Annual Report 2021 Securing the Future ManTech International Corporation 1 ManTech successfully navigated the dynamic year that was 2021. Despite the ongoing pandemic and rapidly evolving geopolitical events, we achieved strong financial results, expanded our outstanding portfolio and drove our business forward to meet our customers’ most complex and challenging missions. I am proud of our accomplishments this year, as they are the result of the commitment and perseverance of our employees who embody our mission-first, customer-focused culture. Throughout the year, we continued to invest in our people to attract, maintain and retain competitive talent, including improving our employee value proposition and further empowering our employees to drive desired outcomes for our customers and their careers. We enter 2022 with our market positioning, strategy and investments well aligned with our customers’ needs and objectives. Market drivers of our long-term growth continue to reinforce the importance of advancing national cyber capabilities and digital and systems modernization across the federal government. We are answering the call by delivering differentiated solutions at speed with the innovation, flexibility and security needed to meet our customers’ demanding missions. ManTech’s strong portfolio of national security customers, differentiated capabilities and talented workforce positions us well to drive long-term growth and value for all our stakeholders. Strong Growth for Our Future To Our Shareholders: Solid Financial and Operational Performance in 2021 During the year we reported: • Revenues of $2.55 billion • Operating income of $187 million and net income of $137 million, which increased 18% and 14%, respectively • Diluted earnings per share of $3.35 • Operating cash flow of $212 million, a healthy 1.5x net income • $53 million in cash and cash equivalents and $300 million in outstanding borrowings on our $1.1 billion credit facility Kevin M. Phillips Chairman of the Board, CEO and President 2021 ANNUAL REPORT 2 Total contract awards for the year reached $2.7 billion, driving a book-to-bill ratio of 1.1x. Our backlog also reached a record level of $10.6 billion, and our funded backlog was $1.6 billion, providing us with good visibility and a solid foundation to execute from. In 2021, new business comprised approximately 25% of total awards for the year. Key contract wins included: • $476 million with U.S. Space Force for intelligent systems engineering for launch enterprise systems • $136 million with the U.S. Marine Corps Warfighting Lab to provide research and development of emerging technologies that support Force Design 2030 • $123 million with the FBI for cybersecurity engineering • $118 million with Naval Surface Warfare Center for unmanned aircraft systems intelligent systems engineering support • $110 million with Naval Surface Warfare Center Crane to develop radar and electronic warfare systems We also maintained our strong balance sheet, which provides ManTech with the financial flexibility to deploy capital to drive long-term shareholder value creation. Enhancing Our Capabilities With our strong financial position, we executed two strategic acquisitions during 2021 which are directly in line with our plan for growth and capital deployment. • In December 2021, we completed the largest acquisition in the company’s history – Gryphon Technologies, which added sophisticated capabilities in model-based systems engineering (MBSE), predictive analytics, cloud engineering and cyber. This acquisition strengthens our market position and capabilities across Department of Defense customers. • Also in December 2021, we completed the acquisition of TMAC, a data engineering company providing services and solutions that deliver market-leading differentiation and value to our customers in the Intelligence Community. We also unveiled a strategic partnership with Google Cloud, establishing the potential to drive growth opportunities that leverage cognitive cyber, hyperscale analytics, secure cloud and other areas where ManTech’s capabilities as well as investments and Google Cloud’s strengths complement each other. Under the partnership, we launched a joint development center in Northern Virginia to enable customers to engage in practical problem solving and showcase our combined technology capabilities. Continued Investment in Our People In 2021, we strengthened the breadth and depth of our training and development courses to enhance the skills of our team in areas essential to the missions of our customers today and tomorrow. We added new certification opportunities at a range of universities with which we partner, including certifications across systems engineering and machine learning disciplines. We continued to provide tuition-free programs through Purdue University Global, including a program exclusively for ManTech employees for a Master of Science in Data Analytics. Securing the Future ManTech International Corporation 3 This past year we furthered our dedication to military veterans by launching our ManTech Vets training program. We were pleased to be recognized as a great company to work for and the #1 “Best Company for Veterans” by Monster. com, Military Times and the U.S. Department of Labor. ManTech has long been committed to a sustainable, inclusive and diverse workplace where our employees feel welcomed and empowered to reach their highest potential. Our inclusion and diversity journey is a key component of our strategy. In 2021 we established ManTech’s Inclusion & Diversity (I&D) Governance Structure composed of employees from across the business to ensure representation of the many voices that comprise One ManTech. Maintaining a Customer and Mission First Strategic Focus to Drive Continued Success Our accomplishments in 2021 demonstrate the power of our business, the steadfast commitment of our talented employees, and the significant impact they have on our customers and their critically important national security missions. We are proud that our customers continue to look to ManTech to deliver new technologies and drive innovation. Our entire team is focused on building on our progress and solving mission- critical challenges for our customers every day. We appreciate your investment and look forward to updating you on our progress in 2022. Sincerely, Kevin M. Phillips Chairman, CEO and President Revenue $2.55B Diluted Earnings per Share $3.35 Operating Cash Flow $212M Cash Returned to Shareholders $62M Operating Income $187M Bookings $2.7B PERFORMANCE 2021 2021 ANNUAL REPORT 4 Company Competencies Sectors Defense Intelligence Federal Civilian Certifications AS9100D ISO 9001:2015 CMMI 2.0 Service ML3 CMMI Dev 2.0 ML4 ISO 20000-1:2018 ISO 27001:2013 Capabilities: Full-Spectrum Cyber • Cyber Network Operations (CNO) / Offensive • Defense • Analytics • Security Orchestration, Automation & Response • Hardening & Resilience • Cyber Range & Training • Risk Management and Compliance Secure Mission & Enterprise IT • IT and Digital Modernization and T Transformation • Managed Services and Integrated Service Management • Cloud, Hybrid Cloud, and Multi-Cloud Solutions • Infrastructure as a Service (IaaS) • Platform as a Service (PaaS) • Software as a Service (SaaS) • User Engagement and Experience • Digital Workplace Transformation and Enterprise Mobility Services Advanced Data Analytics • Predictive Analytics • Data Science • Data Fusion and Visualization • Analytics Automation • Data Collection and Management Software Systems Development • Agile Development • DevOps and DevSecOps Development • Cloud Native Development • Application Migration and Modernization • Mobile Application Development Intelligent Systems Engineering • Platform Innovation and Modernization • Digital Engineering Transformation • Model-Based Systems Engineering • Modeling, Simulation and Analysis • Integration, Testing and Evaluation • Reliability, Availability and Maintainability Analysis • Systems Lifecycle Support / In-Service Engineering Intelligence Mission Support • Multi-Disciplined Intelligence • Intelligence Lifecycle Support • Security, Mission Assurance and Program Protection • Mission Operations and Management • Intelligence Analysis • Media and Material Exploitation • Counterintelligence Mission Operations • C5ISR • Training • Mission Planning and Execution • Logistics, Supply Chain Management and Sustainment ManTech International Corporation 5 Securing the Future Our Board of Directors Kevin M. Phillips – ManTech Chairman of the Board, CEO and President Richard L. Armitage – President of Armitage International, Former Deputy Secretary of State, Former Assistant Secretary of State, Ambassador Mary K. Bush – Chairwoman of Bush International Barry G. Campbell – Former Director, President and Chief Executive Officer, Allied Aerospace Industries, Inc. Richard J. Kerr – Member of the President’s Commission on Intelligence Reform, Former Deputy Director, CIA Lieutenant General Kenneth A. Minihan – USAF Ret., Managing Director of the Homeland Security Fund for Paladin Capital Group Peter B. LaMontagne – CEO, SMX Our Technology Focus Areas Through our Innovation and Capabilities Office, ManTech is building upon our solutions and services through technology investments in five key Technology Focus Areas vital to our customers’ mission-critical needs: Cognitive Cyber for Physical and Digital Platforms: cybersecurity systems that learn, automate responses and work smarter, supporting mission operators in the dynamic and high-velocity arena of cyber conflict. Mission & Enterprise IT (M/EIT): continuous digital modernization at agencies of critical importance in national security, delivering best-in-class capabilities ranging from cloud migration to operations and analytics. Analytics, Automation & Artificial Intelligence (A3): hyper-scale analytics, robotic process automation (RPA) and leading-edge AI and machine learning technologies to drive efficiency, cost savings and performance. Intelligent Systems Engineering (ISE): model-based systems engineering and digital twinning to virtualize and thoroughly test connected platforms, sensors and digital interfaces prior to live implementation. Data at the Edge (D@tE): data assurance solutions that enable customers to access and manage their data securely via Zero Trust cyber defenses, and leverage Edge computing to speed delivery. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 000-49604 ManTech International Corporation (Exact name of registrant as specified in its charter) __________________________________________ Delaware 22-1852179 (State or other jurisdiction of incorporation) (IRS Employer Identification No.) 2251 Corporate Park Drive Herndon VA 20171 (Address of principal executive offices) (Zip Code) (703) 218-6000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock MANT Nasdaq Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated fil f er, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated fil f er,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2021 was $2.36 billion (based on the closing price of $86.54 per share on June 30, 2021, as reported by the Nasdaq Global Select Market). There were the following numbers of shares outstanding of each of the registrant's classes of common stock as of February 23, 2022: ManTech International Corp. Class A Common Stock, $0.01 par value per share, 27,635,206 shares; ManTech International Corp. Class B Common Stock, $0.01 par value per share, 13,176,695 shares. DOCUMENTS INCORPORATED BY REFERENCE Certain portions of the definitive Proxy Statement to be filed with the Securities Exchange Commission pursuant to Regulation 14A in connection with the registrant's 2022 Annual Meeting of Stockholders, to be filed subsequent to the date hereof, are incorporated by reference into Part III (Items 10, 11, 12, 13 and 14) of this Annual Report on Form 10-K. Such definitive Proxy Statement will be filed with the Commission not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. TABLE OF CONTENTS ge Part I Item 1. Business 4 Item 1A. Risk Factors 7 Item 1B. Unresolved Securities and Exchange Commission Staff Comments 13 Item 2. Properties 13 Item 3. Legal Proceedings 14 Item 4. Mine Safety Disclosures 14 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 15 Item 6. [Reserved] 17 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 17 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 25 Item 8. Financial Statements and Supplementary Data 26 Report of Independent Registered Public Accounting Firm 27 Consolidated Balance Sheets 30 Consolidated Statements of Income 31 Consolidated Statements of Comprehensive Income 32 Consolidated Statements of Changes in Stockholders' Equity 33 Consolidated Statements of Cash Flows 34 Notes to Consolidated Financial Statements 36 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 57 Item 9A. Controls and Procedures 57 Item 9B. Other Information 58 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 58 Part III Item 10. Directors, Executive Officers and Corporate Governance 60 Item 11. Executive Compensation 60 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 60 Item 13. Certain Relationships and Related Transactions, and Director Independence 61 Item 14. Principal Accounting Fees and Services 61 Part IV Item 15. Exhibits and Financial Statement Schedule 62 Item 16. Form 10-K Summary 64 Signatures 65 Schedule II 66 [THIS PAGE INTENTIONALLY LEFT BLANK] PART I In this document, unless the context indicates otherwise, the terms “Company” and “ManTech” as well as the words “we,” “our,” “ours” and “us” refer to both ManTech International Corporation and its consolidated subsidiaries. The term “registrant” refers only to ManTech International Corporation, a Delaware corporation. Industry and Market Data Industry and market data used throughout this Annual Report on Form 10-K were obtained through surveys and studies conducted by third parties, industry and general publications. We have not independently verified any of the market data obtained from these third-party sources, nor have we validated any assumpti m ons underlying such data. Cautionary Note Regarding Forward-Looking Statements All statements and assumpti m ons contained in this Annual Report on Form 10-K that do not relate to historical facts constitute "forward-looking statements." These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often include the use of words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan" and words and terms of similar substance in connection with discussions of future events, situations or financial performanc f e. While these statements represent our current expectations, no assurance can be given that the results or events described in such statements will be achieved. Forward-looking statements may include, among other things, statements with respect to our financial condition, results of operations, prospects, business strategies, competitive position, growth opportunities, and plans and objectives of management. Such statements are subject to numerous assumpti m ons, risks, uncertainties and other factors, many of which are outside of our control, and include, without limitations, the risks and uncertainties discussed in Item 1A "Risk Factors" in Part I of this Annual Report on Form 10-K. Factors or risks that could cause our actual results to differ materially from the results we anticipate include, but are not limited to, the following: • failu f re to maintain our relationship with the U.S. government, or the failure to win new contract awards or to retain existing U.S. government contracts; • disrupti r ons to our business resulting from the COVID-19 pandemic or other similar global health epidemics, pandemics and/or other disease outbreaks; • adverse changes in U.S. government spending for programs we support, whether due to changing mission priorities, socio-economic policies or federal budget constraints generally; • inability to recruit and retain a sufficient number of employees with specialized skill sets or necessary security clearances who are in great demand and limited supply; • failu f re to compete effectively for awards procured through the competitive bidding process, and the adverse impact of delays resulting from our competitors' protests of new contracts that are awarded to us; • disrupti r ons to our business or damage to our reputation resulting from cyber attacks and other security threats; • failu f re to obtain option awards, task orders or funding under our contracts; • the government renegotiating, modifying or terminating our contracts; • failu f re to comply with, or adverse changes in, complex U.S. government laws and procurement regulations; • adverse results of U.S. government audits or other investigations of our government contracts; • failu f re to successfully integrate acquired companies or businesses into our operations or to realize any accretive or synergistic effec f ts from such acquisitions; • failu f re to mitigate risks associated with conducting business internationally; and • adverse changes in business conditions that may cause our investments in recorded goodwill to become impaired. We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report. We undertake no obligation to update any forward-looking statement made herein following the date of this Annual Report, whether as a result of new information, subsequent events or circumstances, changes in expectations or otherwise. 3 Item 1. Business Corporate Overview and Background We were co-founded by George J. Pedersen in 1968 as a New Jersey corporation, starting with a single U.S. Navy contract. We provide innovative, mission-focused technology solutions and services for U.S. intelligence community, defense and federal civilian agencies. For over 50 years we have successfull f y developed and delivered solutions that support national and homeland security missions. Our principal areas of expertise include full-spectrum cyber, secure mission and enterprise information technology (IT), advanced data analytics, intelligent systems engineering, software and systems development, and national security mission support. We have differenti f ated technical capabi a lities, intimate knowledge of our customers' missions, and extensive experience providing proven, diverse sets of solutions and services, which we use to help our customers solve some of their greatest challenges and most complex problems. We provide services and solutions that support missions of national priority and significance, such as global cyber operations, IT and digital modernization, national security threat intelligence and analytics, and military operational readiness. Our Solutions and Services We combine deep domain expertise and technical capabi a lity to build upon our strong record of delivering comprehensive IT, systems engineering and other services and solutions, primarily in support of mission-critical programs for the intelligence community, the Department of Defense (DoD) and federal civilian agencies including the diplomatic, homeland security, healthcare and space communities. We integrate our broad capabi a lities into tailored solutions to meet the evolving requirements of our customers' long-term programs. Our following solution sets are aligned with the long-term needs of our customers: • Full-Spectrum Cyber; • Secure Mission & Enterprise IT; • Advanced Data Analytics; • Software and Systems Development; • Intelligent Systems Engineering; • Intelligence Mission Support; and • Mission Operations. Full-S l pec S trum Cyber We provide full-spectrum cyber with a focus on cyber network operations, defense, analytics, zero-trust, security orchestration, automation and response (SOAR), hardening and resilience, and range and training. Our professionals tackle some of the most challenging problems facing the nation, including preventing, identifying and neutralizing external cyber- attacks, engineering tailored defensive security solutions and controls, developing robust insider threat detection programs, creating enterprise vulnerability management programs and supporting offensive and exploitation efforts. Additionally, our cyber solutions and services include security operations, threat intelligence, incident response and forensics, boundary defense, security systems engineering, infrastructure t security, and computer forensics and exploitation. We are focuse f d on delivering mission continuity in a cyber-contested environment utilizing artificial intelligence (AI) and cognitive methods. Our forensics and incident response capa a bi a lities provide our customers with additional insight and evidence for post-attack assessments, assisting with efforts to strengthen their security posture. Through ACRE®, our Advanced Cyber Range Environment, we offer customers enhanced training and visibility into their own IT infrastructures t (security design and engineering, vulnerability analysis, software assurance) and arm them with information needed to deny, disrupt and degrade attempts to compromise their business operations and protect their reputation. We also provide extensive, hands-on training and cyber workforce development to help our customers align their resources to the national cyber strategy. Secure Missi i on & Enterprise r IT We develop, implement and sustain enterprise information technology systems on a global scale, leveraging technology to improve mission performance, increase security and reduce costs for our customers. We offer a wide range of services and solutions focused on IT and digital modernization, cloud solutions, managed services, IT-as-a-service and integrated service 4 management, edge computing, user engagement and experience and digital workplace transformation. We evaluate our customers' enterprise infrastructure with the goal of enhancing security, increasing efficiency, reducing system footprint and lowering total cost of ownership. We are at the forefront of helping our customers migrate to new, innovative enterprise IT management methodologies, including fully outsourced managed services models. Advanced Data Analytic t s As data volumes continue to grow rapidly, advanced analytics are necessary to drive actionable intelligence. We provide predictive analytics, analytics automation, data science, data collection and management, and data fusion and visualization. Our systems comprise robust ingest engines and data lakes, fault-tolerant databases for unstructured t data, programming models for processing large data sets, query engines with instrumentation to support robust hunt missions, and analytics that score and comb output for high-value intelligence. Our systems and services allow all of our customers, across government domains, to make well-informed decisions that benefit the mission and our nation. Software and System y s Development We develop, modify and maintain software solutions and complex systems that link different computing systems and software applications to act as a coordinated whole. This solution set includes a broad array of full lifecycle services, including requirements analysis; planning, design, implementation, integration and enhancement; testing, deployment, maintenance and quality assurance; application migration and modernization; application development; and documentation and configuration management. Our software and systems development activities support u all major a software development lifecycle methodologies including Agile, DevOps, DevSecOps and other hybrid methodologies. As part of our application development processes, we use cutting-edge techniques, such as microservices architecture t to enable a continuous deployment of large and complex applications and enhance our ability to migrate and transform legacy applications into modernized platforms. Additionally, our expertise spans the ability to develop natively across a variety of domains including the cloud, mobile and other platforms. We develop software solutions and systems across many domains and mission-specific applications. Our experienced software engineers and developers design, develop, integrate, operate and sustain mission-critical software applications and systems worldwide for our defense, intelligence and federal civilian customers. Intel t li l gent i Systems Engineering n We are recognized across the markets we serve for our operational, engineering and technical expertise across major a domains, including land, sea, air, space and cyberspace. We apply a intelligent systems engineering across a wide array of large- scale system development and acquisition programs used by government and industry. We provide world-class talent, proven management and technical processes to manage some of the most complex projects throughout their lifecycle, from concept through deployment. The intelligent systems engineering services we provide include platform innovation and modernization, digital and models-based systems engineering, reliabil a ity and maintainability, modeling, simulation and analysis, systems lifecycle support, human factors and safety engineering, systems architecture and engineering and test and evaluation. Our test and evaluation services are closely linked with our systems engineering capabi a lities, and include specific competencies in test engineering, preparation and planning; modeling and simulation; test range operations and management; systems and cyber vulnerability; and independent validation and verification. We use digital representation of systems and the resulting digital artifacts to sustain national defense systems, following the DoD's Digital Engineering Strategy. Intel t li l gence i Mission Support We provide specialized professional and technical solutions and mission support services for national security missions. Our multi-disciplined intelligence solutions span the intelligence lifecycle and include security, mission assurance and program protection, intelligence analysis, mission operations and management, counterintelligence and media and material exploitation. We focus f on data collection and analysis, including providing support to strategic and tactical intelligence systems, networks and facilities; development and integration of collection and analysis systems and techniques; and support to the development and application of analytical techniques to counterintelligence, homeland security operations, human intelligence operations/ training and counterterrorist operations. We provide signals intelligence collection, analysis and dissemination, and intelligence analysis. We leverage technology advancements in automation and artificial intelligence to support data-centric approac a hes to cyber threat intelligence and insider threat support. We develop, integrate and maintain advanced signal 5 processing systems to support classified programs and facilities that collect and process intelligence. We also provide