efficiency services, as well
as transportation infrastructure improvements, and strategies to address severe air and carbon pollution issues. We believe
our ability to offer energy, infrastructure, climate change, and environmental services to both commercial and government
clients in this region from local offices, typically staffed by native citizens, positions us to help clients address these key
issues and to expand our market presence. We have focused our geographic footprint by selectively closing or reducing the
size of offices which appear to be unlikely to generate profitable growth in the near to medium term, generally in nations or
regions undergoing either economic or political challenges.

Strengthen our technology-based offerings

With our acquisitions of Ironworks Consulting L.L.C. (“Ironworks”) in 2011, Ecommerce Accelerator LLC (“ECA”)
in 2013, and CityTech and Olson in 2014, we strengthened our services in the fields of content and customer relationship
management, loyalty marketing, and end-to-end e-commerce. We are positioned to increase these services by expanding the
technological underpinnings of our business, while bringing these marketing and e-commerce solutions, as well as expanded
data management and analytics offerings to allow our clients to better link themselves with consumers and other stakeholders.

Leverage research and advisory work into full life cycle solutions

We plan to continue to leverage our research and advisory services and strong client relationships to increase our
revenue from longer running engagements. These engagements could include: information services and technology-based
solutions, project and program management, business process solutions, marketing and communications delivery, strategic
communications, and technical assistance and training. Our research and advisory services provide us with insight and
understanding of our clients’ missions and goals. We believe the domain expertise and program knowledge we develop from
these assignments position us to capture a greater portion of larger execution engagements. However, we will need to
undertake such expansion carefully to avoid actual, potential, and perceived conflicts of interest. See “Risk Factors—Risks
Related to our Business—The diversity of the services we provide, and the clients we serve, may create actual, potential, and
perceived conflicts of interest and conflicts of business that limit our growth and lead to potential liabilities for us.”

Defend, expand, and deepen our presence in core federal and state and local government markets

The current environment of federal and state and local budgetary constraints has created challenging market conditions
for all competitors in the government services sector. We will focus not only on defending our current market footprint, but
also on innovating to continue expanding across key growth markets, such as federal government health-related and
cybersecurity initiatives, digital services, and disaster recovery work to state and local governments. We will continue to
provide innovative solutions that help our public sector clients “do more with less.” We will specifically target deeper
penetration of those agencies that currently procure services only from one or two of our service areas. We believe we can
leverage many of our long-term client relationships by introducing these existing clients, where appropriate, to our other
services. For example, we plan to introduce many of our research and advisory clients to our capabilities to provide associated
information technology, cybersecurity, large-scale program management, and strategic communications and digital services.
Given the increasing focus on deficit reduction and transparency, we can also offer clients our extensive performance
measurement, program evaluation, and performance management services. Finally, having grown to more than 55 offices
across the U.S., we can focus more of our business development efforts on addressing the needs of federal and state and local
government agencies with operations outside of the Washington, D.C. metropolitan area.

Pursue larger prime contract opportunities

We believe that continuing to expand our client engagements into services we offer as part of our end-to-end client
solutions enables us to pursue larger prime contract opportunities, which should provide a greater return on our business
development efforts and allow for increased employee utilization. We plan to continue to target larger and longer-term
opportunities through greater emphasis on early identification of opportunities, strategic capture and positioning, and
enhanced brand recognition. We believe that the resulting increase in the scale, scope, and duration of our contracts will help
us continue to grow our business.

Pursue strategic acquisitions

We plan to augment our organic growth with strategic acquisitions. Since the beginning of 2011, we have added a
number of companies including: Marbek Resource Consultants Ltd. (“Marbek”) in January 2011; AeroStrategy L.L.C.
(“AeroStrategy”) in September 2011; Ironworks in December 2011; GHK in February 2012; Symbiotic Engineering, L.L.C.
(“Symbiotic”) in September 2012; ECA in July 2013; Mostra in February 2014; CityTech in March 2014; and Olson in
November 2014. Our more recent acquisitions are discussed further in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Acquisitions and Business Combinations.” We plan to continue a disciplined
acquisition strategy to obtain new clients, increase our size and market presence, and obtain capabilities that complement our
existing portfolio of services, while focusing on cultural compatibility and positive financial impact.

CLIENT AND CONTRACT MIX

Government clients (including federal, state and local, and international governments) and commercial clients
(including U.S. and international) accounted for approximately 65% and 35%, respectively, of our 2015 revenue,
approximately 70%, and 30%, respectively, of our 2014 revenue, and approximately 72% and 28%, respectively, of our 2013
revenue. Our clients span a broad range of civilian and defense agencies and commercial enterprises. Commercial clients
include non-profit organizations and universities, while government clients include the World Bank and the United Nations.
In general, a client is considered government if the primary funding of that client is from a government agency or institution.
If we are a subcontractor, then the client is not considered to be the prime contractor but rather the ultimate client receiving
the services from the prime contractor team.

In 2015, 2014, and 2013, our three largest clients were HHS, DOS, and DoD. The following table summarizes the

percentage of our total revenue for each of these.

Year ended December 31,
2014

2013

2015

Department of Health and Human Services .................................
Department of State ......................................................................
Department of Defense.................................................................
Total .............................................................................................

18%
8%
5%
31%

17%
8%
6%
31%

18%
8%
7%
33%

Most of our revenue is derived from prime contracts, which accounted for approximately 85%, 86%, and 86% of our
revenue for 2015, 2014, and 2013, respectively. Unless the context otherwise requires, we use the term “contracts” to refer
to contracts and any task orders or delivery orders issued under a contract.

Our contract periods typically extend from one month to five years, including option periods. Many of our government
contracts provide for option periods that may be exercised by the client. In 2015, 2014, and 2013, no single contract accounted
for more than 4% of our revenue. Our 10 largest contracts by revenue collectively accounted for approximately 15%, 14%,
and 16% of our revenue in 2015, 2014, and 2013, respectively.

Our international operations pose special risks, as discussed below in “Risk Factors—Risks Related to Our Business—
Our international operations pose additional risks to our profitability and operating results.” The table below details
information on our domestic and international revenues for each of the three years presented. Revenue is attributed to location
based on the geographic areas to which a contract is awarded. Certain immaterial amounts in the prior year have been
reclassified to conform to current year presentation.

2015

Year ended December 31,
2014
(In thousands)

2013

U.S. .............................................................................................. $
International .................................................................................
Total ............................................................................................. $

1,013,211 $
119,021
1,132,232 $

919,098 $
131,036
1,050,134 $

865,976
83,327
949,303

CONTRACT BACKLOG

We define total backlog as the future revenue we expect to receive from our contracts and other engagements. We
generally include in our total backlog the estimated revenue represented by contract options that have been priced, but not
exercised. We do not include any estimate of revenue relating to potential future delivery orders that might be awarded under
our General Services Administration Multiple Award Schedule (“GSA Schedule”) contracts, other Indefinite
Delivery/Indefinite Quantity (“IDIQ”) contracts, Master Service Agreements (“MSAs”), or other contract vehicles that are
also held by a large number of firms and under which potential future delivery orders or task orders might be issued by any
of a large number of different agencies, and are likely to be subject to a competitive bidding process. We do, however, include
potential future work expected to be awarded under IDIQ contracts that are available to be utilized by a limited number of
potential clients and are held either by us alone or by a limited number of firms.

We include expected revenue in funded backlog when we have been authorized by the client to proceed under a contract
up to the dollar amount specified by our client, and this amount will be owed to us under the contract after we provide the
services pursuant to the authorization. If we do not provide services authorized by a client prior to the expiration of the
authorization, we remove amounts corresponding to the expired authorization from funded backlog. We do include expected
revenue under an engagement in funded backlog when we do not have a signed contract, but only in situations when we have
received client authorization to begin or continue working and we expect to sign a contract for the engagement. In this case,
the amount of funded backlog is limited to the amount authorized. Our funded backlog does not represent the full revenue
potential of our contracts because many government clients, and sometimes other clients, authorize work under a particular
contract on a yearly or more frequent basis, even though the contract may extend over several years. Most of the services we
provide to commercial clients are provided under contracts or task orders under MSAs with relatively short durations. As a
consequence, our backlog attributable to these clients is typically reflected in funded backlog and not in unfunded backlog.

We define unfunded backlog as the difference between total backlog and funded backlog. Our estimate of unfunded
backlog for a particular contract is based, to a large extent, on the amount of revenue we have recently recognized on that
contract, our experience in utilizing contract capacity on similar types of contracts, and our professional judgment.
Accordingly, our estimate of total backlog for a contract included in unfunded backlog is sometimes lower than the revenue
that would result from our client utilizing all remaining contract capacity.

Although we expect our total backlog to result in revenue, the timing of revenue associated with both funded and
unfunded backlog will vary based on a number of factors, and we may not recognize revenue associated with a particular
component of backlog when anticipated, or at all. Our government clients generally have the right to cancel any contract, or
ongoing or planned work under any contract, at any time. In addition, there can be no assurance that revenue from funded or
unfunded backlog will have similar profitability to previous work or will be profitable at all. Generally speaking, we believe
the risk that a particular component of backlog will not result in future revenue is higher for unfunded backlog than for funded
backlog. See “Risk Factors—Risks Related to Our Business—We may not receive revenue corresponding to the full amount
of our backlog, or may receive it later than we expect, which could adversely affect our revenue and operating results.”

Our funded and estimates of unfunded and total backlog were as follows at December 31:

Funded ......................................................................................... $
Unfunded .....................................................................................
Total backlog ................................................................................ $

791.9 $
1,025.5
1,817.4 $

849.9 $
1,018.4
1,868.3 $

696.5
959.8
1,656.3

2015

2014
(In millions)

2013

There were no awards included in our 2015, 2014 or 2013 backlog amounts that were under protest.

BUSINESS DEVELOPMENT

Our business development efforts are critical to our organic growth. Our business development processes and systems
are designed to enable agility and speed-to-market over the business development life cycle, especially given the distinctions
between commercial and public sectors. Business development efforts in priority market areas, which include some of our
largest federal agency accounts (HHS, DOS, DOE, Department of Transportation and EPA), are executed through account
teams, each of which is headed by a corporate account executive and supported by dedicated corporate business development
professionals and senior staff from the relevant operational area. Each account executive has significant authority and
accountability to set priorities and bring to bear the appropriate resources, focusing on larger and strategically important
pursuits. Each team participates in regular executive reviews. Our non-federal government clients are served by account
leaders from operating units and coordinated by senior executives within industry sectors (e.g. energy) where such
coordination is deemed appropriate to enhance our business development opportunities. This account-based approach allows
deep insight into the needs of our clients. It also helps us anticipate our clients’ evolving requirements over the coming 12 to
18 months and position ourselves to meet those requirements. Each of our operational areas is responsible for maximizing
sales in our existing accounts and finding opportunities in closely-related accounts.

The corporate business development function also includes a market research and competitive intelligence group, a
proposal group, a marketing group, a communications group, and a strategic capture unit. The marketing group engages in
brand marketing and strategic marketing program development and execution to raise awareness of our services and solutions
across our markets, and to generate leads for further pursuit by sales personnel. Our contracts and administration function
leads our pricing decisions in partnership with the business development account teams and operational areas.

COMPETITION

We operate in a highly competitive and fragmented marketplace and compete against a number of firms in each of our
key markets. Some of our principal competitors include: Abt Associates Inc.; AECOM Technology Corporation; Alliance
Data Systems Corporation; Booz Allen Hamilton Holding Corporation; CACI International Inc.; Cambridge Systematics,
Inc.; CRA International, Inc.; CSRA Inc.; Deloitte LLP; Eastern Research Group, Inc.; Cardno ENTRIX, Inc.; L-3
Communications Corporation; Leidos Holdings, Inc.; Lockheed Martin Corporation; ManTech International Corporation;
Navigant Consulting, Inc.; Northrop Grumman Corporation; Omnicom Group Inc.; PA Consulting Group;
PricewaterhouseCoopers (PwC); Publicis Group; SAIC, Inc.; Research Triangle Institute; Tetra Tech Inc.; Westat, Inc., and
WPP Plc. In addition, within each of our key markets, we have numerous smaller competitors, many of which have narrower

service offerings and serve niche markets. Some of our competitors are significantly larger than we are and have greater
access to resources and stronger brand recognition than we do.

We consider the principal competitive factors in our market to be client relationships, reputation and past performance
of the firm, client references, technical knowledge and industry expertise of employees, quality of services and solutions,
scope of service offerings, and pricing.

INTELLECTUAL PROPERTY

We own a number of trademarks and copyrights, and have an issued patent and pending patent applications that help
maintain our business and competitive position. Sales and licenses of our intellectual property do not currently comprise a
substantial portion of our revenue or profit. We rely on the technology and models, proprietary processes, and other
intellectual property we own or have rights to use in our analyses and other work we perform for our clients. We use these
innovative, and often proprietary, software, analytical models and tools throughout our service offerings. Our staff regularly
maintains, updates, and improves these software, models, and tools based on our corporate experience. In addition, we
sometimes retain limited rights in software applications we develop for clients. We use a variety of means to protect our
intellectual property, but there can be no assurance that it will be adequately protected.

EMPLOYEES

As of December 31, 2015, we had more than 5,000 benefits-eligible (full-time and regular part-time) employees,
approximately 32% of whom held post-graduate degrees in diverse fields such as social sciences, business and management,
physical sciences, public policy, human capital, information technology and mathematics, engineering, planning, economics,
life sciences, and law. Approximately 65% of these employees held a bachelor’s degree or equivalent or higher. Our
professional environment encourages advanced training to acquire industry-recognized certifications, rewards strong job
performance with advancement opportunities, and fosters ethical and honest conduct. Our salary structure, incentive
compensation, and benefit packages are competitive within our industry.

ITEM 1A. RISK FACTORS

The following discussion of “risk factors” sets forth some of the most significant factors that may adversely affect our
business, operations, financial position or future financial performance, reputation and/or value of our stock. This information
should be read in conjunction with Management’s Discussion and Analysis and the consolidated financial statements and
related notes incorporated by reference into this Annual Report on Form 10-K. Because of the following factors, as well as
other factors, whether known or unknown, affecting our business, operations, financial position or future financial
performance, reputation and/or value of our stock, past financial performance should not be considered to be a reliable
indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.

RISKS RELATED TO OUR INDUSTRY

The failure of Congress to approve appropriations bills in a timely manner for the federal government agencies and
departments we support, or the failure of the President and Congress to reach an agreement on fiscal issues, could
delay and reduce spending, cause us to lose revenue and profit, and affect our cash flow.

On an annual basis, Congress is required to approve appropriations bills that govern spending by each of the federal
government agencies and departments we support. When Congress is unable to agree on budget priorities, and thus is unable
to pass annual appropriations bills on a timely basis, it typically enacts a continuing resolution. Continuing resolutions
generally allow federal government agencies and departments to operate at spending levels based on the previous fiscal year.
When agencies and departments operate on the basis of a continuing resolution, funding we expect to receive from clients
for work we are already performing and for new initiatives may be delayed or cancelled. Thus, the failure by Congress to
approve appropriations bills in a timely manner can result in the loss of revenue and profit when federal government agencies
and departments are required to cancel or change existing or new initiatives or the deferral of revenue and profit to later
periods due to delays in implementing existing or new initiatives. There is also the possibility that Congress will not enact
appropriations bills or a continuing resolution in a timely manner. Furthermore, the federal government may not be able to
fund its operations due to a failure by Congress to raise the U.S. debt ceiling. In such events, many parts of the federal
government, including agencies, departments, programs, and projects we support, may “shut down,” which could have a
substantial negative affect on our revenue, profit, and cash flow. The budgets of many of our state and local government
clients are also subject to similar processes, and thus subject us to similar risks and uncertainties.

In addition, in an effort to control the federal government deficit, Congress passed the Budget Control Act of 2011 (the
“Budget Act”), which mandated the reduction of discretionary spending by the federal government by $1.2 trillion over 10
years. While some of these reductions have been rescinded, the spending caps through 2021 remain in place and, unless they
are also rescinded, could significantly constrain federal discretionary spending for the services we provide. Because we derive
a significant portion of our revenue from contracts with federal government clients, a decline in federal government
expenditures and/or a shift of expenditures away from programs we support, whether as a result of the Budget Act or
otherwise, would likely have a negative impact on our business and results.

Government spending priorities may change in a manner adverse to our business.

We derived approximately 48%, 51%, and 58% of our revenue in 2015, 2014, and 2013, respectively, from contracts
with federal government clients, and approximately 17%, 19%, and 14% of our revenue from contracts with state and local
governments and international governments in 2015, 2014, and 2013, respectively. Expenditures by our federal government
clients may be restricted or reduced by presidential or congressional action, by action of the Office of Management and
Budget, by action of individual agencies or departments, or by other actions. In addition, many state and local governments
are not permitted to operate with budget deficits and nearly all state and local governments face considerable challenges in
balancing their budgets. Accordingly, we expect that some of our government clients may delay payments due to us, may
eventually fail to pay what they owe us, and/or may delay certain programs and projects. For some government clients, we
may face a difficult choice: turn down (or stop) work with the risk of damaging a valuable client relationship, or perform
work with the risk of not getting paid in a timely fashion or perhaps at all. Federal, U.S. state, and local government elections
could also affect spending priorities and budgets at all levels of government. In addition, increased deficits and debt at all
levels of government, both domestic and international, may lead to reduced spending by agencies and departments on projects
or programs we support.

Our failure to comply with complex laws, rules, and regulations could cause us to lose business and subject us to a
variety of penalties and sanctions.

We must comply with laws, rules, and regulations that affect how we do business with our clients and impose added
costs on our business. Each client has its own laws, rules, and regulations that affect its contracts. Some of the more significant
laws and regulations affecting the formation, administration, and performance of government contracts include:

•

The U.S. Federal Acquisition Regulation, and agency and department regulations
analogous or supplemental to it;

The Truth in Negotiations Act;

The Procurement Integrity Act;

The Civil False Claims Act;

The Cost Accounting Standards; and

Laws, rules and regulations restricting (i) the use and dissemination of information classified for national
security purposes, (ii) the exportation of specified products, technologies, and technical data, and (iii) the
use and dissemination of sensitive but unclassified data.

Any failure to comply with applicable federal, and/or state and local government laws, rules and regulations could
subject us to civil and criminal penalties and administrative sanctions, including termination of contracts, repayment of
amounts already received under contracts, forfeiture of profits, suspension of payments, fines, and suspension or debarment
from doing business with federal, state and local government agencies and departments, any of which could adversely affect
our reputation, our revenue, our operating results, and/or the value of our stock.

In addition, the federal government and other governments with which we do business may change their procurement
practices or adopt new contracting laws, rules, or regulations that could be costly to satisfy or that could impair our ability to
obtain new contracts and reduce our revenue and profit, for example, by curtailing the use of services firms or increasing the
use of firms with a “preferred status,” such as small businesses.

Recent acquisitions and increased contracting with international governments, agencies, and departments have
increased our presence in countries outside of the U.S. Failure to abide by laws, rules and regulations applicable to our work
outside the U.S. could have similar effects to those described above.

We are subject to various routine and non-routine governmental reviews, audits and investigations, and unfavorable
government audit results could force us to adjust previously reported operating results, could affect future operating
results, and could subject us to a variety of penalties and sanctions.

Federal government departments and agencies, including the NIH, and many U.S. states audit and review our contract
performance, pricing practices, cost structure, financial capability, and compliance with applicable laws, rules, and
regulations. Audits could raise issues that have significant adverse effects, including, but not limited to, substantial
adjustments to our previously reported operating results and substantial effects on future operating results. If a government
audit, review, or investigation uncovers improper or illegal activities, we may be subject to civil and criminal penalties and
administrative sanctions, including termination of contracts, repayment of amounts already received under contracts,
forfeiture of profits, suspension of payments, fines, and suspension or debarment from doing business with federal and state
and local government agencies and departments, any of which could adversely affect our reputation, our revenue, our
operating results, and/or the value of our stock. We may also lose business if we are found not to be sufficiently able to meet
ongoing cash flow and financial obligations on a timely basis. In addition, we could suffer serious harm to our reputation and
our stock price could decline if allegations of impropriety are made against us, whether true or not. Federal government audits
have been completed on our incurred contract costs only through 2006; audits for costs incurred on work performed since
then have not yet been completed. In addition, non-audit reviews by federal, state and local governments may still be
conducted on all our government contracts, even for periods before 2006.

Our contracts may contain provisions that are unfavorable to us and permit our clients to, among other things,
terminate our contracts partially or completely at any time prior to completion.

Our contracts may contain provisions that allow our clients to terminate or modify these contracts at their convenience
upon short notice. If a client terminates one of our contracts for convenience, we may only bill the client for work completed
prior to the termination, plus any commitments and settlement expenses the client agrees to pay, but not for any work not yet
performed. In addition, many of our government contracts and task and delivery orders are incrementally funded as
appropriated funds become available. The reduction or elimination of such funding can result in contract options not being
exercised and further work on existing contracts and orders being curtailed. In any such event, we would have no right to
seek lost fees or other damages. In addition, certain contracts with international government clients may have more severe
and/or different contract clauses than what we are accustomed to with federal, state and local government clients, such as
penalties for any delay in performance. If a client were to terminate, decline to exercise options under, or curtail further
performance under one or more of our major contracts, our revenue and operating results could be adversely affected.

Our commercial work depends on certain sectors of the global economy that are highly cyclical, which can lead to
substantial variations in our revenue and profit from period to period.

In recent years, we have significantly expanded our work with commercial clients, due in large part to strategic
acquisitions. Our commercial clients, which include clients outside the U.S., generated approximately 35%, 30%, and 28%
of our revenue in 2015, 2014, and 2013, respectively. This increased reliance on commercial clients presents new risks and
challenges. For example, our commercial work is heavily concentrated in cyclical industries such as energy, air transport,
environmental, health, retail and financial services. Demand for our services from our commercial clients has historically
declined when their industries have experienced downturns, and we expect a decline in demand for our services when these
industries experience a downturn in the future. Other factors that could negatively affect our commercial business include,
but are not limited to, a decline in general economic conditions, changes in the worldwide geopolitical climate, increases in
the cost of energy, the financial condition of our clients, and government regulations.

RISKS RELATED TO OUR BUSINESS

Maintaining our client relationships and professional reputation are critical to our ability to successfully win new
contracts and renew expired contracts.

Our client relationships and professional reputation are key factors in maintaining and growing our business, revenue
and profit levels under contracts with our clients. We continually bid for and execute new contracts, and our existing contracts
continually become subject to re-competition and expiration. If we are not able to replace the revenue from these contracts,
either through follow-on contracts or new contracts for those requirements or for other requirements, our revenue and
operating results may be adversely affected. Upon the expiration of a contract, we typically seek a new contract or
subcontractor role relating to that client to replace the revenue generated by the expired contract. There can be no assurance
that those expiring contracts we are servicing will continue after their expiration, that the client will re-procure those
requirements, that any such re-procurement will not be restricted in a way that would eliminate us from the competition (e.g.,
set aside for small businesses), or that we will be successful in any such re-procurements or in obtaining subcontractor roles.
Any factor that diminishes our reputation or client relationships with federal, state and local governments, international
governments, as well as commercial clients, could make it substantially more difficult for us to compete successfully for both
new engagements and qualified employees. To the extent our reputation and/or client relationships deteriorate, our revenue
and operating results could be adversely affected.

Our reliance on GSA Schedule and other IDIQ contracts creates the risk of volatility in our revenue and profit levels.

We believe that one of the elements of our success is our position as a prime contractor under GSA Schedule contracts
and other IDIQ contracts. As these types of contracts have increased in importance over the last several years, we believe our
position as a prime contractor has become increasingly important to our ability to sell our services to federal government
clients. However, these contracts require us to compete for each delivery order and task order, rather than having a more
predictable stream of activity during the term of a contract. In addition, we may spend considerable cost and managerial time
and effort to prepare bids and proposals for contracts that we may not win. There can be no assurance that we will continue
to obtain revenue from such contracts at current levels, or in any amount, in the future. To the extent that federal government
agencies and departments choose to employ GSA Schedule contracts and other IDIQ contracts encompassing activities for
which we are not able to compete or provide services, we could lose business, which would negatively affect our revenue
and profitability.

We may not receive revenue corresponding to the full amount of our backlog, or may receive it later than we expect,
which could adversely affect our revenue and operating results.