counterterrorism operations support and counterintelligence analytical expertise. Mission Operations We have a legacy of providing full-lifecycle mission solutions including C5ISR, training, logistics and supply chain management and sustainment, consulting and mission planning and execution. We are a proven leader in supporting a wide range of federal customers with mission critical solutions. We specialize in the design, development, analysis, implementation and support of all aspects of C5ISR systems and technology. Our experience includes land, sea, air, space and cyber domains, to include command-and-control infrastructure, t intelligence, surveillance and reconnaissance platforms and sensors (manned and unmanned), and the communication, dissemination and analysis of data. We also deliver advanced training solutions using a range of environments including live, virtual t , constructive, immersive and gaming scenarios. We leverage dedicated subject matter experts, a virtual t cyber training range, and our longstanding, acclaimed learning center, ManTech University, in developing customized training solutions for our customers. We also provide supply chain management and logistics services involving the use of sophisticated systems that secure the entire supply chain, from supplies to data. Human Capital Resources Our talented people have always been and continue to be our greatest asset. Our ability to deliver enduring value to our customers and their critical missions is enabled by the thoughtful innovation, tireless efforts and steadfast dedication of our people. As of December 31, 2021, we employed approximately 9,800 people, 81% of whom hold security clearances and approximately 45% of whom are veterans. The highly-skilled and cleared nature t of our talent base enable a s us to quickly respond to customer needs and provides us with opportunities to understand and help solve our customers’ most challenging national security problems. Security clearance requirements, and the time and processes required to attain and maintain clearances, serve as a significant barrier to entry in our market. At ManTech, we believe in the abilities and potential of our people. We invest in attracting, developing, and retaining our talented workforce by providing exciting work assignments and opportunities for skill development and career growth, and we recognize and reward our people for their contributions and accomplishments. In turn, our loyal and career-oriented professionals enjoy great trust and success in helping our customers meet the mission-critical needs of our government. Training and Development In recognition of our employees’ interest in career mobility and professional development, we have a robust Career Enabl a ement Initiative. ManTech's Career Enablement Initiative is an employee-initiated, leader supported, and enterprise-wide approach to career growth and development. Since inception, we have seen a rapid adoption of the initiative across the enterprise, as management works to incorporate the initiative into our Company’s culture. In addition, we now offer four career path journeys in the areas of Cyber, IT, Program/Project Management, and P&L Leadership, and have seen an increase in mobility of talent across the organization. Our ManTech University training program, establi a shed in 2006, serves as a training platform for the entire company, which we augment with our Skillsoft platform that provides a wide variety of training resources for our employees. Empl m oye l e Engagement We continued to focus on the health, safety f , and well-being of our employees during the COVID-19 pandemic. We have supported our employees with the accommodations and support that enable them to continue supporting our customers and their missions despite the difficul f ties of these unprecedented times. We expanded our dedicated team of engagement specialists, both in reach and in scope, to proactively identify areas of vulnerability and connect with potentially affected employees, identify any trends that relate to employee concern, and build engagement strategies to address systemic issues. Always looking to improve, we surveyed our employees to obtain valuable feedback about their experience and our business culture. We formed a COVID-19 task force to monitor and oversee our response to, and management of, challenges related to the pandemic. We developed and issued health and safety protocols and prepared our leaders to support and respond to the needs of our employees. We prioritized the engagement of our employees, providing our employees with timely and transparent communications, demonstrating strong and visible leadership, and reinforcing of our culture of compassion, which we believe helped us maintain business continuity and led to high levels of retention and employee engagement. 6 Our Customers We derive the vast majori a ty of our revenues from U.S. government customers. We have successful, long-standing relationships with these customers, having supported many of them for over half a century. Within the U.S. government, our revenues are well-diversifie f d across a number of intelligence, defense and federal civilian agencies. Backlog At December 31, 2021, our backlog was $10.6 billion, of which $1.6 billion was funded backlog. At December 31, 2020, our backlog was $10.2 billion, of which $1.2 billion was funded backlog. We define backlog as our estimate of the remaining future revenue from existing signed contracts, assuming the exercise of all options relating to such contracts and including executed task orders issued under Indefinite Quantity/Indefinite Delivery (ID/IQ) contracts. We also include an estimate of revenue for solutions that we believe we will be asked to provide in the future under the terms of ID/IQ contracts for which there are established patterns of revenues. We define funded backlog as the portion of backlog for which funding currently is appropriated and allocated to the contract by the purchasing agency or otherwise authorized for payment by the customer upon completion of a specified portion of work. Our funded backlog does not include the full value of our contracts because Congress often appropriates funds for a particular program or contract on a yearly or quarterly basis, even though the contract may call for performance over a much longer period of time. A variety of circumstances or events may cause changes in the amount of our backlog and funded backlog, including the execution of new contracts, the extension of existing contracts, the non-renewal or completion of current contracts, the early termination of contracts, and adjustments to estimates for previously included contracts. Changes in the amount of our funded backlog also are affected by the funding cycles of the government. Seasonality Our business is not seasonal. However, in order to avoid the loss of unexpended fiscal year funds it is not uncommon for U.S. government agencies to award extra tasks or complete other contract actions in the weeks and days leading up to September 30, which is the end of the government fiscal year. Additionally, our quarterly results are impacted by the number of working days in a given quarter. There are generally fewer working days for our employees to generate revenue in the first and fourth quarters of our fiscal year. Competitive Landscape We compete in a market shaped by customer requirements and federal budget priorities and constraints. Our key competitors currently include divisions of large defense contractors, as well as a number of large and mid-size U.S. government contractors with specialized capabi a lities. Because of the diverse requirements of U.S. government customers and the highly competitive nature t of large procurements, we frequently collaborat a e with these and other companies to compete for large contracts, and we bid against these companies in other situations. Available Information Our internet address is www.mantech.com. Through links on the Investor Relations section of our website, we make available, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable a after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC). In addition, the SEC maintains a website (www.sec.gov) that contains reports, proxy statements and other information we file electronically with the SEC. Item 1A. Risk Factors Set forth below are the risks k that we believe are material to our investors. r You should carefull f yl consider the following risks, k together witht the othe t r info n rmation contained in or incorporated by reference into thisi Annual Report e on Form 10-K, including our consolidated financial statements and notes thereto. Any of the following risks k couldl materially and adversely affec f t our business, financial condition, results of operations and prospects, t as well as the actual outcome of mattersr as to which forward-looking statements are made in this Annual Report. e 7 The risk i s k described below are not the only risk i s k we face. Addit d ional risk i s k and uncertainties not currentlyl known to us, or those we currently deem to be immaterial,l may also l materially and adversely affect f our business, financial condition or results of operations. This section contains forward-looking statements. t You should refe e r to the expl x anation of the qualifi i cation and limitations of fo f rward-looking statements set forth at the beginni e ng of this Annual Repor e t. Risks Related to Our Business We depe e nd on contrac t ts with i the U.S. government for substanti t all i yl all of our revenues. If our relations t hips with i the U.S. S government are harmed, our business, i future revenues and growth prospectst couldl be adversely affected. We derive the vast majori a ty of our revenues from U.S. government customers, and we anticipate that U.S. government contracts will be the primary source of our revenues for the foreseeable future. Any issue that compromises our relationship with the U.S. government generally, or any U.S. government agency that we serve, could adversely and materially harm our business, prospects, financial condition or operating results. Among the key factors in maintaining our relationships with U.S. government agencies are our performance on our contracts and task orders, the strength of our professional reputation, compliance with applicable laws and regulations, and the strength of our relationships with our customers and client personnel. To the extent our reputation or relationships with U.S. government agencies is impaired, our revenue and operating profits could materially decline. Our business i could be adversely affected by the COVID-19 V pandemic or other similar i global health t pandemics, epidem i ics and/or other t disease i outbreaks. The COVID-19 pandemic (and any future global health pandemics, epidemics and/or other disease outbreaks), and government responses to mitigate the impact of such crises, could adversely impact our ability to operate our business and therefore have a material adverse effect on our business, financial position, results of operations, liquidity and cash flows. Travel restrictions, social distancing guidelines and other preventative measures put in place by health organizations, federal, state, and local governments have altered the manner in which many of our employees work with our customers, and in response, we have modified our operating schedules and staffing and implemented telework or alternate work arrangements where possible. Notwithstanding our implementation of telework and other means of remote work for our employees that support impacted programs and our internal support organizations, some programs we support, by their nature, t cannot accommodate remote work. These programs require shiftwork or the implementation of other mitigation strategies that enable us to maintain our workforce in a “mission ready” state, which has resulted in reduced utilization of that portion of the workforce. The COVID-19 pandemic could also affect our contract performance and could also result in increased costs that may not be fully recoverable a , adequately covered by insurance, or addressed by the CARES Act or any subsequent legislative or regulatory measures. Additionally, the COVID-19 pandemic, along with preventative measures put in place by health organizations and federal, state, and local governments, creates ancillary risks to our business, to include the risk of sustained declines in the capi a tal markets, the risk of a sustained economic downturn or recession and other macroeconomic phenomena that could adversely affect customer demand for our services in the future. Furthermore, our business, financial position, results of operations, liquidity and/or cash flows could be adversely and materially affected if the COVID-19 pandemic worsens, lasts significantly longer than anticipated, and/or manifests in additional multiple waves of infection (whether due to new strains of the virus or vaccines providing less protection than expected). Significant and sustained disruptions at our customers could occur, which could in turn have a material adverse effect on our business, financial position, results of operations, liquidity and/or cash flows. We may fail to attract t and retain i skilled l and qualified employ m ees with t requisite i specialized l skill sets or security clel arances, which could impair our abilit l yt to effectiv t elyl serve our clie l nts, require i more subcontracti t ng i work than is optimal i ,l impact m our profitabili i ty i and limit our growth prospects. t Our business depends in large part upon our ability to attract and retain sufficient numbers of employees who have advanced IT and technical services skills. Often, these employees must also hold some of the highest security clearances in the United States. Cleared people are in great demand (particularly as it relates to the limited supply u of cleared personnel with certain IT and technical service skills), and we compete intensely with other U.S. government contractors, the U.S. government and private industry. The government and industry have recognized that the current process for obtaining security clearances is time-consuming, inefficient and can present a risk to customer mission. While some improvements have been made to the process in the last couple of years, security clearances at the highest levels may still take months or even years to complete. We anticipate that such personnel may remain a limited resource for the foreseeable future. If we are unable to hire a sufficient 8 number of qualified employees or cannot obtain their appropriate security clearances in a timely manner, our ability to serve our clients could be harmed, and we may not be able to grow our business. Additionally, if we cannot hire sufficient qualified employees to staff our contracts, we may be required to engage more contracted personnel, which could reduce our profit margins. Even if we are able to attract the requisite skilled employees, intense competition for such employees may result in attrition in our employee ranks, and we may need to expend additional resources to hire, train and replace such personnel. U.S. government spending n and missi i on prioritie t s could change in a manner that adversely affects our future revenues and limi i ts i our growth prospects. t We depend on continued expenditures t by the U.S. government on programs that we support. Spending levels on programs that we support (including those related to intelligence, defense, homeland security, and federal health IT missions) have varied over time, and our customers may reduce expenditures for our services for any number of reasons, to include changing mission priorities, the availabil a ity of discretionary spending in light of the country’s growing debt and long-term fiscal challenges, and the implementation of efficiency and cost reduction efforts. A reduction in U.S. government spending levels, or changes in spending priorities, could adversely affect our business and impac m t our future t revenues. We encounter t intense competiti i on to win contractst and most of our contractst are awarded through compet m it t iv t e bidding i processes; our revenue and profitabili i ty i may be adversely impact m ed t if we fail to compet m et effectiv t elyl for such awards, or if there are delays l as a resultl of our competitors' i protests of contract awards that we receive.e We operate in a highly competitive industry, with contract awards typically subject to competitive bidding processes. We may not be able to continue to win competitively awarded contracts at historic levels. We compete with larger companies who have significant financial resources, as well as smaller, more specialized companies that may be abl a e to concentrate their resources into highly-skilled niche markets. Our competitors may be able to provide our customers with more desirable a capabi a lities or better contract terms than we can provide, including price, technical qualifications, past contract experience, geographic a presence and the availability of qualified professional personnel. Our failure to compete effectively in competitive procurements could adversely impact our future revenues. Participating in the competitive bidding process also involves costs, risks and uncertainties, including the cost, time and effort required to prepare bids and proposals for contracts that may not ultimately be awarded to us; the need to expend resources or make financial commitments (such as procuring leased premises) in advance of an award decision, or the need to bid on programs prior to the completion of their design, which may result in execution challenges, cost overruns, or in the case of unsuccessful competitions, the loss of committed costs; and the ability to accurately estimate the resources and costs structure t required to service any contract we are awarded. The loss of business to our competitors could adversely impact our revenues and, if we are forced to reduce our prices, adversely impact our profitability. In recent years, the competitive environment has also resulted in an increase in bid protests from unsuccessful bidders on contract awards. It can take months to resolve protests by one or more of our competitors relating to contracts that are awarded to us. Even where the protest is unsuccessful and the award to us is upheld, the resulting delay in startup t and funding of the work under such contracts may adversely impact our revenues and profitabil a ity. Cyber attacks t and other security threats could disr i upt our business i and impair m our abilit l yt to effectiv t elyl provide services to our custome t rs; as a leading provider of cyber security services to our custome t rs, any signifi i cant cyber incident d couldl damage our reputati e on and have a material adverse effect on our business i and financ i ial results. l We create, implement and maintain IT and engineering systems, and provide services that are often critical to our customers' operations, some of which involve classified or other sensitive information in intelligence, national security and other classified or sensitive customer functions. Our network and systems are subject to continuous exposure to cyber and other security threats, including computer viruses, attacks by individual and state-sponsored computer hackers and physical break-ins. We also face a heightened risk of a security breach or disruption due to our custody of classified and other sensitive information. Like other government contractors, we are regularly the target of cyber incidents, and these attempted cyber intrusions are expected to continue to proliferate. If we are unable to protect our network and systems from significant cyber attacks, or if we are unable to detect intrusion attempts or other cyber incidents quickly and remediate those incidents successfully, we may experience one or more of the following adverse effects: • loss of revenue due to adverse customer reaction; 9 • exposure to claims for damages, or the incurrence of significant costs related to upgrading systems, networks and our cyber security program generally; • loss of revenue due to the redeployment of staff for remediation efforts instead of work on billable a contracts; • damage to our reputation, which could adversely impact our ability to attract or retain customers or market our services that relate to the creation or maintenance of secure IT systems; and • inability to successfully market services that rely on the creation and maintenance of secure IT systems. While we maintain cyber risk insurance to provide some coverage for certain risks arising from cybersecurity breaches, there is no assurance that such insurance would cover all or a significant portion of the costs or consequences associated with a cybersecurity breach. In addition to these costs and the adverse effects described in this risk factor, a significant cyber breach could result in one or more of our customers terminating or reducing the scope of our contracts with them. Security breaches in custome t r system y s couldl adversely affect our business. i Many of the programs we support and the systems we develop, install and maintain involve managing and protecting information involved in intelligence, national security and other classified or sensitive customer functions. Losses from a security breach in one of these systems could cause serious harm to our business, damage our reputation and impact our eligibility for further work on critical systems for our current customers or for other U.S. government customers generally. Losses could also exceed the policy limits of our errors and omissions and product liabil a ity insurance coverage. If our reputation is damaged or our eligibility to compete for additional work is compromised our revenues could be adversely affected. Our earnings i and profitabili i ty i may vary based on the mixi of our contracts, t and may be adversely affected if we fail to accuratel t yl estimate and manage our costst ,s time and resources. We generate revenues under different types of government contracts, including cost-reimbursable, time-and-materials and fixed-price contracts. Our earnings and profitability may vary depending on changes in the amount of revenues we derive from each type of contract, the nature t of services or solutions provided, or the level of achievement of performance objectives required to receive award fees. For example, cost-reimbursable contracts generally offer lower margin opportunities than fixed- price contracts, but tend to minimize financial risk. However, to varying degrees, each contract type involves some risk of underestimating the costs and resources necessary to fulfill the contract obligations. Our profitability is adversely impacted when we incur contract costs that we cannot bill to our customers. While fixed-price contracts allow us to benefit from cost savings, these contracts also increase our exposure to the risk of cost overruns. When bidding on proposals involving fixed- price contracts, we rely heavily on our estimates of costs and the time required to complete the associated projects and make assumpti m ons regarding technical issues. Our failure to accurately estimate these costs or the resources and technology necessary to perform these contracts, or to effectively manage and control our costs during performance of work could result, and in some instances has resulted, in reduce d d profits or in losses. More generally, any increased or unexpected costs or unanticipated delays in connection with performing our contracts (including costs and delays caused by factors outside of our control) could make our contracts less profitable a than expected. We may acquire businesse i s, and these transactions involve l numerous risks and uncertaintie i s that could adversely impact m ongoing operations. As part of our operating strategy, we selectively pursue acquisitions. These transactions pose many risks, including: • our inabil a ity to identify suitable acquisition candidates at prices we consider attractive; • our inabil a ity to compete successfully for an identified acquisition candidate, consummate an acquisition or accurately estimate the financial effec f t of acquisitions on our business; • diffi f culty retaining an acquired company's key employees, customers or contracts; • diffi f culty integrating acquired businesses, resulting in unforeseen difficulties and greater expense than anticipated; • our failure to discover or adequately assess liabilities of a business that we acquire; and • the need to record write-downs from future impairments of intangible assets, which could reduce our future reported earnings. Acquired entities may not achieve to the level of profitability or revenue that we anticipate. Additionally, we may not realize anticipated synergies. If our acquisitions perform poorly, our business and financial results could be adversely affec f ted. 10 Congress may a fail to approve budgets on a time i ly basis for the federal agencies we support u which could delay l procurement of our services and solutions and cause us to lose l future revenues. On an annual basis, Congress must approve budgets that govern spending by the federal agencies that we support. u In years when Congress is not able to complete its budget process before the end of the government fiscal year on September 30, Congress typically funds government operations pursuant to a continuing resolution, which allows federal government agencies to operate at the spending levels approved in the previous budget cycle. When the government operates under a continuing resolution, funding we expect to receive from customers for current work may be delayed and new initiatives may be delayed or even canceled. The government's failure to complete its budget process, or to fund government operations pursuant to a continuing resolution, may result in a federal government shutdown. A prolonged delay in Congressional budget approval could delay our customers’ procurement of our services and adversely impact our business and results of operations. Legal and Regulatory Risks U.S. government contractst contain i provisions giving our custome t rs a variety of rightst that are unfavorable to us, including the abili i ty i to terminate i a contract at any time i for convenience. U.S. government contracts contain provisions and are subject to laws and regulations that provide the government with rights and remedies not typically found in commercial contracts. Among other rights, these contracts give the government the ability to: • terminate existing contracts for convenience, as well as for default; • reduce d orders under, or otherwise modify, contracts or subcontracts; • decline to exercise an option to renew multi-year contracts or issue task orders under multiple award contracts; • suspend or debar us from doing business with the U.S. government or with a government agency; • terminate our facility security clearances and thereby prevent us from receiving classified contracts; • claim rights in product d s and systems produced by us; and • control or prohibit the export of our products and services. If the government terminates a contract for convenience, we may recover only our incurred or committed costs, settlement expenses and profit on work completed prior to the termination. If the government terminates a contract for default, we may not even recover those amounts and may be held liable for excess costs incurred by the government in procuring undelivered items and services from another source. If one of our government customers were to unexpectedly terminate, cancel or decline to exercise an option to renew one or more of our significant contracts or programs, our revenues and operating results would be materially harmed. We are subject to comple m x e laws and regulati l ons, and if we fail to comply m with these laws and regulati l ons, we could be subject to severe penaltie t s and sanctions and harm our business. i As a government contractor, we are subject to numerous laws and regulations that govern how we conduct business with our customers. The following are among the more noteworthy laws and regulations: • the Federal Acquisition Regulation and the Defense Federal Acquisition Regulation Supplement, which comprehensively regulate the formation, administration and performance of U.S. government contracts; • Truthful Cost or Pricing Data, which requires certification and disclosure of all cost and pricing data in connection with contract negotiations; • the Cost Accounting Standards and Cost Principles, which impose accounting requirements that govern our right to reimbursement under certain cost-reimbursable U.S. government contracts; • laws, regulations and executive orders restricting the use and dissemination of information classified for national security purposes and the export of certain products, services and technical data; • U.S. export controls, which apply when we engage in international work; • the Foreign Corrupt Practices Act; and • the False Claims Act, which prohibits the submission of fraudulent claims to the government for payment or approval. Actions under the False Claims Act may be brought by either the government or by individuals on behalf of the government (who may then share a portion of any recovery). If we fail to comply with these laws and regulations, we may be subje u ct to contractual damages, fines, civil or criminal penalties or administrative sanctions, and could harm our reputation. For more severe misconduct, sanctions and penalties may include the termination of contracts, forfeiture of profits, the triggering of price reduction clauses, suspension of payments, 11 fines and the suspension or debarment from doing business with federal government agencies, any of which could adversely affect our business, financial condition, operating results and future prospects. Unfavorable results l of U.S. government auditst or other investigati i ons could adversely affect our profitabili i ty i ,y harm our reputation t and relations t hips with t our customers or impai m ri our ability i to win i new contracts. t The Defense Contract Audit Agency (DCAA), Defense Contract Management Agency (DCMA) and other government agencies routinely audit and investigate government contracts and contractor systems. These agencies review our contract performance, cost structure t and compliance with applicable laws, regulations and standards. The DCAA and DCMA also review the adequacy of, and compliance with, internal control systems and policies, including accounting, purchasing, estimating, compensation and management information systems. Allegations of impropriety or deficient controls could harm our reputation or influence the award of new contracts. Any costs found to be improperly allocated to a specific contract will not be reimbursed, while such costs already reimbursed must be refunded. If our internal control systems or policies are found to be non-compliant or inadequate, payments may be withheld or suspended, or we may be subje u ct to increased government scrutiny and approval requirements that could delay or adversely affect our ability to invoice and receive timely payment for services we perform on our contracts. Adverse findings by DCAA or DCMA may also impair our ability to compete for and win new contracts with the U.S. government. We face risk i s k associated t with t our international t business, i and our business i operations in foreign countries t involve considerable i risks and hazards. Our business operations are subject to a variety of risks associated with conducting business internationally, including, changes in or interpretations of foreign laws or policies that may adversely affect the performance of our services; political instabil a ity in foreign countries; business practices and customs that are unfamiliar or inconsistent with business practices in the U.S. We also provide services to the U.S. government in foreign countries that may be experiencing political unrest, war or terrorism. In connection with these deployments, we may be exposed to increased risk of incurring liabilities arising from incidents involving our employees or third parties. We may also incur additional costs in connection with such deployments, such as increased insurance costs, the cost of liabilities that are in excess of or not covered by our insurance policies, or the costs of repatriation of our employees or executives for reasons beyond our control. Changes in tax laws or unantic t ipated t changes in our tax provision couldl have a material t impact m on our profitabili i ty i and/or operating i cash flow. l We are subject to income and other taxes in U.S. and foreign jurisdictions. Changes in applicable U.S. (federal, state and local) or foreign tax laws and regulations, or their interpretation and application have affected and could continue to affect our income tax expense and taxes paid or payable a . In addition, we are subject to various audits where depending on the final determination could have a material impact on our tax provision. We are currently under examination by several jurisdictions, including U.S. federal tax years 2016-2018 and amounts submitted for research and development credits for those years. Beginning in 2022, the Tax Cuts and Jobs Act (TCJA) of 2017 eliminates the option to deduct research and development expenditures t currently and requires taxpayers to amortize them over five years pursuant to IRC Section 174. Although Congress is considering legislation that would defer or repeal this provision, we have no assurance this will be enacted. If this provision of the TCJA is not repealed or otherwise modified, it will materially reduce our operating cash flows in 2022. Risks Related to Our Stock Our quarterly t operating i results l may fluctuate. Our quarterly revenues and operating results may fluctuate as a result of a number of factors, many of which are outside of our control. For these reasons, comparing our operating results on a period-to-period basis may be of limited significance in some cases. In addition to the risk factors already identified in this section of our Form 10-K, a number of additional factors could cause our revenues, cash flows and operating results to vary from quarter-to-quarter, including: • flu f ctuations in revenues earned on fixed-price contracts and contracts with a performance-based fee structure; t • timing of significant bid and proposal costs; • seasonal or quarterly fluctuations in our workdays and staff utilization rates; and • changes in the volume of purchase requests from customers for equipment and materials. 12 Because most of our expenses are fixed, cash flows from our operations may vary significantly as a result of changes in the level of services we provide under existing contracts, as well as the number of contracts that are commenced, completed or terminated during any quarter. Depending on the nature of the contract, we may incur significant operating expenses during the start-up and early stages of large contracts and not receive corresponding payments from the customer in that same quarter. We may also incur significant or unanticipated expenses when a contract expires, terminates or is not renewed. We may a change our dividend i polic l y c in the future.e We have maintained a regular cash dividend program since 2011. We anticipate continuing to pay quarterly dividends during 2022. However, any future payment of dividends, including the timing and amount of any such dividends, is at the discretion of our Board of Directors and may depend upon our earnings, liquidity, financial condition, alternate capit a al deployment opportunities or any other factors that our Board of Directors considers relevant. A change in our regular cash dividend program could have an adverse effect on the market price of our common stock. Mr. Pederse r n, Ch Ch iairman Emeritus, effe effectiv t lelyl cont l rols t us, d and hi his interests y may not be li aligned gned i i wi h th i h those of of h other stockh ld kholders. As of Dece b mber 31, 2021, Mr. d Pedersen owned i approximatelyly 32% of our tot lal outst di andi g ng h shares of common stock. l Holders of our l Class B common stock are i enti ltl d ed to ten votes per h share, hil while h ld holders of our l Class A common stock are entitled to only only one vote per h share. As of Dece b mber 31, 2021, Mr. d Pedersen benefificialllly owned 13,176,695 h shares of l Class B common stock d and cont ll roll d ed i approximatelyly 83% of hthe bi combi d ned i voti g ng power of our stock. Accordidingl ngly, Mr. d Pedersen cont l rols hthe vote on b substantialllly lall matters b i submitt d ed to a vote of our stockh ld kholders. As long long as Mr. d Pedersen benefificialllly owns a majori jori a yty of hthe bi combi d ned i voti g ng power of our common stock, he i willll have hthe b ability ility, i without hthe consent of our bli public stockh ld kholders, to lelect lall me b mbers of our Boa d rd of i Directors d and to cont l rol our ma g nagement d and affairs. Mr. Pedersen's i voti g ng cont l rol may have hthe effect of preve i nti g ng or didiscouragi ouragi g ng transactions i l involving ving an actual or a pote i nti lal change change of cont l rol of us, g rega dl rdless of h whe hther a premium is offered over hthen-current ma k rket i prices. Mr. Pedersen i willll lalso be bl able to cause a change change of cont l rol of us. Provision i s in our charter documents and Delaware law may inhibit i potential i acquisition t bids that our stockholders may consider favorable,e and the market price of our Class l A common stock may a be lower as a result. l There are provisions in our certificate of incorporation and bylaws that make it more difficult for a third party to acquire, or attempt to acquire, control of us, even if a change of control were considered favorable a by our stockholders. Among the provisions that could have an anti-takeover effect, are provisions relating to the following: the high vote nature of our Class B common stock; the ability of our Board to issue preferred stock; the inabil a ity of stockholders to take action by written consent; and advance notice requirements relating to director nominations or other proposals submitted by our stockholders. General Risk Factors Goodwilll representst a signific i ant asset on our balance sheet,t and changes in future business i conditions t could cause these investments to become impaired, m requiring substantial t write i -downs that would reduce our operating t income. As of December 31, , 2021 our goodwill was $1.5 billion. The amount of our recorded goodwill may substantially increase in the future as a result of any acquisitions that we make. We evaluate the recoverabil a ity of recorded goodwill amounts annually, or when evidence of potential impairment exists. Impairment analysis is based on several factors requiring judgment and the use of estimates, which are inherently uncertain and based on assumpti m ons that may prove to be inaccurate. Additionally, material changes in our financial outlook, as well as events outside of our control, such as deteriorating market conditions for companies in our industry, may indicate a potential impairment. When there is an impairment, we are required to write down the recorded amount of goodwill, which is reflected as a charge against operating income. Item 1B. Unresolved Securities and Exchange Commission Staff t Comments We have not received any written comments from the SEC staff regarding our periodic or current reports under the Exchange Act that remain unresolved. Item 2. Properties We do not own any facilities or real estate that are material to our operations. 13 Item 3. Legal Proceedings We are subject to certain legal proceedings, government audits, investigations, claims and disputes that arise in the ordinary course of our business. Like most large government defense contractors, our contract costs are audited and reviewed on a continual basis by an in-house staff of auditors from the DCAA. In addition to these routine audits, we are subject from time- to-time to audits and investigations by other agencies of the U.S. government. These audits and investigations are conducted to determine if our performance and administration of our government contracts are compliant with contractual requirements and applicable federal statute t s and regulations. An audit or investigation may result in a finding that our performance, systems and administration are compliant or, alternatively, may result in the government initiating proceedings against us or our employees, including administrative proceedings seeking repayment of monies, suspension and/or debarment from doing business with the U.S. government or a particular agency or civil or criminal proceedings seeking penalties and/or fines. Audits and investigations conducted by the U.S. government frequently span several years. Although we cannot predict the outcome of these and other legal proceedings, investigations, claims and disputes, based on the information now available to us, we do not believe the ultimate resolution of these matters, either individually or in the aggregate, will have a material adverse effec f t on our business, prospects, financial condition or operating results. Item 4. Mine Safety Disclosures Not applicable. 14 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information f Our Class A common stock has been quoted on the Nasdaq Stock Market under the symbol “MANT” since our initial public offering on February r 7, 2002. There is no establi a shed public market for our Class B common stock. As of February 23, 2022, there were 58 holders of record of our Class A common stock and 3 holders of record of our Class B common stock. The number of holders of record of our Class A common stock is not representative of the number of beneficial holders because many of the shares are held by depositories, brokers or nominees. Dividend Policy During fiscal years 2021 and 2020, we declared and paid quarterly dividends, each in the amount of $0.38 and $0.32 per share, respectively, on all issued and outstanding shares of common stock. For 2022, we anticipate we will continue paying quarterly dividends, and on February 22, 2022, the Board of Directors declared a quarterly cash dividend in the amount of $0.41 per share; however any future dividends declared will be at the discretion of our Board of Directors and will depend, among other factors, upon our earnings, liquidity, financial condition, alternate capit a al allocation opportunities or any other factors our Board of Directors deems relevant. Recent Sales of Unregistered Securities We did not issue or sell any securities in fiscal year 2021 that were not registered under the Securities Act of 1933. Equity Compensation Plan Information Information regarding our equity compensation plans and the securities authorized for issuance thereunder is incorporated by reference in Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Purchase of Equity Securities We did not purchase equity securities during the year ended December 31, 2021. 15 Performan f ce Graph The stock performance graph compares the cumulative total shareholder return t of our common stock to the NASDAQ Composite-Total Returns t Index, Standard & Poor's MidCap 400 Index, Russell 2000 Index and Standard & Poor's 1500 IT Consulting & Services Index. The period measured is December 31, 2016 to December 31, 2021. The graph assumes an investment of $100 in our common stock and each of the indices with reinvestment of all dividends. Year Index Value of 5 Year Cumulative Total Return Assumes Initial Investment of $100 December 31, 2021 ManTech International Corporation NASDAQ Composite-Total Returns Index Standard & Poor's MidCap 400 Index Russell 2000 Index Standard & Poor's 1500 IT Consulting & Services Index 2016 2017 2018 2019 2020 2021 100 120 140 160 180 200 220 240 260 280 300 320 16 Item 6. [Reserved] Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion of our financial condition and results of operations should be read together with the consolidated financial statements and the notes to those statements included in Item 8 "'Financial Statements and Supplementary Data." This discussion contains forward-looking statements that involve risks and uncertainties. For a description of these forward-looking statements, refer to Part I “Cautionary Note Regarding Forward-Looking Statements.” A description of factors that could cause actual results to differ materially from the results we anticipate include, but are not limited to, those discussed in Item 1A “Risk Factors,” as well as those discussed elsewhere in this Annual Report. The following discussion is intended to provide the readers of our financial statements with a narrative from management’s perspective regarding our financial condition and results of operations, liquidity, and certain other factors that could affect our future results. Overview We provide mission-focused technology solutions and services for U.S. defense, intelligence community and federal civilian agencies. We excel in full-spectrum cyber, secure mission & enterprise IT, advanced data analytics, software and systems development, intelligent systems engineering, intelligence mission support and mission operations. Approximately 99% of our revenues during the year ended December 31, 2021 were generated from contracts with the U.S. government, or through prime contractors supporting the U.S. government. The U.S. government is the largest consumer of services and solutions in the U.S. In government fiscal year (GFY) 2021, the U.S. government obligated approximately $387 billion on contracted services. Our business is impacted by the overall U.S. government budget and the alignment of our capabi a lities and offerings with the U.S. government's spending priorities. The Department of Defense (DoD) is the largest purchaser of services and solutions in the U.S. government. The President’s GFY 2022 budget proposal included $753 billion for national defense programs. Included in the President’s budget proposal is spending for infrastructure, t economic stimulus, and education. In November 2021, the President signed into law the Infrastructure, Investment and Jobs Act (IIJA). To date, the GFY 2022 budget appropriations have not been enacted and continue to be debated by Congress. Since the beginning of GFY 2022, the U.S. government has been, and continues to be, funded through a series of Continuing Resolutions (CR). The current CR is set to expire on March 11, 2022. Absent an approval of GFY 2022 appropriations, or other stop gap spending measures, the U.S. government could experience periodic shutdowns which could materially impact our financial results and liquidity. In 2021, the U.S. government increased the debt ceiling by nearly $3 trillion. The current debt ceiling is expected to allow the U.S. government to operate into 2023. Exiting 2021, inflation has significantly increased. The Federal Reserve has signaled their intent to increase interest rates over the coming year. Increasing interest rates will increase the amount of the federal budget used to satisfy interest payments on the U.S. debt which could impact the amount of funding allocated to programs that support national defense. While we cannot predict the future of the U.S. government’s spending priorities, we believe the geopolitical aggression of adversarial nations as well as cyber threats from state and non-state actors remain prominent and align well to the services and capabi a lities we provide to our customers. COVID-19 I Pandemic In March of 2020, the World Health Organization declared COVID-19 a pandemic. Over the past two years, the pandemic has had a significant impact on the global population and economy. In response to the pandemic, the U.S. government enacted legislation in an attempt to mitigate the economic impacts through stimulus spending. In March 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law. The CARES Act contained a provision (3610) under which government contractors could seek reimbursement for employee's salaries when they are prevented from accessing worksites or are subject to reduced work schedules and cannot telecommute. These provisions were extended through September 30, 2021 when the President signed into law the American Rescue Plan (ARP) Act of 2021. Amounts submitted for reimbursement under the CARES Act diminished significantly in our third quarter of 2021 and costs incurred in our fourth quarter of 2021 were no longer covered. On September 9, 2021, the President issued an Executive Order requiring all federal employees and contractors supporting 17 the federal government be vaccinated (or to have an approved accommodation) by December 8, 2021. The vaccination deadline was subsequently extended to January 18, 2022. On December 7, 2021, a federal district judge suspended the enforcement of this order. This suspension is currently under appeal. We are continuing to monitor impacts of the global outbreak of the COVID-19 pandemic including new variants of the virus, specific impacts and mitigation protocols enacted in regions in which we operate, and the vaccination status t of our employees. In preparation of the vaccine mandate and to promote the well-being of our workforce, we have and continue to encourage our employees to get vaccinated (or seek an approved accommodation). We cannot predict the potential impact of the vaccination mandate or the overall evolution of the pandemic and its further impacts on the economy or our business. Acquisitions We continually monitor U.S. government spending and budgetary priorities to align our investments in new capabi a lities to drive organic growth. We will selectively pursue acquisitions that broaden our domain expertise and service offerings and/or establi a sh relationships with new customers. In 2021, we acquired Gryphon Technologies, Inc. (Gryphon) and Technical and Management Assistance Corporation (TMAC). Gryphon provides a broad array of advanced digital and systems engineering capabi a lities for Department of Defense agencies. TMAC provides advanced data engineering services and solutions that ensure the delivery r of vital information to the U.S. Intelligence Community. Since going public in 2002, we have acquired and integrated 34 businesses into our operations. Pricing Our industry remains competitive on price. While there has been a trend away from the lowest-price technically acceptable a procurement model for a majori a ty of our customers, contracts continue to be awarded through a competitive bidding process (including indefinite delivery, r indefinite quantity and other multi-award contracts), which could increase pricing pressure. To ensure our cost structure t remains competitive, we continually evaluate and adjust our levels of indirect spending to stay in line with the expected business opportunities. Our industry also remains competitive with respect to attracting and retaining employees with the necessary skills and security clearances to perform certain services that are a priority for our customers. We classify indirect expenses either as cost of services or general and administrative in manner consistent with disclosure statements submitted and approved by the Defense Contract Management Agency (DCMA). Effective January 1, 2021, changes in indirect cost allocations reclassified f certain expenses from general and administrative to cost of sales (overhead). While this does not impact indirect expenses in total, it does reduce general and administrative as compared to prior periods. Revenues Substantially all of our revenues are derived from services and solutions provided to the U.S. government or to prime contractors supporting the U.S. government, including services provided by our employees and our subcontractors, and solutions that include third-party hardware and software that we purchase and integrate as a part of our overall solutions. Customer requirements may vary from period-to-period depending on specific contract and customer requirements. We provide our services and solutions under three types of contracts: cost-reimbursable; time-and-materials; and fixed- price. In general, cost-reimbursable a contracts are the least profitable of our government contracts but offer the lowest risk of loss. Under time-and-materials contracts, to the extent that our actual labor a costs are higher or lower than the billing rates under the contract, our profit under the contract may either be greater or less than we anticipated or we may suffer a loss under the contract. In general, we realize a higher profit margin on work performed under time-and-materials contracts than cost- reimbursable contracts. Fixed-price contracts generally offer higher profit margin opportunities but can involve greater financial risk because we bear the impact of cost overruns in return t for the full benefit of any cost savings. Cost of Services Cost of services primarily includes direct costs incurred to provide services and solutions to our customers. The most significant portion of these costs are direct labor costs, including salaries and wages, plus associated fringe benefits of our employees directly serving customers, in addition to the related management, facilities and infrastructure t costs. Cost of services also includes other direct costs, such as the costs of subcontractors and outside consultants and third-party materials, including hardware or software that we purchase and provide to the customer as part of an integrated solution. Changes in the mix of services and equipment provided under our contracts can result in variabi a lity in the proportion that cost of services bears to revenues. As we typically earn higher profits on our own labor a services, we expect the ratio of cost of 18 services as a percentage of revenues to decline when our labor a services mix increases relative to subcont u racted labor a or third- party materials. Conversely, as subcontracted labor a or third-party material purchases for customers increases relative to our own labor services, we expect the ratio of cost of services as a percentage of revenues to increase. General and Adminis d trative Expenses x General and administrative expenses include the salaries and wages, plus associated fringe benefits of our employees not performing work directly for customers, and associated facilities costs. Among the functions covered by these costs are business development, bid and proposal, contracts administration, finance and accounting, legal, corporate governance and executive and senior management. In addition, we included stock-based compensation, as well as depreciation and amortization expenses related to the general and administrative function. Depreciation and amortization expenses include the depreciation of computers, furniture t and other equipment, the amortization of third-party software used internally, leasehold improvements and intangible assets. Intangible assets include customer relationships and contract backlogs acquired in business combinations, which are amortized over their estimated useful lives. Interest Expense x Interest expense is primarily related to interest expense incurred or accrued under our outstanding borrowings on our debt and deferred financing charges. Interest Income Interest income is primarily from cash on hand and late invoice payments by the government. 