The calculation of backlog is highly subjective and subject to numerous uncertainties and estimates, and there can be
no assurance that we will in fact receive the amounts we have included in our backlog. Our assessment of a contract’s potential
value is based on factors such as the amount of revenue we have recently recognized on that contract, our experience in
utilizing contract capacity on similar types of contracts, and our professional judgment. In the case of contracts that may be
renewed at the option of the client, we generally calculate backlog by assuming that the client will exercise all of its renewal
options; however, the client may elect not to exercise its renewal options. In addition, federal government contracts rely on
congressional appropriation of funding, which is typically provided only partially at any point during the term of federal
government contracts, and all or some of the work to be performed under a contract may require future appropriations by
Congress and the subsequent allocation of funding by the procuring agency or department to the contract. Protests of contracts
continue to be common in our industry, and successful protests of contracts awarded to us could also adversely affect our
backlog and our potential associated revenue. Our estimate of the portion of backlog that we expect to recognize as revenue
in any future period is likely to be inaccurate because the receipt and timing of this revenue often depends on subsequent
appropriation and allocation of funding and is subject to various contingencies, such as timing of task orders and delivery
orders, many of which are beyond our control. In addition, we may never receive revenue from some of the engagements that
are included in our backlog, and this risk is greater with respect to unfunded backlog. Although we adjust our backlog to
reflect modifications to, or renewals of, existing contracts, awards of new contracts, or approvals of expenditures, if we fail
to realize revenue corresponding to our backlog, our revenue and operating results could be adversely affected.

Failure to identify, hire, train and retain talented employees who are committed to our mission and vision could have
a negative effect on our reputation and our business.

Our business, which provides professional services and technology-based solutions to government and commercial
clients, largely depends on our ability to attract and retain qualified employees. Additionally, as our business continues to
evolve, as we acquire new businesses, and as we provide a wider range of services, we become increasingly dependent upon
our employees. If we are unable to recruit and retain a sufficient number of qualified employees that are committed to our
mission and vision, we may incur higher costs related to an increase in subcontractors, hiring, training and retention.
Additionally, the loss of key personnel could impair our ability to effectively serve our clients and maintain and grow our
business, and our future revenue and operating results could be adversely affected.

Because much of our work is performed under task orders and delivery orders, and sometimes under short-term
assignments, we are exposed to the risk of not having sufficient work for our staff, which can affect revenue and profit.

We perform some of our work under short-term contracts. Even under many of our longer-term contracts, we perform
much of our work under individual task orders and delivery orders, many of which are awarded on a competitive basis. If we
cannot obtain new work in a timely fashion, whether through new contracts, task orders, or delivery orders, modifications to
existing contracts, or otherwise, we may not be able to keep our staff profitably utilized, which may result in challenges
related to retaining talented members of our staff and also adversely impact our financial results. It is difficult to predict when
such new work or modifications will be obtained. There can be no assurance that we can profitably manage the utilization
of, or retain, our staff.

If we are unable to accurately estimate and control our contract costs, then we may incur losses on our contracts,
which could decrease our operating margins and reduce our profits. In particular, our fixed-price contracts could
increase the unpredictability of our earnings.

It is important for us to accurately estimate and control our contract costs so that we can maintain positive operating
margins and profitability. As described elsewhere in this Form 10-K, we generally enter into three principal types of contracts
with our clients: fixed-price, time-and-materials and cost-plus.

The federal government and some clients have increased the use of fixed-price contracts. We derived 38% of our
revenue from fixed-price contracts in 2015, as compared to 34% in 2014 and 29% in 2013. Under fixed-price contracts, we
receive a fixed price irrespective of the actual costs we incur and, consequently, we are exposed to a number of risks. We
realize a profit on fixed-price contracts only if we can control our costs and prevent cost overruns on our contracts. Fixed-
price contracts require cost and scheduling estimates that are based on a number of assumptions, including those about future
economic conditions, costs, and availability of labor, equipment and materials, and other exigencies. We could experience
cost overruns if these estimates are inaccurate as a result of errors or ambiguities in the contract specifications, or become
inaccurate as a result of a change in circumstances following the submission of the estimate due to, among other things,
unanticipated technical problems, difficulties in obtaining permits or approvals, changes in local laws or labor conditions,
weather delays, or the inability of our vendors or subcontractors to perform. If cost overruns occur, we could experience
reduced profits or, in some cases, a loss for that project. If a project is significant, or if there are one or more common issues
that impact multiple projects, costs overruns could increase the unpredictability of our earnings, as well as have an adverse
impact on our business and earnings.

In our consumer and financial market, we provide digital marketing services in a highly competitive and constantly
evolving market. Our success in this market depends upon our ability to develop and integrate new technologies into
our business and enhance our existing products and services, as well as our ability to respond to rapid changes in
technology in order to remain competitive.

In our consumer and financial market, which has expanded due to certain acquisitions, including the acquisition of
Olson, we provide digital marketing services in highly competitive markets. We compete principally with large systems
consulting and implementation firms, traditional and digital advertising and marketing agencies, offshore consulting and
outsourcing companies, and clients’ internal information systems departments. To a lesser extent, other competitors include
boutique consulting firms that maintain specialized skills and/or are geographically focused. We expect these competitors to
devote significant effort to maintaining and growing their respective market shares. If we cannot respond effectively to
advances by our competitors in this market, or grow our own business efficiently, our overall business and operating results
could be adversely affected.

Our success in this competitive market depends in part on our ability to adapt to rapid technological advances and
evolving standards in computer hardware and software development and media infrastructure, changing and increasingly
sophisticated customer needs and newly-developed digital marketing services and platform introductions and enhancements.
If, within this market, we are unable to develop new or sufficiently differentiated products and services, enhance and improve
our products and support services in a timely manner or to position and/or price our products and services to meet demand,
our overall business and operating results could be adversely affected.

Litigation, claims, disputes, audits, reviews, and investigations in connection with the completed Road Home contract
expose us to many different types of liability, may divert management attention, and could increase our costs.

In June 2006, our subsidiary, ICF Emergency Management Services, LLC, was awarded the Road Home contract by
the State of Louisiana, Office of Community Development, to manage a program designed primarily to help homeowners
and landlords of small rental properties affected by Hurricanes Rita and Katrina by providing them compensation for the
uninsured, uncompensated damages they suffered from the hurricanes. The Road Home contract was our largest contract
throughout its three-year duration. It was completed on June 11, 2009.

The Road Home contract provided us with significant opportunities, but also created substantial risks. A number of
these risks continue beyond the term of the contract. We still have lawsuits pending, and other claims have been made against
us in connection with this contract. New lawsuits may be filed and new claims may be made against us in the future including,
but not limited to, claims by subcontractors and others who are dissatisfied with the amount of money they have received
from, or their treatment under, the Road Home program. We have defended such lawsuits and claims vigorously and plan to
continue to do so, but we have not prevailed in every case and may not prevail in future cases. Although the contract provides
that, with several exceptions, we are allowed to charge, as an expense under the contract, reasonable costs and fees incurred
in defending and paying claims brought by third parties arising out of our performance, there can be no assurance that our
costs and fees will be reimbursed. The State of Louisiana has not reimbursed us for the majority of such costs or fees and has
not reimbursed any such costs or fees since 2008. The outstanding contract receivables related to defending and paying claims
were fully reserved as of December 31, 2015.

In addition and as discussed in “Note N—Contingencies and Commitments” in our financial statements, the State of
Louisiana, Office of Community Development, has made a significant claim against us for alleged overpayments to grant
applicants, currently totaling approximately $175.3 million. The State has also indicated that as it continues to review
homeowner grant calculations, it expects to assert additional demands in the future, increasing the aggregate claim amount.
We have communicated with the State in an effort to resolve its claim and we will continue to do so. The State may elect to
pursue this claim in the future. If the State elects to pursue the claim, there is a 10-year statute of limitations applicable to
any claim brought in a judicial proceeding. Prior to commencing any judicial proceeding, the State must first submit the
claim for administrative review to the Louisiana Commissioner of Administration pursuant to state law. The result of this
administrative review can then be challenged or confirmed in court by either the State or ICF. We intend to defend our
position vigorously, believing the State’s claim to be unfounded and improper; however, there is no guarantee that we will
be successful in our efforts. We believe this claim has no merit, and therefore have not recorded a liability as of December
31, 2015.

As discussed above, the Road Home contract has been, and we expect it to continue to be, audited, investigated,
reviewed, and monitored frequently by federal and state government authorities and their representatives. These activities
may consume significant management time and effort; further, the contract provides that we are subject to audits for a period
after the date of the last payment made under the contract. Findings from any audit, investigation, review, monitoring, or
similar activity could subject us to civil and criminal penalties and administrative sanctions from federal and state government
authorities, which could substantially adversely affect our reputation, our revenue, our operating results, and the value of our
stock.

We derive significant revenue and profit from contracts awarded through a competitive bidding process, which can
impose substantial costs on us, and we will lose revenue and profit if we fail to compete effectively.

We derive significant revenue and profit from contracts that are awarded through a competitive bidding process.

Competitive bidding imposes substantial costs and presents a number of risks, including:

•

the substantial cost and managerial time and effort that we spend to prepare bids and proposals;

the need to estimate accurately the resources and costs that will be required to service any contracts we are
awarded, sometimes in advance of the final determination of their full scope;

the expense and delay that may arise if our competitors protest or challenge awards made to us pursuant to
competitive bidding, as discussed below; and

the opportunity cost of not bidding on and winning other contracts we may have otherwise pursued.

To the extent we engage in competitive bidding and are unable to win particular contracts, we not only incur substantial
costs in the bidding process that negatively affect our operating results, but we may lose the opportunity to operate in the
market for the services provided under those contracts for a number of years. Even if we win a particular contract through
competitive bidding, our profit margins may be depressed or we may even suffer losses as a result of the costs incurred
through the bidding process and the need to lower our prices to overcome competition.

Our business could be adversely affected by delays caused by our competitors protesting contract awards received by
us, which could stop our work. Likewise, we may protest the contracts awarded to some of our competitors, a process
that takes the time and energy of our management and incurs outside costs.

Due in part to the competitive bidding process under which government contracts are awarded, we are at risk of
incurring expenses and delays if one or more of our competitors protest contracts awarded to us. Contract protests continue
to be more common in our industry and may result in a requirement to resubmit offers for the protested contract or in the
termination, reduction, or modification of the awarded contract. It can take many months to resolve contract protests and, in
the interim, the contracting government agency or department may suspend our performance under the contract pending the
outcome of the protest. Even if we prevail in defending the contract award, the resulting delay in the startup and funding of
the work under these contracts may adversely affect our operating results.

Moreover, in order to protect our competitive position, we may protest the contract awards of our competitors. This
process takes the time and energy of our executives and employees, is likely to divert management’s attention from other
important matters, and could cause us to incur outside expenses.

Our international operations pose additional risks to our profitability and operating results.

We have offices in the UK, Belgium, China, India and Canada, among others, and expect to continue to have
international operations and offices, some of which are in underdeveloped countries that do not have a well-established
business infrastructure. We also perform work in some countries where we do not have a physical office. Some of the
countries in which we work have a history of political instability or may expose our employees and subcontractors to physical
danger. Expansion into selective new geographic regions requires considerable management and financial resources, the
expenditure of which may negatively impact our results, and we may never see any return on our investment.

Geopolitical events in the European Union may also adversely impact our business. Specifically, the UK or other
member states may conduct referenda leading to an exit from the European Union, resulting in a reduction in funding for the
European Commission that could lead to a reduction in the funding and scope of our work for the European Commission. In
addition, security and sovereignty issues resulting from geopolitical events, or the European Union negotiations driven by
those events, could change the current balance of responsibility established between the European Commission and member
nations, which could also reduce the funding and scope of our work for the European Commission.

Our operations are subject to risks associated with operating in, and selling to and in, countries other than the U.S., that
could, directly or indirectly, adversely affect our international and domestic operations and our overall revenue, profit, and
operating results including, but not limited to:

•

compliance with the laws, rules, regulations, policies, legal standards, and enforcement mechanisms of the
U.S. and the other countries in which we operate, including bribery and anti-corruption laws, economic
sanctions, trade restrictions, local tax and income laws, and local labor and employment laws, which are
sometimes inconsistent;

restrictions on the ability to repatriate profits to the U.S. or otherwise move funds;

potential personal injury to personnel who may be exposed to military conflicts and other hostile situations
in foreign countries;

expropriation and nationalization of our assets or those of our subcontractors, and other inabilities to protect
our property rights; and/or

difficulties in managing and staffing such operations, including obtaining work permits or visas, identifying
qualified local employees, operating according to different local labor laws and regulations, dealing with
different local business cultures and practices, and collecting contract receivables.

In addition, as our work with international clients grows in selective geographies, certain of our revenues and costs are
increasingly denominated in other currencies. Where such revenues and costs are denominated in other currencies, they are
translated to U.S. dollars for financial reporting purposes. Our revenues and profits may decrease as a result of currency
fluctuations and devaluations and limitations on the conversion of foreign currencies into U.S. dollars. We currently have
forward contract agreements (“hedges”) related to our operations in Europe. We recognize changes in the fair-value of the
hedges in our results of operations. We may increase the number, size and scope of our hedges as we analyze options for
mitigating our foreign exchange risk. We cannot be sure that our hedges will be successful in reducing the risks to us of our
exposure to foreign currency fluctuations and, in fact, the hedges may adversely affect our operating results.

As we develop new services, clients and practices, enter new lines of business, and focus more of our business on
providing a full range of client solutions, our operating risks increase.

As part of our corporate strategy, we are attempting to leverage our research and advisory services to sell a full range
of services across the life cycle of a policy, program, project, or initiative, and we are regularly searching for ways to provide
new services to clients. In addition, we plan to extend our services to new clients, into new lines of business, and into new
selective geographic locations. As we focus more on implementation and improvement, attempt to develop new services,
clients, practice areas and lines of business, open new offices, and do business in new geographic locations, those efforts
could be unsuccessful and adversely affect our results of operations.

Such growth efforts place substantial additional demands on our management and staff, as well as on our information,
financial, administrative and operational systems. We may not be able to manage these demands successfully. Growth may
require increased recruiting efforts, opening new offices, increased business development, selling, marketing and other
actions that are expensive and entail increased risk. We may need to invest more in our people and systems, controls,
compliance efforts, policies and procedures than we anticipate. Therefore, even if we do grow, the demands on our people
and systems, controls, compliance efforts, policies and procedures may be sufficiently great that the quality of our work, our
operating margins, and our operating results suffer, at least in the short-term, and perhaps in the long-term.

Efforts involving a different focus, new services, new clients, new practice areas, new lines of business, new offices
and new geographic locations entail inherent risks associated with our inexperience and competition from mature participants
in those areas. Our inexperience may result in costly decisions that could harm our profit and operating results. In particular,
implementation and improvement services often relate to the development, implementation and improvement of critical
infrastructure or operating systems that our clients may view as “mission critical,” and if we fail to satisfy the needs of our
clients in providing these services, our clients could incur significant costs and losses for which they could seek compensation
from us.

The diversity of the services we provide, and the clients we serve, may create actual, potential, and perceived conflicts
of interest and conflicts of business that limit our growth and could lead to potential liabilities for us.

Because we provide services to a wide array of both government and commercial clients, occasions arise where, due to
actual, potential, or perceived conflicts of interest or business conflicts, we cannot perform work for which we are qualified.
A number of our contracts contain limitations on the work we can perform for others, such as, for example, when we are
assisting a government agency or department in developing regulations or enforcement strategies. Actual, potential, and
perceived conflicts limit the work we can do and, consequently, can limit our growth and adversely affect our operating
results. In addition, if we fail to address actual or potential conflicts properly, or even if we simply fail to recognize a perceived
conflict, we may be in violation of our existing contracts, may otherwise incur liability, and may lose future business for not
preventing the conflict from arising, and our reputation may suffer. Particularly as we grow our commercial business, we
anticipate that conflicts of interest and business conflicts will pose a greater risk.

Our relations with other contractors are important to our business and, if disrupted, could cause us damage.

We derive a portion of our revenue from contracts under which we act as a subcontractor or from “teaming”
arrangements in which we and other contractors jointly bid on particular contracts, projects, or programs. As a subcontractor
or team member, we often lack control over fulfillment of a contract, and poor performance on the contract, whether resulting
from our performance or the performance of another contractor, could tarnish our reputation, result in a reduction of the
amount of our work under, or termination of, that contract or other contracts, and cause us not to obtain future work, even
when we perform as required. Moreover, our revenue, profit and operating results could be adversely affected if any prime
contractor or teammate does not pay our invoices in a timely fashion, chooses to offer products or services of the type that
we provide, teams with other companies to provide such products or services, or otherwise reduces its reliance upon us for
such products or services.

We depend on our intellectual property and our failure to protect it could harm our competitive position.

Our success depends in part upon our internally developed technology and models, proprietary processes, and other
intellectual property that we incorporate in our products and utilize to provide our services. If we fail to protect our intellectual
property, our competitors could market services or products similar to our services and products, which could reduce demand
for our offerings. Government clients typically retain a perpetual, worldwide, royalty-free right to use the intellectual property
we develop for them in a manner defined within government regulations, including providing it to other government agencies
or departments, as well as to our competitors in connection with their performance of government contracts. When necessary,
we seek authorization to use intellectual property developed for the government or to secure export authorization.
Government clients may grant us the right to commercialize software developed with government funding, but they are not
required to do so. If we improperly use intellectual property that was even partially funded by government clients, these
clients could seek damages and royalties from us, sanction us, and prevent us from working on future government contracts.
Actions could also be taken against us if we improperly use intellectual property belonging to others besides our government
clients. In addition, there can be substantial costs associated with protecting our intellectual property which can also have an
adverse effect on our results of operations.

We may be harmed by intellectual property infringement claims.

We have been subject to claims, and are likely to be subject to future claims, that the intellectual property we use in
delivering services and business solutions to our clients infringes upon the intellectual property rights of others. Our
employees develop much of the intellectual property that we use to provide our services and business solutions to our clients,
but we also acquire or obtain rights to use intellectual property through mergers or acquisitions of other companies, engage
third parties to assist us in the development of intellectual property and license technology from other vendors. If our vendors,
our employees or third parties assert claims that we or our clients are infringing on their intellectual property, we could incur
substantial costs to defend those claims, even if we prevail. In addition, if any of these infringement claims are ultimately
successful, we could be required to:

•

pay substantial damages;

cease selling and using products and services that incorporate the challenged intellectual property;

•

obtain a license or additional licenses from our vendors or other third parties, which may not be available
on commercially reasonable terms or at all; and

redesign our products and services that rely on the challenged intellectual property, which may be very
expensive or commercially impractical.

Any of these outcomes could further adversely affect our operating results.

Systems and/or service failures could interrupt our operations, leading to reduced revenue and profit.

Any interruption in our operations or any systems failures, including, but not limited to: (i) the inability of our staff to
perform their work in a timely fashion, whether caused by limited access to and/or closure of our and/or our clients’ offices
or otherwise, (ii) the failure of network, software and/or hardware systems, and (iii) other interruptions and failures, whether
caused by us, a third-party service provider, unauthorized intruders and/or hackers, computer viruses, natural disasters, power
shortages, terrorist attacks or otherwise, could cause loss of data and interruptions or delays in our business or that of our
clients, or both. In addition, the failure or disruption of mail, communications and/or utilities could cause an interruption or
suspension of our operations or otherwise harm our business. Our property and business interruption insurance may be
inadequate to compensate us for all losses that may occur as a result of any system or operational failure or disruption and,
as a result, revenue, profits and operating results could be adversely affected.

Improper disclosure of confidential and personal data could result in liability and harm our reputation.

We store and process increasingly large amounts of confidential information concerning our employees, customers and
vendors, as well as confidential information on behalf of our customers (such as information regarding applicants in programs
on which we perform services through our contractual relationships with customers). Therefore, we must ensure that we are
at all times compliant with the various privacy laws, rules, and regulations in all of the countries within which we are
operating. These laws, rules, and regulations can vary significantly from country to country, with many being more onerous
than those in the U.S. The risk of failing to comply with these laws, rules, and regulations increases as we continue to expand
globally in selective geographies. Moreover, we must ensure that all of our vendors who have access to such information also
have the appropriate privacy policies, procedures and protections in place.

Although we take appropriate measures to protect such information, the continued occurrence of high-profile data
breaches of other companies provides evidence of an external environment increasingly hostile to information security.
Cybersecurity attacks in particular are evolving, and we face the constant risk of cybersecurity threats, including computer
viruses, attacks by computer hackers and other electronic security breaches that could lead to disruptions in critical systems,
unauthorized release of confidential or otherwise protected information and/or corruption of data. In particular, as a federal
government contractor, we face a heightened risk of a security breach or disruption with respect to personally identifiable,
sensitive but unclassified, classified, or otherwise protected data resulting from an attack by computer hackers, foreign
governments and/or cyber terrorists. Improper disclosure of this information could harm our reputation, lead to legal exposure
to customers, or subject us to liability under laws, rules and regulations that protect personal or other confidential data,
resulting in increased costs or loss of revenue.

This environment demands that we continuously improve our design and coordination of security controls. Despite
these efforts, it is possible that our security controls over data, our training, and other practices we follow may not prevent
the improper disclosure of personally identifiable or other confidential information.

RISKS RELATED TO ACQUISITIONS

When we undertake acquisitions, they may present integration challenges, fail to perform as expected, increase our
liabilities, and/or reduce our earnings.

One of our growth strategies is to make strategic acquisitions. When we complete acquisitions, it may be challenging
and costly to integrate the acquired businesses due to operating and integrating new accounting systems, differences in the
locations of personnel and facilities, differences in corporate cultures, disparate business models, or other reasons. If we are
unable to successfully integrate acquired companies, our revenue and operating results could suffer. In addition, we may not
successfully achieve the anticipated cost efficiencies and synergies from these acquisitions. Also, our costs for managerial,
operational, financial, and administrative systems may increase and be higher than anticipated. During and following the
integration of an acquired business, we may experience attrition, including losing key employees and/or clients of the acquired
business, which could adversely affect our future revenue and operating results and prevent us from achieving the anticipated
benefits of the acquisition.

Businesses we acquire may have liabilities or adverse operating issues, or both, that we either fail to discover through
due diligence or underestimate prior to the consummation of the acquisition. These liabilities and/or issues may include the
acquired business’ failure to comply with, or other violations of, applicable laws, rules, or regulations or contractual or other
obligations or liabilities. As the successor owner, we may be financially responsible for, and may suffer harm to our reputation
or otherwise be adversely affected by, such liabilities and/or issues. An acquired business also may have problems with
internal controls over financial reporting, which could in turn cause us to have significant deficiencies or material weaknesses
in our own internal controls over financial reporting. These and any other costs, liabilities, issues, and/or disruptions
associated with any past or future acquisitions, and the related integration, could harm our operating results.

As a result of our acquisitions, we have substantial amounts of goodwill and intangible assets, and changes in business
conditions could cause these assets to become impaired, requiring write-downs that would adversely affect our
operating results.

All of our acquisitions have been accounted for as purchases and involved purchase prices well in excess of tangible
asset values, resulting in the creation of a significant amount of goodwill and other intangible assets. As of December 31,
2015, goodwill and purchased intangibles accounted for approximately 63% and 5%, respectively, of our total assets. Under
U.S. generally accepted accounting principles (“GAAP”), we do not amortize goodwill and intangible assets acquired in a
purchase business combination that are determined to have indefinite useful lives, but instead review them annually (or more
frequently if impairment indicators arise) for impairment. Although we have to date determined that such assets have not
been impaired, future events or changes in circumstances that result in an impairment of goodwill or other intangible assets
would have a negative impact on our profitability and operating results.

RISKS RELATED TO OUR CORPORATE AND CAPITAL STRUCTURE

Provisions of our charter documents and Delaware law may prevent or deter potential acquisition bids to acquire us
and other actions that stockholders may consider favorable, and the market price of our common stock may be lower
as a result.

Our charter documents contain the following provisions that could have an anti-takeover effect:

•

our board of directors is divided into three classes, making it more difficult for stockholders to change the
composition of the board;

directors may be removed only for cause;

our stockholders are not permitted to call a special meeting of the stockholders;

all stockholder actions are required to be taken by a vote of the stockholders at an annual or special meeting
or by a written consent signed by all of our stockholders;

•

our stockholders are required to comply with advance notice procedures to nominate candidates for election
to our board of directors or to place stockholders’ proposals on the agenda for consideration at stockholder
meetings; and

the approval of the holders of capital stock representing at least two-thirds of our voting power is required
to amend our indemnification obligations, director classifications, stockholder proposal requirements, and
director candidate nomination requirements set forth in our amended and restated certificate of
incorporation and amended and restated bylaws.

In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law,
which regulates corporate acquisitions. These provisions could discourage potential acquisition proposals; delay or prevent
a change-in-control transaction; discourage others from making tender offers for our common stock; and/or prevent changes
in our management.

There are risks associated with our outstanding and future indebtedness which could reduce our profitability, limit
our ability to pursue certain business opportunities and reduce the value of our stock.