19 Results of Operations Year Ended December 31, 2021 Compared to Year Ended December 31, 2020 The following table a sets forth certain items from f our consolidated statements of income and the relative percentages that certain items of expense and earnings bear to revenues as well as the year-over-year change from December 31, 2020 to December 31, 2021. Year Ended December 31, Year-to-Year Change 2021 2020 2021 2020 2020 to 2021 Dollars Percentages Dollars Percent (dollars in thousands) REVENUES $ 2,553,956 $ 2,518,384 100.0 % 100.0 % $ 35,572 1.4 % Cost of services 2,174,545 2,138,791 85.1 % 84.9 % 35,754 1.7 % General and administrative expenses 192,595 221,544 7.6 % 8.8 % (28,949) (13.1)% OPERAT R ING INCOME 186,816 158,049 7.3 % 6.3 % 28,767 18.2 % Interest expense (2,389) (1,900) 0.1 % 0.1 % 489 25.7 % Interest income 128 247 — % — % (119) (48.2)% Other income (expense), net (277) 1 — % — % (278) (27,800.0)% INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS 184,278 156,397 7.2 % 6.2 % 27,881 17.8 % Provision for income taxes (47,541) (35,865) 1.8 % 1.4 % 11,676 32.6 % Equity in earnings (losses) of unconsolidated subsidiaries 280 (2) — % — % 282 14,100.0 % NET INCOME $ 137,017 $ 120,530 5.4 % 4.8 % $ 16,487 13.7 % Revenues The primary drivers of the increase in our revenues are revenues from new contract awards, growth on existing contracts and the acquisitions we completed in the prior year. These increases were offset by contracts and tasks that ended during d the year and reduced scope of work on some contracts including contracts with variable material purchase requirements. We expect revenues to increase in 2022 due to our recent acquisitions, growth on existing programs and new contracts. Cost of s o ervices The increase in cost of services was primarily due to increases in revenues. As a percentage of revenues, direct labor a costs were 50% and 49% for the years ended December 31, 2021 and 2020, respectively. As a percentage of revenues, other direct costs, which include subcontractors and third party equipment and materials used in the perfor f mance of our contracts, were 36% for both the years ended December 31, 2021 and 2020. With COVID-19 mitigation protocols being reduced or lifted, direct labor a has been impacted as employees have begun utilizing paid time off at a normalized level. Profitability has increased due to higher program profits including improved award fees as compared to the prior period. General and administrat i ive expe e nses The decrease in general and administrative expenses was primarily the result of changes in the classification of certain indirect cost allocations of approximately $30.1 million. These decreases were partially offset by a return t to more normalized indirect spending compared to 2020, which experienced reduced travel, conference expenses and other indirect expenses due to the impacts of COVID-19. As a percentage of revenues, general and administrative expenses decreased for the year ended December 31, 2021 as compared to the same period in 2020. We expect general and administrative expenses as a percentage of revenue to increase slightly in 2022, due to higher amortization expenses and continued return t to normalized indirect spending. 20 Provision i for income taxes Our effective tax rate is affec f ted by recurring items, such as the relative amount of income we earn in various taxing jurisdictions and their tax rates. It is also affected by discrete items that may occur in any given year, but are not consistent from year-to-year. Our effective income tax rate was 26% and 23% for the years ended December 31, 2021 and 2020, respectively. The increase in our effective tax rate is primarily due to an increase in nondeductible executive equity compensation and a reduced research and development credit. For ddi addi iti l onal i f informa ition conc i erni g ng hthe resear h ch and development tax credidit, see Note 13 to our co li nsolidat d ed fifinancial statem t en s in Item 8. Year Ended December 31, 2020 Compared to Year Ended December 31, 2019 To review the comparison of our results of operations for the fiscal year ended December 31, 2020 with our results of operations for the fiscal year ended December 31, 2019, please refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Backlog For the years ended December 31, 2021 and 2020 our backlog was $10.6 billion and $10.2 billion, respectively, of which $1.6 billion and $1.2 billion, respectively, was funded backlog. The increase in our backlog is due to contract awards and acquisitions during the year. We believe our backlog, together with new contract awards, will support continued growth in our business. Backlog represents estimates that we calculate on a consistent basis. For additional information on how we compute backlog, see “Backlog” in Item 1 “Business.” Liquidity and Capital Resources Our primary sources of liquidity are cash provided by operations and our credit facilities. On December 31, 2021, our cash and cash equivalents balance was $53.4 million. There were $300.0 million in outstanding borrowings under our credit facilities at December 31, 2021. The maximum available borrowings under our credit facilities at December 31, 2021 were $796.6 million. These sources of liquidity have met the short-term and long-term liquidity needs for financing of acquisitions, working capit a al, payment under our cash dividend program and capit a al expenditures. t Cash provided by operating activities has been adequate to fund our operations, including payments under our regular cash dividend program. When there are short-term fluctuations in our cash flows and level of operations, we may from time-to-time increase borrowings under our credit facilities to meet cash demands. Cash Flows w from Operating Activities Our operating cash flow is primarily affected by our ability to invoice and collect from our clients in a timely manner, our ability to manage our vendor payments and the overall profitability of our contracts. We bill most of our customers monthly after services are rendered. Our accounts receivable days sales outstanding (DSO) were 68 and 56 for the quarters ended December 31, 2021 and 2020, respectively. The increase in DSO is primarily due to increases in accounts receivable from companies acquired in December 2021. For the years ended December 31, 2021 and 2020, our net cash flows from operating activities were $212.2 million and $247.2 million, respectively. The decrease in net cash flows from operating activities during the year ended December 31, 2021 when compared to the same period in 2020 was primarily due to hthe iti i ming of accrued sala iries and l relat d ed expenses d and payment of ve d ndors. Cash Used in Investing Activities Our cash used in investing activities consists primarily of business combinations, purchases of property and equipment and investments in capit a alized software for internal use. For the years ended December 31, 2021 and 2020, our net cash used in investing activities were $425.2 million and $150.1 million, respectively. For the year ended December 31, 2021, our net cash used in investing activities were primarily due to hthe ac i i quisi itions of Gryphon Gryphon d and TMAC as wellll as hthe h purchase of i equipment to support our ma g naged IT se i rvice contracts d and i f infrastructure investments. For the year ended December 31, 2020, our net cash used in investing activities were primarily due to the acquisitions of Minerva Engineering and Tapest a ry Technologies and the purchase of equipment to support our managed IT service contracts and infrastructure investments. 21 Cash Flows Used in Financing Activities For the year ended December 31, 2021, our net cash flo f ws from f financing activities were $225.2 million, primarily due to net borrowing under our credit facilities to fund acquisitions, offset by dividends paid. For the year ended December 31, 2020, our net cash used in financing activities were $64.8 million, primarily due to dividends paid and net repayments under our revolving credit facility, offset by the proceeds from the exercise of stock options. Credit Facility On July 20, 2021, we amended and restated our credit agreement (Third Amended and Restated Credit Agreement) with a syndicate of lenders led by Bank of America, N.A., as sole administrative agent. The Third Amended and Restated Credit Agreement includes an aggregate principal amount of up to $1.1 billion made available through (i) a $500 million revolving credit facility with a $100 million letter of credit sublimit and a $50 million swing line loan sublimit and (ii) a $600 million delayed-draw term loan facility. Under the delayed-draw term loan facility, borrowings are available a to be drawn prior to the first anniversary of the Third Amended and Restated Credit Agreement in up to three separate drawings in a minimal amount of $50 million. The Third Amended and Restated Credit Agreement also includes an accordion feature that permits us to arrange with the lenders for the provision of additional commitments. The maturity date of the Third Amended and Restated Credit Agreement is July 20, 2026. We have deferred $3.7 million in debt issuance costs, including $3.3 million due to the Third Amended and Restated Credit Agreement, which are being amortized over the term of the new credit agreement. Borrowings under the Third Amended and Restated Credit Agreement are collateralized by substantially all of our assets and those of our Material Subsidiaries and bear interest at one of the following variable rates as selected by us at the time of borrowing: a London Interbank Offer Rate base rate plus market-rate spreads (1.25% to 2.00% based on our consolidated total leverage ratio) or Bank of America's base rate plus market spreads (0.25% to 1.00% based on our consolidated total leverage ratio). The terms of the Third Amended and Restated Credit Agreement permit prepayment and termination of the loan commitments at any time, subject to certain conditions. The Third Amended and Restated Credit Agreement requires us to comply with specified financial covenants, including the maintenance of certain leverage ratios and a consolidated coverage ratio. The Third Amended and Restated Credit Agreement also contains various covenants, including affirmative covenants with respect to certain reporting requirements and maintaining certain business activities, and negative covenants that, among other things, may limit or impose restrictions on our ability to incur liens, incur additional indebtedness, make investments, make acquisitions and undertake certain other actions. As of, and during the fiscal years ending December 31, 2021 and 2020, we were in compliance with our financial covenants under the credit agreement. h There was $300.0 i millllion d and $15.0 i millllion outst di andi g ng on our credidit facili i ilities at Dec b ember 31, 2021 d and 2020, respec iti l vely. Contrac t tual Obligations Our primary contractual obligations include operating lease obligations and debt obligations. Our operating lease obligations as of Dece b mber 31, 2021 were $96.1 i millllion. ion These obligations will be paid within the time period of less than one year to more than 5 years. See Note 5 to our consolidated financial statements in Item 8 for additional information regarding leases. Our debt obligations as of December 31, 2021 were $300.0 mill . ion We may elect to pay all of or a portion of this obligation earlier than contractually required. See Note 9 to our consolidated financial statements in Item 8 for additional information regarding debt and related matters. Capit a al Resources We believe the capital resources available to us from cash on hand, our remaining capac a ity under our credit facilities, and cash from our operations are adequate to fund our anticipated cash requirements for at least the next year. We anticipate financing our external growth from acquisitions and our longer-term internal growth through one or more of the following sources: cash from operations; use of our credit facilities; and additional borrowings of debt or issuance of equity. Cash Management To the extent possible, we invest our available cash in short-term, investment grade securities in accordance with our investment policy. Under our investment policy, we manage our investments in accordance with the priorities of maintaining the safety of our principal, maintaining the liquidity of our investments, maximizing the yield on our investments and investing our cash to the fullest extent possible. Our investment policy provides that no investment security can have a final maturity that 22 exceeds six months and that the weighted average maturity of the portfolio cannot exceed 60 days. Cash and cash equivalents include cash on hand, amounts due from banks and short-term investments with maturity dates of three months or less at the date of purchase. Dividend During the years ended December 31, 2021 and 2020, we declared and paid quarterly dividends in the amount of $0.38 and $0.32 per share on both classes of common stock. On February 22, 2022, we declared a quarterly cash dividend in the amount of $0.41 per h sha , re to be paid on March 25, 2022. While we expect to continue the regular cash dividend program, any future dividends declared will be at the discretion of our Board of Directors and will depend, among other factors, upon our results of operations, financial condition and cash requirements, as well as such other factors our Board of Directors deems relevant. Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). Our significant accounting policies are described in Note 2 to our consolidated financial statements in Item 8. We consider certain of these policies to be critical accounting policies as they require management to make significant estimates and judgments that affect the reported amount of assets, liabilities, revenues and expenses. Actual results may differ from these estimates under different assumpti m ons or conditions. Revenue Recognition and Cost Estimation At contract inception, we identify our performance obligations; then we determine the transaction price for the contract. The transaction price can be a fixed or variable amount. It is common for our contracts to contain award fees, incentive fees or other provisions that can either increase or decrease the transaction price. These variabl a e amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We estimate variable consideration as the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price when it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variabl a e consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and historical, current and forecasted information that is reasonably available to us. The transaction price is allocated to each distinct perfor f mance obligation using our best estimate of the standalone selling price for each distinct good or service promised in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service promised. Revenue is recognized when, or as, the performance obligation is satisfied. Based on the nature of the products and services provided in the contract, we use our judgment to determine if an input measure or output measure best depicts the transfer of control over time. For services contracts, we typically satisfy our performance obligations as services are rendered. We typically use a cost-based input method to measure progress. Contract costs include labor, a material and allocable indirect expenses. Revenue is recognized proportionally as contract costs are incurred plus estimated fees. For time-and-material contracts, we bill the customer per labor a hour and per material, and revenue is recognized in the amount invoiced since the amount corresponds directly to the value of our performance to date. For stand-ready service contracts, a time-elapsed output method is used to measure progress, and revenue is recognized straight-line over the term of the contract. We also consider control to transfer when we have a present right to payment and our customer has legal title. Determining a measure of progress and when control transfers requires us to make judgments that affect the timing of when revenue is recognized. The effect of a contract modification on the transaction price and our measure of progress for the performanc f e obligation to which it relates is recognized as a cumulative adjustment to revenue and profit. A significant change in one or more estimates could affect the profitability of our contracts. We recognize adjustments in estimated profit on contracts in the period identified. The impact of adjustments in contract estimates can be reflected in either revenue or operating expenses on our consolidated statement of income. We have an Estimate at Completion process in which management reviews the progress and execution of our performance obligations. As part of this process, management reviews information including, but not limited to, any outstanding key 23 contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenue and costs. The risks and opportunities include management’s judgment about the ability and cost to achieve the contract milestones and other technical contract requirements. Management must make assumptions and estimates regarding labor a productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation, execution by our subcontractors, the availability and timing of funding from our customer and overhead cost rates, among other variables. A significant change in one or more of these estimates could affect the profitability of our contracts. For the years ended December 31, 2021, 2020 and 2019, the aggregate impact of adjustments in contract estimates increased our revenue by $8.8 million, $10.8 million and $11.3 million, respectively. No adjustment on any one contract was material to our consolidated financial statements for f the years ended December 31, 2021, 2020 and 2019. Estimates in Fair Value of Assets Acquired and Liabilities Assumed in Business Combinations Determining the fair value of assets acquired and liabilities assumed requires significant judgment, which includes, among other factors, analysis of historical performance and estimates of future performanc f e. These factors may cause final amounts to differ materially from original estimates. In some cases, we use discounted cash flow analyses, which are based on our best estimate of future revenue, earnings and cash flows as well as our discount rate adjuste d d for risk. Estimates in Fair Value of Reporting e Unitst in Goodwill Impairment r The fair values of the reporting units are determined based on a weighting of the income approach, market approach and market transaction approach. The income approach is a valuation technique in which fair value is based from forecasted future cash flow discounted at the appropriate rate of return t commensurate with the risk as well as current rates of return t for equity and debt capi a tal as of the valuation date. The foreca f st used in our estimation of fair value was developed by management based on a contract basis, incorporating adjustments to reflect known contract and market considerations (such as reductions and uncertainty in government spending, pricing pressure and opportunities). The discount rate utilizes a risk adjusted weighted average cost of capit a al. The market approach is a valuation technique in which the fair value is calculated based on market prices realized in an actual arm's length transaction. The technique consists of undertaking a detailed market analysis of publicly traded companies that provides a reasonable basis for comparison to us. Valuation ratios, which relate market prices to selected financial statistics derived from comparable a companies, are selected and applied to us after consideration of adjustments for financial position, growth, market, profitability and other factors. The market transaction approach is a valuation technique in which the fair value is calculated based on market prices realized in actual arm's length transactions. The technique consists of undertaking a detailed market analysis of merged and acquired companies that provides a reasonable basis for comparison to us. Valuation ratios, which relate market prices to selected financial statistics derived from comparable companies, are selected and applied to us after consideration of adjustments for financial position, growth, market, profitability and other factors. To assess the reasonableness of the calculated reporting unit fair values, we compare the sum of the reporting units' fair values to our market cap a italization (per share stock price times the number of shares outstanding) and calculate an implied control premium (the excess of the sum of the reporting units' fair values over the market capitalization), and then assess the reasonableness of our implied control premium. Due to the many variables inherent in the estimation of a reporting unit's fair value and the relative size of our recorded goodwill, differences in assumptions may have a material effec f t on the results of our goodwill impairment analysis. Est E imates in Accounting for Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes, as a result our deferred income taxes are determined based on the estimated future tax effe f cts of differences between the financial statement and tax bases of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year-to-year. In providing for deferred r taxes, we consider tax regulations of the jurisdictions in which we operate, estimates of future taxable income and available tax planning strategies. If tax regulations, operating results or the abili a ty to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred r tax assets based on the “more likely than not” criteria. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would “more likely than not” sustain the position following an audit. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The determination that a tax position meets the "more likely than not" 24 criteria requires a significant amount of judgment, which may differ significantly from what is ultimately accepted by the relevant taxing authority. Recently Issued But Not Yet Adopted Accounting Standards Updates For information on the recently issued but not yet adopted Accounting Standards Updates, see Note 2 to our consolidated financial statements in Item 8. Item 7A. Quantitative and Qualitative Disclosures about Market Risk Our exposure to market risk relates to changes in interest rates for borrowings under our credit facilities. At December 31, 2021, we had $300.0 million outstanding on our credit facilities. Borrowings under our credit facilities bear interest at variable rates. A hypothetical 10% increase in interest rates would have a $0.1 million effect on our interest expense for the year ended December 31, 2021. We do not use derivative financial instruments for speculative or trading purposes. When we have excess cash, we invest in short-term, investment grade, interest-bearing securities. Our investments are made in accordance with an investment policy. Under this policy, no investment security can have a maturity exceeding six months and the weighted average maturity of the portfolio cannot exceed 60 days. 25 Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm 27 Consolidated Balance Sheets as of December 31, 2021 and 2020 30 Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019 31 Consolidated Statements of Comprehensive Income for f the years ended December 31, 2021, 2020 and 2019 32 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2021, 2020 and 2019 33 Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 34 Notes to Consolidated Financial Statements 36 g 26 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of ManTech International Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of ManTech International Corporation and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February r 25, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable a rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Revenue from Contracts with i Custome t rs — Refer f tot Notes t 2 and 3 to the financ i ial statements Critical Audit Matter Descripti i on The Company recognizes revenue on contracts over time when there is a continuous transfer of control to the customer over the duration of the contract as the services are rendered. The accounting conclusions for contracts involves judgment, particularly as it relates to determining the amount, timing and presentation of revenue that will be recognized for each performance obligation within the contract, and the distinct number of performance obligations represented by the contract. On certain contracts, revenue is recognized over time using a cost-based input method that measures the extent of progress towards completion of a performance obligation. Contract costs include lab a or, material, and allocable indirect expenses. Revenue is recognized proportionally as contract costs are incurred plus estimated fees. Management must make assumpti m ons and estimates regarding labor a productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation, execution by subcontractors, the availability and timing of 27 funding from our customer and overhead cost rates, among other variables. A significant change in one or more of these estimates could affec f t the profitabil a ity of the Company’s contracts. Given the judgments necessary to determine the amount, timing and presentation of revenue and to estimate total costs and fees for the performanc f e obligations that recognize revenue using a cost-based input method, auditing such estimates required extensive audit effort due to the volume and complexity of these contracts and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures. For all contracts, understanding and differentiating the number of performance obligations contained in the contract represented a high degree of auditor judgment because of the variety of contracts and services promised and the interrelationship among those elements. How the Critical Audit Matter Was Addresse d d in the Audit Our audit procedures related to management’s conclusion on amount, timing, and presentation of revenue recognition, as well as the estimates of total costs and fees for the performanc f e obligations that recognize revenue using a cost-based input method included the following, among others: • We tested the effec f tiveness of controls over contract revenue, including management’s controls over the initial setup t of new contract arrangements and the estimates of total costs and fees for performance obligations. • We developed an expectation of revenue and compared it to the recorded balance. • For a selection of contracts, we performed elements of the following for each contract: – Evaluated the terms and conditions of each contract and the appropriateness of the accounting treatment in accordance with generally accepted accounting principles by: – Inspecting the executed contract to test that the facts on which management’s conclusions were reached were consistent with the actual terms and conditions of the contract. – Evaluating the contract within the context of the five-step model prescribed by ASC 606, Revenue from Contractst witht Customers, and evaluating whether management’s conclusions were appropriate by evaluating the nature of the promises within the contract, the interrelationship of the promised services provided, the pattern by which obligations are fulfilled, the number of performance obligations identified, and which party is responsible for fulfillment. – Involving industry experts in evaluating the appropriateness of management’s conclusions. – Compared the transaction price to the consideration expected to be received based on current rights and obligations under the contracts and any modifications that were agreed upon with the customers. – Tested the accuracy and completeness of the costs incurred to date for the performance obligation. – Evaluated the estimates of total cost and fees for the performance obligation by: – Comparing costs incurred to date to the costs management estimated to be incurred by that date. – Evaluating management’s ability to achieve the estimates of total cost and fees by performing corroborating inquiries with the Company’s project managers, and comparing the estimates to management’s work plans. – Comparing management’s estimates for the selected contracts to costs and fees of similar performance obligations, when applicable. – Tested the mathematical accuracy of management’s calculation of revenue for the performance obligation. • We analyzed adju d stments in contract estimates recorded during the year to assess whether such adjustments were the result of changes in facts and circumstances and not estimates that were previously inaccurate. Valuation t of Acquired Intangible i Assets — Refer e to Notes 2 and 4 to the financial statements Critical Audit Matter Descripti i on During 2021 the Company completed the acquisition of Gryphon Technologies, Inc. (“Gryphon”) for approximately $360.8 million. The Company accounted for the acquisition under the acquisition method of accounting for business combinations. 28 Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including customer relationship and backlog intangible assets with an aggregate fair value of $71.3 million. The Company estimated the fair value of the customer relationship and backlog intangible assets using the excess earnings method (income approach), which is a specific discounted cash flow method. The fair value determination of the customer relationship and backlog intangible assets required management to make significant estimates and assumptions related to future revenue, earnings and cash flows, as well as discount rates. We identified the customer relationship and backlog intangible assets for the Gryphon acquisition as a critical audit matter because of the significant estimates and assumptions management made to determine the fair value of these assets. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s forecast of future revenue, earnings and cash flows, and the selection of discount rates. How the Critical Audit Matter Was Addresse d d in the Audit Our audit procedures related to the forecast of future revenue, earnings and cash flows, and the selection of discount rates for the customers relationships and backlog intangible assets for the acquired entities included the following, among others: • We tested the effectiveness of controls over the valuation of the customer relationship and backlog intangible assets, including management’s controls over forecasts of future revenue, earnings and cash flows, and the selection of discount rates. • We assessed the reasonable a ness of management’s forecast of future revenue, earnings and cash flows by comparing the projections to historical results. • With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodologies and (2) discount rates, which included testing the source information underlying the determination of the discount rates, testing the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rates selected by management. /s/ Deloitte & Touche LLP Mclean, Virginia February 25, 2022 We have served as the Company's auditor since 1999. 29 MANTECH INTERNATIONAL CORPORATION CONSOLIDATED BALANCE SHEETS (In Thousands Except Share and Per Share Amounts) cember 31, 2021 2020 ASSETS Cash and cash equivalents $ 53,374 $ 41,193 Receivable a s—net 476,035 400,621 Prepaid expenses 32,600 26,243 Taxes receivabl a e—current 22,140 21,968 Other current assets 13,372 6,354 Total Current Assets 597,521 496,379 Goodwill 1,498,988 1,237,894 Other intangible assets—net 265,555 202,231 Property and equipment—net 133,297 121,296 Operating lease right of use assets 75,319 94,825 Employee supplemental savings plan assets 43,342 37,848 Investments 11,555 11,549 Other assets 13,988 11,642 TOTAL ASSETS $ 2,639,565 $ 2,213,664 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Accounts payable a $ 169,140 $ 142,360 Accrued salaries and related expenses 129,685 123,953 Contract liabil a ities 36,197 37,218 Operating lease obligations—current 32,557 30,105 Accrued expenses and other current liabilities 9,649 15,177 Total Current Liabilities 377,228 348,813 Long term debt 300,000 15,000 Deferre f d income taxes 174,060 141,638 Operating lease obligations—long term 63,575 80,242 Accrued retirement 36,053 36,310 Other long-term liabilities 13,229 12,249 TOTAL LIABILITIES 964,145 634,252 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 27,863,041 and 27,538,474 shares issued at December 31, 2021 and 2020; 27,618,928 and 27,294,361 shares outstanding at December 31, 2021 and 2020 279 275 Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 13,176,695 and 13,176,695 shares issued and outstanding at December 31, 2021 and 2020 132 132 Additional paid-in capital 566,573 545,717 Treasury stock, 244,113 and 244,113 shares at cost at December 31, 2021 and 2020 (9,158) (9,158) Retained earnings 1,117,867 1,042,676 Accumulated other comprehensive loss (273) (230) TOTAL STOCKHOLDERS' EQUITY 1,675,420 1,579,412 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,639,565 $ 2,213,664 See notes to consolidated financial statements. 30 MANTECH INTERNATIONAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In Thousands Except Per Share Amounts) Year Ended December 31, 2021 2020 2019 REVENUES $ 2,553,956 $ 2,518,384 $ 2,222,559 Cost of services 2,174,545 2,138,791 1,893,461 General and administrative expenses 192,595 221,544 190,773 OPERAT R ING INCOME 186,816 158,049 138,325 Interest expense (2,389) (1,900) (2,594) Interest income 128 247 450 Other income (expense), net (277) 1 (83) INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS 184,278 156,397 136,098 Provision for income taxes (47,541) (35,865) (22,212) Equity in earnings (losses) of unconsolidated subsidiaries 280 (2) 4 NET INCOME $ 137,017 $ 120,530 $ 113,890 BASIC EARNINGS PER SHARE: Class A common stock $ 3.37 $ 2.99 $ 2.85 Class B common stock $ 3.37 $ 2.99 $ 2.85 DILUTED EARNINGS PER SHARE: Class A common stock $ 3.35 $ 2.97 $ 2.83 Class B common stock $ 3.35 $ 2.97 $ 2.83 See notes to consolidated financial statements. 31 MANTECH INTERNATIONAL CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands) Year Ended December 31, 2021 2020 2019 NET INCOME $ 137,017 $ 120,530 $ 113,890 OTHER COMPREHENSIVE INCOME (LOSS): Translation adjustments, net of tax (72) (41) (77) Actuarial gain (loss) on defined benefit pension plans, net of tax 29 33 (19) Cumulative-effect adjustment for adoption of Accounting Standards Update 2018-02 — — (24) Total other comprehensive income (loss) (43) (8) (120) COMPREHENSIVE INCOME $ 136,974 $ 120,522 $ 113,770 See notes to consolidated financial statements. 32 MANTECH INTERNATIONAL CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (In Thousands) December 31, 2021 2020 2019 Common Stock, Class A At beginning of year $ 275 $ 272 $ 268 Stock-based compensation expense 2 1 1 Stock option exercises 2 2 3 At end of year 279 275 272 Common Stock, Class B At beginning of year 132 132 132 At end of year 132 132 132 Additional Paid-In Capital At beginning of year 545,717 525,851 506,970 Stock-based compensation expense 15,367 11,365 7,492 Stock option exercises 9,756 10,247 12,892 Payment consideration to tax authority on employees' behalf (4,267) (1,746) (1,503) At end of year 566,573 545,717 525,851 Treasury Stock, at cost At beginning of year (9,158) (9,158) (9,158) At end of year (9,158) (9,158) (9,158) Retained Earnings At beginning of year 1,042,676 973,767 903,084 Net income 137,017 120,530 113,890 Dividends (61,826) (51,621) (43,207) At end of year 1,117,867 1,042,676 973,767 Accumulated Other Comprehensive Loss At beginning of year (230) (222) (102) Translation adjustments, net of tax (72) (41) (77) Actuarial gain (loss) on defined benefit pension plans, net of tax 29 33 (19) Cumulative-effect adjustment for adoption of Accounting Standard Update 2018-02 — — (24) At end of year (273) (230) (222) Total Stockholders' Equity $ 1,675,420 $ 1,579,412 $ 1,490,642 See notes to consolidated financial statements 33 MANTECH INTERNATIONAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) Year Ended December 31, 2021 2020 2019 CASH FLOWS FROM (USED IN) OPERAT R ING ACTIVITIES: Net income $ 137,017 $ 120,530 $ 113,890 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 77,075 70,300 55,879 Noncash lease expense 36,065 28,169 27,619 Deferred income taxes 17,450 9,856 15,739 Stock-based compensation expense 15,369 11,366 7,493 Bad debt expense (6,022) 5,244 3,000 Contract loss reserve — (372) (1,481) Change in assets and liabilities—net of effects from f acquired businesses: Receivable a s-net (3,954) 1,298 24,660 Prepaid expenses (1,790) (5,963) 419 Taxes receivable a —current 1,470 28 (21,996) Other current assets 818 (987) 4,060 Employee supplemental savings plan asset (5,764) (5,208) (6,297) Other assets (4,941) (1,827) 97 Accounts payable 14,475 (303) 14,707 Accrued salaries and related expenses (18,040) 24,666 2,796 Contract liabil a ities (5,350) 9,149 (589) Operating lease obligations (35,675) (31,055) (28,520) Accrued expenses and other current liabilities (6,625) 9,248 (3,857) Accrued retirement (257) 758 4,553 Other long-term liabilities 1,068 2,010 9,380 Other (218) 337 (146) Net cash flow from operating activities 212,171 247,244 221,406 CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: Acquisition of businesses-net of cash acquired (370,811) (78,815) (152,851) Purchases of property and equipment (54,908) (71,129) (54,795) Proceeds from sale of property and equipment 302 869 — Proceeds from corporate owned life insurance 270 4,137 21 Investment in capit a alized software for internal use (9) (5,193) (3,677) Deferred contract costs — — (3,878) Proceeds from equity method investment — — 283 Net cash (used in) investing activities (425,156) (150,131) (214,897) CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: Borrowings under credit facility 507,500 302,500 624,000 Repayments under credit fac f ility (222,500) (324,000) (595,000) Dividends paid (61,823) (51,618) (43,205) Proceeds from exercise of stock options 9,758 10,249 12,895 Payment consideration to tax authority on employee's behalf (4,267) (1,746) (1,503) Debt issuance costs (3,315) — — Principal paid on fin f ancing leases (187) (159) (136) Net cash from (used in) financing activities 225,166 (64,774) (2,949) NET CHANGE IN CASH AND CASH EQUIVALENTS 12,181 32,339 3,560 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 41,193 8,854 5,294 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 53,374 $ 41,193 $ 8,854 34 SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest $ 1,769 $ 1,819 $ 2,436 Noncash investing and financing activities: Noncash investing activities $ 1,861 $ 5,480 $ 5,981 Operating lease obligations arising from obtaining right of use assets $ 15,695 $ 6,459 $ 31,010 Finance lease obligations arising from obtaining right of use assets $ 141 $ 107 $ 368 See notes to consolidated financial statements. 35 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2021, 2020 and 2019 1. Description of the Business ManTech International Corporation (depending on the circumstances, “ManTech” “Company” “we” “our” “ours” or “us”) provides mission-focused technology solutions and services for U.S. defense, intelligence community and federal civilian agencies. We excel in full-spectrum cyber, secure mission & enterprise IT, advanced data analytics, software and systems development, intelligent systems engineering, intelligence mission support and mission operations. 2. Summary of Significant Accounting Policies Principles l of Consolidati i on - Our consolidated financial statements include the accounts of ManTech International Corporation, subsidiaries we control and variable interest entities that are required to be consolidated. All intercompany accounts and transactions have been eliminated. Use of Accounting t Estim t ates - We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires management to make estimates and assumpti m ons that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates involve judgments with respect to, among other things, various future economic factors that are difficult to predict and are beyond our control. Therefore, actual amounts could differ from these estimates. Business Combination i s - The accounting for our business combinations consists of allocating the purchase price to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values, with the excess recorded as goodwill. We have up to one year from the acquisition date to use information as of each acquisition date to adjust the fair value of the acquired assets and liabilities, which may result in material changes to their recorded values with an offsetting adjustment to goodwill. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, which includes, among other factors, analysis of historical performance and estimates of future performanc f e. In some cases, we have used discounted cash flow analyses, which were based on our best estimate of future revenue, earnings and cash flows as well as our discount rate, adjuste d d for risk, and estimated attrition rates. Fairi Value of Financial Instrum t ents - The carrying value of our cash and cash equivalents, accounts receivable, accounts payable a and accrued r expenses approximate their fair value because of the short-term nature t of these amounts. Cash and Cash Equivalents l - For the purpose of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks and short-term investments with maturity dates of three months or less at the date of purchase. Contract Assets - Amounts are invoiced as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Generally, revenue recognition occurs before billing, resulting in contract assets. These contract assets are referred to as unbilled receivables and are reported within receivables, net on our consolidated balance sheet. Billed i Receivables l - Amounts billed and due from our customers are classified as billed receivables and are reported within receivables, net on the consolidated balance sheet. The portion of the payments retained by the customer until final contract settlement is not considered a significant financing component because the intent is to protect the customer. Goodwilll - The purchase price of an acquired business is allocated to the tangible assets, financial assets and separately recognized intangible assets acquired less liabilities assumed based upon their respective fair values, with the excess recorded as goodwill. We review goodwill at least annually for impairment, or whenever events or circumstances indicate that the carrying value of long-lived assets may not be fully recoverable a . We have elected to perform this annual review as of October 31st of each calendar year. In reviewing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount. If we elect to perform f a qualitative assessment and determine that it is more likely than not that the fair value of the reporting unit is less than its carry amount, then we will perform the quantitative impairment test (described below). We also may bypass the qualitative assessment for any reporting unit in any period and, proceed directly to perform the quantitative impairment test. 36 The quantitative goodwill impairment test, is used to identify both the existence of impairment and the amount of the impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, the goodwill of the reporting unit is not impaired. If the carrying r amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in the amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The fair values of the reporting units are determined based on a weighting of the income approach, market approach and market transaction approach. The income approach is a valuation technique in which fair value is based from forecasted future cash flow discounted at the appropriate rate of return t commensurate with the risk as well as current rates of return t for equity and debt capi a tal as of the valuation date. The forecast used in our estimation of fair value was developed by management based on a contract basis, incorporating adjustments to reflect known contract and market considerations (such as reductions and uncertainty in government spending, pricing pressure and opportunities). The discount rate utilizes a risk adjusted weighted average cost of capit a al. The market approach is a valuation technique in which the fair value is calculated based on market prices realized in an actual arm's length transaction. The technique consists of undertaking a detailed market analysis of publicly traded companies that provides a reasonable basis for comparison to us. Valuation ratios, which relate market prices to selected financial statistics derived from comparable a companies, are selected and applied to us after consideration of adjustments for financial position, growth, market, profitability and other factors. The market transaction approach is a valuation technique in which the fair value is calculated based on market prices realized in actual arm's length transactions. The technique consists of undertaking a detailed market analysis of merged and acquired companies that provides a reasonable basis for comparison to us. Valuation ratios, which relate market prices to selected financial statistics derived from comparable a companies, are selected and applied to us after consideration of adjustments for financial position, growth, market, profitability and other factors. To assess the reasonableness of the calculated reporting unit fair values, we compare the sum of the reporting units' fair values to our market capi a talization (per share stock price times the number of shares outstanding) and calculate an implied control premium (the excess of the sum of the reporting units' fair values over the market capi a talization) and then assess the reasonableness of our implied control premium. Other Intangible t Assets - Contract rights and other intangible assets are amortized primarily using the pattern of benefits method over periods ranging from 1 year to 25 years. We account for the cost of computer software developed or obtained for internal use in accordance with Accounting Standards Codification (ASC) 350-985, Intangibles - Goodwill and Other - Software t . These capit a alized software costs are included in other intangible assets, net. We account for software development costs related to software products for sale, lease or otherwise marketed in accordance with ASC 985-20, Software t - Costs C of Software t to Be Sold, Leased, or Marketed. For projects fully funded by us, development costs are capi a talized from the point of demonstrated technological feasibility until the point in time that the product is available for general release to customers. Once the product is available for general release, capitalized costs are amortized based on units sold or on a straight-line basis over a period of 5 years or other such shorter period as may be required. Leases - We account for leases in accordance with ASC 842, Leases. Upon adoption, we elected the practical expedient to recognize the lease payments related to short-term leases as profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments are incurred. We also elected the following transition related practical expedients: not to reassess whether expired or existing contracts are or contain leases, not to reassess lease classification as determined under ASC 840 and not to reassess initial direct costs from any existing lease. We elected the practical expedient not to separate nonlease components from lease components on all classes of underlying assets. Our leases include nonlease components such as common area maintenance, utilities and operating expenses. We determine whether a contract is or contains a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of identified property or equipment (an identified asset) for a period of time in exchange for consideration. We have the right to control the use of the identified asset when we have both of the following: the right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. In making this determination, we consider all relevant facts and circumstances. We reassess whether a contract is or contains a lease only if the terms and conditions of the contract are changed. We account for lease components and nonlease components associated with a lease as a single lease component. Operating leases are included in Operating lease right of use assets, Operating lease obligations—current and Operating lease obligations—long term on our consolidated balance sheets. Finance leases are included in Property and equipment—net, Accrued expenses and other current liabilities and Other long-term liabilities on our consolidated balance sheets. 