As a result of our acquisitions, we have incurred substantial debt in the past. As of December 31, 2015, we had an
aggregate of $311.5 million of outstanding indebtedness under a credit facility that will mature in May 2019. Subject to the
limits contained in the agreements governing our outstanding debt, we may incur additional debt in the future. Our ability to
pay interest and repay the principal for our indebtedness, as well as meet our debt and operations covenant requirements, is
dependent upon our ability to manage our business operations, generate sufficient cash flows to service such debt and other
factors discussed in this section. If we are unable to comply with the terms of our financing agreements or obtain additional
required financing, this could ultimately result in a significant adverse effect on our financial results and the value of our
stock. Among other things, our debt could:

•

make it difficult to obtain additional financing for working capital, capital expenditures, acquisitions, or
other general corporate purposes;

result in a substantial portion of our cash flow from operations being dedicated to the payment of the
principal and interest on our debt, as well as used to make debt service payments;

limit our flexibility in planning for, and reacting to, changes in our business and the marketplace;

place us at a competitive disadvantage relative to other less leveraged firms; and

increase our vulnerability to economic downturns and rises in interest rates.

Should any of these or other unforeseen consequences arise, they could have an adverse effect on our business, financial

condition, results of operations, future business opportunities and/or ability to satisfy our obligations under our debt.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We lease our offices and do not own any real estate. As of December 31, 2015, we leased approximately 330,000 square
feet of office space at our corporate headquarters at 9300/9302 Lee Highway, Fairfax, Virginia (in the Washington, D.C.
metropolitan area) through December 2022 (the “Fairfax Offices”). The Fairfax Offices house a portion of our operations
and almost all of our corporate functions, including most of our staff within executive management, treasury, accounting,
legal, human resources, business and corporate development, facilities management, information services, and contracts.

As of December 31, 2015, we had leases in place for approximately 1.3 million square feet of office space in more than
65 office locations throughout the U.S. and around the world, with various lease terms expiring over the next 11 years. As of
December 31, 2015, approximately 8,000 square feet of the space we leased was subleased to other parties. We believe that
our current office space, as well as other office space we expect to be able to lease, will meet our needs for the next several
years. Lastly, a portion of our operations staff is housed at client-provided facilities, pursuant to the terms of a number of our
client contracts.

ITEM 3. LEGAL PROCEEDINGS

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.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND

ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock trades on the NASDAQ Global Select Market under the symbol “ICFI.” The high and low sales

prices of our common stock for each quarter for the two years 2015 and 2014 are as follows:

2015 Fourth Quarter ......................................................................................... $
2015 Third Quarter .......................................................................................... $
2015 Second Quarter ........................................................................................ $
2015 First Quarter ............................................................................................ $
2014 Fourth Quarter ......................................................................................... $
2014 Third Quarter .......................................................................................... $
2014 Second Quarter ........................................................................................ $
2014 First Quarter ............................................................................................ $

Holders

Sales Price Per Share
(in dollars)

High

Low

37.25 $
37.21 $
42.43 $
43.73 $
42.48 $
36.59 $
40.95 $
44.34 $

29.19
30.11
34.09
37.00
30.33
30.75
33.92
32.85

As of February 29, 2016, there were 40 registered holders of record of our common stock. This number is not
representative of the number of beneficial holders because many of the shares are held by depositories, brokers, or nominees.

Dividends

We have neither declared nor paid any cash dividends on our common stock and presently intend to retain our future

earnings, if any, to fund the development and growth of our business.

Stock Performance Graph

The following graph compares the cumulative total stockholder return on our common stock from December 31, 2010
through December 31, 2015, with the cumulative total return on (i) the NASDAQ Composite, (ii) the Russell 2000 stock
index, and (iii) our peer group composed of other governmental and commercial service providers: The Advisory Board
Company; Booz Allen Hamilton Holding Corporation; CACI International Inc.; CBIZ, Inc.; CDI Corporation; Convergys
Corporation; The Corporate Executive Board Company; CRA International, Inc.; Exponent Inc.; FTI Consulting, Inc.;
Gartner, Inc.; GP Strategies Corporation; Huron Consulting Group Inc.; IHS Inc.; Leidos Holdings, Inc.; ManTech
International Corporation; Maximus, Inc.; Navigant Consulting, Inc.; NCI, Inc.; Resources Connection Inc.; Science
Applications International Corporation (SAIC); Tetra Tech, Inc.; Unisys Corporation; and VSE Corporation (a “Peer
Group”). As part of the annual process of reviewing our peer group, management ensures that the selected companies remain
aligned with our evolving business strategy. There were no changes to our peer group with the exception of excluding Sapient
Corporation since it was acquired in February 2015. The comparison below assumes that all dividends are reinvested and all
returns are market-cap weighted. The historical information set forth below is not necessarily indicative of future
performance.

ICF International, Inc. ................................. $
NASDAQ Composite ..................................
Russell 2000 Index ......................................
Peer Group ..................................................

Recent Sales of Unregistered Securities

2011

96.35 $
100.53
95.82
97.51

Year Ended December 31,
2013

2014

2012

91.14 $
116.92
111.49
110.67

134.95 $
166.19
154.78
157.61

159.33 $
188.78
162.35
169.71

2015

138.26
199.95
155.18
175.44

During the three months ended December 31, 2015, we issued the following securities that were not registered under
the Securities Act of 1933, as amended (“Securities Act”). No underwriters were involved in the following issuances of
securities.

(a) Issuances of Common Stock:

For the three months ended December 31, 2015, a total of 5,015 shares of unregistered common stock, valued at an
aggregate of $173,064 were issued to seven of our directors on October 1, 2015 and December 31, 2015 for director-
related compensation.

Each of these issuances was made in reliance upon the exemption from the registration provisions of the Securities Act,
set forth in Section 4(2) thereof relative to sales by an issuer not involving any public offering and the rules and regulations
thereunder. The recipients of securities in each case acquired the securities for investment only and not with a view to the
distribution thereof. Each of the recipients of securities in these transactions was an accredited or sophisticated person and
had adequate access, through employment, business, or other relationships, to information about us.

Purchases of Equity Securities by Issuer

The following table summarizes the share repurchase activity during the three months ended December 31, 2015 for our
share repurchase plan that expired on November 4, 2015.

Total Number
of Shares
Purchased (a)

Average Price
Paid per
Share (a)

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

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

— $
34,138 $
— $
34,138 $

—
31.16
—
31.16

— $
34,138 $
— $

34,138

30,577,141
—
—

Period
October 1 – October 31 ........................
November 1 – November 30 ................
December 1 – December 31 .................
Total ..............................................

(a) Our Board of Directors approved a share repurchase plan effective in November 2013 that expired on November 4,
2015, which authorized us to repurchase in the aggregate up to $35.0 million of our outstanding common stock. In
March 2015, the plan was amended to allow repurchases in the aggregate up to $75.0 million, not to exceed the
amount allowed under our Credit Facility as defined in “Note I—Long-term Debt” in the “Notes to Consolidated
Financial Statements.”

The following table summarizes the share repurchase activity during the three months ended December 31, 2015 under our
new share repurchase plan effective November 5, 2015 and shares purchased in satisfaction of employee tax withholding
obligations.

Total Number
of Shares

Purchased (a)

Average Price
Paid per
Share (a)

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

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

— $
199,044 $
— $
199,044 $

—
33.33
—
33.33

— $
198,282 $
— $

198,282

—
39,887,059
39,887,059

Period
October 1 – October 31 ........................
November 1 – November 30 ................
December 1 – December 31 .................
Total ..............................................

(a) The total number of shares purchased of 199,044 includes shares repurchased pursuant to our share repurchase
program described further in footnote (b) below, as well as shares purchased from employees to pay required
withholding taxes related to the settlement of restricted stock units in accordance with our applicable long-term
incentive plan. During the three months ended December 31, 2015, we repurchased 762 shares of common stock
from employees in satisfaction of tax withholding obligations at an average price of $33.46 per share.

(b) In the third quarter of 2015, our Board of Directors approved a new share repurchase plan, effective November 5,
2015, and expiring on November 4, 2017 that authorizes share repurchases in the aggregate up to $75.0 million, not
to exceed the amount allowed under our revolving line of credit. Our Credit Facility, which we entered into on May
16, 2014, further limits our share repurchases to $75.0 million during the duration of the Credit Facility, net of new
issuances as defined in the Credit Facility. During the three months ended December 31, 2015, we repurchased
198,282 shares under this program at an average price of $33.33 per share.

ITEM 6.

SELECTED FINANCIAL DATA

The following table presents selected historical financial data derived from our audited consolidated financial
statements and other information for each of the five years presented. This information should be read in conjunction with
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial
statements and the related notes included elsewhere in this Annual Report. The financial information below reflects the results
or impact of our acquisitions since the date the entities were purchased.

2015

Year Ended December 31,
2013
(in thousands, except per share amounts)

2012

2014

2011

Statement of Earnings Data:
Revenue ................................................................ $ 1,132,232 $ 1,050,134 $
Direct costs ...........................................................
654,946
Operating costs and expenses:

694,436

949,303 $
591,516

937,133 $
583,195

840,775
520,522

Indirect and selling expenses ........................
Depreciation and amortization ......................
Amortization of intangible assets ..................
Operating Income .................................................
Interest expense .............................................
Other (expense) income ...............................
Income before income taxes .................................
Provision for income taxes ...................................
Net income ........................................................... $

329,159
16,222
17,184
75,231
(10,072)
(1,559)
63,600
24,231
39,369 $

302,020
13,369
10,437
69,362
(4,254)
(958)
64,150
24,120
40,030 $

272,387
11,238
9,477
64,685
(2,447)
(12)
62,226
22,896
39,330 $

263,878
9,789
14,089
66,182
(3,946)
(325)
61,911
23,836
38,075 $

240,964
10,258
9,550
59,481
(2,747)
26
56,760
21,895
34,865

Earnings per share (“EPS”):

Basic .............................................................. $
Diluted .......................................................... $

2.04 $
2.00 $

1.99 $
1.95 $

1.94 $
1.91 $

1.77
1.75

Weighted-average shares:

Basic ..............................................................
Diluted ..........................................................

19,335
19,663

19,608
19,997

19,755
20,186

19,663
19,957

19,684
19,928

Other Operating Data (Unaudited):
Service revenue(1) ................................................. $
EBITDA(2) ............................................................
Adjusted EBITDA(2) .............................................
Adjusted EPS(3) ....................................................
Non-GAAP EPS(3) ................................................

849,122 $ 774,394 $
93,168
108,637
98,626
110,740
2.19
2.10
2.51
2.64

709,774 $
85,400
86,303
1.98
2.28

705,295 $
90,060
90,736
1.93
2.36

619,806
79,289
80,971
1.80
2.09

2015

2014

2012

2011

As of December 31,
2013
(in thousands)

Consolidated balance sheet data:
12,122 $
Cash and cash equivalents .................................... $
Net working capital ..............................................
85,186
Total assets ........................................................... 1,083,159 1,110,340
350,052
Long-term debt .....................................................
500,689
Total stockholders’ equity ....................................

311,532
523,276

7,747 $
83,756

8,953 $
76,124
700,914
40,000
474,091

14,725 $
91,671
709,721
105,000
428,750

4,097
96,257
694,615
145,000
393,028

(1) Service revenue represents revenue less subcontractor and other direct costs, such as third-party materials and travel
expenses. Service revenue is not a recognized term under U.S. GAAP and does not purport to be an alternative to revenue
as a measure of operating performance. Service revenue is a measure used by us to evaluate our margins for services
performed and, therefore, we believe it is useful to investors. We generally expect the ratio of direct costs as a percentage
of revenue to increase when our own labor decreases relative to subcontractor labor or outside consultants. A
reconciliation of revenue to service revenue follows:

2015

2014

Year ended December 31,
2013
(In thousands)

2012

2011

Revenue ................................................................ $ 1,132,232 $ 1,050,134 $ 949,303 $ 937,133 $ 840,775
Subcontractor and other direct costs ....................
(220,969)
Service revenue .................................................... $ 849,122 $ 774,394 $ 709,774 $ 705,295 $ 619,806

(231,838)

(283,110)

(275,740)

(239,529)

(2) EBITDA, earnings before interest and other income and/or expense, tax, and depreciation and amortization, is a measure
we use to evaluate performance. We believe EBITDA is useful to investors because similar measures are frequently used
by securities analysts, investors, and other interested parties in evaluating companies in our industry. 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 its size and nature and whether or not we expect it 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 do not purport to be an alternative to
net income as a measure of operating performance, or to cash flows from operating activities as a measure of liquidity.
Because not all companies use identical calculations, this presentation of EBITDA and adjusted EBITDA may not be
comparable to other similarly-titled measures used by other companies. EBITDA and adjusted EBITDA are not intended
to be a measure of free cash flow for management’s discretionary use, as they do not consider certain cash requirements
such as interest payments, tax payments, capital expenditures, and debt service. We have a revolving line of credit that
includes covenants based on EBITDA, subject to certain adjustments. A reconciliation of net income to EBITDA and
adjusted EBITDA follows:

Net income .................................................. $
Other expense (income) ..............................
Interest expense ...........................................
Provision for income taxes ..........................
Depreciation and amortization ....................
EBITDA ......................................................
Acquisition-related expenses ......................
Special charges related to severance for

staff realignment .....................................
Special charges related to office closures ....
Adjusted EBITDA ....................................... $

2015

39,369 $
1,559
10,072
24,231
33,406
108,637
189

1,118
796
110,740 $

2014

Year ended December 31,
2013
(In thousands)

2012

40,030 $
958
4,254
24,120
23,806
93,168
2,243

1,931
1,284
98,626 $

39,330 $
12
2,447
22,896
20,715
85,400
903

—
—
86,303 $

38,075 $
325
3,946
23,836
23,878
90,060
676

—
—
90,736 $

2011

34,865
(26)
2,747
21,895
19,808
79,289
1,682

—
—
80,971

(3) Adjusted EPS represents diluted EPS excluding the impact of certain items such as special charges and acquisition-
related expenses that we do not consider to be indicative of the performance of our ongoing operations and are excluded
from adjusted EBITDA as described further above. Non-GAAP EPS represents adjusted EPS further adjusted to
eliminate the impact of amortization of intangible assets related to our acquisitions. Adjusted EPS and non-GAAP EPS
are not recognized terms under U.S. GAAP and do not purport to be an alternative to basic or diluted EPS. Because not
all companies use identical calculations, the presentation of adjusted EPS and non-GAAP EPS may not be comparable
to other similarly titled measures used by other companies. We believe that the supplemental adjustments applied in
calculating adjusted EPS and non-GAAP EPS are reasonable and appropriate to provide additional information to
investors. A reconciliation of diluted EPS to adjusted EPS and non-GAAP EPS follows:

2015

Year ended December 31,
2013

2012

2014

2011

Diluted EPS .......................................................... $
Acquisition-related expenses, net of tax ...............
Special charges related to severance for staff

2.00 $
0.01

2.00 $
0.07

1.95 $
0.03

1.91 $
0.02

1.75
0.05

realignment, net of tax ......................................

0.04

0.06

—

Special charges related to office closures, net of

tax .....................................................................
Adjusted EPS .......................................................
Amortization of intangibles, net of tax .................
Non-GAAP EPS ................................................... $

0.05
2.10
0.54
2.64 $

0.06
2.19
0.32
2.51 $

—
1.98
0.30
2.28 $

—
1.93
0.43
2.36 $

—
1.80
0.29
2.09

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

The following discussion and analysis should be read in conjunction with the “Selected Financial Data” and the
consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion
and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions, such as statements of
our plans, objectives, expectations, and intentions. The cautionary statements made in this Annual Report on Form 10-K
should be read as applying to all related forward-looking statements wherever they appear in this Annual Report on Form
10-K. Our actual results could differ materially from those anticipated in the forward-looking statements. Factors that could
cause or contribute to our actual results differing materially from those anticipated include those discussed in “Risk Factors”
and elsewhere in this Annual Report on Form 10-K.

OVERVIEW AND OUTLOOK

We provide professional services and technology-based solutions to government and commercial clients, including
management, technology, and policy consulting and implementation services. We help our clients conceive, develop,
implement, and improve solutions that address complex natural resource, social, and public safety issues. Our services
primarily address four key markets: energy, environment, and infrastructure; health, education and social programs; safety
and security; and consumer and financial. We provide services across these four markets that deliver value 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.

In prior years we have had three markets; however, due to the acquisition of Olson near the end of fiscal year 2014, we
made certain changes to better reflect our current business starting in the first quarter of 2015. First, we began to break out
our revenues into four markets instead of three by adding a new market related to our consumer and financial client revenue,
which was previously included in the health, social programs, and consumer/financial market. Second, we changed the name
of the health, social programs, and consumer/financial market to health, education and social programs. Finally, we changed
the name of our public safety and defense market and renamed it safety and security to more accurately reflect the nature of
our client base. The criteria for determining the clients, and related revenue, presented in each of the classifications remains
the same.

Our clients utilize our services because we combine diverse institutional knowledge and experience in their activities
with the deep subject-matter expertise of our highly educated staff, which we deploy in multi-disciplinary teams. We
categorize our clients into two classifications; government and commercial. Within the government classification, we present
three client sub-classifications: federal government, state and local government, and international government.

Our major clients are federal government departments and agencies. Our federal government clients have included
every cabinet-level department, most significantly HHS, DOS, and DoD. Federal government clients generated
approximately 48%, 51%, and 58% of our revenue in 2015, 2014, and 2013, respectively. State and local government clients
generated approximately 10%, 10%, and 9% of our revenue in 2015, 2014, and 2013, respectively. International government
clients generated approximately 7%, 9%, and 5% of our revenue in 2015, 2014, and 2013, respectively.

We also serve a variety of commercial clients worldwide, including airlines, airports, electric and gas utilities, oil
companies, hospitals, health insurers, and other health-related companies, banks and other financial services companies,
transportation, travel and hospitality firms, non-profits/associations, law firms, manufacturing firms, retail chains, and
distribution companies. Our commercial clients, which include clients outside the U.S., generated approximately 35%, 30%,
and 28% of our revenue in 2015, 2014, and 2013, respectively. We have successfully worked with many of our clients for
decades, with the result that we have a unique and knowledgeable perspective on their needs.

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—professional services for government and commercial clients.

Although we describe our multiple service offerings to four markets to provide a better understanding of our business,

we do not manage our business or allocate our resources based on those service offerings or markets.

In 2015, we saw growth in commercial client revenue, federal government revenue, and state and local government
revenue, which was partially offset by lower international government revenue, primarily due to the impact of foreign
currency exchange rate fluctuations. Revenue increased to $1,132.2 million, representing growth of approximately 7.8% for
the year ended December 31, 2015 compared to the prior year. Operating income increased 8.5% to $75.2 million for the
year ended December 31, 2015 compared to the prior year; however, net income declined 1.7% to $39.4 million, largely
driven by higher interest expense due to borrowings to fund the Olson acquisition, as well as an increase in amortization for
intangible assets resulting from the Olson acquisition.

Our 2014 acquisitions of Olson, Mostra and CityTech have contributed to the continued diversification of our revenue
sources, consistent with our growth strategy. The acquisition of Olson, a leading provider of marketing technology and digital
services, was significant and was completed on November 5, 2014. The aggregate purchase price of approximately $298.2
million in cash was funded by our Fourth Amended and Restated Business Loan and Security Agreement (the “Credit
Facility”). Due to the increased level of debt outstanding under our Credit Facility, applicable interest rates, as determined
by the pricing matrices governing the Credit Facility, increased approximately one percentage point following the acquisition.
We anticipate that interest expense will decrease over the next 12 months based on our expectation of a reduction in the
average balance of debt outstanding. In 2015, amortization of intangibles increased $6.7 million, largely due to the acquisition
of Olson; however we expect this amortization to decrease over the next 12 months as some of these intangibles assets become
fully amortized. As a result of the acquisitions of Olson and CityTech and future growth expectations for our commercial
business, we anticipate our concentration of revenue to commercial clients and revenue within the consumer and financial
market will continue to increase as a percentage of our total revenue.

We believe that 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 in our key markets due to heightened concerns about clean
energy and energy efficiency; health promotion, treatment, and cost control; and ongoing homeland security threats. We also
see significant opportunity to leverage further 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 across the program life cycle in our four key markets, and to complete and successfully integrate
additional strategic acquisitions. In our four markets, we will continue to focus on building scale in vertical and horizontal
domain expertise; developing business with both our government and commercial clients; and replicating our business model
in selective geographies. In doing so, we will continue to evaluate strategic acquisition opportunities that enhance our subject
matter knowledge, broaden our service offerings, and/or provide scale in specific geographies.

Federal government revenue was 48% of our total revenue for the year ended December 31, 2015. While we continue
to see favorable long-term market opportunities, there are certain near-term challenges facing all government service
providers, including top-line legislative constraints on federal government discretionary spending that limit expenditure
growth through 2021. Actions by Congress could result in a delay or reduction to our revenue, profit, and cash flow and could
have a negative impact on our business and results of operations; however, we believe we are well positioned in markets that
have been, and will continue to be, priorities to the federal government.

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 current working capital requirements.

Our results of operations and cash flow may vary significantly from quarter to quarter depending on a number of factors,

including, but not limited to:

•

progress of contract performance;

extraordinary economic events and natural disasters;

number of billable days in a quarter;

timing of client orders;

timing of award fee notices;

•

changes in the scope of contracts;

variations in purchasing patterns under our contracts;

federal and state and local governments’ and other clients’ spending levels;

timing of billings to, and payments by, clients;

timing of receipt of invoices from, and payments to, employees and vendors;

commencement, completion, and termination of contracts;

strategic decisions we make, such as acquisitions, consolidations, divestments, spin-offs, joint ventures,
strategic investments, and changes in business strategy;

timing of significant costs and investments (such as bid and proposal costs and the costs involved in planning
or making acquisitions);

timing of events related to discrete tax items;

our contract mix and use of subcontractors;

additions to, and departures of, staff;

changes in staff utilization;

paid time off taken by our employees;

level and cost of our debt;

changes in accounting principles and policies; and/or

general market and economic conditions.

Because a significant portion of our expenses, such as personnel, facilities, and related costs, are fixed in the short term,
contract performance and variation in the volume of activity, as well as in the number and volume of contracts commenced
or completed during any quarter, may cause significant variations in operating results from quarter to quarter.

We generally have been able to price our contracts in a manner that accommodates the rates of inflation experienced in

recent years, although we cannot ensure that we will be able to do so in the future.

CRITICAL ACCOUNTING POLICIES

The preparation of our financial statements in accordance with GAAP requires that we make estimates and judgments
that affect the reported amount of assets, liabilities, revenue, and expenses, as well as the disclosure of contingent assets and
liabilities. If any of these estimates 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. We believe that the
estimates, assumptions, and judgments involved in the accounting practices described below have the greatest potential
impact on our financial statements and therefore consider them to be critical accounting policies. Our significant accounting
policies, including the critical accounting policies listed below, are more fully described and discussed in “Note B—Summary
of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements.”

Revenue Recognition

We recognize revenue when persuasive evidence of an arrangement exists, services have been rendered, the contract
price is fixed or determinable, and collectability is reasonably assured. We enter into three types of contracts: time-and-
materials, cost-based and fixed-price.

•

Time-and-Materials Contracts. Revenue for time-and-materials contracts is recorded on the basis of
allowable labor hours worked multiplied by the contract-defined billing rates, plus the costs of other items
used in the performance of the contract. Profits and losses on time-and-materials contracts result from the
difference between the cost of services performed and the contract-defined billing rates for these services.

Cost-Based Contracts. Revenue under cost-based contracts is recognized as costs are incurred. Applicable
estimated profit, if any, is included in earnings in the proportion that incurred costs bear to total estimated
costs. Incentives, award fees, or penalties related to performance are also considered in estimating revenue
and profit rates based on actual and anticipated awards, taking into consideration factors such as our prior
award experience and communications with the customer regarding performance.

Fixed-Price Contracts. Revenue for fixed-price contracts is recognized when earned, generally as work is
performed. Services performed vary from contract to contract and are not always uniformly performed over
the term of the arrangement. Fixed-price contracts may contain multiple elements that must be evaluated to
determine if they represent separate units of accounting that have stand-alone value. If the assessment is
made that there is more than one unit of accounting, the contract value is then allocated to each unit based
upon management’s best estimate of selling price and the appropriate revenue recognition method is applied
to each unit. We recognize revenue in a number of different ways on fixed-price contracts based upon the
nature of the services to be provided and an assessment of what best mirrors the pattern of performance for
the deliverable/contract, including:

•

Proportional Performance: Revenue on certain fixed-price contracts is recognized based on
proportional performance when the provision of services extends beyond an accounting period with
more than one discrete performance act, and progress towards completion can be measured based
on a reliable output or input. Under this method, revenue is recorded each period based upon certain
contract performance input measures incurred (labor hours, labor costs, or total costs) or output
measures completed, expressed as a proportion of a total project estimate. Progress on a contract is
monitored regularly to ensure that revenue recognized reflects project status. When hours or costs
incurred are used as the basis for revenue recognition, the hours or costs incurred represent a
reasonable surrogate for output measures of contract performance, including the presentation of
deliverables to the client. Clients are obligated to pay as services are performed, and in the event
that a client cancels the contract, payment for services performed through the date of cancellation
is typically negotiated with the client.