37 Our ROU asset is recognized as the lease obligation, any initial direct costs and any prepaid lease payments, less any lease incentives. Our lease obligations are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Our lease payments consist of amounts relating to the use of the underlying asset during the lease term, specifically fixed payments, payments to be made in optional periods when we are reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease and the amounts probable of being owed by us under residual guarantees. Our variable lease payments are excluded in measuring ROU assets and lease obligations because they do not depend on an index or a rate or are not in substance fixed payments. We exclude lease incentives and initial direct costs incurred from our lease payments. Our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future t payments. For operating leases, after lease commencement, we measure our lease obligation for each period at the present value of any remaining lease payments, discounted by using the rate determined at lease commencement. In our consolidated statement of income, we recognize a single operating lease expense calculated on a straight-line basis over the remaining lease term. The depreciation of the ROU asset increases each year as a result of the declining lease obligation balance. Variabl a e lease payments are not recognized in the measurement of the lease obligation; they are recognized in the period in which the related obligation has been incurred. For finance leases, after f lease commencement, we measure our lease obligation by using the effective interest rate method. In each period, the lease obligation will be increased to reflect the interest that is accrued on the related lease obligation by using the appropriate discount rate, offset by a decrease in the lease obligation resulting from the periodic lease payments. We recognize the ROU asset at cost, reduced by any accumulated depreciation. The ROU asset is depreciated on a straight-line basis. Together, the interest expense and depreciation expense result in a front-loaded expense profile. We will present interest expense and depreciation expense separately on our consolidated statements of income. In our consolidated statements of income, we recognize lease expense within general and administrative expense or cost of goods sold depending on the use of the underlying lease. For leases classified as financing, the interest on lease obligations is classified within interest expense. Property and Equipme i nt - Property and equipment are recorded at original cost to us. Upon sale or retirement, the costs and related accumulated depreciation or amortization are eliminated from the respective accounts and any resulting gain or loss is included in income. Maintenance and repairs are charged to expense as incurred. Empl m oye l e Supplem l ental Savings i Plan l Assets - We maintain several non-qualified defined contribution supplemental retirement plans for certain key employees that are accounted for in accordance with ASC 710-10-05, Comp m ensation - General - Deferred Compensation - Rabbi Trust, as the underlying assets are held in rabbi trusts with investments directed by the respective employee. A rabbi a trust is a grantor trust generally set up to fund compensation for a select group of management and the assets of this trust are available a to satisfy the claims of general creditors in the event of bankruptcy of us. The assets held by the rabbi a trusts are recorded at cash surrender value in our consolidated financial statements as Employee supplemental savings plan assets with a related liability to employees recorded as a deferred compensation liability in accrued retirement. Investments - Investments where we have the ability to exercise significant influence, but we do not control, are accounted for under the equity method of accounting and are included in Other assets on our consolidated balance sheets. Significant influence typically exists if we have a 20% to 50% ownership interest in the investee. Under this method of accounting, our share of the net earnings (losses) of the investee is included in Equity in earnings (losses) of unconsolidated subsidiaries on our consolidated statement of income. Investments where we have less than 20% ownership interest in the investee and lack the ability to exercise significant influence are accounted for under ASC 321-10-35, Investments - Equityt Securities. Under this topic, our investment equals our cost, less impairment, if any. For investments without a readily determinable fair value, we perform a qualitative assessment to determine if any impairment indicator is present. If an indicator is present, we estimate the fair value to determine if the fair value was less than its carrying value. If the fair value is less than its carrying value or if there is an observable a price change through a similar security from the same issuer, we would record an impairment. Deferred Contract t Costst - Costs of obtaining or fulfilling a contract that meet the criteria in ASC 340, Other Assets and Deferred Costst , are cap a italized and amortized on a systematic basis that is consistent with the transfer of goods or services to the customer. Deferred f contract costs are reported on our consolidated balance sheets within current or non-current other assets based on the expected life of the related contract. At December 31, 2021 and 2020, we had $1.9 million and $6.6 million, 38 respectively, of deferred contract costs related to the fulfillment of future contract obligations. For the year ended December 31, 2021 and 2020, we recorded amortization expense of $4.7 million and $2.8 million, respectively. Impairme r nt of Long-Lived Assets - Whenever events or changes in circumstances indicate that the carry r ing amount of long-lived assets may not be fully recoverable a , we evaluate the probability that future undiscounted net cash flows will be less than the carrying r amount of the assets. If any impairment were indicated as a result of this review, we would recognize a loss based on the amount by which the carrying amount exceeds the estimated fair value. Contract Liabil i it l ie t s - We receive advances and milestone payments from our customers on selected contracts that exceed revenue earned to date, resulting in contract liabilities. Contract liabi a lities typically are not considered a significant financing component because it is used to meet working capit a al demands that can be higher in the early stages of a contract and to protect us from the customer failing to adequately complete some or all of its obligations under the contract. Contract liabi a lities are reported on our consolidated balance sheet on a net contract basis at the end of each reporting period. Revenue Recogniti o on - We account for a contract when: both we and the customer approve and commit; our rights and those of the customer are identified, payment terms are identified f ; the contract has commercial substanc u e; and collectability of consideration is probable. At contract inception, we identify the distinct goods or services promised in the contract, referred to as perfor f mance obligations. Then we determine the transaction price for the contract; the consideration to which we can expect in exchange for the promised goods or services in the contract. The transaction price can be a fixed or variable amount. It is common for our contracts to contain award fees, incentive fees or other provisions that can either increase or decrease the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variabl a e consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and historical, current and forecasted information that is reasonably available to us. The transaction price is allocated to each distinct performanc f e obligation using our best estimate of the standalone selling price for each distinct good or service promised in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service promised. Revenue is recognized when, or as, the performance obligation is satisfied. We recognize revenue over time when there is a continuous transfer of control to our customer. For our U.S. government contracts, this continuous transfer of control to the customer is supported by clauses in the contract that allow the U.S. government to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. When control is transferred over time, revenue is recognized based on the extent of progress towards completion of the performanc f e obligation. Based on the nature of the products and services provided in the contract, we use our judgment to determine if an input measure or output measure best depicts the transfer of control over time. For services contracts, we typically satisfy our performance obligations as services are rendered. We typically use a cost-based input method to measure progress. Contract costs include labor, a material and allocable indirect expenses. Revenue is recognized proportionally as contract costs are incurred plus estimated fees. For time-and-material contracts, we bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced since the amount corresponds directly to the value of our performance to date. For stand-ready service contracts, a time-elapsed output method is used to measure progress, and revenue is recognized straight-line over the term of the contract. If a contract does not meet the criteria for recognizing revenue over time, we recognize revenue at a point in time. Revenue is recognized at the point in time when control of the good or service is transferred to our customer. We consider control to transfer when we have a present right to payment and our customer has legal title. Determining a measure of progress and when control transfers requires us to make judgments that affect the timing of when revenue is recognized. Essentially all of our contracts satisfy their performance obligations over time. Contracts are often modified to account for changes in contract specifications and requirements. Contract modifications impact the contract when the modification either creates a new perfor f mance obligation or changes the existing enforceable a rights and obligations. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates is recognized as a cumulative adjustment to revenue and profit. Furthermore, a significant change in one or more estimates could affect the profitabil a ity of our contracts. We recognize adjustments in estimated profit on contracts in the period identified. The impact of adjustments in contract estimates can be reflec f ted in either revenue or operating expenses on our consolidated statement of income. We have an Estimate at Completion process in which management reviews the progress and execution of our performance 39 obligations. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenue and costs. The risks and opportunities include management’s judgment about the ability and cost to achieve the contract milestones and other technical contract requirements. Management must make assumptions and estimates regarding labor a productivity and availability, the complexity of the work to be performed, the availabil a ity of materials, the length of time to complete the performance obligation, execution by our subcontractors, the availabil a ity and timing of funding from our customer and overhead cost rates, among other variables. A significant change in one or more of these estimates could affect the profitability of our contracts. For the year ended December 31, 2021, 2020 and 2019 the aggregate impact of adjustments in contract estimates increased our revenue by $8.8 million, $10.8 million and $11.3 million, respectively. No adjustment on any one contract was material to our consolidated financial statements for the year ended December 31, 2021. Contract Costs - Contract costs include direct labor, direct materials, overhead and, when applicable, general and administrative expenses. Incremental costs of obtaining a contract that we expect to recover are recognized as deferred contract costs and are amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services. Other incremental costs are expensed when incurred. Costs of fulfilling a contract that relate directly to a contract or to an anticipated contract that can be specifically identified, generate or enhance resources that will be used in satisfying future performanc f e obligations and are expected to be recovered, are recognized as deferred contract costs and amortized on a systematic basis that is consistent with the transfer of the goods or services to the customer. Other costs of fulfilling a contract (costs of wasted materials, labor a or other resources to fulfill the contracts that were not reflected in the price of the contract and costs that relate to satisfied performance obligations in the contract) are expensed when incurred. General and Administ i rativ t e Expenses - General and administrative expenses include the salaries and wages, plus associated fringe benefits of our employees not performing work directly for customers, and associated facilities costs. Among the functions covered by these costs are corporate business development, bid and proposal, contracts administration, finance and accounting, legal, corporate governance and executive and senior management. In addition, we include stock-based compensation, as well as depreciation and amortization expenses related to the general and administrative function. We recognize interest related to unrecognized tax benefits within interest expense and penalties related to unrecognized tax benefits in general and administrative expenses. We classify indirect costs incurred as cost of services and general and administrative expenses in the same manner as such costs are defined in our disclosure statements under U.S. Government Cost Accounting Standards. Depreciati i on and Amortization i Method - Furniture t and office equipment are depreciated using the straight-line method with estimated useful lives ranging from one year to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of the asset's useful life or the term of the lease. Stock-based Compensation t - We account for stock-based compensation in accordance with ASC 718, Comp m ensation - Stock Compensation, which requires the use of a valuation model to calculate the fair value of stock-based awards. We have elected to use the Black-Scholes-Merton pricing model to determine fair value of stock options on the dates of grant for our stock options. The fair value of stock options is recognized as operating expenses or is capit a alized, as appropriate, straight-line over the period in which service is provided in exchange for the award. The grant date fair value of the restricted stock is equal to the closing market price of our common stock on the date of grant. The compensation expense for restricted stock is recognized over the service period and is based on the grant date fair value of the shares. The grant date fair value of the restricted stock unit (RSU) is equal to the closing market price of our common stock on the grant date less the present value of dividends expected to be awarded during the service period. We recognize the grant date fair value of RSUs of shares we expect to issue as compensation expense ratably a over the requisite service period. We account for forfeitures t as they occur. Income Taxes - We account for income taxes in accordance with ASC 740, Income Taxes. Under this method, deferred r income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year-to-year. In providing for deferred r taxes, we consider tax regulations of the jurisdictions in which we operate, estimates of future taxabl a e income and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would “more likely than not” sustain the position following an audit. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. 40 Foreign-C i urre C ncy Translati l on - All assets and liabi a lities of foreign subsidiaries are translated into U.S. dollars at fisc f al year-end exchange rates. Income and expense items are translated at average monthly exchange rates prevailing during the fiscal year. The resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss). Compreh m ensive Income I (Loss) - Comprehensive income (loss) consists of net income; translation adjustments, net of tax; and actuarial gain (loss) on defined benefit pension plan, net of tax. Recently Adopted ASUs ASUs adopted during the year ended December 31, 2021 did not have a material impact on our consolidated financial statements. Recently Issued But Not Yet Adopted ASUs ASUs effective after December 31, 2021 are not expected to have a material effect f on our consolidated fina f ncial statements. 3. Revenue from Contracts with Customers We derive revenue from contracts with customers primarily from contracts with the U.S. government in the areas of intelligence, defense, homeland security and other fede f ral civilian agencies. Substantially all of our revenue is derived from services and solutions provided to the U.S. government or to prime contractors supporting the U.S. government, including services by our employees and our subcontractors, and solutions that include third-party hardware and software that we purchase and integrate as a part of our overall solutions. Customer requirements may vary from period-to-period depending on the contract. We provide our services and solutions under three types of contracts: cost-reimbursable, fixe f d-price and time-and- materials. Under cost-reimbursable contracts, we are reimbursed for costs that are determined to be reasonable, allowable and allocable to the contract and paid a fee f representing the profit margin negotiated between us and the contracting agency, which may be fixe f d or performance based. Under fixed-price contracts, we perform f specific tasks for a fixe f d price. Fixed-price contracts may include either a product delivery o r r specific service performance over a defined period. Under time-and- materials contracts, we are reimbursed for labor a at fixed hourly rates and generally reimbursed separately for allowable materials, costs and expenses at cost. We have one reportable segment. Our U.S. government customers typically exercise independent decision-making and contracting authority. Offices or divisions within an agency or department of the U.S. government may directly, or through a prime contractor, use our services as a separate customer as long as the customer has independent decision-making and contracting authority within its organization. We treat sales to U.S. government customers as sales within the U.S. regardless of where the services are performed. We generated approximately 100%, 99% and 99% from revenue generated in the U.S. for the years ended December 31, 2021, 2020 and 2019, respectively. The following table a s disclose revenue (in thousands) by contract type, customer and prime or subcontractor for the periods presented. Year Ended December 31, 2021 2020 2019 Cost-reimbursable a $ 1,740,261 $ 1,724,056 $ 1,541,687 Fixed-price 472,435 485,847 451,312 Time-and-materials 341,260 308,481 229,560 $ 2,553,956 $ 2,518,384 $ 2,222,559 41 Year Ended December 31, 2021 2020 2019 U.S. Government $ 2,531,132 $ 2,476,655 $ 2,175,734 State agencies, international agencies and commercial entities 22,824 41,729 46,825 $ 2,553,956 $ 2,518,384 $ 2,222,559 Year Ended December 31, 2021 2020 2019 Prime contractor $ 2,376,018 $ 2,297,452 $ 1,995,471 Subcontractor 177,938 220,932 227,088 $ 2,553,956 $ 2,518,384 $ 2,222,559 We deliver a broad array of IT and technical services solutions under contracts with the U.S. government, state and local governments and commercial customers. The components of receivables are as follow f s (in thousands): December 31, 2021 December 31, 2020 Billed receivable a s $ 370,115 $ 312,991 Unbilled receivables 118,387 106,007 Allowance for doubtful accounts (12,467) (18,377) Receivable a s-net $ 476,035 $ 400,621 Receivable a s at December 31, 2021 are expected to be substantially collected within one year except for approximately $1.7 million, of which a majority is related to U.S. government receivable a s. We do not believe that we have significant exposure to credit risk as billed receivable and unbilled receivables are primarily due from the U.S. government. The allowance for f doubtful accounts represents our estimate for exposure to compliance, contractual issues and bad debts related to prime contractors. We measure future expected credit losses expected to occur over the estimated life or remaining contractual life o f f an asset (which includes losses that may be incurred in future periods). When we identify receivables with unique risk characteristics, we evaluate such receivables on an individual basis. A change in our assessment of the creditworthiness and collections from a prime contractor on one of our contracts resulted in a decrease in allowance for f doubtful accounts during 2021. The following table a discloses contract liabilities (in thousands): December 31, 2021 December 31, 2020 Contract liabil a itie $ s 36,197 $ 37,218 Changes in the balance of contract liabi a lities are primarily due to the timing difference between our performance and our customers' payments. For the year ended December 31, 2021, the amount of revenue that was included in the opening contract liabilities balance was $31.0 million. The remaining performance obligation at December 31, 2021 was $2.4 billion. The following table a discloses when we expect to recognize the remaining performance obligation as revenue (in billions): For the year ending December 31, 2022 December 31, 2023 Thereafter $ 1.4 $ 0.4 $ 0.6 4. Acquisitions Technical and Management Assistance Cor C porati r on (TMAC M ) C —On December 30, 2021, we completed the acquisition of TMAC through a share purchase agreement by and among ManTech International Corporation, Technical and Management 42 Assistance Corporation, Project Cipher, Inc, and its Shareholder. TMAC is a leading provider of advanced data engineering services and solutions that ensure the delivery of vital information to the U.S. Intelligence Community. The acquisition was accounted for as a business combination. The results of TMAC's operations have been included in our consolidated financial statements since that date. We funded the acquisition with cash on hand. The preliminary purchase price was $30.2 million, which includes an estimated working capit a al adjustment. The preliminary purchase price was preliminarily allocated to the underlying assets and liabilities based on their estimated fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired and liabilities assumed was recorded as goodwill. As we are still in the process of reviewing the fair value of the assets acquired and liabilities assumed, the purchase price allocation for TMAC is not complete as of December 31, 2021. In accordance with ASC 805, Business Combinations, we expect to finalize our purchase price allocation within one year of the acquisition date. Recognition of goodwill is largely attributed to the value paid for TMAC's capabi a lities, which will broaden our footprint within the U.S. Intelligence Community. The goodwill recorded for this transaction is valued at $13.2 million and will be deductible for tax purposes over 15 years. The components of other intangible assets associated with the acquisition were customer relationships and backlog valued at $15.3 million and $0.7 million, respectively. The fair values of the customer relationships and backlog were determined using the excess earnings method (income approach) in which the value is derived from an estimation of the after-tax cash flows specifically attributable a to backlog and customer relationships. Assumptions used in the analysis included revenue and expense forecasts, contributory asset charges, tax amortization benefit and discount rates. Customer contracts and related relationships represent the underlying relationships and agreements with TMAC's existing customers. Customer relationships are amortized using the pattern of benefits method over their estimated useful lives of approximately 20 years. Backlog is amortized using the pattern of benefits method over its estimated useful life of 1 year. The weighted-average amortization period of other intangibles is 19 years. For the year ended December 31, 2021, we incurred approximately $0.4 million of acquisition costs related to the TMAC transaction, which are included in general and administrative expenses in our consolidated statement of income. Gryphon y Technologie l s, Inc.c (Gryphon) y —On December 9, 2021, we completed the acquisition of Gryphon through a unit purchase agreement by and among ManTech International Corporation, Gryphon Parent, LLC and Gryphon Finance, LLC. Gryphon will further strengthen our long-term competitive position by adding differentiated digital and systems engineering capabi a lities across the Department of Defense. The acquisition was accounted for as a business combination. The results of Gryphon's operations have been included in our consolidated financial statements since that date. We funded f the acquisition with cash on hand and borrowing under our credit facilities. The preliminary purchase price was $360.8 million, which includes an estimated working capit a al adjustment. The preliminary purchase price was preliminarily allocated to the underlying assets and liabilities based on their estimated fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired and liabilities assumed was recorded as goodwill. As we are still in the process of reviewing the fair value of the assets acquired and liabilities assumed, the purchase price allocation for Gryphon is not complete as of December 31, 2021. In accordance with ASC 805, Business Combinations, we expect to finalize our purchase price allocation within one year of the acquisition date. Recognition of goodwill is largely attributed to the value paid for Gryphon's capabi a lities, which will broaden our footprint within the Department of Defense. Pre-existing goodwill recorded for this transaction will be deductible for tax purposes over 13 years. The remainder of goodwill attributable to the acquisition of Gryphon will not be deductible for tax purposes. The components of other intangible assets associated with the acquisition were customer relationships and backlog valued at $65.8 million and $5.5 million, respectively. The fair values of the customer relationships and backlog were determined using the excess earnings method (income approach) in which the value is derived from an estimation of the after-tax cash flows specifically attributable to backlog and customer relationships. Assumptions used in the analysis included revenue and expense forecasts, contributory asset charges, tax amortization benefit and discount rates. Customer contracts and related relationships represent the underlying relationships and agreements with Gryphon's r existing customers. Customer relationships are amortized using the pattern of benefits method over their estimated useful lives of approximately 20 years. Backlog is amortized using the pattern of benefits method over its estimated useful lifef of 2 years. The weighted-average amortization period of other intangibles is 19 years. 43 The fol f lowing table represents the preliminary purchase price allocation for Gryphon (in thousands): sh and cash equivalents $ 20,184 Receivable a s 63,454 Prepaid expenses 3,227 Taxes receivable - current 1,642 Other current assets 3,679 Goodwill 247,632 Other intangible assets 73,708 Property and equipment 2,736 Operating lease right of use assets 5,479 Other assets 474 Accounts payable a (12,221) Accrued salaries and related expenses (23,326) Contract liabil a ities (4,773) Operating lease obligations—current r (1,243) Accrued expenses and other current liabilities (596) Deferred income taxes (14,972) Operating lease obligations—long term (4,287) Net assets acquired and liabilities assumed $ 360,797 For the year ended December 31, 2021, we incurred approxi a mately $1.1 million of acquisition costs related to the Gryphon transaction, which are included in general and administrative expenses in our consolidated statement of income. Tapestry Technologies (Tape ( stry)y —On December 11, 2020, we completed the acquisition of Tapestry a through a share purchase agreement by and among ManTech International Corporation, Tapestry a Technologies, Inc., Project Tribune Holdings, Inc. (Holdco), and all of the shareholders of the Holdco. Tapes a try provides unique insight and cybersecurity solutions to the U.S. Defense Information Systems Agency (DISA) and the Department of Defense (DoD). This acquisition broadens our footprint with DISA, serves as a springboard into the broader Defense Department IT marketspace, and provides us access to well-funded DISA and DoD programs. The acquisition was accounted for as a business combination. The results of Tapestry's operations have been included in our consolidated financial statements since that date. We funded f the acquisition with cash on hand and borrowing under our revolving credit fac f ility. The purchase price of $46.3 million has been allocated to the underlying assets and liabilities based on their estimated fai f r value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired and liabilities assumed was recorded as goodwill. The purchase price allocation for Tapestry a was comple m te as of December 31, 2021. Recognition of goodwill is largely attributed to the value paid for f Tapestry' a s capabilities, which will broaden our footprint within DISA and the Defense Department IT marketpla t ce. The goodwill recorded for this transaction is valued at $27.0 million and will be deductible for tax purposes over 15 years. The components of other intangible assets associated with the acquisition were customer relationships and backlog valued at $15.1 million and $1.4 million, respectively. The fair values of the customer relationships and backlog were determined using the excess earnings method (income approach) in which the value is derived from an estimation of the after-tax cash flows f specifically attributable a to backlog and customer relationships. Assumptions used in the analysis included revenue and expense forecasts, contributory asset charges, tax amortization benefit and discount rates. Customer contracts and related relationships represent the underlying relationships and agreements with Tapestry' a s existing customers. Customer relationships are amortized using the pattern of benefits method over their estimated useful lives of approximately 20 years. Backlog is amortized using the pattern of benefits method over its estimated useful life of 2 years. The weighted-average amortization period of other intangibles is 18 years. For the year ended December 31, 2020, we incurred approxi a mately $0.1 million of acquisition costs related to the Tapes a try transaction, which are included in general and administrative expenses in our consolidated statement of income. 