Specific Performance: When the services to be performed consist of a single act, revenue is
recognized at the time the act is performed or at the completion of the single service.

Straight-Line: When services are performed or are expected to be performed consistently
throughout an arrangement, or when we are compensated on a retainer or fixed-fee basis, revenue
is recognized ratably over the period benefited.

Completed Contract: Revenue and costs on certain fixed-price contracts are recognized at
completion if the final act is so significant to the arrangement that value is deemed to be transferred
only at completion.

Revenue recognition requires us to use judgment relative to assessing risks, estimating contract revenue and costs or
other variables, and making assumptions for scheduling and technical issues. Due to the size and nature of many of our
contracts, the estimation of revenue and estimates at completion can be complicated and are subject to many variables.
Contract costs include labor, subcontractor costs, and other direct costs, as well as an allocation of indirect costs. At times,
we must also make assumptions regarding the length of time to complete the contract because costs include expected increases
in wages, prices for subcontractors, and other direct costs. From time to time, facts develop that require us to revise our
estimated total costs or hours and thus the associated revenue on a contract. To the extent that a revised estimate affects
contract profit or revenue previously recognized, we record the cumulative effect of the revision in the period in which the
facts requiring the revision become known. A provision for the full amount of an anticipated loss on any type of contract is
recognized in the period in which it becomes probable and can be reasonably estimated. As a result, operating results could
be affected by revisions to prior accounting estimates.

Our contractual arrangements are evaluated to assess whether revenue should be recognized on a gross versus net basis.
Management’s assessment when determining gross versus net revenue recognition is based on several factors such as whether
we serve as the primary service provider, have autonomy in selecting subcontractors, or have credit risk, all of which are
primary indicators that we serve as the principal to the transaction. In such cases, revenue is recognized on a gross basis.
When such indicators are not present and we are primarily functioning as an agent under an arrangement, revenue is
recognized on a net basis.

We generate invoices to clients in accordance with the terms of the applicable contract, which may not be directly
related to the performance of services. Unbilled receivables are invoiced based upon the achievement of specific events as
defined by each contract, including deliverables, timetables, and incurrence of certain costs. Unbilled receivables are
classified as a current asset. Advanced billings to clients in excess of revenue earned are recorded as deferred revenue until
the revenue recognition criteria are met. Reimbursements of out-of-pocket expenses are included in revenue with
corresponding costs incurred by us included in the cost of revenue. We record revenue net of taxes collected from customers
to be remitted to governmental authorities.

We may proceed with work based upon client direction prior to the completion and signing of formal contract
documents. We have a review process for approving any such work. Revenue associated with such work is recognized only
when it can be reliably estimated and realization is probable. We base our estimates on a variety of factors, including previous
experiences with the client, communications with the client regarding funding status, and our knowledge of available funding
for the contract.

Goodwill and Other Intangible Assets

The purchase price of an acquired business is allocated to the tangible assets and separately identifiable intangible assets
acquired, less liabilities assumed, based upon their respective fair values, with the excess recorded as goodwill. Goodwill
represents the excess of costs over the fair value of net assets of businesses acquired. Goodwill and intangible assets acquired
in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead reviewed
annually for impairment, or more frequently if impairment indicators arise. Intangible assets with estimable useful lives are
amortized over such lives and reviewed for impairment if impairment indicators arise. As of December 31, 2015, goodwill
and intangibles assets were $687.4 million and $58.9 million, respectively.

We perform our annual goodwill impairment review as of September 30 of each year. For the purposes of performing
this review, we have concluded that we have one reporting unit. For the annual impairment review as of September 30, 2015,
we opted to perform a qualitative assessment of whether it is more likely than not that our reporting unit's fair value is less
than its carrying amount. If, after completing the qualitative assessment, we determine that it is more likely than not that the
estimated fair value of the reporting unit exceeded the carrying amount, we may conclude that no impairment exists. If we
conclude otherwise, a two-step goodwill impairment test must be performed, which includes a comparison of the fair value
of the reporting unit to the carrying value.

Our qualitative analysis as of September 30, 2015 included macroeconomic and industry and market-specific
considerations, financial performance indicators and measurements, and other factors. Based on our qualitative assessment,
we determined that it is more likely than not that the fair value of our one reporting unit exceeded the carrying amount, and
thus the two-step impairment test was not required to be performed for 2015. Therefore, based upon management’s review,
no goodwill impairment charge was required as of September 30, 2015. Historically, we have recorded no goodwill
impairment charges.

We are required to review long-lived assets and certain identifiable intangibles for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset might not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows
expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the asset exceeds its fair value. Assets to be disposed of are reported
at the lower of the carrying amount or fair value, less cost to sell.

Stock-based Compensation

On June 5, 2015, our stockholders approved an amendment (the “Amendment”) to the ICF International, Inc. 2010
Omnibus Incentive Plan (as amended, the “Omnibus Plan”). The Amendment, among other items, increased the new shares
available for issuance under the Omnibus Plan to 5,090,000. The Omnibus Plan provides for the granting of options, stock
appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares, performance units, cash-based
awards, and other stock-based awards to all officers, key employees, and non-employee directors.

We utilize cash-settled RSUs (“CSRSUs”), which are settled only in cash payments. The cash payment is based on the
fair value of our stock price at the vesting date, calculated by multiplying the number of CSRSUs vested by our closing stock
price on the vesting date, subject to a maximum payment cap and a minimum payment floor. We also grant awards of
unregistered shares to our non-employee directors under our Annual Equity Election program. The awards are issued from
our treasury stock and have no impact on the shares available for grant under the Omnibus Plan.

We recognized total compensation expense relating to stock-based compensation of $14.7 million, $13.4 million, and
$11.9 million for the years ended December 31, 2015, 2014, and 2013, respectively. We recognize stock-based compensation
expense for stock options, restricted stock awards, RSUs and CSRSUs on a straight-line basis over the requisite service
period, which is generally the vesting period. We recognize expense for performance-based share awards (“PSAs”), which
are subject to a performance condition and a market condition, on a straight-line basis over the performance period. Non-
employee director awards do not include vesting conditions and therefore are expensed when issued.

Compensation expense is based on the estimated fair value of these instruments and the estimated number of shares we
ultimately expect will vest. The calculation of the fair value of our awards requires certain inputs that are subjective and
changes to the estimates used will cause the fair value of our stock awards and related stock-based compensation expense to
vary. The fair value of stock options, restricted stock awards, RSUs, PSAs and non-employee director awards is estimated
based on the fair value of a share of common stock at the grant date. We have elected to use the Black-Scholes-Merton option
pricing model to determine the fair value of stock options. The fair value of a stock option award is affected by our stock
price on the date of grant, as well as other assumptions used as inputs in the valuation model including the estimated volatility
of our stock price over the term of the awards, the estimated period of time that we expect employees to hold their stock
options and the risk-free interest rate assumption. The fair value of PSAs is estimated using a Monte Carlo simulation model.
We treat CSRSUs as liability-classified awards, and therefore account for them at fair value estimated based on the closing
price of our stock at the reporting date.

We are required to adjust stock-based compensation expense for the effects of estimated forfeitures of awards over the
expense recognition period. Although we estimate the rate of future forfeitures based on factors such as historical experience
and employee class, actual forfeitures may differ from our current estimates. In addition, the estimation of PSAs that will
ultimately vest requires judgment based on performance conditions. To the extent actual results or updated estimates differ
from our current estimates, such amounts will be recorded as a cumulative adjustment in the period such estimates are revised.
See “Note K—Accounting for Stock-based Compensation” in the “Notes to Consolidated Financial Statements” for further
discussion.

Recent Accounting Pronouncements

New accounting standards are discussed in “Note B—Summary of Significant Accounting Policies” in the “Notes to

Consolidated Financial Statements.”

SELECTED KEY METRICS

The following table shows our revenue from each of our four key markets as a percentage of total revenue for the
periods indicated. For each client, we have attributed all revenue from that client to the market we consider to be the client’s
primary market, even if a portion of that revenue relates to a different market.

Energy, environment, and infrastructure ..............................
Health, education, and social programs ................................
Safety and security ...............................................................
Consumer and financial ........................................................
Total .....................................................................................

34%
45%
8%
13%
100%

34%
46%
10%
10%
100%

35%
46%
12%
7%
100%

2015

Year ended December 31,
2014

2013

The fluctuation in the percentages of revenue by market for the year ended December 31, 2015, compared to the year
ended December 31, 2014, was primarily driven by the acquisition of Olson. The fluctuation in the percentages of revenue
by market for the year ended December 31, 2014, compared to the year ended December 31, 2013, was primarily attributable
to the acquisitions of Olson, Mostra and CityTech.

Our primary clients are the agencies and departments of the federal government and commercial clients. Most of our
revenue is from contracts on which we are the prime contractor, which we believe provides us strong client relationships. In
2015, 2014, and 2013, approximately 85%, 86%, and 86% of our revenue, respectively, was from prime contracts. The
following table shows our revenue by type of client as a percentage of total revenue for the periods indicated. Certain
immaterial revenue amounts in the prior year have been reclassified due to minor adjustments.

2015

Year ended December 31,
2014

2013

U.S. federal government ..............................................
U.S. state and local government ...................................
International government .............................................
Government .......................................................................
Commercial ........................................................................
Total ....................................................................................

48%
10%
7%
65%
35%
100%

51%
10%
9%
70%
30%
100%

58%
9%
5%
72%
28%
100%

Contract mix

Our contract mix varies from year to year due to numerous factors, including our business strategies and the
procurement activities of our clients. Unless the context requires otherwise, we use the term “contracts” to refer to contracts
and any task orders or delivery orders issued under a contract. We have three main types of contracts, time-and-materials
contracts, fixed-price contracts, and cost-based contracts, described further below.

Time-and-materials contracts. Under time-and-materials contracts, we are paid for labor at fixed hourly rates and
generally reimbursed separately for allowable materials, other direct costs, and out-of-pocket expenses. Our actual labor costs
may vary from the expected costs that formed the basis for our negotiated hourly rates if we utilize different employees than
anticipated, need to hire additional employees at higher wages, increase the compensation paid to existing employees, or are
able to hire employees at lower-than-expected rates. Our non-labor costs, such as fringe benefits, overhead, and general and
administrative costs, also may be higher or lower than we anticipated. To the extent that our actual labor and non-labor costs
under a time-and-materials contract vary significantly from our expected costs or the negotiated hourly rates, we can generate
more or less than the targeted amount of profit or, perhaps, incur a loss.

Fixed-price contracts. Under fixed-price contracts, we perform specific tasks for a pre-determined price. Compared to
time-and-materials and cost-based contracts, fixed-price contracts involve greater financial risk because we bear the full
impact of labor and non-labor costs that exceed our estimates, in terms of costs per hour, number of hours, and all other costs
of performance in return for the full benefit of any cost savings. We therefore may generate more or less than the targeted
amount of profit or, perhaps, incur a loss.

Cost-based contracts. Under cost-based contracts, (which include cost-based fixed fee, cost-based award fee, and cost-
based incentive fee contracts, as well as grants and cooperative agreements), we are paid based on the allowable costs we
incur, and usually receive a fee. All of our cost-based contracts reimburse us for our direct labor and fringe-benefit costs that
are allowable under the contract; however, certain contracts limit the amount of overhead and general and administrative
costs we can recover, which may be less than our actual overhead and general and administrative costs. In addition, our fees
are constrained by fee ceilings and, in certain cases, such as with grants and cooperative agreements, we may receive no fee.
Because of these limitations, our cost-based contracts, on average, are our least profitable type of contract, and we may
generate less than the expected profit, or perhaps, incur a loss. Cost-based fixed-fee contracts specify the fee to be paid. Cost-
based incentive-fee and cost-based award-fee contracts provide for increases or decreases in the contract fee, within specified
limits, based upon actual results as compared to contractual targets for factors such as cost, quality, schedule, and
performance.

The following table shows the approximate percentage of our revenue for each of these types of contracts for the periods

indicated.

Year ended December 31,
2014

2013

2015

Time-and-materials ......................................................................
Fixed-price ...................................................................................
Cost-based ....................................................................................
Total .............................................................................................

43%
38%
19%
100%

47%
34%
19%
100%

52%
29%
19%
100%

The increase in fixed-price contracts revenue as a percent of total revenue and the decrease in time-and-materials
contracts revenue as a percent of total revenue, for the year ended December 31, 2015, compared to the year ended December
31, 2014, is primarily due to the increase in fixed-price contracts from the acquisition of Olson. The increase in fixed-price
contracts revenue as a percent of total revenue and the decrease in time-and-materials contracts revenue as a percent of total
revenue, for the year ended December 31, 2014, compared to the year ended December 31, 2013, is primarily due to the
increase in fixed-price contracts from the acquisition of Olson and Mostra.

ACQUISITIONS AND BUSINESS COMBINATIONS

A key element of our growth strategy is to pursue acquisitions. In 2014, we added Mostra, CityTech and Olson; and in

2013, we added ECA.

Olson. On November 5, 2014, we completed the acquisition of Olson, a leading provider of marketing technology and
digital services based in Minneapolis, Minnesota. As a result of the acquisition, Olson became our wholly owned subsidiary.
The aggregate purchase price of approximately $298.2 million in cash was funded by our Credit Facility. The acquisition
expanded our existing digital technology and strategic communications work and strengthened our ability to bring more
integrated solutions to an expanded client base, including multi-channel marketing initiatives across web, mobile, email,
social, print, broadcast and off-premise platforms.

CityTech. In March 2014, we acquired CityTech, a Chicago-based digital interactive consultancy specializing in
enterprise applications development, web experience management, mobile application development, cloud enablement,
managed services, and customer experience management solutions. The acquisition adds expertise to our content
management capabilities and complements our digital and interactive business.

Mostra. In February 2014, we completed the acquisition of Mostra, a strategic communications consulting company
based in Brussels, Belgium. Mostra offers end-to-end, multichannel communications solutions to assist government and
commercial clients, in particular the European Commission. The acquisition extends our strategic communications
capabilities globally to complement our policy work and enhance our strategy of providing a full suite of services that leverage
our research and advisory services.

ECA. In July 2013, we hired the staff of, and purchased certain assets and liabilities from, ECA, an e-commerce
technology-based services firm based in New York, New York. The addition of ECA enhanced our multi-channel, end-to-
end e-commerce solutions.

RESULTS OF OPERATIONS

The following table sets forth certain items from our consolidated statements of comprehensive income and the period-

over-period rate of change in each of them and expresses these items as a percentage of revenue for the periods indicated.

Years Ended December 31, 2015, 2014, and 2013
(dollars in thousands)

Year Ended December 31,

Year to Year Change

2015

2014
Dollars

2013

2015

2014
Percentages

2013

2014 to 2015
Dollars Percent Dollars Percent

2013 to 2014

Revenue .......................................... $ 1,132,232 $ 1,050,134 $ 949,303 100.0 % 100.0% 100.0% $ 82,098
654,946 591,516 61.4 % 62.4% 62.3% 39,490
Direct Costs ....................................

694,436

7.8% $ 100,831
6.0% 63,430

10.6%
10.7%

Operating Costs and Expenses
Indirect and selling expenses ..........
Depreciation and amortization ........
Amortization of intangible assets ....
Total Operating Costs and

329,159
16,222
17,184

302,020 272,387 29.1 % 28.7% 28.7% 27,139
13,369 11,238 1.4 % 1.3% 1.2% 2,853
9,477 1.5 % 1.0% 1.0% 6,747
10,437

9.0% 29,633
2,131
960

21.3%
64.6%

10.9%
19.0%
10.1%

Expenses ......................................

362,565

325,826 293,102 32.0 % 31.0% 30.9% 36,739

11.3% 32,724

11.2%

Operating Income ..........................

75,231

69,362 64,685 6.6 % 6.6% 6.8% 5,869

8.5%

4,677

7.2%

Interest expense ...............................
Other expense ..................................

(10,072)
(1,559)

(4,254)
(958)

(2,447) (0.9 )% (0.4)% (0.3)% (5,818) 136.8%
62.7%

(12) (0.1 )% (0.1)% —

(601)

(1,807)

73.8%
(946) 7,883.3%

Income Before Income Taxes .......
Provision for Income Taxes ..........

63,600
24,231

64,150 62,226 5.6 % 6.1% 6.5%
24,120 22,896 2.1 % 2.3% 2.4%

(550)
111

(0.9)%
0.5%

1,924
1,224

3.1%
5.3%

Net Income ..................................... $

39,369 $

40,030 $ 39,330 3.5 % 3.8% 4.1% $

(661)

(1.7)% $

700

1.8%

Year ended December 31, 2015, compared to year ended December 31, 2014

Revenue. Revenue for the year ended December 31, 2015, was $1,132.2 million, compared to $1,050.1 million for the
year ended December 31, 2014, representing an increase of $82.1 million or 7.8%. The increase in revenue was primarily
attributable to the 25.0% increase in revenue from commercial clients, which was the result of higher revenue from digital
services, driven largely by the Olson acquisition. Total government revenue was relatively flat for the year ended December
31, 2015 compared to the year ended December 31, 2014. Increases in federal government revenue and state and local
government revenue of 1.5% and 5.0%, respectively, were mostly offset by lower international government revenue, which
was driven by the weakening of certain foreign currencies relative to the U.S. dollar, primarily the Euro, British Pound and
Canadian dollar. As a result of the acquisitions of Olson and CityTech and future growth expectations for our commercial
business, we expect that commercial revenue will continue to increase as a percentage of our total revenue.

Direct Costs. Direct costs for the year ended December 31, 2015, were $694.4 million compared to $654.9 million for
the year ended December 31, 2014, an increase of $39.5 million or 6.0%. The increase in direct costs was primarily
attributable to direct costs resulting from the acquisition of Olson, partially offset by a reduction in our use of subcontracted
labor. Direct costs as a percent of revenue decreased to 61.4% for the year ended December 31, 2015, compared to 62.4%
for the year ended December 31, 2014. We generally expect the ratio of direct costs as a percentage of revenue to decrease
when our own labor increases relative to subcontracted labor.

Changes in the mix of services and other direct costs provided under our contracts can result in variability in our direct
costs as a percentage of revenue. For example, when we perform work in the area of implementation, we expect that more of
our services will be performed in client-provided facilities and/or with dedicated staff. Such work generally has a higher
proportion of direct costs than much of our current research and advisory work, and we anticipate that higher utilization of
such staff will decrease indirect expenses. In addition, to the extent we are successful in winning larger contracts, our own
labor services component could decrease because larger contracts typically are broader in scope and require more diverse
capabilities, potentially resulting in more subcontracted labor, more other direct costs, and lower margins. Although these
factors could lead to a higher ratio of direct costs as a percentage of revenue, the economics of these larger jobs are nonetheless
generally favorable because they increase income, broaden our revenue base, and have a favorable return on invested capital.

Indirect and selling expenses. Indirect and selling expenses for the year ended December 31, 2015, were $329.2 million
compared to $302.0 million for the year ended December 31, 2014, an increase of $27.1 million or 9.0%. Indirect and selling
expenses include our management, facilities, and infrastructure costs for all employees, as well as salaries and wages,
including stock-based compensation provided to employees whose compensation and other benefit costs are included in
indirect and selling expenses, plus associated fringe benefits, not directly related to client engagements. The increase in
indirect and selling expenses was primarily attributable to the Olson acquisition. In addition, the year ended December 31,
2014 included a $2.8 million reduction to indirect and selling expenses related to a fair value adjustment for contingent
consideration recorded as a result of the ECA acquisition. Indirect and selling expenses as a percent of revenue increased to
29.1% for the year ended December 31, 2015, compared to 28.7% for the year ended December 31, 2014.

Depreciation and amortization. Depreciation and amortization was $16.2 million for the year ended December 31,
2015, compared to $13.4 million for the year ended December 31, 2014. Depreciation and amortization includes depreciation
of property and equipment and the amortization of the costs of software we use internally. The increase in depreciation and
amortization of 21.3% was primarily due to the acquisition of Olson.

Amortization of intangible assets. Amortization of intangible assets for the year ended December 31, 2015, was $17.2
million compared to $10.4 million for the year ended December 31, 2014. The $6.7 million increase was primarily due to the
addition of $64.9 million of intangible assets as a result of the Olson acquisition, partly offset by reduced amortization related
to intangible assets from acquisitions in prior years that were fully amortized.

Operating Income. For the year ended December 31, 2015, operating income was $75.2 million compared to $69.4
million for the year ended December 31, 2014, an increase of $5.9 million or 8.5%. Operating income as a percent of revenue
was 6.6% for the years ended December 31, 2015 and 2014. We incurred lower expenses related to acquisitions, severance
and international office closures during the year ended December 31, 2015, compared to the year ended December 31, 2014,
however the positive margin impact of this reduction was mostly offset by the fair value adjustment of $2.8 million related
to contingent consideration for the acquisition of ECA that reduced indirect and selling expenses during the year ended
December 31, 2014.

Interest expense. For the year ended December 31, 2015, interest expense was $10.1 million, compared to $4.3 million
for the year ended December 31, 2014. The $5.8 million increase was driven by a higher average debt balance during the
year ended December 31, 2015 as a result of borrowings to fund the acquisition of Olson, and an increase in the applicable
interest rates under our Credit Facility due to the increased level of debt outstanding.

Other expense. Other expense was $1.6 million for the year ended December 31, 2015, compared to $1.0 million for
the year ended December 31, 2014. Other expense for both periods primarily represented the reclassification of foreign
currency translation losses from accumulated other comprehensive loss into earnings as a result of closing certain
international offices as part of actions taken to improve our cost structure and operations.

Provision for Income Taxes. The effective income tax rate for the year ended December 31, 2015 and December 31,
2014, was 38.1% and 37.6%, respectively. The rate increase was primarily related to unfavorable adjustments for
compensation costs and other expenses permanently not deductible for tax purposes. Our effective tax rate, including state
and foreign taxes net of federal benefit, for the year ended December 31, 2015 was lower than the statutory tax rate for the
year primarily due to the true-up of our 2014 tax provision, tax benefit of foreign tax rate differential and state tax credits,
partially offset by permanent differences related to compensation costs and other expenses not deductible for tax purposes.
We account for the expected impact of discrete tax items once we determine that they are both reasonably quantified and
when we are confident they will be realized due to the associated event occurring, such as the filing of an amended tax return,
enactment of tax legislation, or the closure of an audit examination.

Year ended December 31, 2014, compared to year ended December 31, 2013

Revenue. Revenue for the year ended December 31, 2014, was $1,050.1 million, compared to $949.3 million for the
year ended December 31, 2013, representing an increase of $100.8 million or 10.6%. The increase in revenue was due to the
7.1% increase in government revenue, as well as the 19.5% increase in revenue from commercial clients. The increase in
government revenue was primarily attributable to international government revenue from the acquisition of Mostra, as well
as revenue generated from state and local government clients. The increase in revenue from commercial clients was primarily
driven by growth in digital interactive program revenues from the Olson and CityTech acquisitions, as well as energy and
healthcare related program revenues. The growth in government and commercial revenue was partially offset by a decline in
federal government revenue, largely driven by a decline in the public safety and defense market and the impact of severe
weather experienced by our operations on the east coast of the U.S. in the first quarter of 2014. We estimated that the impact
of the severe weather on first quarter revenues was approximately $4.0 million to $5.0 million.

Direct Costs. Direct costs for the year ended December 31, 2014, were $654.9 million, compared to $591.5 million for
the year ended December 31, 2013, an increase of $63.4 million or 10.7%. The increase in direct costs is primarily attributable
to the acquisition of Olson, Mostra and CityTech. Direct costs as a percent of revenue of 62.4% for the year ended December
31, 2014 were consistent with direct costs as a percent of revenue of 62.3% for the year ended December 31, 2013.

Indirect and selling expenses. Indirect and selling expenses for the year ended December 31, 2014, were $302.0
million, compared to $272.4 million for the year ended December 31, 2013, an increase of $29.6 million or 10.9%. The
increase in indirect and selling expenses was primarily attributable to the Olson, Mostra and CityTech acquisitions. This
increase was partially offset by a decrease in non-labor expense, driven by a reduction in the fair value of contingent
consideration related to the acquisition of ECA of $2.8 million. Indirect and selling expenses were 28.7% as a percent of
revenue for the years ended December 31, 2014 and December 31, 2013.