44 Minerva Engine n ering (Minerva)—On November 9, 2020, we completed the acquisition of Minerva through a membership interest purchase agreement by and among ManTech International Corporation., Minerva Engineering, LLC and NH Holdco LLC. Minerva is a leading provider of advanced cyber services that support the intelligence community, including risk and vulnerability assessment, incident response and cyber intrusion detection, and wireless signal discovery. This acquisition enhances and expands our cyber defense capa a bi a lities within the intelligence community, adding new customers, new past performance qualifications, mission-critical contracts, and highly skilled, cleared professionals that increase our deep cyber security talent base. The acquisition was accounted for as a business combination. The results of Minerva's operations have been included in our consolidated financial statements since that date. We paid for the acquisition with cash on November 9, 2020 and a short- term promissory note that was paid on November 12, 2020. The purchase price of $32.7 million includes a finalized working capit a al adjustment and has been allocated to the underlying assets and liabilities based on their estimated fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired and liabilities assumed was recorded as goodwill. The purchase price allocation for Minerva was complete as of December 31, 2021. Recognition of goodwill is largely attributed to the value paid for Minerva's capabi a lities, which will broaden our footprint within the intelligence community through the addition of differentiated capabi a lities and access to new customers and contracts. The goodwill recorded for this transaction is valued at $19.8 million and will be deductible for tax purposes over 15 years. The components of other intangible assets associated with the acquisition were customer relationships and backlog valued at $10.5 million and $1.1 million, respectively. The fair values of the customer relationships and backlog were determined using the excess earnings method (income approach) in which the value is derived from an estimation of the after-tax cash flows specifically attributable a to backlog and customer relationships. Assumptions used in the analysis included revenue and expense forecasts, contributory asset charges, tax amortization benefit and discount rates. Customer contracts and related relationships represent the underlying relationships and agreements with Minerva's existing customers. Customer relationships are amortized using the pattern of benefits method over their estimated useful lives of approximately 20 years. Backlog is amortized using the pattern of benefits method over its estimated useful life of 2 years. The weighted-average amortization period for other intangible assets is 18 years. For the year ended December 31, 2020, we incurred approximately $0.4 million of acquisition costs related to the Minerva transaction, which are included in general and administrative expenses in our consolidated statement of income. 5. Leases We elected to adopt ASC 842 using the modified retrospective method at the beginning of the period of adoption, January 1, 2019, through the recognition of a lease obligation and corresponding right of use asset. We elected the following transition related practical expedients: not to reassess whether any expired or existing contracts are or contain leases, not to reassess lease classification as determined under ASC 840, Leases, and, not to reassess initial direct costs for any existing lease. We have also elected not to apply the recognition and measurement requirements to short-term leases (less than 1 year). Our operating leases are primarily made up of real estate. Our variable lease payments do not depend on an index or a rate or are not in substance fixed payments. Our leases have remaining lease terms of 1 month to 10 years, some of which include options to extend the leases for up to 14 years, and some of which include options to terminate the leases within 1 year. Our transportation vehicles and equipment leases include a residual value guarantee, which is a guarantee made to the lessor that the value of the underlying asset returned t to the lessor at the end of the lease will be at least a specific amount. We suble u ase some of our real estate space. Sublease income is immaterial and is presented net with the corresponding lease expense. We recognize payments related to short-term leases (less than one year) as expense on a straight-line basis over the lease term and variable a lease payments in the period in which the obligation for those payments were incurred. As such, our short-term lease expense for the year ended December 31, 2021, 2020, and 2019 was $5.2 million, $6.3 million, and $5.4 million, respectively. For the year ended December 31, 2021, 2020, and 2019 we incurred r variable a lease costs of $3.6 million, $2.7 million, and $2.4 million, respectively. 45 The balance sheet information related to our leases was as foll f ows (dollars in thousands): December 31, 2021 December 31, 2020 Operating Leases Operating lease right of use assets $ 75,319 $ 94,825 Operating lease obligations—current r $ 32,557 $ 30,105 Operating lease obligations—long term $ 63,575 $ 80,242 Finance Leases Property and equipment—gross $ 797 $ 705 Accumulated depreciation (467) (330) Property and equipment—net $ 330 $ 375 Accrued expenses and other current liabilities $ 204 $ 178 Other long-term liabilities $ 144 $ 227 The components of lease expense were as follows (in thousands): For the year ended December 31, 2021 2020 2019 Operating lease expenses $ 39,007 $ 33,873 $ 33,622 Finance Leases Depreciation of right of use assets $ 179 $ 168 $ 147 Interest on lease liabilities $ 25 $ 36 $ 44 The weighted average information related to leases was as foll f ows: December 31, 2021 December 31, 2020 Weighted Average Remaining Lease Term Operating leases 4 years 4 years Finance leases 2 years 3 years Weighted Average Discount Rate Operating leases 3 % 4 % Finance leases 6 % 4 % 46 Future minimum lease payments under non-cancellable leases as of December 31, 2021 were as follows (in thousands): For the year ended: Operating Leases Financing Leases December 31, 2022 $ 35,056 $ 216 December 31, 2023 31,730 77 December 31, 2024 17,875 30 December 31, 2025 6,296 30 December 31, 2026 3,246 11 Thereafter 7,564 — Total future t minimum lease payments 101,767 364 Less imputed interest (5,635) (16) Total $ 96,132 $ 348 6. Earnings per Share Under ASC 260, Earnings per Share, the two-class method is an earnings allocation formul f a that determines earnings per share for f each class of common stock according to dividends declared (or accumulated) and participation rights in undistributed earnings. Under that method, basic and diluted earnings per share data are presented for each class of common stock. In applying the two-class method, we determined that undistributed earnings should be allocated equally on a per share basis between Class A and Class B common stock. Under our Certificate of Incorporation, the holders of the common stock are entitled to participate ratably, on a share-for-share basis as if all shares of common stock were of a single class, in such dividends, as may be declared by the Board of Directors. During the years ended December 31, 2021, 2020 and 2019, we declared and paid quarterly dividends, in the amount of $0.38, $0.32 and $0.27 per share on both classes of common stock. Basic earnings per share has been computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding during each period. Shares issued during d the period and shares reacquired during the period are weighted for f the portion of the period in which the shares were outstanding. Diluted earnings per share have been computed in a manner consistent with that of basic earnings per share while giving effect to all potentially dilutive common shares that were outstanding during each period. 47 The net income available to common stockholders and weighted average number of common shares outstanding used to compute basic and diluted earnings per share for each class of common stock are as follows (in thousands, except per share amounts): Year Ended December 31, 2021 2020 2019 Distributed earnings $ 61,826 $ 51,621 $ 43,207 Undistributed earnings 75,191 68,909 70,683 Net income $ 137,017 $ 120,530 $ 113,890 Class A common stock: Basic net income available to common stockholders $ 92,588 $ 81,087 $ 76,294 Basic weighted average common shares outstanding 27,459 27,105 26,763 Basic earnings per share $ 3.37 $ 2.99 $ 2.85 Diluted net income available to common stockholders $ 92,940 $ 81,405 $ 76,555 Effect of potential exercise of stock options 325 328 279 Diluted weighted average common shares outstanding 27,784 27,433 27,042 Diluted earnings per share $ 3.35 $ 2.97 $ 2.83 Class B common stock: Basic net income available to common stockholders $ 44,429 $ 39,443 $ 37,596 Basic weighted average common shares outstanding 13,177 13,185 13,188 Basic earnings per share $ 3.37 $ 2.99 $ 2.85 Diluted net income available to common stockholders $ 44,077 $ 39,125 $ 37,335 Diluted weighted average common shares outstanding 13,177 13,185 13,188 Diluted earnings per share $ 3.35 $ 2.97 $ 2.83 For the years ended December 31, 2021, 2020 and 2019, options to purchase 53,240 shares, 213,248 shares and 288,133 shares, respectively, were outstanding but not included in the computation of diluted earnings per share because the options' effect would have been anti-dilutive. For the years ended December 31, 2021, 2020 and 2019, there were 196,735 shares, 223,405 shares and 338,748 shares, respectively, issued from the exercise of stock options. 7. Property and Equipment Major classes of property and equipment are summarized as foll f ows (in thousands): December 31, 2021 December 31, 2020 Furniture t and equipment $ 234,169 $ 194,470 Leasehold improvements 70,932 62,293 Finance leases 797 705 Property and equipment-gross 305,898 257,468 Accumulated depreciation and amortization (172,601) (136,172) Property and equipment-net $ 133,297 $ 121,296 Depreciation and amortization expense related to property and equipment for the years ended December 31, 2021, 2020 and 2019 was $47.3 million, $39.5 million and $27.6 million, respectively. 48 8. Goodwill and Other Intangible Assets The changes in the carrying amounts of goodwill during fiscal years 2021 and 2020 were as follows (in thousands): Goodwill Balance Goodwill at December 31, 2019 $ 1,191,259 Acquisitions 46,624 Acquisition fair value adjust d ment 11 Goodwill at December 31, 2020 1,237,894 Acquisitions 260,863 Acquisition fair value adjustment 231 Goodwill at December 31, 2021 $ 1,498,988 Other intangible assets consisted of the following (in thousands): December 31, 2021 December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Other intangible assets: Contract and program intangible assets $ 517,932 $ 262,105 $ 255,827 $ 430,632 $ 242,194 $ 188,438 Capit a alized softwa f re 56,938 47,210 9,728 54,605 40,812 13,793 Total other intangible assets-net $ 574,870 $ 309,315 $ 265,555 $ 485,237 $ 283,006 $ 202,231 Amortization expense relating to intangible assets for the years ended December 31, 2021, 2020 and 2019 was $26.4 million, $27.6 million and $25.4 million, respectively. Amortization expense for the year ended December 31, 2021 and 2020 includes an impairment of $1.2 million and $1.4 million, respectively, for capit a alized software. We estimate that we will have the following amortization expense for the fut f ure t periods indicated below (in thousands): Year ending: December 31, 2022 $ 32,529 December 31, 2023 $ 25,706 December 31, 2024 $ 23,389 December 31, 2025 $ 21,031 December 31, 2026 $ 19,658 9. Debt On July 20, 2021, we amended and restated our credit agreement (Third Amended and Restated Credit Agreement) with a syndicate of lenders led by Bank of America, N.A., as sole administrative agent. The Third Amended and Restated Credit Agreement includes an aggregate principal amount of up to $1.1 billion made available through (i) a $500 million revolving credit facility with a $100 million letter of credit sublimit and a $50 million swing line loan sublimit and (ii) a $600 million delayed-draw term loan facility f . Under the delayed-draw term loan facility, borrowings are available a to be drawn prior to the first anniversary of the Third Amended and Restated Credit Agreement in up to three separate drawings in a minimal amount of $50 million. The Third Amended and Restated Credit Agreement also includes an accordion feature that permits us to arrange with the lenders for the provision of additional commitments. The maturity date of the Third Amended and Restated Credit Agreement is July 20, 2026. We have deferred $3.7 million in debt issuance costs, including $3.3 million due to the Third Amended and Restated Credit Agreement, which are being amortized over the term of the new credit agreement. Borrowings under the Third Amended and Restated Credit Agreement are collateralized by substantially all of our assets 49 and those of our Material Subsidiaries and bear interest at one of the following variable rates as selected by us at the time of borrowing: a London Interbank Offer Rate base rate plus market-rate spreads (1.25% to 2.00% based on our consolidated total leverage ratio) or Bank of America's base rate plus market spreads (0.25% to 1.00% based on our consolidated total leverage ratio). The aggregate annual weighted average interest rates were 1.59% and 2.32% for the years ended December 31, 2021 and 2020, respectively. The terms of the Third Amended and Restated Credit Agreement permit prepayment and termination of the loan commitments at any time, subject to certain conditions. The Third Amended and Restated Credit Agreement requires us to comply with specified financial covenants, including the maintenance of certain leverage ratios and a consolidated coverage ratio. The Third Amended and Restated Credit Agreement also contains various covenants, including affirmative covenants with respect to certain reporting requirements and maintaining certain business activities, and negative covenants that, among other things, may limit or impose restrictions on our ability to incur liens, incur additional indebtedness, make investments, make acquisitions and undertake certain other actions. As of, and during the fiscal years ending, December 31, 2021 and 2020, we were in compliance with our financial covenants under the credit agreement. There was $300.0 million and $15.0 million outstanding on our credit facilities at December 31, 2021 and 2020, respectively. The weighted average borrowings under the revolving and term portions of the facilities during the years ended December 31, 2021 and 2020 were $35.3 million and $37.3 million, respectively. The maximum available borrowing under the credit facilities at December 31, 2021 was $796.6 million. At December 31, 2021 and 2020, we had $3.4 million and $6.2 million, respectively, outstanding on our letter of credit that reduces our availability to borrow under our revolving credit facility. 10. Commitments and Contingencies Contracts with the U.S. government, including subcontracts, are subject to extensive legal and regulatory requirements and, from time-to-time, agencies of the U.S. government, in the ordinary course of business, investigate whether our operations are conducted in accordance with these requirements and the terms of the relevant contracts. U.S. government investigations of us, whether related to our U.S. government contracts or conducted for other reasons, could result in administrative, civil, or criminal liabi a lities, including repayments, fines or penalties being imposed upon us, or could lead to suspension or debarment from future U.S. government contracting activities. Management believes it has adequately reserved for any losses that may be experienced from any investigation of which it is aware. The Defense Contract Audit Agency has completed our incurred cost audits through 2018 with no material adjustments. The remaining audits for 2019 through 2020 are not expected to have a material effe f ct on our financial position, results of operations or cash flow and management believes it has adequately reserved for any losses. In the normal course of business, we are involved in certain governmental and legal proceedings, claims and disputes and have litigation pending under several suits. We believe that the ultimate resolution of these matters will not have a material effe f ct on our financial position, results of operations or cash flows, except for the matter noted below. We have $3.4 million outstanding on our letter of credit, of which $1.6 million is related to an outstanding performance bond in connection with a contract between ManTech MENA, LLC and Jadwalean International Operations and Management Company to fulfill technical support requirements for the Royal Saudi Air Force. 11. Stockholders' Equity and Stock-Based Compensation Common Stock t - We have 150,000,000 shares of authorized Class A common stock, par value $0.01 per share. We have 50,000,000 shares of authorized Class B common stock, par value $0.01 per share. On December 31, 2021, there were 27,618,928 shares of Class A common stock outstanding, 244,113 shares of Class A common stock recorded as treasury stock and 13,176,695 shares of Class B common stock outstanding. Holders of Class A common stock are entitled to one vote for each share held of record and holders of Class B common stock are entitled to ten votes for each share held of record, except with respect to any “going private transaction” (generally, a transaction in which George J. Pedersen (our Chairman Emeritus), his affiliates, his direct and indirect permitted transferees or a group, generally including Mr. Pedersen, such affiliates and permitted transferees, seek to buy all outstanding shares), as to which each share of Class A common stock and Class B common stock are entitled to one vote per share. The Class A common stock and the Class B common stock vote together as a single class on all matters submitted to a vote of stockholders, including the election of directors, except as required by law. Holders of common stock do not have cumulative voting rights in the election of directors. 50 Stockholders are entitled to receive, when and if declared by the Board of Directors from time-to-time, such dividends and other distributions in cash, stock or property from our assets or funds legally and contractually available for such purposes subject to any dividend preferences that may be attributable a to preferred stock that may be authorized. Each share of Class A common stock and Class B common stock is equal in respect to dividends and other distributions in cash, stock or property, except that in the case of stock dividends, only shares of Class A common stock will be distributed with respect to the Class A common stock and only shares of Class B common stock will be distributed with respect to Class B common stock. In no event will either Class A common stock or Class B common stock be split, divided or combined unless the other class is proportionately split, divided or combined. The shares of Class A common stock are not convertible into any other series or class of securities. Each share of Class B common stock, however, is freely convertible into one share of Class A common stock at the option of the Class B stockholder. Upon the death of Mr. Pedersen, all outstanding shares of Class B common stock automatically convert to Class A common stock. Preferred Stock - We are authorized to issue an aggregate of 20,000,000 shares of preferred stock, $0.01 par value per share, the terms and conditions of which are determined by our Board of Directors upon issuance. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of holders of any shares of preferred stock that we may designate and issue in the future. At December 31, 2021 and 2020, no shares of preferred stock were outstanding and the Board of Directors currently has no plans to issue a series of preferred stock. Accounting for Stock-Based Compensation: Our 2016 Management Incentive Plan (the Plan) was designed to attract, retain and motivate key employees. The types of awards available a under the Plan include stock options, restricted stock and RSUs, among others. Equity awards granted under the Plan are settled in shares of Class A common stock. At the beginning of each year, the Plan provides that the number of shares available a for issuance automatically increases by an amount equal to 1.5% of the total number of shares of Class A and Class B common stock outstanding on December 31st of the previous year. On January 2, 2022, there were 611,922 additional shares made available for issuance under the Plan. Through December 31, 2021, the Board of Directors has authorized the issuance of up to 16,358,071 shares under this Plan. Through December 31, 2021, the remaining aggregate number of shares of our common stock available for future t grants under the Plan was 7,665,322. The Plan expires in March 2026. The Plan is administered by the Compensation Committee of our Board of Directors, along with its delegates. Subject to the express provisions of the Plan, the Committee has the Board of Directors' authority to administer and interpret the Plan, including the discretion to determine the exercise price, vesting schedule, contractual life and the number of shares to be issued. Stock Compensation t Expense - For the years ended December 31, 2021, 2020 and 2019, we recorded $15.4 million, $11.4 million and $7.5 million of stock-based compensation expense, respectively. No compensation expense of employees with stock awards was capit a alized during the years ended December 31, 2021, 2020 and 2019. For the years ended December 31, 2021, 2020 and 2019, we recorded $2.3 million, $1.6 million and $2.1 million, respectively, to income tax benefit related to the exercise of stock options, vested cancellations and the vesting of restricted stock and restricted stock units. Stock Options - Under the Plan, we have issued stock options in the past. A stock option granted gives the holder the right, but not the obligation to purchase a certain number of shares at a predetermined price for a specific period of time. We typically issued options that vest over 3 years in equal installments beginning on the first anniversary of the date of grant. Under the terms of the Plan, the contractual t life of the option grants may not exceed 8 years. During the year ended December 31, 2019, we issued options that expire 5 years from the date of grant. We did not grant any options during the years ended December 31, 2021 and 2020. Fairi Value Determination t - We have used the Black-Scholes-Merton option pricing model to determine fair value of our stock option awards on the date of grant. We will reconsider the use of the Black-Scholes-Merton model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that cannot be reasonably estimated under this model. The following weighted-average assumptions were used for option grants during the year ended December 31, 2019: • Volat V ilityt - The expected volatility of the options granted was estimated based upon historical volatility of our share price through weekly observations of our trading history. • Expe E cted life of options - The expected life of options granted to employees was determined from historical exercises of the grantee population. The options had graded vesting over 3 years in equal installments beginning on the first anniversary of the date of the grant and a contractual t term of 5 years. 