Depreciation and amortization. Depreciation and amortization was $13.4 million for the year ended December 31,
2014, compared to $11.2 million for the year ended December 31, 2013. The increase in depreciation and amortization of
19.0% was primarily due to an increase in expenses for assets acquired in the latter part of 2013 related to opening new
offices, as well as the acquisition of Olson and Mostra.

Amortization of intangible assets. Amortization of intangible assets for the year ended December 31, 2014, was $10.4
million compared to $9.5 million for the year ended December 31, 2013. The 10.1% increase was primarily due to
amortization resulting from the Olson, Mostra and CityTech acquisitions, partly offset by lower amortization of intangible
assets related to acquisitions in prior years that were fully amortized.

Operating Income. For the year ended December 31, 2014, operating income was $69.4 million compared to $64.7
million for the year ended December 31, 2013, an increase of $4.7 million or 7.2%. Operating income as a percent of revenue
decreased to 6.6% for the year ended December 31, 2014, from 6.8% for the year ended December 31, 2013. During fiscal
year 2014, operating income included actions taken to improve our cost structure and operations including $1.9 million for
severance costs and $1.3 million as a result of closing certain international offices. Operating income also included $2.2
million of acquisition costs, approximately $2.7 million of losses incurred on projects acquired as part of our acquisition of
ECA, and approximately $1.6 million to $2.0 million of losses due to severe weather experienced by our operations on the
east coast of the U.S. The negative margin impact of these items was partially offset by a change in the fair value of contingent
consideration in the amount of $2.8 million related to the acquisition of ECA, and the positive impact on operating income
from the Olson, Mostra and CityTech acquisitions.

Interest expense. For the year ended December 31, 2014, interest expense was $4.3 million, compared to $2.4 million
for the year ended December 31, 2013. This increase was driven by a higher average debt balance during the year ended
December 31, 2014, primarily due to borrowings to fund the acquisitions of Olson, Mostra and CityTech, and an increase in
the applicable interest rates under our Credit Facility due to the increased level of debt outstanding.

Other expense. Other expense was $1.0 million for the year ended December 31, 2014 primarily due to the
reclassification of $0.5 million of foreign currency translation losses from accumulated other comprehensive loss into
earnings as a result of closing one of our international offices.

Provision for Income Taxes. The effective income tax rate for the year ended December 31, 2014, and December 31,
2013, was 37.6% and 36.8%, respectively. The rate increase was primarily related to non-deductible acquisition costs and
other expenses offset by favorable adjustments resulting from the true-up of our 2013 tax provision to our federal and foreign
tax return filings, state tax credits, and non-taxable income. Our effective tax rate for the year ended December 31, 2014,
including state and foreign taxes net of federal benefit, was lower than the statutory tax rate for the year primarily due to the
true-up of our 2013 tax provision, non-taxable income, foreign and state tax credits partially offset by permanent differences
related to acquisition costs and other expenses not deductible for tax purposes.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Borrowing Capacity. Short-term liquidity requirements are created by our use of funds for working
capital, capital expenditures, and the need to provide any debt service. We expect to meet these requirements through a
combination of cash flow from operations and borrowings under our Credit Facility. We entered into our Credit Facility with
a syndication of 11 commercial banks on May 16, 2014, which was further modified on November 5, 2014. The Credit
Facility matures on May 16, 2019 and allows for borrowings of up to $500.0 million without a borrowing base requirement,
taking into account financial, performance-based limitations, and provides for an “accordion,” which permits additional
revolving credit commitments of up to $100.0 million, subject to lenders’ approval. The Credit Facility provides for stand-
by letters of credit aggregating up to $30.0 million that reduce the funds available under the Credit Facility when issued. The
Credit Facility is collateralized by substantially all of our assets and requires that we remain in compliance with certain
financial and non-financial covenants. The financial covenants, as defined in the Credit Facility, require, among other things,
that we maintain, on a consolidated basis for each quarter, a fixed charge coverage ratio of not less than 1.25 to 1.00 and a
leverage ratio of not more than 3.75 to 1.00. As of December 31, 2015, we were in compliance with our covenants under the
Credit Facility.

As of December 31, 2015, we had $311.5 million borrowed under the Credit Facility and outstanding letters of credit
of $3.7 million, resulting in unused borrowing capacity of $184.8 million under our Credit Facility (excluding the accordion),
which is available for our working capital needs and for other purposes. Taking into account certain financial, performance-
based limitations, available borrowing capacity (excluding the accordion) was $131.9 million.

We have the ability to borrow funds under our Credit Facility at interest rates based on both LIBOR and prime rates, at
our discretion, plus their applicable margins. The weighted average interest rate on outstanding borrowings at December 31,
2015 and 2014 was 2.23% and 2.41%, respectively.

We anticipate that our long-term liquidity requirements, including any future acquisitions, will be funded through a
combination of cash flow from operations, borrowings under our Credit Facility, additional secured or unsecured debt, or the
issuance of common or preferred stock, each of which may be initially funded through borrowings under our Credit Facility.

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, customary capital
expenditures, and other current working capital requirements. We are continuously analyzing our capital structure to ensure
we have sufficient capital to fund future acquisitions and internal growth. We monitor the state of the financial markets on a
regular basis to assess the availability and cost of additional capital resources both from debt and equity sources. We believe
that we will be able to access these markets at commercially reasonable terms and conditions if we need additional borrowings
or capital.

Financial Condition. There were several changes in our balance sheet during the year ended December 31, 2015. Cash
decreased to $7.7 million on December 31, 2015, from $12.1 million on December 31, 2014 and long-term debt decreased
to $311.5 million on December 31, 2015, from $350.1 million on December 31, 2014. Contract receivables, net, of $259.8
million on December 31, 2015 was generally consistent with the prior year, while days-sales-outstanding decreased to 73
days on December 31, 2015, as compared to 74 days on December 31, 2014. Accrued salaries and benefits and accounts
payable decreased $13.2 million and $2.0 million, respectively, and days-payables-outstanding decreased from 58 days as of
December 31, 2014 to 53 days as of December 31, 2015. Treasury stock increased $24.7 million primarily due to share
buybacks under our share repurchase plan. The $5.0 million increase in accumulated other comprehensive loss was driven
by the devaluation of certain foreign currencies relative to the U.S. dollar, primarily the Euro, British Pound and Canadian
dollar.

We have explored various options of mitigating the risk associated with potential fluctuations in the foreign currencies
in which we conduct transactions. We currently have 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 hedges in our results of operations. We may
increase the number, size and scope of our hedges as we analyze options for mitigating our foreign exchange risk. The current
impact of the hedges to the consolidated financial statements is immaterial.

Cash Flow. We consider cash on deposit and all highly liquid investments with original maturities of three months or
less when purchased to be cash and cash equivalents. The following table sets forth our sources and uses of cash for the
following years.

(In thousands)
Net cash provided by operating activities ......................................... $
Net cash used in investing activities ..................................................
Net cash (used in) provided by financing activities ..........................
Effect of exchange rate changes on cash ...........................................
(Decrease) increase in cash and cash equivalents ............................. $

Year ended December 31,
2014

2015

2013

76,319 $
(14,500)
(64,448)
(1,746)
(4,375) $

79,160 $
(358,506 )
283,519
(1,004 )
3,169 $

80,813
(16,622)
(70,433)
470
(5,772)

Our operating cash flow is primarily affected by the overall profitability of our contracts, our ability to invoice and
collect from our clients in a timely manner, and our ability to manage our vendor payments. We bill most of our clients
monthly after services are rendered. Operating activities provided cash in each of the years 2015, 2014, and 2013 of $76.3
million, $79.2 million, and $80.8 million, respectively. Cash flows from operating activities for 2015 were positively
impacted by net income and income tax receivable and payable, partially offset by accrued salaries and benefits and accrued
expenses. Cash flows from operating activities for 2014 were positively impacted by net income, accounts payable and
accrued salaries and benefits, partially offset by income tax receivable and payable, contract receivables and deferred revenue.
Cash flows from operating activities for 2013 were positively impacted by net income, income tax receivable and payable
and accrued salaries and benefits, partially offset by prepaid and other assets.

Our cash flow used in investing activities consists primarily of capital expenditures and acquisitions. During the year
ended 2015, we purchased capital assets totaling $12.7 million and paid approximately $1.8 million related to a holdback
adjustment for our 2014 acquisition of Olson. During the year ended 2014, we paid approximately $347.9 million for business
acquisitions, net of cash acquired, and purchased capital assets totaling $10.6 million. During the year ended 2013, we paid
approximately $4.8 million for business acquisitions, net of cash acquired, and purchased capital assets totaling $11.9 million.

Our cash flow used in and provided by financing activities consists primarily of debt and equity transactions. For the
year ended 2015, cash flow used in financing activities was primarily due to net payments on our Credit Facility of $38.5
million, and share repurchases under our share repurchase plan of $22.3 million. For the year ended 2014, cash flow provided
by financing activities was primarily due to net advances on our Credit Facility of $310.1 million, primarily as a result of our
acquisitions, partially offset by share repurchases under our share repurchase plan of $24.4 million. For the year ended 2013,

cash flow used in financing activities was primarily due to a net pay down on the Credit Facility of $65.0 million, and share
repurchases under our share repurchase plan of $5.4 million.

OFF-BALANCE SHEET ARRANGEMENTS

Contractual Obligations

We use off-balance sheet arrangements to finance the lease of facilities. We have financed the use of all of our office
and storage facilities through operating leases. Operating leases are also used from time to time to finance the use of
computers, servers, copiers, telephone systems, and to a lesser extent, other fixed assets, such as furnishings, and we also
obtain operating leases in connection with business acquisitions. We generally assume the lease rights and obligations of
businesses acquired in business combinations and continue financing facilities and equipment under operating leases until
the end of the lease term following the acquisition date.

As of December 31, 2015, we had 10 outstanding letters of credit provided for under our Credit Facility with a total

value of $3.7 million primarily related to deposits to support our facility leases.

The following table summarizes our contractual obligations as of December 31, 2015 that require us to make future
cash payments. Our summary of contractual obligations includes payments that we have an unconditional obligation to make.

Payments due by Period

(In thousands)
Long-term debt obligation (1) ................................ $
Rent of facilities ...................................................
Operating lease obligations ..................................
Capital expenditure obligations ............................
Total ..................................................................... $

Total
337,108 $
252,204
1,629
10,491
601,432 $

Less than
1 year

1 to 3
years

7,596 $
36,493
704
4,331
49,124 $

15,154 $
69,088
874
6,160
91,276 $

3 to 5
years
314,358 $
62,540
51
—
376,949 $

More than
5 years

—
84,083
—
—
84,083

(1) Represents the obligation for principal and variable interest payments related to the Credit Facility assuming the principal amount
outstanding and interest rates at December 31, 2015 remain fixed through maturity. These assumptions are subject to change in future
periods.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain financial market risks, the most predominant being fluctuations in interest rates for

borrowings under the Credit Facility and foreign exchange rate risk.

Interest rate fluctuations are monitored by our management as an integral part of our overall risk management program,
which recognizes the unpredictability of financial markets and seeks to reduce potentially adverse effects on our results of
operations. As part of this strategy, we may use interest rate swap arrangements to manage or hedge our interest rate risk. We
do not use derivative financial instruments for speculative or trading purposes.

Our exposure to market risk includes changes in interest rates for borrowings under the Credit Facility. These
borrowings accrue interest at variable rates. Based upon our borrowings under this facility in 2015, a 1% increase in interest
rates would have increased interest expense by approximately $3.7 million and would have decreased our annual pre-tax
income and cash flow by a comparable amount.

As a result of conducting business in currencies other than the U.S. dollar and our international operations where
transactions are in currencies other than the U.S. dollar, we are subject to market risk with respect to adverse fluctuations in
currency exchange rates. In general, our currency risk is mitigated largely by matching costs with revenues in a given
currency; however, our exposure to fluctuations in other currencies against the U.S. dollar increases as revenue in currencies
other than the U.S. dollar increase. In addition, we currently have hedges in place to mitigate our foreign exchange risk related
to our operations in Europe; however, there is some risk that revenue and profits will be affected by foreign currency exchange
fluctuations. We do not use derivative instruments for trading or speculative purposes.

We use a sensitivity analysis to assess the impact of movement in foreign currency exchange rates on revenue. During
the year ended December 31, 2015, approximately 11% of our revenue was generated from our international operations based
on the location to which a contract was awarded. As a result, a 10% increase or decrease in the value of the U.S. dollar against
all currencies would have an estimated impact on revenue of approximately 1%, or $12 million, a portion of which would be
offset by expenses incurred in local currency. Actual gains and losses in the future could differ materially from this analysis
based on the timing and amount of both foreign currency exchange rate movements and our actual exposure. As of December
31, 2015, we held approximately $6.5 million in cash in foreign bank accounts to be utilized on behalf of our foreign
subsidiaries, thereby partially mitigating foreign currency conversion risks.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of ICF International, Inc. and subsidiaries are provided in Part IV in this Annual

Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. Based on an evaluation under the supervision and with the
participation of the Company’s management, the Company’s principal executive officer and principal financial officer have
concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act were effective as of December 31, 2015 to provide reasonable assurance that information required to be
disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized
and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the
Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow
timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting. The Company’s management is
responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in
Exchange Act Rules 13a-15(f) and 15d-15(f). Management conducted an assessment of the effectiveness of the Company’s
internal control over financial reporting based on the criteria set forth in the 2013 Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the assessment,
management has concluded that its internal control over financial reporting was effective as of December 31, 2015. The
Company’s independent registered public accounting firm, Grant Thornton LLP, has issued an audit report on the Company’s
internal control over financial reporting, which appears on page F-2 of this Form 10-K.

The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting, and the preparation of financial statements for external purposes in accordance with GAAP.
The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with GAAP, (iii) that the Company’s receipts and expenditures are being made only in
accordance with authorizations of the Company’s management and directors; and (iv) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a
material effect on the financial statements.

Changes in Internal Control Over Financial Reporting. During 2015, we made material changes to certain business
processes and internal controls impacting financial reporting as a result of the acquisition of Olson in the fourth quarter of
2014, and due to the system conversion and upgrade of our enterprise resource planning (ERP) system for Mostra and GHK.
For 2015, we designed additional controls to further monitor the integration of related processes and to maintain oversight
for our internal control over financial reporting.

There were no other changes in our internal control over financial reporting during the fourth quarter of 2015, which
were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the
Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over
financial reporting.

Inherent Limitations Over Internal Controls. A control system, no matter how well designed and operated, can provide
only reasonable, not absolute, 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 internal controls can provide absolute
assurance that all control issues and instances of fraud, if any, have been detected. Because of the inherent limitations in any
control system, misstatements due to error or fraud may occur and may not be detected. Also, any evaluation of the
effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because
of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

ITEM 9B. OTHER INFORMATION

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item will be included in our Proxy Statement for the 2016 Annual Meeting of

Stockholders (the “2016 Proxy Statement”) and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item will be included in the 2016 Proxy Statement and is incorporated herein by

reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND

RELATED STOCKHOLDER MATTERS

The information required by this item will be included in the 2016 Proxy Statement and is incorporated herein by

reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE

The information required by this item will be included in the 2016 Proxy Statement and is incorporated herein by

reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item will be included in the 2016 Proxy Statement and is incorporated herein by

reference.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(1) Financial Statements

PART IV

Page
Reports of Independent Registered Public Accounting Firm ............................................................................................ F-1
Consolidated Balance Sheets as of December 31, 2015 and 2014 .................................................................................... F-3
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2015, 2014, and 2013............. F-4
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2015, 2014, and 2013 ................. F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2014, and 2013 ................................ F-6
Notes to Consolidated Financial Statements ..................................................................................................................... F-7
Selected Quarterly Financial Data (unaudited) ................................................................................................................. F-29

(2) Financial Statement Schedules

None.

(3) Exhibits

The following exhibits are included with this report or incorporated herein by reference:

Exhibit
Number

Exhibit

2.1

2.2

Membership Interest Purchase Agreement by and among ICF Consulting Group, Inc., Scott K. Walker,
William F. Loving, Thomas K. Luck, as trustee of the John D. Whitlock 2010 Irrevocable Trust, and Hot
Technology Holdings, L.L.C., dated as of December 12, 2011 (Incorporated by reference to Exhibit 2.1 to the
Company’s Form 10-K, filed March 2, 2012).

Agreement and Plan of Merger by and among OCO Holdings, Inc., ICF International, Inc., ICF 2014 Merger
Corp. and OCO Rep Services LLC, dated as of October 21, 2014 (Incorporated by reference to Exhibit 2.2 to
the Company’s Form 10-K, filed February 27, 2015). (1)

3.1

Amended and Restated Certificate of Incorporation (Incorporated by reference to Exhibit 4.1 to the Company’s

Form S-8 (File No. 333-137975), filed October 13, 2006).

3.2

Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K, filed

April 22, 2009).

4.1

Specimen common stock certificate (Incorporated by reference to Exhibit 4.1 to the Company’s Form S-1/A

(File No. 333-134018), filed September 12, 2006).

4.2

See Exhibits 3.1 and 3.2, above, for provisions of the Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws of the Company defining the rights of holders of common stock of the
Company.

10.1

2006 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.3 to the Company’s Form S-1

(File No. 333-134018), filed May 11, 2006).

10.2

ICF International, Inc. Nonqualified Deferred Compensation Plan, as amended and restated as of January 1,

2012 (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-K, filed March 1, 2013).

10.3

ICF International, Inc. 2010 Omnibus Incentive Plan, as amended (Incorporated by reference to Exhibit A to
the Company’s Definitive Proxy Statement for the 2015 Annual Meeting of Stockholders, filed April 24,
2015).

10.4

Form of Restricted Stock Unit Award under the 2010 Omnibus Incentive Plan, as amended. (Incorporated by

reference to Exhibit 10.3 to the Company’s Form 10-Q, filed July 31, 2015).

10.5

Form of Stock Option Award under the 2010 Omnibus Incentive Plan, as amended (Incorporated by reference

to Exhibit 10.5 to the Company’s Form 10-K, filed March 4, 2011).

10.6

Form of CEO Performance Share Award Agreement (Incorporated by reference to Exhibit 10.2 to the

Company’s Form 8-K, filed March 11, 2015).

10.7

Form of COO Performance Share Award Agreement (Incorporated by reference to Exhibit 10.3 to the

Company’s Form 8-K, filed March 11, 2015).

10.8

Form of General Performance Share Award Agreement under the 2010 Omnibus Incentive Plan, as amended.

(Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q, filed July 31, 2015).

10.9

Form of Cash-Settled Restricted Stock Unit Award under the 2010 Omnibus Incentive Plan, as amended.

(Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q, filed July 31, 2015).

10.10

Restated Employment Agreement by and between the Company and Sudhakar Kesavan, dated December 29,

2008 (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K, filed December 30, 2008).

10.11

10.12

Restated Severance Protection Agreement by and between the Company and Sudhakar Kesavan, dated
December 29, 2008 (Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K, filed
December 30, 2008).

Restated Severance Protection Agreement by and between the Company and John Wasson, dated
December 12, 2008 (Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K, filed
December 18, 2008).

10.13

Amended Severance Letter Agreement by and between the Company and John Wasson, dated December 12,
2008 (Incorporated by reference to Exhibit 10.4 to the Company’s Form 8-K, filed December 18, 2008).

10.14

Employment Terms by and between the Company and James C. Morgan, dated June 8, 2012 (Incorporated by

reference to Exhibit 10.1 to the Company’s Form 10-Q, filed August 6, 2012).

10.15

Severance Benefit/Protection Agreement by and between the Company and James C. Morgan, dated June 8,

2012 (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q, filed August 6, 2012).

10.16

Severance Letter Agreement by and between the Company and Isabel S. Reiff, dated February 21, 2012

(Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q, filed May 4, 2012).

10.17

Severance Letter Agreement by and between the Company and Ellen Glover, dated February 21, 2012

(Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q, filed May 4, 2012).

10.18

Severance Letter Agreement by and between the Company and Sergio J. Ostria, dated March 6, 2012.*

10.19

Fourth Amended and Restated Business Loan and Security Agreement by and among ICF International, Inc.,
ICF Consulting Group, Inc., and various other subsidiaries of ICF International, Inc. as Borrowers, and a group
of Lenders for which Citizens Bank of Pennsylvania acted as Administrative Agent, and RBS Citizens, N.A.
and PNC Capital Markets, LLC, acted in the capacity of joint lead arrangers and joint book running managers,
dated May 16, 2014 (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K, filed May 21,
2014).

10.20

First Modification to Fourth Amended and Restated Business Loan and Security Agreement and Other Loan
Documents, dated as of November 5, 2014 (Incorporated by reference to Exhibit 10.15 to the Company’s Form
10-K, filed February 27, 2015).

10.21

Deed of Lease by and between Hunters Branch Leasing, LLC and ICF Consulting Group, Inc., effective April
1, 2010 (Incorporated by reference to Exhibit 10.6 to the Company’s Form 10-K, filed March 11, 2010).

21.0

Subsidiaries of the Registrant.*

23.1

Consent of Grant Thornton LLP.*

31.1

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

31.2

Certificate of the Principal Financial and Accounting Officer Pursuant to Exchange Act Rules 13a-14(a) and

15d-14(a).*

32.1

Certification of the Chief Executive Officer 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. Annual Report on Form 10-K for the year ended
December 31, 2015 formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance
Sheets, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of
Stockholders’ Equity, (iv) Consolidated Statements of Cash Flow and (v) Notes to Consolidated Financial
Statements. *

(1) Certain confidential information contained in this exhibit was omitted by means of redacting a portion of the text and
replacing it with an asterisk. This exhibit has been filed separately with the Secretary of the Securities and Exchange
Commission without the redaction pursuant to a confidential treatment request under Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.

* Submitted electronically herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

March 8, 2016

ICF INTERNATIONAL, INC.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the registrant and in the capacities and on the dates indicated.

By:

/s/ SUDHAKAR KESAVAN
Sudhakar Kesavan
Chairman and Chief Executive Officer

Signature

Title

/s/ SUDHAKAR KESAVAN
Sudhakar Kesavan

Chairman, Chief Executive Officer and Director
(Principal Executive Officer)

/s/ JAMES MORGAN
James Morgan

Chief Financial Officer
(Principal Financial Officer)

/s/ PHILLIP ECK
Phillip Eck

Controller
(Principal Accounting Officer)

/s/ EILEEN O’SHEA AUEN
Eileen O’Shea Auen

Director

/s/ EDWARD H. BERSOFF
Dr. Edward H. Bersoff

Director

/s/ SRIKANT M. DATAR
Dr. Srikant M. Datar

Director

/s/ CHERYL GRISÉ
Cheryl Grisé

/s/ SANJAY GUPTA
Sanjay Gupta

/s/ LESLYE KATZ
Leslye Katz

Director

/s/ PETER SCHULTE
Peter Schulte

Director

Date

March 8, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
ICF International, Inc.

We have audited the accompanying consolidated balance sheets of ICF International, Inc. (a Delaware corporation) and
subsidiaries (the “Company”) as of December 31, 2015 and 2014, and the related consolidated statements of
comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended
December 31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of ICF International, Inc. and subsidiaries as of December 31, 2015 and 2014, and the results of their operations
and their cash flows for each of the three years in the period ended December 31, 2015 in conformity with accounting
principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the Company’s internal control over financial reporting as of December 31, 2015, based on criteria established in
the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO), and our report dated March 8, 2016 expressed an unqualified opinion.

/s/ GRANT THORNTON LLP

McLean, Virginia
March 8, 2016

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
ICF International, Inc.

We have audited the internal control over financial reporting of ICF International, Inc. (a Delaware corporation) and
subsidiaries (the “Company”) as of December 31, 2015, based on criteria established in the 2013 Internal Control—
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material respects. Our audit included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for
our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2015, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated financial statements of the Company as of and for the year ended December 31, 2015, and our
report dated March 8, 2016 expressed an unqualified opinion on those financial statements.

/s/ GRANT THORNTON LLP

McLean, Virginia
March 8, 2016

F-2

ICF International, Inc., and Subsidiaries

Consolidated Balance Sheets
(in thousands, except share and per share amounts)

2015

2014

December 31,
Assets
Current Assets

Cash and cash equivalents ........................................................................................ $
Contract receivables, net ..........................................................................................
Prepaid expenses and other ......................................................................................
Income tax receivable ..............................................................................................
Total current assets .......................................................................................................
Total property and equipment, net ..............................................................................
Other assets:

Goodwill...................................................................................................................
Other intangible assets, net .......................................................................................
Restricted cash .........................................................................................................
Other assets ..............................................................................................................
Total Assets .................................................................................................................... $

7,747 $
259,834
10,032
—
277,613
45,425

687,404
58,899
1,362
12,456
1,083,159 $

12,122
260,254
10,338
5,715
288,429
43,241

687,778
76,707
1,478
12,707
1,110,340

Liabilities and Stockholders’ Equity
Current Liabilities

Accounts payable ..................................................................................................... $
Accrued salaries and benefits ...................................................................................
Accrued expenses and other current liabilities .........................................................
Deferred revenue ......................................................................................................
Income tax payable ..................................................................................................
Deferred income taxes ..............................................................................................
Total Current Liabilities ...............................................................................................
Long-term Liabilities:

Long-term debt .........................................................................................................
Deferred rent ............................................................................................................
Deferred income taxes ..............................................................................................
Other ........................................................................................................................
Total Liabilities ..............................................................................................................
Commitments and Contingencies (Note N)
Stockholders’ Equity

Preferred stock, par value $.001 per share; 5,000,000 shares authorized; none

63,738 $
43,118
43,001
33,392
2,604
8,004
193,857

311,532
15,785
25,322
13,387
559,883

65,755
56,314
42,308
31,554
—
7,312
203,243

350,052
19,997
27,886
8,473
609,651

issued ...................................................................................................................

—

Common stock, $.001 par value; 70,000,000 shares authorized; 21,313,472 and

21,035,654 shares issued; and 19,032,054 and 19,430,154 shares outstanding as
of December 31, 2015, and December 31, 2014, respectively .............................
Additional paid-in capital .........................................................................................
Retained earnings .....................................................................................................
Treasury stock ..........................................................................................................
Accumulated other comprehensive loss ...................................................................
Total Stockholders’ Equity ...........................................................................................
Total Liabilities and Stockholders’ Equity ................................................................. $

21
280,113
325,306
(74,673 )
(7,491 )
523,276
1,083,159 $

21
267,206
285,937
(49,994)
(2,481)
500,689
1,110,340

The accompanying notes are an integral part of these statements.

F-3

ICF International, Inc., and Subsidiaries

Consolidated Statements of Comprehensive Income
(in thousands, except per share amounts)

Years ended December 31,
Revenue ............................................................................................ $
Direct Costs ......................................................................................
Operating costs and expenses

2015
1,132,232 $
694,436

2014
1,050,134 $
654,946

Indirect and selling expenses ......................................................
Depreciation and amortization ...................................................
Amortization of intangible assets ...............................................

329,159
16,222
17,184

302,020
13,369
10,437

2013

949,303
591,516

272,387
11,238
9,477

Total operating costs and expenses .....................................

362,565

325,826

293,102

Operating Income ............................................................................
Interest expense ..........................................................................
Other expense ............................................................................

75,231
(10,072)
(1,559)

Income Before Income Taxes .........................................................
Provision for Income Taxes ............................................................

63,600
24,231

69,362
(4,254)
(958)

64,150
24,120

64,685
(2,447 )
(12 )

62,226
22,896

Net Income ....................................................................................... $

39,369 $

40,030 $

39,330

Earnings per Share:

Basic .................................................................................... $
Diluted ................................................................................ $

Weighted-average Common Shares Outstanding:

Basic ....................................................................................
Diluted ................................................................................

Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax ..................
Comprehensive income, net of tax ................................................. $

2.04 $
2.00 $

19,335
19,663

(5,010)
34,359 $

2.04 $
2.00 $

19,608
19,997

(1,491)
38,539 $

1.99
1.95

19,755
20,186

251
39,581

The accompanying notes are an integral part of these statements.

F-4

ICF International, Inc., and Subsidiaries

Consolidated Statements of Stockholders’ Equity
(in thousands)

Additional

Years ended December 31, 2015,
2014 and 2013
January 1, 2013 ................................ 19,559 $

Common Stock
Paid-in Retained Treasury Stock
Shares Amount Capital Earnings Shares Amount
20 $ 237,262 $ 206,577

612 $(13,868) $

Accumulated
Other
Comprehensive
Loss

Total
(1,241) $428,750

Net income .....................................
Other comprehensive income .........
Equity compensation ......................
Exercise of stock options................
Issuance of shares pursuant to

—
—
—
159

—
—
—
1

— 39,330
—
—
—
8,786
—
3,102

—
—
—
—

—
—
105
—

— 39,330
251
251
— 8,891
— 3,103

vesting of restricted stock units ..

294

—

(5)

—

Net payments for stock issuances

and buybacks ..............................

(247)

—

335

—

246 (7,782)

— (7,447)

Tax impact of stock option

exercises and award vesting .......

—

1,213

—

— 1,213

December 31, 2013 ........................... 19,765 $

21 $ 250,698 $ 245,907

853 $(21,545) $

(990) $474,091

Net income .....................................
Other comprehensive loss ..............
Equity compensation ......................
Exercise of stock options................
Issuance of shares pursuant to

—
—
—
85

—
—
—
—

— 40,030
—
—
—
10,680
—
1,831

—
—
—
—

—
—
328
—

— 40,030
(1,491) (1,491)
— 11,008
— 1,831

vesting of restricted stock units ..

333

—

Net payments for stock issuances

and buybacks ..............................

(753)

—

454

—

753 (28,777)

— (28,323)

Tax impact of stock option

exercises and award vesting .......

—

3,543

—

— 3,543

December 31, 2014 ........................... 19,430 $

21 $ 267,206 $ 285,937 1,606 $(49,994) $

(2,481) $500,689

—
—
—
44

—
—
—
—

— 39,369
—
—
—
10,392
—
932

—
—
—
—

—
—
458
—

— 39,369
(5,010) (5,010)
— 10,850
932
—

vesting of restricted stock units ..

234

—

Net payments for stock issuances

and buybacks ..............................

(676)

—

276

—

676 (25,137)

— (24,861)

Tax impact of stock option

exercises and award vesting .......

—

1,307

—

— 1,307

December 31, 2015 ........................... 19,032 $

21 $ 280,113 $ 325,306 2,282 $(74,673) $

(7,491) $523,276

The accompanying notes are an integral part of these statements.

F-5

ICF International, Inc., and Subsidiaries

Consolidated Statements of Cash Flows
(in thousands)

Years ended December 31,
Cash Flows from Operating Activities

Net income ............................................................................................. $
Adjustments to reconcile net income to net cash provided by operating

activities:

2015

2014

2013

39,369 $

40,030 $

39,330

Bad debt expense ............................................................................
Deferred income taxes ....................................................................
Non-cash equity compensation .......................................................
Depreciation and amortization .......................................................
Deferred rent ..................................................................................
Other adjustments, net ....................................................................
Changes in operating assets and liabilities, net of the effect of

acquisitions:

Contract receivables ...............................................................
Prepaid expenses and other assets ..........................................
Accounts payable ...................................................................
Accrued salaries and benefits .................................................
Accrued expenses ...................................................................
Deferred revenue ....................................................................
Income tax receivable and payable .........................................
Restricted cash ........................................................................
Other liabilities .......................................................................

268
2,106
10,850
33,406
1,002
1,786

(2,713)
(170)
(2,374)
(13,208)
(4,522)
2,367
8,356
116
(320)

272
4,071
11,008
23,806
2,685
(3,015 )

(2,464 )
(1,743 )
9,424
4,286
683
(2,099 )
(6,453 )
387
(1,718 )

112
2,434
8,891
20,715
2,606
1,972

233
(3,633 )
390
3,753
(1,091 )
(2,407 )
6,749
150
609

Net Cash Provided by Operating Activities ...............................................
Cash Flows from Investing Activities

Capital expenditures for property and equipment and capitalized

76,319

79,160

80,813

software ...............................................................................................
Payments for business acquisitions, net of cash received .......................

(12,682)
(1,818)

(10,635 )
(347,871 )

(11,859 )
(4,763 )

Net Cash Used in Investing Activities .........................................................
Cash Flows from Financing Activities

Advances from working capital facilities ...............................................
Payments on working capital facilities ...................................................
Payments on capital expenditure obligations .........................................
Debt issue costs ......................................................................................
Proceeds from exercise of options ..........................................................
Tax benefits of stock option exercises and award vesting ......................
Net payments for stockholder issuances and buybacks ..........................

381,745
(420,265)
(3,289)
(17)
932
1,307
(24,861)

733,032
(422,980 )
(2,339 )
(1,245 )
1,831
3,543
(28,323 )

(14,500)

(358,506 )

(16,622 )

Net Cash (Used in) Provided by Financing Activities ...............................
Effect of Exchange Rate Changes on Cash ................................................

(64,448)
(1,746)

283,519
(1,004 )

(Decrease) Increase in Cash and Cash Equivalents ...................................
Cash and cash equivalents, beginning of period ........................................
Cash and cash equivalents, end of period .................................................. $

(4,375)
12,122
7,747 $

3,169
8,953
12,122 $

139,215
(204,215 )
(2,302 )
—
3,103
1,213
(7,447 )

(70,433 )
470

(5,772 )
14,725
8,953

Supplemental disclosure of cash flow information:

Cash paid during the period for:

Interest ............................................................................................ $
Income taxes ................................................................................... $

9,845 $
16,315 $

2,728 $
24,335 $

2,459
13,670

Non-cash investing and financing transactions:

Capital expenditure obligations ...................................................... $
Fair value of contingent consideration payable in connection with

acquisition.................................................................................... $

12,870 $

— $

—

— $

2,842

The accompanying notes are an integral part of these statements.

F-6

ICF International, Inc., and Subsidiaries

Notes to Consolidated Financial Statements
(dollar amounts in tables in thousands, except per share data)

NOTE A—BASIS OF PRESENTATION AND NATURE OF OPERATIONS

Basis of Presentation and Nature of Operations

The accompanying consolidated financial statements include the accounts of ICF International, Inc. (“ICFI”), and its
subsidiary, ICF Consulting Group, Inc. (“Consulting,” and together with ICFI, “the Company”). 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.

Nature of Operations

The Company provides professional services and technology-based solutions to government and commercial clients,
including management, 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. 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 United States (“U.S.”) federal government departments and agencies, most
significantly the Department of Health and Human Services, the Department of State and the Department of Defense. The
Company also serves U.S. state and local government departments and agencies; international governments; and commercial
clients worldwide, such as airlines, airports, electric and gas utilities, oil 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 and local government, unless otherwise indicated.

The Company, incorporated in Delaware, is headquartered in Fairfax, Virginia. It maintains offices throughout the
world, including over 55 offices in the U.S. and more than 10 offices in key markets outside the U.S., including offices in the
United Kingdom, Belgium, China, India and Canada.

Reclassifications

Certain amounts in the 2014 and 2013 consolidated financial statements have been reclassified to conform to the current

year presentation.

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered, the
contract price is fixed or determinable, and collectability is reasonably assured. The Company enters into three types of
contracts: time-and-materials, cost-based, and fixed-price.

•

F-7

•

Cost-Based Contracts. Revenue under cost-based contracts is recognized as costs are incurred. Applicable
estimated profit, if any, is included in earnings in the proportion that incurred costs bear to total estimated
costs. Incentives, award fees, or penalties related to performance are also considered in estimating revenue
and profit rates based on actual and anticipated awards, taking into consideration factors such as the
Company’s prior award experience and communications with the customer regarding performance.

Fixed-Price Contracts. Revenue for fixed-price contracts is recognized when earned, generally as work is
performed. Services performed vary from contract to contract and are not always uniformly performed over
the term of the arrangement. Fixed-price contracts may contain multiple elements that must be evaluated to
determine if they represent separate units of accounting that have stand-alone value. If the assessment is
made that there is more than one unit of accounting, the contract value is then allocated to each unit based
upon management’s best estimate of selling price and the appropriate revenue recognition method is applied
to each unit. The Company recognizes revenue in a number of different ways on fixed-price contracts based
upon the nature of the services to be provided and an assessment of what best mirrors the pattern of
performance for the deliverable/contract, including:

•

Specific Performance: When the services to be performed consist of a single act, revenue is
recognized at the time the act is performed or at the completion of the single service.

Straight-Line: When services are performed or are expected to be performed consistently
throughout an arrangement, or when the Company is compensated on a retainer or fixed-fee basis,
revenue is recognized ratably over the period benefited.

Revenue recognition requires the Company to use judgment relative to assessing risks, estimating contract revenue and
costs or other variables, and making assumptions for scheduling and technical issues. Due to the size and nature of many of
the Company’s contracts, the estimation of revenue and estimates at completion can be complicated and are subject to many
variables. Contract costs include labor, subcontractor costs, and other direct costs, as well as an allocation of indirect costs.
At times, the Company must also make assumptions regarding the length of time to complete the contract because costs
include expected increases in wages, prices for subcontractors, and other direct costs. From time to time, facts develop that
require the Company to revise its estimated total costs or hours and thus the associated revenue on a contract. To the extent
that a revised estimate affects contract profit or revenue previously recognized, the Company records the cumulative effect
of the revision in the period in which the facts requiring the revision become known. A provision for the full amount of an
anticipated loss on any type of contract is recognized in the period in which it becomes probable and can be reasonably
estimated. As a result, operating results could be affected by revisions to prior accounting estimates.

Contractual arrangements are evaluated to assess whether revenue should be recognized on a gross versus net basis.
Management’s assessment when determining gross versus net revenue recognition is based on several factors, such as whether
the Company serves as the primary service provider, has autonomy in selecting subcontractors, or has credit risk, all of which
are primary indicators that the Company serves as the principal to the transaction. In such cases, revenue is recognized on a
gross basis. When such indicators are not present and the Company is primarily functioning as an agent under an arrangement,
revenue is recognized on a net basis.

F-8

The approximate percentage of revenue by contract type was as follows:

2015

Year ended December 31,
2014

2013

Time-and-materials ...............................................................
Fixed-price ............................................................................
Cost-based .............................................................................
Total ......................................................................................

43 %
38 %
19 %
100 %

47%
34%
19%
100%

52%
29%
19%
100%

Payments to the Company on cost-based contracts with the federal government are provisional payments subject to
adjustment upon audit by the government. Such audits have been finalized through December 31, 2006, and any adjustments
have been immaterial. Contract revenue for subsequent periods has been recorded in amounts that are expected to be realized
upon final audit and settlement of costs in those years.

The Company generates invoices to clients in accordance with the terms of the applicable contract, which may not be
directly related to the performance of services. Unbilled receivables are invoiced based upon the achievement of specific
events as defined by each contract, including deliverables, timetables, and incurrence of certain costs. Unbilled receivables
are classified as a current asset. Advanced billings to clients in excess of revenue earned are recorded as deferred revenue
until the revenue recognition criteria are met. Reimbursements of out-of-pocket expenses are included in revenue with
corresponding costs incurred by the Company included in the cost of revenue. The Company records revenue net of taxes
collected from customers to be remitted to governmental authorities.

The Company may proceed with work based upon client direction prior to the completion and signing of formal contract
documents. It has a review process for approving any such work. Revenue associated with such work is recognized only when
it can be reliably estimated and realization is probable. The Company bases its estimates on a variety of factors, including
previous experiences with the client, communications with the client regarding funding status, and its knowledge of available
funding for the contract.

Cash and Cash Equivalents

The Company considers cash on deposit and all highly liquid investments with original maturities of three months or

less when purchased to be cash and cash equivalents.

Restricted Cash

The Company has restricted cash representing amounts held in escrow accounts and/or not readily available due to

contractual restrictions.

Allowance for Doubtful Accounts

The Company considers a number of factors in its estimate of allowance for doubtful accounts, including the customer’s
financial condition, historical collection experience, and other factors that may bear on collectability of the receivables. The
Company writes off contract receivables when such amounts are determined to be uncollectible. Losses have historically
been within management’s expectations.

Property and Equipment

Property and equipment are carried at cost and are depreciated using the straight-line method over their estimated useful
lives, which range from two to seven years. Leasehold improvements are amortized on a straight-line basis over the shorter
of the economic life of the improvement or the related lease term. Assets acquired in acquisitions are recorded at fair value.

The Company is required to review long-lived assets and identifiable intangibles subject to amortization for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future
undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment
to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Assets to be
disposed of are reported at the lower of the carrying amount or fair value, less cost to sell.

F-9

Goodwill and Other Intangible Assets

The purchase price of an acquired business is allocated to the tangible assets and separately identifiable intangible assets
acquired, less liabilities assumed, based upon their respective fair values, with the excess recorded as goodwill. Goodwill
represents the excess of costs over the fair value of net assets of businesses acquired. Goodwill and intangible assets acquired
in a business combination and determined to have an indefinite useful life are not amortized, but instead are reviewed for
impairment annually, or more frequently if impairment indicators arise. Intangible assets with estimable useful lives are
amortized over such lives and reviewed for impairment if impairment indicators arise.

The Company performs its annual goodwill impairment review as of September 30 of each year. For the purposes of
performing this review, the Company has concluded that it is one reporting unit. For the annual impairment review as of
September 30, 2015, the Company opted to perform a qualitative assessment of whether it is more likely than not that its
reporting unit's fair value is less than its carrying amount. If, after completing its qualitative assessment, the Company
determines that it is more likely than not that the estimated fair value of the reporting unit exceeded its carrying amount, it
may conclude that no impairment exists. If the Company concludes otherwise, a two-step goodwill impairment test must
be performed, which includes a comparison of the fair value of the reporting unit to the carrying value.

The Company’s qualitative analysis as of September 30, 2015 included macroeconomic and industry and market
specific considerations, financial performance indicators and measurements, and other factors. Based on the Company’s
qualitative assessment, it determined that it is more likely than not that the fair value of its one reporting unit exceeded its
carrying amount, and thus the two-step impairment test was not required to be performed for 2015. Therefore, based upon
management’s review, no goodwill impairment charge was required as of September 30, 2015. Historically, the Company
has recorded no goodwill impairment charges.

The Company is required to review long-lived assets and certain identifiable intangibles for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. Recoverability
of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net
cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Assets to be disposed
of are reported at the lower of the carrying amount or fair value, less cost to sell.

Capitalized Software

The Company capitalizes eligible costs to develop enhancements and upgrades to internal-use software that are incurred
subsequent to the preliminary project stage. Amortization expense is recorded on a straight-line basis over the expected
economic life, typically three to five years. During the years ended December 31, 2015, 2014 and 2013, the costs capitalized
for the development of internal- use software were not material to the Company’s consolidated financial statements.

Deferred Rent

The Company recognizes rent expense on a straight-line basis over the non-cancellable term of each lease, including
renewal option periods when renewal is reasonably assured or executed. Lease incentives or abatements received at or near
the inception of leases are accrued and amortized ratably over the life of the lease.

Stock-based Compensation

The Company recognizes stock-based compensation expense related to share-based payments to employees, including
grants of employee stock options, restricted stock awards, restricted stock units (“RSUs”), and cash-settled restricted stock
units (“CSRSUs”) on a straight-line basis over the requisite service period, which is generally the vesting period. The
Company recognizes expense for performance-based share awards (“PSAs”), which have a performance condition and a
market condition, on a straight-line basis over the performance period. Non-employee director awards do not include vesting
conditions and therefore are expensed when issued.

Compensation expense is based on the estimated fair value of these instruments and the estimated number of shares the
Company ultimately expects will vest. The Company estimates the rate of future forfeitures based on factors such as historical
experience and employee class. In addition, the estimation of PSAs that will ultimately vest requires judgment based on
performance conditions. Changes to these estimates are recorded as a cumulative adjustment in the period estimates are
revised.

F-10

The fair value of stock options, restricted stock awards, RSUs, PSAs and non-employee director awards is estimated
based on the fair value of a share of common stock at the grant date. The Company has elected to use the Black-Scholes-
Merton option pricing model to determine the fair value of stock options. The fair value of PSAs is estimated using a Monte
Carlo simulation model.

CSRSUs are settled only in cash payments. The cash payment is based on the fair value of the Company’s stock price
at the vesting date, calculated by multiplying the number of CSRSUs vested by the Company’s closing stock price on the
vesting date, subject to a maximum payment cap and a minimum payment floor. The Company treats these awards as liability-
classified awards, and therefore accounts for them at fair value estimated based on the closing price of the Company’s stock
at the reporting date.

Other Comprehensive Income

Other comprehensive income represents foreign currency translation adjustments arising from the use of differing
exchange rates from period to period. The financial positions and results of operations of the Company’s foreign subsidiaries
are based on the local currency as the functional currency and are translated to U.S. dollars for financial reporting purposes.
Assets and liabilities of the subsidiaries are translated at the exchange rate in effect at each period-end. Income statement
accounts are translated at the average rate of exchange prevailing during the period. Translation adjustments are included in
accumulated other comprehensive income (loss) in stockholders’ equity in the Company’s consolidated balance sheets. The
activity included in other comprehensive income (loss) in the Company’s consolidated statements of comprehensive income
related to foreign currency translation adjustments for each period reported is summarized below.

Foreign currency translation adjustments (1) ........................... $
Realized losses reclassified into earnings (2) ...........................
Other comprehensive (loss) income, net of tax (3) .................. $

(5,676 ) $
666
(5,010 ) $

(2,017 ) $
526
(1,491 ) $

251
—
251

2015

Year ended December 31,
2014

2013

(1) In the third quarter of 2015, the Company recorded an adjustment to its foreign currency translation totaling approximately $4 million,
primarily related to goodwill, intangible assets and fixed assets for certain acquired international subsidiaries.
(2) Represents the reclassification of foreign currency translation adjustments from accumulated other comprehensive loss into earnings as
a result of closing international offices. Amounts are included in the other expense line item in the consolidated statements of
comprehensive income.
(3) Net of tax of $1.0 million, $0.4 million and $0 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Fair Value of Financial Instruments

The Company's financial instruments, including cash and cash equivalents, contract receivables, accounts payable,
accrued expenses, and other current liabilities, are carried at cost, which the Company believes approximates their fair values
at December 31, 2015 and December 31, 2014, due to their short maturities. The Company believes the carrying value of
other long-term liabilities related to capital expenditure obligations approximates their fair value at December 31, 2015 based
on the current rates offered to us for similar instruments with comparable maturities. The Company believes the carrying
value of its lines of credit payable at December 31, 2015 and 2014 approximate the estimated fair value for debt with similar
terms, interest rates, and remaining maturities currently available to companies with similar credit ratings.

The Company applies the provisions of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), to its assets
and liabilities that are required to be measured at fair value pursuant to other accounting standards including assets and
liabilities resulting from the Company’s nonqualified deferred compensation plan and foreign currency forward contract
agreements not eligible for hedge accounting. The fair value of assets and liabilities resulting from the Company’s
nonqualified deferred compensation plan and foreign currency forward contract agreements at December 31, 2015 and 2014
and the changes in fair value for the years ended December 31, 2015, 2014, and 2013 were immaterial.

F-11

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary
differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled. The Company evaluates its ability to benefit from all deferred tax assets
and establishes valuation allowances for amounts it believes are not more likely than not to be realizable. For uncertain tax
positions, the Company uses a more-likely-than-not recognition threshold based on the technical merits of the income tax
position taken. Income tax positions that meet the more-likely-than-not recognition threshold are measured in order to
determine the tax benefit recognized in the financial statements. Penalties, if probable and reasonably estimable, and interest
expense related to uncertain tax positions are not recognized as a component of income tax expense but recorded separately
in indirect expenses.

Treasury Shares

Treasury shares are accounted for under the cost method.

Segment, Customer and Geographic Information

The Company has concluded that it operates in one segment based upon the consolidated information used by its chief
operating decision maker in evaluating the financial performance of its business and allocating resources. This single segment
represents the Company’s core business, professional services for government and commercial clients. Although the
Company describes its multiple service offerings in four markets to provide a better understanding of the Company’s business
operations, the Company does not manage its business or allocate resources based upon those service offerings or markets.

Approximately $540 million, $532 million, and $550 million of the Company’s revenue for the years 2015, 2014, and
2013, respectively, was derived under prime contracts and subcontracts with agencies and departments of the federal
government representing 48%, 51%, and 58% of total revenue. No other customer accounted for 10% or more of the
Company’s revenue during the years 2015, 2014, and 2013.

The Company’s international operations offer services to both commercial and non-U.S. government customers.
Revenue is attributed to location based on the geographic areas to which a contract is awarded. The Company’s revenue
generated from international clients as a percentage of total revenue was approximately 11%, 12%, and 9% for the years
2015, 2014, and 2013.

Risks and Uncertainties

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash
and cash equivalents and contract receivables. The majority of the Company’s cash transactions are processed through one
U.S. commercial bank. Cash held domestically in excess of daily requirements is used to reduce any amounts outstanding
under the Company’s Credit Facility. As of December 31, 2015 and 2014, the Company held approximately $6.5 million and
$10.1 million, respectively, of cash in foreign bank accounts. To date, the Company has not incurred losses related to cash
and cash equivalents.

The Company’s contract receivables consist principally of contract receivables from agencies and departments of, as
well as from prime contractors to, the federal government, other governments, and commercial organizations. The Company
believes that this credit risk with respect to contract receivables, is limited due to the credit worthiness of the U.S. government.
Contract receivable credit risk is also limited due to a large number of customers in differing agencies of the U.S. government.
The Company extends credit in the normal course of operations and does not require collateral from its clients.

The Company has historically been, and continues to be, heavily dependent upon contracts with the federal government
and is subject to audit by agencies of the federal government. Such audits determine, among other things, whether an
adjustment of invoices rendered to the government is appropriate under the underlying terms of the contracts. Management
does not expect any significant adjustments as a result of government audits that will adversely affect the Company’s financial
position.

F-12

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. of
America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and
contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the
reporting periods. Actual results could differ from those estimates.

Recent Accounting Pronouncements not yet Adopted

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09
provides a single comprehensive revenue recognition framework and supersedes almost all existing revenue recognition
guidance. Included in the new principles-based revenue recognition model are changes to the basis for deciding on the timing
for revenue recognition. In addition, the standard expands and improves revenue disclosures. In August 2015, the FASB
issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date, to amend ASU 2014-
09 to defer the effective date of the new revenue recognition standard. As a result, ASU 2014-09 is effective for the Company
for its fiscal year 2018 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative
effect adjustment as of the date of adoption. The Company is currently evaluating the impact of adopting ASU 2014-09.

In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing
Arrangement (Subtopic 350-40). ASU 2015-05 provides guidance to help entities evaluate whether a cloud computing
arrangement contains a software license that should be accounted for as internal-use software or as a service contract. The
update is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted.
Upon adoption, an entity has the option to apply the provisions of ASU 2015-05 either prospectively to all arrangements
entered into or materially modified, or retrospectively. The adoption of ASU 2015-05 is not expected to have a material
impact on the Company’s consolidated financial statements.

In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments
(Topic 805). ASU 2015-16 eliminates the requirement for an acquirer to retrospectively account for adjustments made to
provisional amounts recognized in a business combination to reflect new information that existed as of the acquisition date.
Instead, an acquirer will recognize these measurement-period adjustments during the period in which it determines the amount
of the adjustment. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods
within those fiscal years, with early adoption permitted. The adoption of ASU 2015-16 is not expected to have a material
impact on the Company’s consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740). This
update requires an entity to classify deferred tax liabilities and assets as noncurrent within a classified statement of financial
position. ASU 2015-17 is effective for annual and interim reporting periods beginning after December 15, 2016. This update
may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. Early
application is permitted as of the beginning of the interim or annual reporting period. The adoption of ASU 2015-17 is not
expected to have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update revises an entity’s accounting for
operating leases and requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than
12 months. This update also requires certain qualitative and specific quantitative disclosures. ASU 2016-02 does not
significantly change the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a
lessee. This update is effective for the first interim and annual periods beginning after December 15, 2018, with early adoption
permitted. The Company is currently evaluating the impact of adopting ASU 2016-02.

F-13

NOTE C—CONTRACT RECEIVABLES

Contract receivables consisted of the following at December 31:

Billed ....................................................................................................................... $
Unbilled ...................................................................................................................
Retainages ...............................................................................................................
Other ........................................................................................................................
Allowance for doubtful accounts .............................................................................
Contract receivables, net ......................................................................................... $

159,985 $
93,131
5,486
3,370
(2,138 )
259,834 $

162,876
90,419
5,788
3,058
(1,887)
260,254

2015

2014

Contract receivables, net of the established allowance, are stated at amounts expected to be realized in future periods.
Unbilled receivables result from revenue that has been earned in advance of billing. Unbilled receivables can be invoiced at
contractually defined intervals or milestones, as well as upon completion of the contract or government audits. The Company
anticipates that the majority of unbilled receivables will be substantially billed and collected within one year, and therefore,
classifies them as current assets in accordance with industry practice.

NOTE D—PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31:

Leasehold improvements ......................................................................................... $
Software ..................................................................................................................
Furniture and equipment .........................................................................................
Computers ...............................................................................................................

Accumulated depreciation and amortization ...........................................................
Total property and equipment, net ........................................................................... $

2015

2014

17,064 $
41,902
28,734
28,928
116,628
(71,203 )
45,425 $

19,097
31,364
23,466
27,671
101,598
(58,357)
43,241

Depreciation expense for property and equipment for the years ended December 31, 2015, 2014, and 2013, was

approximately $16.2 million, $13.4 million, and $11.2 million, respectively.

NOTE E—GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill for the fiscal years ended December 31 were as follows:

Balance as of January 1 ........................................................................................... $
Goodwill resulting from the ECA business combination ........................................
Goodwill resulting from the Mostra business combination (1) .................................
Goodwill resulting from the CityTech business combination (1) .............................
Goodwill resulting from the Olson business combination (1) ..................................
Effect of foreign currency translation ......................................................................
Balance as of December 31 ..................................................................................... $

2015

2014

687,778 $
—
(380 )
(29 )
3,410
(3,375 )
687,404 $

418,839
141
24,118
19,563
225,117
—
687,778

(1) During the year ended December 31, 2015, the Company recorded changes to goodwill representing adjustments during the
measurement-period (up to one year from the date of an acquisition) related to acquisitions during the year ended December 31, 2014.
These goodwill adjustments were not significant to our previously reported operating results or financial position. See further discussion
of the Company’s business combinations in “Note F—Business Combinations.”

F-14

Other Intangible Assets

Intangible assets are primarily amortized over periods ranging from approximately 1 to 10 years. The weighted-average
period of amortization for all intangible assets as of December 31, 2015, is 8.7 years. The customer-related intangible assets
related to the business combinations, which consist of customer contracts, backlog, and non-contractual customer
relationships, are being amortized based on estimated cash flows and respective estimated economic benefit of the assets.
The weighted-average period of amortization of the customer-related intangibles is 8.7 years. Intangible assets related to
acquired developed technology are being amortized on an accelerated basis over a weighted-average period of 5.5 years.

Other intangibles consisted of the following at December 31:

Customer-related .................................................................... $
Developed technology ............................................................
Total intangible assets ............................................................ $

117,654 $
1,463
119,117 $

(59,412) $
(806)
(60,218) $

58,242
657
58,899

Gross Carrying
Value

2015
Accumulated
Amortization

Net Carrying
Value

Gross Carrying
Value

2014
Accumulated
Amortization

Net Carrying
Value

Customer-related .................................................................... $
Developed technology ............................................................
Marketing-related ...................................................................
Total intangible assets ............................................................ $

118,957 $
1,538
4,262
124,757 $

(46,703) $
(494)
(853)
(48,050) $

72,254
1,044
3,409
76,707

Aggregate amortization expense for the years ended December 31, 2015, 2014, and 2013, was approximately $17.2
million, $10.4 million, and $9.5 million, respectively. The estimated future amortization expense relating to intangible assets
is as follows:

Year ending December 31,
2016 ......................................................................................................................................................... $
2017 .........................................................................................................................................................
2018 .........................................................................................................................................................
2019 .........................................................................................................................................................
2020 .........................................................................................................................................................
Thereafter ................................................................................................................................................
Total ........................................................................................................................................................ $

12,608
11,098
8,435
6,127
4,525
16,106
58,899

NOTE F—BUSINESS COMBINATIONS

Olson

On November 5, 2014, the Company completed the acquisition of OCO Holdings, Inc. and its various subsidiaries,
including Olson + Co., Inc. (collectively, “Olson”), a leading provider of marketing technology and digital services based in
Minneapolis, Minnesota. As a result of the acquisition, Olson became a wholly owned subsidiary of the Company. The
aggregate purchase price of approximately $298.2 million in cash was funded by the Company’s Credit Facility (as defined
in “Note I – Long-Term Debt” below). The acquisition expanded the Company’s existing digital technology and strategic
communications work and strengthened its ability to bring more integrated solutions to an expanded client base, including
multi-channel marketing initiatives across web, mobile, email, social, print, broadcast and off-premise platforms.

F-15

The acquisition was accounted for under the acquisition method. The allocation of the total purchase price to the tangible
and intangible assets and liabilities of Olson is based on management’s estimate of fair value as of the acquisition date and
was completed in the fourth quarter of 2015. The Company engaged an independent valuation firm to assist management in
the allocation of the purchase price to goodwill and to other acquired intangible assets. The excess of the purchase price over
the estimated fair value of the net tangible assets acquired was approximately $293.4 million. The Company has allocated
approximately $228.5 million to goodwill and $64.9 million to other intangible assets. The goodwill recorded as part of the
acquisition primarily reflects the value of providing an established platform to leverage the Company’s existing digital
interactive technologies and domain expertise, synergies expected to arise from providing end-to-end customer solutions to
a combined client-base across all channels, as well as any intangible assets that do not qualify for separate recognition. The
weighted average amortization period for the amount allocated to other intangible assets in total is 9.6 years from the
acquisition date. The intangible assets consist of approximately $60.3 million of customer-related intangibles that are being
amortized over 10.2 years from the acquisition date, $4.0 million of marketing-related intangibles that were amortized over
1.2 years from the acquisition date, and $0.6 million of developed technology intangibles that are being amortized over 6.2
years from the acquisition date. Olson was a stock purchase for tax purposes; therefore, goodwill and amortization of other
intangibles created via this acquisition are not deductible for income tax purposes.

During the year ended December 31, 2015, the Company recorded an increase to goodwill of $3.4 million related to
measurement-period adjustments to the preliminary purchase price allocation. The measurement-period adjustments were
primarily related to reductions of $7.3 million and $5.9 million to the valuation of fixed assets and accrued expenses and
other liabilities, as well as a $1.8 million holdback adjustment that increased the purchase price to $298.2 million. Goodwill
adjustments were not significant to our previously reported operating results or financial position.

The purchase price allocation is summarized as follows:

Cash ........................................................................................................................................................... $
Contract receivables ..................................................................................................................................
Other current and non-current assets .........................................................................................................
Property and equipment.............................................................................................................................
Customer-related intangibles .....................................................................................................................
Marketing-related intangibles ....................................................................................................................
Developed technology intangibles ............................................................................................................
Goodwill ....................................................................................................................................................
Total Assets ...............................................................................................................................................

Accounts payable .....................................................................................................................................
Accrued expenses and other liabilities ......................................................................................................
Accrued salaries and benefits ....................................................................................................................
Deferred revenue .......................................................................................................................................
Deferred taxes and income tax payable .....................................................................................................
Total Liabilities .........................................................................................................................................
Net Assets .................................................................................................................................................. $

8,816
36,879
1,512
8,571
60,338
3,947
578
228,527
349,168

9,792
7,126
5,378
9,742
18,922
50,960
298,208

The results of operations of the Olson acquisition are included in the Company’s consolidated statements of
comprehensive income for the year ended December 31, 2015. For the year ended December 31, 2014, Olson contributed net
revenues of $23.0 million and net earnings of $2.2 million since the acquisition date of November 5, 2014, excluding
transaction-related acquisition costs of $1.6 million, as well as interest expense, amortization of intangible assets resulting
from the acquisition, stock-based compensation expense, corporate allocations and integration costs.

The following unaudited condensed pro forma information presents combined financial information as if the acquisition
of Olson had been effective at the beginning of fiscal year 2013. As a result, fiscal year 2014 represents the pro forma results
for year two of the acquisition. The pro forma information includes adjustments reflecting changes in the amortization of
intangibles, acquisition-related expense, stock-based compensation expense, and interest expense, and records income tax
effects as if Olson had been included in the Company’s results of operations. The pro forma information for fiscal year 2014
also includes an adjustment to eliminate $2.6 million of operating income related to the reduction of an Olson contingent
liability that was settled as a result of the acquisition.

F-16

Pro forma Information for the Year Ended December 31 (Unaudited)

Revenue ........................................................................................................... $
Operating income ............................................................................................
Net income ......................................................................................................
Earnings per share:
Basic earnings per share .................................................................................. $
Diluted earnings per share ............................................................................... $

2014

2013

1,167,787 $
78,518
42,461

2.17 $
2.12 $

1,067,511
67,051
35,992

1.82
1.78

CityTech

In March 2014, the Company acquired CityTech, Inc. (“CityTech”), a Chicago-based digital interactive consultancy
specializing in enterprise applications development, web experience management, mobile application development, cloud
enablement, managed services, and customer experience management solutions. The acquisition added expertise to the
Company’s content management capabilities and complemented its digital and interactive business. During the first quarter
of 2015, the Company finalized its valuation of the assets acquired and liabilities assumed as a result of the acquisition. The
purchase was immaterial to the Company’s financial statements taken as a whole.

Mostra

In February 2014, the Company completed its acquisition of Mostra SA (“Mostra”), a strategic communications
consulting company based in Brussels, Belgium. Mostra offers end-to-end, multichannel communications solutions to assist
government and commercial clients, in particular the European Commission. The acquisition extended the Company’s
strategic communications capabilities globally to complement its policy work and enhance its strategy of providing a full
suite of services that leverages its research and advisory services. During the first quarter of 2015, the Company finalized its
valuation of the assets acquired and liabilities assumed as a result of the acquisition. The purchase was immaterial to the
Company’s financial statements taken as a whole.

ECA

In July 2013, the Company hired the staff of, and purchased certain assets and liabilities from, Ecommerce Accelerator
LLC (“ECA”), an e-commerce technology-based services firm based in New York, New York. The addition of ECA enhanced
ICF’s multi-channel, end-to-end e-commerce solutions. In connection with the acquisition, the Company recorded a
contingent consideration payable reflected in other long-term liabilities at the estimated fair value of $2.8 million at December
31, 2013. The fair value of the contingent liability was reduced to zero in the first quarter of 2014 and the change in the fair
value measurement of $2.8 million was recorded as a reduction to indirect and selling expenses. The Company is no longer
required to pay contingent consideration to ECA, as the parties mutually agreed to the release of this potential obligation in
the third quarter of 2014. The purchase was immaterial to the Company’s financial statements taken as a whole.

NOTE G—ACCRUED SALARIES AND BENEFITS

Accrued salaries and benefits consisted of the following at December 31:

Accrued paid time off and leave ...................................................................... $
Accrued salaries ...............................................................................................
Accrued bonuses, liability-classified awards and commissions .......................
Accrued payroll taxes and withholdings ..........................................................
Accrued medical ..............................................................................................
Other ................................................................................................................
Total accrued salaries and benefits ................................................................... $

10,573 $
7,406
11,213
6,154
2,520
5,252
43,118 $

10,291
22,033
15,451
729
2,514
5,296
56,314

2015

2014

F-17

NOTE H—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following at December 31:

Accrued subcontractor and other direct costs ................................................... $
Deposits ............................................................................................................
Accrued IT and software licensing costs ..........................................................
Accrued insurance premiums ...........................................................................
Accrued professional services ..........................................................................
Other accrued expenses and current liabilities .................................................
Total accrued expenses and other current liabilities ......................................... $

25,905 $
5,547
5,139
1,107
673
4,630
43,001 $

26,084
4,475
3,566
1,646
1,112
5,425
42,308

2015

2014

NOTE I—LONG-TERM DEBT

The Company entered into a Fourth Amended and Restated Business Loan and Security Agreement with a syndication
of 11 commercial banks on May 16, 2014, which was further modified on November 5, 2014 (the “Credit Facility”). The
Credit Facility matures on May 16, 2019 and allows for borrowings of up to $500.0 million without a borrowing base
requirement, taking into account financial, performance-based limitations and provides for an “accordion,” which permits
additional revolving credit commitments of up to $100.0 million, subject to lenders’ approval. The Credit Facility provides
for stand-by letters of credit aggregating up to $30.0 million that reduce the funds available under the Credit Facility when
issued. The Credit Facility is collateralized by substantially all of the assets of the Company and requires that the Company
remain in compliance with certain financial and non-financial covenants. The financial covenants, as defined in the Credit
Facility, require, among other things, that the Company maintain, on a consolidated basis for each quarter, a fixed charge
coverage ratio of not less than 1.25 to 1.00 and a leverage ratio of not more than 3.75 to 1.00. As of December 31, 2015, the
Company was in compliance with its covenants under the Credit Facility.

As of December 31, 2015, the Company had $311.5 million in long-term debt outstanding, $3.7 million in outstanding
letters of credit, and available borrowing capacity of $184.8 million under the Credit Facility (excluding the accordion).
Taking into account the financial, performance-based limitations, available borrowing capacity (excluding the accordion)
was $131.9 million as of December 31, 2015.

The Company’s debt issuance costs, which are included within other assets, are amortized over the term of indebtedness.
Amortizable debt issuance costs were $5.8 million as of both December 31, 2015 and December 31, 2014. Accumulated
amortization related to debt issuance costs was $4.0 million and $3.5 million, as of December 31, 2015 and 2014, respectively.
Amortization expense of $0.5 million was recorded for each of the years ended December 31, 2015, 2014, and 2013,
respectively.

The Company has the ability to borrow funds under its Credit Facility at interest rates based on both LIBOR (1, 3, or 6
month rates) and prime rates, at its discretion, plus their applicable margins and payable monthly. At December 31, 2015 and
2014, the Credit Facility was subject to a commitment fee on the unused portion of the Credit Facility of 0.25% and 0.30%
per annum, respectively.

Long-term debt outstanding and the weighted average interest rate at December 31 is summarized as follows:

2015

2014

Revolving Line of Credit/Swing Line .......................... $

Weighted
Average

Debt
Outstanding
311,532

Interest Rate

2.23% $

Debt
Outstanding
350,052

Weighted
Average
Interest Rate

2.41 %

F-18

Letters of Credit

At December 31, 2015 and 2014, the Company had outstanding letters of credit totaling approximately $3.7 million and

$4.4 million, respectively. These letters of credit are renewed annually.

NOTE J—INCOME TAXES

Income tax expense consisted of the following for the years ended December 31:

Current:

Federal ................................................................................... $
State .......................................................................................
Foreign ..................................................................................
Total current ..........................................................................

Deferred:

Federal ...................................................................................
State .......................................................................................
Foreign ..................................................................................
Total deferred ........................................................................
Income Tax Expense .................................................................... $

2015

2014

2013

14,797 $
2,669
1,475
18,941

4,562
512
216
5,290
24,231 $

13,383 $
3,151
3,563
20,097

3,264
399
360
4,023
24,120 $

15,154
3,247
1,651
20,052

2,523
323
(2)
2,844
22,896

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and income tax purposes. Such amounts are classified in the consolidated balance
sheets as current or non-current assets or liabilities based upon the classification of the related assets and liabilities.

F-19

Deferred tax assets (liabilities) consisted of the following at December 31:

Deferred Tax Assets
Current:

Stock option compensation ............................................................................. $
Allowance for bad debt ...................................................................................
Accrued paid time off .....................................................................................
Accrued bonus ................................................................................................
Foreign tax credits ...........................................................................................
Accrued liabilities ...........................................................................................
Total current deferred tax asset ..............................................................................

Non-current:

Foreign net operating loss (NOL) carry forward .............................................
Federal/state net operating loss (NOL) carry forward .....................................
Stock option compensation .............................................................................
Deferred rent ...................................................................................................
Deferred compensation ...................................................................................
Foreign tax credits ...........................................................................................
State tax credits ...............................................................................................
Federal tax credits ...........................................................................................
Foreign exchange ............................................................................................
Accrued liabilities and other ...........................................................................
Total non-current deferred tax assets .....................................................................
Less: Valuation Allowance .........................................................................................
Total Deferred Tax Assets .......................................................................................... $

Deferred Tax Liabilities
Current:

Retention ......................................................................................................... $
Prepaids ...........................................................................................................
Payroll taxes ....................................................................................................
Unbilled revenue .............................................................................................
Other ...............................................................................................................
Total current deferred liability ...............................................................................

Non-current:

Depreciation ....................................................................................................
Amortization ...................................................................................................
Other ...............................................................................................................
Total non-current deferred tax liabilities ................................................................
Total Deferred Tax Liabilities ....................................................................................
Total Net Deferred Tax Liability ............................................................................... $

2015

2014

458 $
831
2,416
149
—
—
3,854

933
6,458
4,334
5,376
2,908
1,914
1,339
225
1,879
2,643
28,009
(933)
30,930 $

(1,860) $
(1,040)
(502)
(8,093)
(363)
(11,858)

(7,186)
(44,867)
(345)
(52,398)
(64,256)
(33,326) $

319
789
1,975
608
322
1,890
5,903

542
3,447
3,757
5,086
2,823
2,060
1,016
225
447
1,375
20,778
(542)
26,139

(1,899)
(1,549)
(1,064)
(8,483)
(219)
(13,214)

(8,766)
(39,318)
(39)
(48,123)
(61,337)
(35,198)

At December 31, 2015 and 2014, the Company had net operating loss (“NOL”) carry-forwards for foreign income taxes

of approximately $6.9 million and $1.9 million, respectively, all of which may be carried forward indefinitely.

At December 31, 2015, the Company had NOL carry-forwards for federal and state income tax purposes of
approximately $15.2 million, which expire in 2034. The Company also had federal tax credits totaling $0.2 million, all of
which may be carried forward indefinitely. The Company acquired these NOLs and credits as a result of its purchase of Olson
in November 2014. Internal Revenue Code Section 382 imposes an annual limitation on the use of a corporation’s NOLs, tax
credits and other carryovers after an “ownership change” occurs.

F-20

Section 382 imposes an annual limitation on the amount of post-ownership change taxable income a corporation may
offset with pre-ownership change NOLs and credits. In general, the annual limitation is determined by multiplying the value
of the corporation’s stock immediately before the ownership change (subject to certain adjustments) by the applicable long-
term tax-exempt rate. Any unused portion of the annual limitation is available for use in future years until such NOLs are
scheduled to expire (in general, NOLs may be carried forward 20 years). The Company presently estimates that it will be
able to fully utilize the acquired NOLs and credits prior to their expiration.

At December 31, 2015, the Company had gross state income tax credit carry-forwards of approximately $2.0 million,
which expire between 2017 and 2025. A deferred tax asset of approximately $1.3 million (net of federal benefit) has been
established related to these state income tax credit carry-forwards as of December 31, 2015.

The need to establish valuation allowances for deferred assets is based on a more-likely-than-not threshold that the
benefit of such assets will be realized in future periods. Appropriate consideration has been given to all available evidence,
including historical operating results, projections of taxable income, and tax planning alternatives. The Company concluded
that a valuation allowance of approximately $0.9 million and $0.5 million was required for tax attributes related to specified
foreign jurisdictions as of December 31, 2015 and 2014, respectively.

Effective January 1, 2009, the Company made no provisions for deferred U.S. income taxes or additional foreign taxes
on any unremitted earnings of its controlled foreign subsidiaries because the Company considers these earnings to be
permanently invested. If these earnings were repatriated, in the form of dividends or otherwise, the Company would be subject
to U.S. income tax on these earnings. Determination of the amount of unrecognized deferred U.S. income tax liability is not
practicable due to the complexities associated with this hypothetical calculation; however, unrecognized foreign tax credit
carry forwards would be available to reduce some portion of the U.S. tax liability. The Company has $1.9 million of foreign
tax credits available for carry forward related to its foreign branch operations as of December 31, 2015.

On September 13, 2013, the Treasury Department and the Internal Revenue Service issued final regulations regarding
the deduction and capitalization of amounts paid to acquire, produce, improve or dispose of tangible personal property. These
regulations are generally effective for tax years beginning on or after January 1, 2014. The application of these regulations
did not have a material impact on the consolidated financial statements for fiscal years 2014 and 2015.

The total amount of unrecognized tax benefits as of December 31, 2015 and 2014, was $0.4 million and $0.7 million,
respectively. Included in the balance as of December 31, 2015 and 2014, were $0.3 million and $0.6 million, respectively, of
tax positions that, if recognized, would impact the effective tax rate.

The unrecognized tax benefit reconciliation, excluding penalty and interest, is as follows:

Unrecognized tax benefits at January 1, 2013 ....................................................................................... $
Decrease attributable to settlements ...............................................................................................
Increase attributable to tax positions taken during a prior period ..................................................
Decrease attributable to lapse of statute of limitations ...................................................................
Unrecognized tax benefits at December 31, 2013 .................................................................................
Increase (decrease) in unrecognized tax benefits ...........................................................................
Unrecognized tax benefits at December 31, 2014 .................................................................................
Decrease attributable to settlements ...............................................................................................
Increase attributable to tax positions taken during a prior period ..................................................
Decrease attributable to lapse of statute of limitations ...................................................................
Unrecognized tax benefits at December 31, 2015 ................................................................................. $

1,091
(8)
43
(424)
702
—
702
(174)
12
(140)
400

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 had approximately $0.1 million and $0.2 million of accrued penalty and interest at
both December 31, 2015, and 2014, respectively.

The Company’s 2012 through 2015 tax years remain subject to examination by the Internal Revenue Service for federal
tax purposes, in addition to the Company’s 2009 amended tax return. Certain significant state and foreign tax jurisdictions
are also either currently under examination or remain open under the statute of limitations and subject to examination for the
tax years from 2011 to 2015.

F-21

Although the Company believes it has adequately provided for all uncertain tax positions, amounts asserted by taxing
authorities could be greater than the Company’s accrued position. Accordingly, additional provisions on federal, state and
foreign income tax related matters could be recorded in the future as revised estimates are made or the underlying matters are
effectively settled or otherwise resolved. Conversely, the Company could settle positions with the tax authorities for amounts
lower than have been accrued. The Company believes it is reasonably possible that, during the next 12 months, the Company’s
liability for uncertain tax positions may decrease by approximately $0.1 million.

The Company’s provision for income taxes differs from the anticipated federal statutory rate. Approximate differences

between the statutory rate and the Company’s provision are as follows:

2015

2014

2013

Taxes at statutory rate ......................................................................
State taxes, net of federal benefit .....................................................
Foreign tax rate differential and U.S. unrepatriated earnings ...........
Other permanent differences ............................................................
Prior year tax adjustments and changes in unrecognized tax

benefits ...........................................................................................
Tax credits ........................................................................................
Taxes at effective rate.......................................................................

35.0%
3.9%
(0.3)%
1.9%

(1.9)%
(0.5)%
38.1%

35.0%
4.2%
(0.6)%
2.0%

(2.3)%
(0.7)%
37.6%

35.0%
4.2%
(0.3)%
0.7%

(2.1)%
(0.7)%
36.8%

NOTE K—ACCOUNTING FOR STOCK-BASED COMPENSATION

Stock Incentive Plans

On June 5, 2015, the Company’s stockholders approved an amendment (the “Amendment”) to the ICF International,
Inc. 2010 Omnibus Incentive Plan (as amended, the “Omnibus Plan”). The Amendment, among other items, increased the
new shares available for issuance under the Omnibus Plan by 1,540,000 shares from 3,550,000 to 5,090,000 (for an aggregate
5,966,186 shares, which includes shares that remained available under the 2006 Long-Term Equity Incentive Plan when the
Omnibus Plan was initially adopted). The Omnibus Plan provides for the granting of options, stock appreciation rights,
restricted stock, restricted stock units, performance shares, performance units, cash-based awards, and other stock-based
awards to all officers, key employees, and non-employee directors of the Company. Under the terms of the Omnibus Plan,
shares awarded that are not stock options or stock appreciation rights, are counted as 1.93 shares deducted for every one share
delivered under those awards. Shares awarded that are stock options or stock appreciation rights are counted as a single share
deducted from the Omnibus Plan for every one share delivered under those awards. As of December 31, 2015, the Company
had approximately 2.7 million shares available to grant under the Amended Plan. CSRSUs have no impact on the shares
available for grant under the Omnibus Plan, and have no impact on the calculated shares used in earnings per share
calculations.

Starting in the third quarter of 2013, the Company started granting awards of unregistered shares to its non-employee
directors on a quarterly basis under its Annual Equity Election program to replace the previous restricted stock awards
program. The awards are issued from the Company’s treasury stock and have no impact on the shares available for grant
under the Omnibus Plan.

Total compensation expense relating to stock-based compensation was approximately $14.7 million, $13.4 million, and
$11.9 million for the years ended December 31, 2015, 2014, and 2013, respectively. As of December 31, 2015, the total
unrecognized compensation expense related to non-vested stock awards totaled approximately $17.1 million. These amounts
are expected to be recognized over a weighted-average period of 2.1 years. The unrecognized expense related to CSRSUs
totaled approximately $11.7 million at December 31, 2015. These costs are expected to be recognized over a weighted-
average period of 2.6 years.

The assumptions of employment termination forfeiture rates used in the determination of fair value of stock awards
during calendar year 2015 were based on the Company’s historical average from October 2006 through the 12 months
preceding the reporting period. The expected annualized forfeiture rates used varied from 4.92% to 8.87%, and the Company
does not expect these termination rates to vary significantly in the future.

F-22

Stock Options

Option awards are granted with an exercise price equal to the market value of the Company’s common stock on the
date of grant. All options outstanding as of December 31, 2015 have a 10-year contractual term. Options generally have a
vesting term of three or four years. The Company recorded approximately $1.5 million, $1.9 million, and $1.6 million of
compensation expense related to stock options for the years ended December 31, 2015, 2014, and 2013, respectively. There
were no options awards granted during 2015. The fair value assumptions using the Black-Scholes-Merton pricing model for
awards granted in 2014 were 5.1 years for the expected life, 33.0% for historical volatility, and 1.5% for the risk-free rate of
return. The fair value assumptions using the Black-Scholes-Merton pricing model for awards granted in 2013 were 5.4 years
for the expected life, 36.8% for historical volatility, and 0.9% for the risk-free rate of return. At December 31, 2015,
unrecognized expense related to stock options totaled approximately $0.9 million, and these costs are expected to be
recognized over a weighted average period of 1.2 years.

The following table summarizes the changes in outstanding stock options:

Number of
Shares

Weighted
Average
Exercise
Price

Aggregate
Intrinsic
Value
(in thousands)

Outstanding at January 1, 2013 ..............................................
Exercised .........................................................................
Granted ............................................................................
Forfeited/Expired ............................................................
Outstanding at December 31, 2013 ........................................
Exercised .........................................................................
Granted ............................................................................
Forfeited/Expired ............................................................
Outstanding at December 31, 2014 ........................................
Exercised .........................................................................
Granted ............................................................................
Forfeited/Expired ............................................................
Outstanding at December 31, 2015 ........................................

638,800 $
(159,309) $
218,707 $
(3,646) $
694,552 $
(85,063) $
166,861 $
(9,426) $
766,924 $
(43,919) $
— $
— $
723,005 $

Vested plus expected to vest at December 31, 2015 ..............
Exercisable at December 31, 2015 .........................................

664,824 $
540,287 $

22.21
19.48
27.03
24.84
24.34
21.53
40.68
25.53
28.20
21.23
—
—
28.62 $

28.35 $
26.35 $

5,872

5,530
5,263

The aggregate intrinsic value in the preceding table is based on the Company’s closing stock price of $35.56 as of
December 31, 2015. The total intrinsic value of options exercised was $0.8 million, $1.5 million, and $2.3 million for the
years ended December 31, 2015, 2014 and 2013, respectively. The weighted average grant date fair value of options granted
was $13.00, and $9.37 per share for the years ended December 31, 2014 and 2013, respectively. The fair value of shares
vested was $2.0 million, $1.8 million, and $1.6 million for the years ended December 31, 2015, 2014 and 2013, respectively.
As of December 31, 2015, the weighted-average remaining contractual term for options vested and expected to vest was 6.4
years, and for exercisable options was 6.0 years.

Information regarding stock options outstanding as of the dates indicated is summarized below:

Range of
Exercise Prices
$ 9.05
– $25.00
$25.01
– $28.00
– $41.00
$28.01
$ 9.05 to $41.00

OPTIONS OUTSTANDING
Weighted
Average
Remaining
Contractual
Term

Number
Outstanding
As of
12/31/15

Weighted
Average
Exercise
Price

OPTIONS EXERCISABLE

Number
Exercisable
As of
12/31/15

Weighted
Average
Exercise
Price

210,293
345,851
166,861
723,005

4.55 $
6.79 $
8.21 $
6.47 $

22.61
26.46
40.68
28.62

210,293 $
274,368 $
55,626 $
540,287 $

22.61
26.31
40.68
26.35

F-23

Restricted Stock Awards

Restricted stock awards generally have a vesting term of one year. Compensation expense related to restricted stock
awards computed under the fair value method for the year ended December 31, 2013, was approximately $0.2 million. The
Company did not grant restricted stock awards in 2015, 2014 and 2013. There was no unrecognized expense related to
restricted stock awards as of December 31, 2015, 2014 and 2013. The fair value of shares vested was $0.7 million for the
year ended December 31, 2013.

A summary of the Company’s restricted stock awards is presented below.

Number of
Shares

Weighted-
Average
Grant Date
Fair Value

Non-vested restricted stock awards at January 1, 2013 ...................................
Granted ......................................................................................................
Vested .......................................................................................................
Forfeited ....................................................................................................
Non-vested restricted stock awards at December 31, 2013 .............................

36,139 $
— $
(30,825) $
(5,314) $
— $

22.41
—
22.38
22.58
—

Restricted Stock Units

RSUs generally have a vesting term of three or four years. Upon vesting, the employee is issued one share of stock for
each RSU he or she holds. Compensation expense related to RSUs computed under the fair value method for the years ended
December 31, 2015, 2014, and 2013, was approximately $7.2 million, $7.8 million, and $8.7 million, respectively. At
December 31, 2015, unrecognized expense related to RSUs totaled approximately $14.4 million. These costs are expected to
be recognized over a weighted-average period of 2.3 years. The fair value of shares vested was $6.3 million, $8.2 million,
and $7.0 million for the years ended December 31, 2015, 2014 and 2013, respectively.

A summary of the Company’s RSUs is presented below.

Number of
Shares

Weighted-
Average
Grant Date
Fair Value

Aggregate
Intrinsic
Value
(in thousands)

Non-vested RSUs at January 1, 2013 ...........................................
Granted ..................................................................................
Vested ...................................................................................
Cancelled ...............................................................................
Non-vested RSUs at December 31, 2013 .....................................
Granted ..................................................................................
Vested ...................................................................................
Cancelled ...............................................................................
Non-vested RSUs at December 31, 2014 .....................................
Granted ..................................................................................
Vested ...................................................................................
Cancelled ...............................................................................
Non-vested RSUs at December 31, 2015 .....................................
RSUs expected to vest in the future .............................................

848,591 $
229,574 $
(288,258) $
(33,719) $
756,188 $
265,811 $
(333,321) $
(44,791) $
643,887 $
250,159 $
(233,899) $
(104,243) $
555,904 $
512,897 $

24.32
27.02
24.28
24.86
25.13
39.48
24.73
27.33
31.10
39.04
26.85
36.76
35.40 $
35.40 $

19,768
18,239

The aggregate intrinsic value in the preceding table is based on the Company’s closing stock price of $35.56 per share

as of December 31, 2015.

F-24

Cash-Settled Restricted Stock Units

CSRSUs generally have a vesting term of four years. Compensation expense related to CSRSUs computed under
the fair value method for the years ended December 31, 2015, 2014 and 2013 was $4.4 million, $3.2 million, and $1.2 million,
respectively. The unrecognized expense related to CSRSUs totaled approximately $11.7 million at December 31, 2015. These
costs are expected to be recognized over a weighted-average period of 2.6 years. CSRSUs have no impact on the shares
available for grant under the Omnibus Plan.

A summary of the Company’s CSRSUs is presented below.

Number of
Shares

Weighted-
Average
Grant Date
Fair Value

Aggregate
Intrinsic
Value
(in thousands)

Non-vested CSRSUs at January 1, 2013 ......................................
Granted ..................................................................................
Cancelled ...............................................................................
Non-vested CSRSUs at December 31, 2013 ................................
Granted ..................................................................................
Vested ...................................................................................
Cancelled ...............................................................................
Non-vested CSRSUs at December 31, 2014 ................................
Granted ..................................................................................
Vested ...................................................................................
Cancelled ...............................................................................
Non-vested CSRSUs at December 31, 2015 ................................
CSRSUs expected to vest in the future .........................................

— $
203,115 $
(2,816) $
200,299 $
416,432 $
(47,742) $
(31,870) $
537,119 $
121,015 $
(78,033) $
(133,438) $
446,663 $
414,431 $

—
27.84
27.03
28.23
39.12
27.55
32.12
36.36
39.35
33.29
38.14
37.18 $
37.16 $

15,883
14,737

The aggregate intrinsic value in the preceding table is based on the Company’s closing stock price of $35.56 per share
as of December 31, 2015. The fair value of CSRSUs vested and settled in cash for the years ended December 31, 2015 and
2014 was $2.9 million and $1.7 million, respectively.

Non-Employee Director Awards

Compensation expense related to non-employee director awards computed under the fair value method for the years
ended December 31, 2015, 2014 and 2013 was $0.6 million, $0.5 million, and $0.2 million, respectively. Non-employee
director awards do not include vesting conditions; thus, there was no unrecognized expense related to these awards as of
December 31, 2015, 2014 and 2013. Non-employee director awards are comprised of unregistered shares and have no impact
on the shares available for grant under the Omnibus Plan. A summary of the Company’s non-employee director awards
granted by fiscal year is presented below.

For the Year ended December 31,

Number of Shares
Granted

Weighted-
Average
Grant Date
Fair Value

2013 ......................................................................................................
2014 ......................................................................................................
2015 ......................................................................................................

5,133 $
15,872 $
18,109 $

35.06
36.08
35.62

Performance Shares

In the first quarter of 2015, the Company’s Board of Directors approved a performance-based share program (the
“Program”) that provides for the issuance of PSAs to its senior management. Under the Program, the number of PSAs that
the participant will receive depends on the Company’s achievement of two performance goals during two performance
periods. The performance goals under the Program are based on a performance condition (i) the Company’s compounded
annual growth rate in earnings per share (“EPS”) during a performance period from January 1, 2015 through December 31,
2016, and a market condition (ii) the Company’s cumulative total shareholder return (“rTSR”) relative to its peer group during
a performance period from January 1, 2015 through December 31, 2017. The PSAs will only be eligible to vest following the

F-25

expiration of the three-year performance period ending on December 31, 2017. Actual shares vested will be subject to both
continued employment by the Company (barring certain exceptions allowing for partial performance periods) and actual
financial measures achieved. The actual number of shares of common stock that will be issued to each participant at the end
of the applicable performance period will be determined by multiplying the award by the product of two percentages, one
based on the Company’s EPS performance and a second one based on the Company’s rTSR performance, subject to a
minimum and maximum performance level.

The fair value of the awards is estimated on the grant date using a Monte Carlo simulation model due to the market
condition for the rTSR component. The fair value assumptions using the Monte Carlo simulation model for awards in 2015
were 0.0% for the dividend yield, 29.3% for historical volatility, and 1.0% for the risk-free rate of return.

During the year ended December 31, 2015, the Company granted approximately 0.1 million PSAs with a grant-date fair
value of $44.21 per share. Compensation expense recognized related to PSAs for the year ended December 31, 2015 was
$0.7 million. Based on the Company’s current estimate of shares expected to vest, unrecognized compensation expense
related to PSAs of $1.9 million as of December 31, 2015 is expected to be recognized over a weighted-average period of
approximately 2.0 years.

NOTE L—EARNINGS PER SHARE

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 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
is due entirely to the assumed exercise of stock options and the vesting and settlement of RSUs. 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 the end of the related
performance period and the result would be dilutive under the treasury stock method. The Company’s PSAs outstanding at
December 31, 2015 did not meet the related performance conditions and therefore were excluded from the calculation of
diluted EPS. For the years ended December 31, 2015, 2014, and 2013, approximately 167,849, 151,611, and 173,168 anti-
dilutive weighted-average shares were excluded from the calculation of EPS because they were anti-dilutive. The dilutive
effect of stock options and RSUs for each period reported is summarized below:

Basic weighted-average shares outstanding ...........................
Effect of potential exercise of stock options and RSUs .........
Diluted weighted-average shares outstanding ........................

19,335
328
19,663

19,608
389
19,997

19,755
431
20,186

2015

2014
(in thousands)

2013

NOTE M—SHARE REPURCHASE PROGRAM

The Company’s Board of Directors approved a share repurchase plan effective in November 2013 and expiring in
November 2015, which authorized the Company to repurchase its outstanding common stock. In March 2015, the plan was
amended to increase the amount authorized for repurchases from $35.0 million to $75.0 million, not to exceed the amount
allowed under the Credit Facility. Our Credit Facility limits share repurchases to $75.0 million during the duration of the
Credit Facility, net of new issuances as defined in the Credit Facility. In the third quarter of 2015, the Company’s Board of
Directors approved a new share repurchase plan effective in November 2015 that extends the share repurchase plan through
November 2017 and authorizes share repurchases in the aggregate up to $75.0 million, not to exceed the amount allowed
under the Credit Facility.

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 Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as
amended 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

F-26

corporate purposes. The timing and extent to which the Company repurchases its shares will depend upon market conditions
and other corporate considerations as may be considered in the Company’s sole discretion.

During the year ended December 31, 2015, the Company repurchased 638,654 shares totaling $22.3 million under

this program. As of December 31, 2015, approximately $39.9 million remained available under the share repurchase plan.

NOTE N—CONTINGENCIES AND COMMITMENTS

Litigation and Claims

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 our
financial position, results of operations, or cash flows.

Road Home Contract

Although no legal proceeding has been commenced, the Company has received correspondence from the Office of
Community Development of the State of Louisiana, claiming that the Company is responsible for the overpayment of Road
Home program grant funds to some grant applicants. The State has also indicated that, as it continues to review homeowner
grant calculations, it expects to assert additional demands in the future, increasing the aggregate claim amount. The total
claim received by the Company to date is approximately $175.3 million. The Company believes this claim has no merit,
intends to vigorously defend its position, and has therefore not recorded a liability as of December 31, 2015.

Operating Leases

On March 8, 2010, the Company entered into a new lease that replaced its prior headquarters lease, which was due to
expire in October 2012. The new lease was initially for approximately 258,000 square feet, with approximately 72,000 square
feet of additional space subsequently added. The lease commenced on April 1, 2010, and will expire on December 31, 2022.
Base rent under the agreement is approximately $0.9 million per month with annual escalations fixed at 2.5% per year,
yielding a total lease commitment of approximately $150.6 million over the twelve-year term of the lease.

The Company has entered into various other operating leases for equipment and office space. Certain facility leases
may contain fixed escalation clauses, certain facility leases require the Company to pay operating expenses in addition to
base rental amounts, and nine leases require the Company to maintain letters of credit. Rent expense is recognized on a
straight-line basis over the lease term. Rent expense and sub-lease income for operating leases were approximately $40.0
million and less than $0.1 million, respectively, for 2015. Rent expense and sub-lease income for operating leases were
approximately $35.8 million and less than $0.1 million, respectively, for 2014. Rent expense for operating leases was
approximately $36.5 million for 2013. Future minimum rental payments under all non-cancelable operating leases are as
follows:

Year ending December 31,
2016 ....................................................................................................................................................... $
2017 .......................................................................................................................................................
2018 .......................................................................................................................................................
2019 .......................................................................................................................................................
2020 .......................................................................................................................................................
Thereafter ..............................................................................................................................................
Total ...................................................................................................................................................... $

37,197
35,748
34,214
32,399
30,192
84,083
253,833

F-27

NOTE O—EMPLOYEE BENEFIT PLANS

Retirement Savings Plan

Effective June 30, 1999, the Company established the ICF Consulting Group Retirement Savings Plan (the “Retirement
Savings Plan”). The Retirement Savings Plan is a defined contribution profit sharing plan with a cash or deferred arrangement
under Section 401(k) of the Internal Revenue Code.

Participants in the Retirement Savings Plan are able to elect to defer up to 70% of their compensation subject to statutory
limitations, and are entitled to receive 100% employer matching contributions for the first 3% and 50% for the next 2% of
their compensation. Contribution expense related to the Retirement Savings Plan for the years ended December 31, 2015,
2014, and 2013, was approximately $13.1 million, $12.3 million, and $12.0 million, respectively.

Deferred Compensation Plan

Certain key employees of the Company are eligible to defer a specified percentage of their cash compensation by having
it contributed to a nonqualified deferred compensation plan. Eligible employees may elect to defer up to 80% of their base
salary and up to 100% of performance bonuses, reduced by any amounts withheld for the payment of taxes or other deductions
required by law. Participants are at all times 100% vested in their account balances. The Company funds its deferred
compensation liabilities by making cash contributions to a Rabbi Trust at the time the salary or bonus being deferred would
otherwise be payable to the employee. The liability to plan participants is materially funded at all times and the plan does not
have a material net impact on the Company’s results of operations.

Employee Stock Purchase Plan

The Company has a 2006 Employee Stock Purchase Plan (“ESPP”) under which one million shares have been
authorized for issuance. The ESPP allows eligible employees to purchase shares of our common stock through payroll
deductions up to $25,000 per calendar year over six-month offering periods at a discount not to exceed 5% of the market
value on the date of each purchase period. For the year ended December 31, 2015, 33,339 shares were purchased by employees
and 776,512 shares remain available for future issuance. The Company does not recognize compensation expense related to
the ESPP.

NOTE P—SUPPLEMENTAL INFORMATION

Valuation and Qualifying Accounts

Allowance for Doubtful Accounts

Balance at beginning of period ............................................... $
Bad debt expense ...................................................................
Net recoveries (write-offs) .....................................................
Effect of foreign currency translation .....................................
Balance at end of period ......................................................... $

1,887 $
268
(8 )
(9 )
2,138 $

1,753 $
272
(138 )
—
1,887 $

1,448
112
193
—
1,753

2015

2014

2013

F-28

NOTE Q—SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

2015

2014

Contract revenue ........... $ 273,527 288,949 288,951 280,805 $ 245,052 $ 263,860 $ 264,796 $ 276,426
Operating income .......... 15,962 18,734 21,497 19,038 16,650 17,574 18,528 16,610
Net income ....................
8,763
Earnings per share:

9,174 11,545 10,750

9,998 11,553

7,900

9,716

Basic ....................... $
Diluted ....................

0.41 $
0.40

0.47 $
0.47

0.60 $
0.59

0.56 $
0.55

0.49 $
0.48

0.51 $
0.50

0.59 $
0.59

0.45
0.44

Weighted-average
common shares
outstanding
(in thousands)

Basic ....................... 19,450 19,475 19,316 19,102 19,804 19,795 19,450 19,409
Diluted .................... 19,838 19,706 19,556 19,373 20,277 20,082 19,713 19,744

F-29

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EXECUTIVE LEADERSHIP

Sudhakar Kesavan
Chairman and Chief Executive Officer

John Wasson
President and Chief Operating Officer

James C. Morgan
Executive Vice President and Chief Financial Officer

Andrea Baier
Senior Vice President
Corporate Growth & Strategic Accounts

Gene Costa
Senior Vice President
Europe & Asia

James E. Daniel
Senior Vice President, General Counsel and Assistant
Secretary

John George
Senior Vice President and Chief Information Officer

Ellen Glover
Executive Vice President
Transformation & Resiliency Solutions

John Guda
Senior Vice President
Commercial Healthcare

James Lawler
Executive Vice President, Chief Human Resources and
Communications Officer

Philip Mihlmester
Executive Vice President
Energy Global Sector Lead

Sergio Ostria
Executive Vice President
Business & Infrastructure Solutions

Dr. Barbara Rudin
Executive Vice President
Social & Analytic Solutions

Dr. David Speiser
Executive Vice President
Strategy

Robert Toth
Senior Vice President
Contracts & Administration

BOARD OF DIRECTORS

Eileen O’Shea Auen
Chief Executive Officer
Deep Run Consulting, LLC

Dr. Edward H. Bersoff
Managing Director
PFF, LLC

Dr. Srikant M. Datar
Arthur Lowes Dickinson Professor
Harvard Business School

Cheryl W. Grisé
Retired Executive Vice President
Eversource Energy (f/k/a Northeast
Utilities)

Sanjay Gupta
Executive Vice President of Marketing,
Innovation & Corporate Relations
Allstate

Leslye G. Katz
Retired Senior Vice President and
Chief Financial Officer
IMS Health, Inc.

Sudhakar Kesavan
Chairman and Chief Executive Officer
ICF International, Inc.

Peter M. Schulte
Managing Partner and Founder
CM Equity Partners

TRANSFER AGENT

American Stock Transfer & Trust
Company 6201 15th Avenue
Brooklyn, New York 11219
1-800-937-5449

INDEPENDENT AUDITOR

Grant Thornton LLP
2010 Corporate Ridge, Suite 400
McLean, Virginia 22102
1-703-847-7500

INVESTOR CONTACT

Lynn Morgen/Betsy Broad
MBS Value Partners
501 Madison Avenue, Floor 12A
New York, New York 10022
1-212-223-4147

CORPORATE OFFICE

ICF International, Inc.
9300 Lee Highway
Fairfax, Virginia 22031
1-703-934-3603
info@icfi.com

...

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