51 • Risk-fr - ee interest rate - The yield on zero-coupon U.S. Treasury strips was used to extrapolate a forwa f rd-yield curve. This “term structure” t of future interest rates was then input into a numeric model to provide the equivalent risk-free rate to be used in the Black-Scholes-Merton model based on the expected term of the underlying grants. • Dividen d d yield - The Black-Scholes-Merton valuation model requires an expected dividend yield as an input. For the year ended December 31, 2019, we have calculated our expected dividend yield based on an expected annual cash dividend of $1.08 per share. The following table a summarizes weighted-average assumptions used in our calculations of fair value for the year ended December 31, 2019: Volatility 27.21 % Expected life of options 3 years Risk-free interest rate 1.98 % Dividend yield 1.76 % Stock Option O Activity i - The weighted-average fair value of options granted during the year ended December 31, 2019, as determined under the Black-Scholes-Merton valuation model, was $12.07. Option grants that vested during d the years ended December 31, 2021, 2020 and 2019 had a combined fair value of $2.5 million, $3.6 million and $2.5 million, respectively. The following table a summarizes stock option activity for the years ended December 31, 2021, 2020 and 2019: Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value (in thousands) Weighted Average Remaining Contractual Life Stock options outstanding at December 31, 2018 1,093,400 $ 45.34 $ 8,776 Granted 489,947 $ 63.87 Exercised (338,748) $ 37.94 $ 9,641 Cancelled and expired (108,504) $ 51.21 Stock options outstanding at December 31, 2019 1,136,095 $ 54.98 $ 28,291 Exercised (223,405) $ 46.72 $ 6,897 Cancelled and expired (126,863) $ 61.17 Stock options outstanding at December 31, 2020 785,827 $ 56.33 $ 25,629 Exercised (196,735) $ 48.65 $ 7,168 Cancelled and expired (21,776) $ 63.80 Stock options outstanding at December 31, 2021 567,316 $ 58.70 $ 8,380 2 years Stock options exercisable a at December 31, 2021 453,249 $ 57.30 $ 7,282 2 years The following table a summarizes non-vested stock options for the year ended December 31, 2021: Number of Shares Weighted Average Fair Value Non-vested stock options at December 31, 2020 353,643 $ 11.66 Vested (220,469) $ 11.35 Cancelled (19,107) $ 12.26 Non-vested stock options at December 31, 2021 114,067 $ 12.16 52 Unrecognized compensation expense related to outstanding stock options was $0.8 million as of December 31, 2021, which is expected to be recognized over a weighted-average period of one year and will be adjust d ed for forfeitures t as they occur. Restricted Stoc S k - Under the Plan, we have issued restricted stock. A restricted stock award is an issuance of shares that cannot be sold or transferred by the recipient until the vesting period lapses a . Restricted stock issued to members of our Board of Directors vest in one year. The related compensation expense is recognized over the service period and is based on the grant date fai f r value of the stock and the number of shares expected to vest. The grant date fair f value of the restricted stock is equal to the closing market price of our common stock on the date of grant. Restrictet d Stock S Activ t ityt - The following table a summarizes the restricted stock activity during the years ended December 31, 2021 and 2020: Number of Shares Weighted Average Fair Value Non-vested restricted stock at December 31, 2019 24,000 $ 62.66 Granted 24,000 $ 71.11 Vested (24,000) $ 62.66 Non-vested restricted stock at December 31, 2020 24,000 $ 71.11 Granted 24,000 $ 86.01 Vested (24,000) $ 71.11 Non-vested restricted stock at December 31, 2021 24,000 $ 86.01 RSUs - Under the Plan, we have issued restricted stock units (RSUs). RSUs are not actual shares, but rather a right to receive shares in the future. The shares are not issued and the employee cannot sell or transfer shares prior to vesting and have no voting rights until the RSUs vest. Employees who are granted RSUs do not receive dividend payments during d the vesting period. Our employees' time-based RSUs generally provide for the delivery o r f shares in one-third increments on the first, second and third anniversaries of the date of grant. The grant date fair f value of the RSUs is equal to the closing market price of our common stock on the grant date less the present value of dividends expected to be awarded during d the service period. We recognize the grant date fair f value of RSUs of shares we expect to issue as compensation expense ratably over the requisite service period. RSU Activ t ityt - The following table a summarizes the RSU activity during the years ended December 31, 2021 and 2020: Number of Units Weighted Average Fair Value RSUs at December 31, 2019 210,827 $ 55.31 Granted 266,880 $ 68.83 Vested (73,047) $ 53.85 Forfeited (57,861) $ 64.52 RSUs at December 31, 2020 346,799 $ 64.48 Granted 236,240 $ 78.78 Vested (152,121) $ 61.06 Forfeited (25,564) $ 67.07 RSUs at December 31, 2021 405,354 $ 73.94 53 12. Retirement Plans As of December 31, 2021, we maintained a qualified defined contribution plan. Our qualified defined contribution plan covers substantially all employees and complies with Section 401 of the Internal Revenue Code. Under this plan, we stipulated a basic matching contribution that matches a portion of the participants' contribution based upon a defined schedule. Additionally, this plan contains a discretionary contribution component where we may contribute additional amounts based on a percentage of eligible employees' compensation. Contributions are invested by an independent investment company. The choice of investment alternatives is at the election of each participating employee. Our contributions to the plan were approximately $40.4 million, $33.0 million and $26.7 million for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, we maintained an Employee Supplemental Savings Plan (ESSP), which is a nonqualified deferred compensation plan for f certain key employees. Prior to January 1, 2020, eligible employees could defer up t u o 75% of qualified annual base compensation and 100% of bonus. Beginning in the 2020 plan year, additional deferrals were suspended. Contributions made in 2020 relate to deferrals on bonuses earned in 2019 but paid in 2020. In the ESSP, participant deferral accounts are credited with a rate of return t based on investment elections as selected by the participant. The assets related to the ESSP are held in a rabbi trust owned by us for benefit of the participating employees. The trust investments are in the form of variable universal life insurance products, which are owned by us. These investments seek to replicate the return t of the participant investment elections. There were no employee contributions for the year ended December 31, 2021. Employee contributions to this plan were approximately $0.5 million and $3.4 million for the years ended December 31, 2020 and 2019, respectively. We maintained a nonqualified supplemental defined benefit pension plan for f certain retired employees of an acquired company as of December 31, 2021. These plans were informally and partially funded f beginning in 1999 through a rabbi trust. Assets held in a rabbi trust are not eligible to be included in the calculation of plan status. t At both December 31, 2021 and 2020, 100% of the rabbi trust assets were invested in a money market account with a commercial bank. All covered employees retired prior to 1998. Our benefit obligation was $0.6 million and $0.7 million at December 31, 2021 and 2020, respectively. 13. Income Taxes The domestic and foreign components of income operations before income taxes and equity method investments were as follows (in thousands): Year Ended December 31, 2021 2020 2019 Domestic $ 184,309 $ 156,496 $ 136,164 Foreign (31) (99) (66) Income from f operations before income taxes and equity method investments $ 184,278 $ 156,397 $ 136,098 54 The provision for income taxes was comprised of the following components (in thousands): Year Ended December 31, 2021 2020 2019 Federal $ 18,513 $ 16,296 $ (9,092) State 9,770 7,463 6,015 Foreign 25 140 97 Current provision (benefit) 28,308 23,899 (2,980) Federal 14,282 8,183 13,451 State 3,525 1,710 2,301 Deferred provision 17,807 9,893 15,752 Federal 1,312 1,996 9,440 State 141 87 — Foreign (27) (10) — Non-current provision resulting from allocating tax benefits directly to changes in liabilities 1,426 2,073 9,440 Provision for income taxes $ 47,541 $ 35,865 $ 22,212 The schedule of effective income tax rate reconciliation is as follows: Year Ended December 31, 2021 2020 2019 Statutory U.S. Federal tax rate 21.0 % 21.0 % 21.0 % Increase (decrease) in tax rate resulting from: State taxes—net of Federal benefit 5.8 % 4.9 % 4.8 % Excess executive compensation 1.4 % 0.7 % 0.8 % Research and development credit (1.1)% (1.8)% (8.8)% Stock-based compensation (1.1)% (0.9)% (1.3)% ESSP (0.6)% (0.7)% (1.0)% Other, net 0.4 % (0.3)% 0.8 % Effective tax rate 25.8 % 22.9 % 16.3 % We paid income taxes, net of refunds of $27.2 million, $23.9 million, and $21.4 million for the years ended December 31, 2021, 2020, and 2019, respectively. 55 Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. A summary of the tax effect of the significant components of deferred income taxes is as follows (in thousands): December 31, 2021 2020 Goodwill and other intangibles $ 185,811 $ 152,412 Property and equipment 22,585 17,237 Lease arrangements 18,676 25,863 Unbilled receivables - IRC Section 481(a) — 2,946 Gross deferred tax liabilities 227,072 198,458 Retirement and other liabilities (27,575) (23,071) Lease obligations (21,717) (28,652) Allowance for f potential contract losses and other contract reserves (3,384) (4,815) Foreign and state operating loss carryforwards (2,344) (2,253) Less: Valuation allowance 2,008 1,971 Gross deferred tax assets (53,012) (56,820) Net deferred tax liabil a ities $ 174,060 $ 141,638 At December 31, 2021, we had federal, state and forei f gn net operating losses of approximately $3.5 million, $11.9 million and $1.9 million, respectively. The federal and foreign net operating losses may be carried forwa f rd indefinitely. The state net operating losses expire beginning 2028 through 2039. We recorded a full f valuation allowance against the foreign net operating losses and a partial valuation allowance against the state net operating losses, as we do not believe those losses will be full f y utilized in the future. t A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as foll f ows (in thousands): December 31, 2021 2020 2019 Gross unrecognized tax benefits at beginning of year $ 11,708 $ 9,635 $ 490 Increases in tax positions for current year 1,562 1,712 1,839 Decreases in tax positions for prior years (109) — (412) Lapse a in statute t of limitations (27) (10) — Increases in tax positions for prior years — 371 7,718 Gross unrecognized tax benefits at end of year $ 13,134 $ 11,708 $ 9,635 The total liabi a lity for gross unrecognized tax benefits as of December 31, 2021, 2020 and 2019 includes $13.1 million, $11.7 million and $9.6 million, respectively, of unrecognized net tax benefits f which, if ultimately recognized, would reduce our annual effective tax rate in a future f period. These liabi a lities, along with liabi a lities for interest and penalties, are included in accrued expenses and other current liabilities and other long-term liabilities in our consolidated balance sheet. Interest, which is included in interest expense in our consolidated statement of income, was $0.2 million for the year ended December 31, 2021 and not material for f the other years presented. During the year ended December 31, 2021, we recognized an increase in unrecognized tax benefits of approxi a mately $1.4 million, of which $1.3 million relates to an increase in research and development tax credits available a to us. During the year ended December 31, 2020, we recognized an increase in unrecognized tax benefits of approxi a mately $2.1 million of which $1.8 million related to an increase in research and development tax credits available a to us. During the year ended December 31, 2019 we recognized an increase in unrecognized tax benefits related to available research and development credits of $7.7 million for tax years 2016-2018 and $1.8 million for f the 2019 tax year. We are subject to income taxes in the U.S., various state and foreign jurisdictions. Tax statutes and regulations within each 56 jurisdiction are subject to interpretation and require significant judgment to apply. We are no longer subject to U.S. federal or non-U.S. income tax examinations by tax authorities for the years before 2016. We are currently under examination by the Internal Revenue Services and various state tax authorities for tax years 2016-2018. We are no longer subject to U.S. state tax examinations by tax authorities for the years before 2016. Given the inherent uncertainty surrounding the on-going IRS examination for tax years 2016-2018, we are unable to reasonably a estimate the timing or change in amounts of our unrecognized tax benefits. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure We have had no disagreements with our auditors on accounting principles, practices or financial statement disclosure during and through the date of the financial statements included in this Report. Item 9A. Controls and Procedures Disclosure Controlsl and Procedures and Internal Control t over Financial Reporti e ng - Management is responsible for establishing and maintaining adequate disclosure controls and procedures and internal control over financial reporting. Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this Annual Report on Form 10-K, is accurately recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures are also designed to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Internal control over financial reporting is a process designed by, or under the supervision of our principal executive officer and our principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for f external purposes in accordance with GAAP and includes those policies and procedures that: • pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; • provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures t are being made only in accordance with authorizations of management or our Board of Directors; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material adverse effec f t on our financial statements. Limitations on the Effectiven f ess of Controls - Management, including our principal executive officer and our principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived 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 assessment of controls can provide absolute assurance that all control issues and instances of fraud, if any, within us have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management's override of the control. The design of any system of controls also is based in part upon certain assumpti m ons about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Scope of the Assessments - The assessment by our principal executive officer and our principal financial officer of our disclosure controls and procedures and the assessment by our management of our internal control over financial reporting included a review of procedures and documents and discussions with other employees in our organization in order to evaluate the adequacy of our internal control system design. In the course of the evaluation, we sought to identify exposure to unprevented or undetected data errors, control problems or acts of fraud and to confirm that appropriate corrective action, including process improvements, were being undertaken. The assessment also included testing of properly designed controls to verify their effective performanc f e. Our management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission in the Internal Control-Integrated Framework (2013) to assess the effectiveness of our internal control over financial reporting. 57 We assess our disclosure controls and procedures and our internal control over financial reporting on an ongoing basis so that the conclusions concerning controls effectiveness can be reported in our Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. We consider the results of these assessment activities as we monitor our disclosure controls and procedures and our internal control over financial reporting. Our intent is to ensure that disclosure controls and procedures and internal control over financial reporting will be maintained and updated as conditions warrant. Among other matters, we sought in our assessment to determine whether there were any “material weaknesses” in our internal control over financial reporting, or whether we had identified any acts of fraud involving senior management, management or other personnel who have a significant role in our internal control over financial reporting. This information was important both for the assessment generally and because the Section 302 certifications require that our principal executive officer and our principal financial officer disclose that information, along with any “significant deficiencies,” to the Audit Committee of our Board of Directors, and to our independent auditors and to report on related matters in this section of the Annual Report on Form 10-K. Assessment of Effe f ctiveness of Disclosure Controls C and Procedures - Based upon the assessments, our principal executive officer and our principal financial officer have concluded that, as of December 31, 2021, our disclosure controls and procedures were effec f tive at the reasonable assurance level described above. Management's Report e on Internal Control over Financial Reporting e - Management is responsible for establi a shing and maintaining adequate control over financial reporting. As permitted by the SEC rules, management's assessment and conclusion on the effectiveness of our internal control over financial reporting as of December 31, 2021, excludes an assessment of the internal control over financial reporting of Gryphon Technologies, acquired on December 9, 2021. The assets of Gryphon Technologies constituted 15% of the Company’s consolidated total assets as of December 31, 2021. Management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission in the Internal Control-Integrated Framework (2013) to assess the effectiveness of our internal control over financial reporting. Based upon the assessments, our management has concluded that, as of December 31, 2021, our internal control over financial reporting was effective. Our independent registered public accounting firm issued an attestation report concerning our internal control over financial reporting, which appears further in this Annual Report. Changes in Internal Control over Financial Reporting e - During the three months ended December 31, 2021, there were no changes in our internal control over financial reporting that have materially affec f ted, or are reasonably likely to materially affect, our internal control for financial reporting. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection Not applicable. 58 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of ManTech International Corporation Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of ManTech International Corporation and subsidiaries (the “Company”) as of December 31, 2021, based on criteria establi a shed in Internal Control — Integrated e Framework r (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria establi a shed in Internal Control — Integrated e Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2021, of the Company and our report dated February 25, 2022, expressed an unqualified opinion on those financial statements. As described in Management's Report e on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Gryphon Technologies, which was acquired on December 9, 2021, and whose financial statements constitute t 15% of total assets as of December 31, 2021. Accordingly, our audit did not include the internal control over financial reporting at Gryphon Technologies. Basis for Opinion 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 Report e on Internal Control over Financial Reporting e . Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable a rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. 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. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliabil a ity of financial reporting and the preparation of financial statements for f 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 t 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 effec f t 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. /s/ Deloitte & Touche LLP Mclean, Virginia February 25, 2022 We have served as the Company's auditor since 1999. 59 PART III Item 10. Directors, Executive Officers and Corporate Governance The information concerning our directors and executive officers required by Item 401 of Regulation S-K is included under the capti a ons “Election of Directors” and “Executive Officers,” respectively, in our definitive Proxy Statement to be filed with the Securities and Exchange Commission (SEC) in connection with our 2022 Annual Meeting of Stockholders (the “2022 Proxy Statement”), and that information is incorporated by reference in this Annual Report on Form 10-K. Our Standards of Ethic t s and Business Conduct, which sets forth the policies comprising our code of conduct, satisfies the SEC's requirements (including Item 406 of Regulation S-K) for a “code of ethics” applicable a to our principal executive officer, principal financial officer, principal accounting officer, controller or persons performing similar functions, as well as Nasdaq's requirements for a code of conduct applicable to all directors, officers and employees. Among other principles, our Standards of Ethic t s and Business Conduct includes guidelines relating to the ethical handling of actual or potential conflicts of interest, compliance with laws, accurate financial reporting and procedures for promoting compliance with (and reporting violations of) these standards. A copy of our Standards of Ethic t s and Business Conduct is available on the investor relations section of our website: www.mantech.com. We are required to disclose any amendment to, or waiver from, a provision of our code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, controller and persons performing similar functions. We intend to use our website as a method of disseminating this disclosure as permitted by applicable SEC rules. The information required by Item 407(d)(4) of Regulation S-K concerning the Audit Committee is included under the capti a on “Committees of the Board of Directors - Audit Committee” in our 2022 Proxy Statement and that information is incorporated by reference in this Annual Report on Form 10-K. The information required by Item 407(d)(5) of Regulation S-K concerning the designation of an audit committee financial expert is included under the capt a ion “Committees of the Board of Directors - Audit Committee” in our 2022 Proxy Statement and that information is incorporated by reference in this Annual Report on Form 10-K. Item 11. Executive Compensation The information required by this Item is included under the capt a ions “Non-Employe m e Director Compensation Table a ,” “Certain Relationships and Related Person Transactions - Compensation Committee Interlocks and Insider Participation,” “Compensation Committee Report” and “Compensation Discussion and Analysis” and the related text and table a s in our 2022 Proxy Statement and that information is incorporated by reference in this Annual Report on Form 10-K. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by Item 403 of Regulation S-K is included under the capt a ion “Beneficial Ownership of Our Stock” in our 2022 Proxy Statement, and that information is incorporated by reference in this Annual Report on Form 10-K. 60 Securities Authorized for Issuance under Equity Compensation Plans The following table a provides information as of December 31, 2021 with respect to compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance. Equity Compensation Plan Information Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted- average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 567,316 $ 58.70 7,665,322 Equity compensation plans not approved by security holders — — — Total 567,316 $ 58.70 7,665,322 The plan contains a formul f a that automatically increases the number of securities available a for issuance. The plan provides that the number of shares available a for issuance under the plan automatically increases on the first trading day of January each calendar year during d the term of the plan by an amount equal to 1.5% of the total number of shares outstanding (including all outstanding classes of common stock) on the last trading day in December of the immediately preceding calendar year, but provides that in no event should any such annual increase exceed 1,500,000 shares. On January 2, 2022, there were 611,922 shares added to the plan under this provision. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item is included under the capti a ons “Certain Relationships and Related Person Transactions” and “Corporate Governance - Director Independence” in our 2022 Proxy Statement and that information is incorporated by reference in this Annual Report on Form 10-K. Item 14. Principal Accounting Fees and Services The information required by this Item is included under the capti a on “Ratification of Appointment of Independent Auditors” in our 2022 Proxy Statement and that information is incorporated by reference in this Annual Report on Form 10-K. 61 PART IV Item 15. Exhibits and Financial Statement Schedule (a) The fol f lowing documents are filed as a part of this Annual Report on Form 10-K: (1) All financial statements: DESCRIPTION PAGE Report of Independent Registered Public Accounting Firm (Deloitte & Touche LLP; PCAOB ID No. 34) 27 Consolidated Balance Sheets as of December 31, 2021 and 2020 30 Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019 31 Consolidated Statements of Comprehensive Income for f the years ended December 31, 2021, 2020 and 2019 32 Consolidated Statements of Changes in Stockholders' Equity for f the years ended December 31, 2021, 2020 and 2019 33 Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 34 Notes to Consolidated Financial Statements 36 (2) Financial statement schedule: SCHEDULE NO. DESCRIPTION PAGE Schedule II Valuation and Qualifyi f ng Accounts for f the years ended December 31, 2021, 2020 and 2019 66 (3) Exhibits required by Item 601 of Regulation S-K (each management contract or compensatory plan or arrangement required to be filed as an exhibit to this annual report pursuant to Item 15(b) of this annual report is identified in the Exhibit list below): Exhibit Description 3.1 Second Amended and restated Certificate of Incorporation of the registrant as filed with the Secretary of State of the State of Delaware on January 30, 2002 (incorporated herein by reference from registrant's Registration Statement on Form S-1 (File No. 333-73946), as filed with the Securities and Exchange Commission (SEC) on November 23, 2002, as amended). 3.2 Second Amended and Restated Bylaws of the registrant (incorporated herein by reference from registrant's Annual Report on Form 10-K for the year ended December 31, 2003, as filed with the SEC on March 15, 2004, as amended). 3.3 Third Amended and Restated Bylaws of the Registrant (incorporated herein by reference from registrant's Current Report on Form 8-K, as filed with the SEC on December 13, 2017). 4.1 Form of Common Stock Certificate (incorporated herein by reference from registrant's Registration Statement on Form S-1 (File No. 333-73946), as filed with the SEC on November 23, 2001, as amended). 4.2 Description of Securities of the Registrant (incorporated herein by reference from registrant’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 21, 2020). 10-K for the year ended December 31, 2019, as filed with the SEC on February 21, 2020). 10.1 Third Amended and Restated Credit Agreement dated July 20, 2021, by and among the registrant and a syndicate of lenders, including, Bank of America, N.A., acting as Administrative Agent for the lenders (incorporated herein by reference from the registrant’s Current Report on Form 8-K, as filed with the SEC on July 20, 2021) 10.2* Form of Indemnification Agreement (incorporated herein by reference from registrant’s Current Report on Form 8-K, as filed with the SEC on August 3, 2020). 10.3* ManTech International Corporation 2021 Executive Incentive Compensation Plan, adopted on March 9, 2021 in which our executive officers participate (incorporated herein by reference from registrant’s Current Report on Form 8-K, as filed with the SEC on March 12, 2021). 10.4* Management Incentive Plan of ManTech International Corporation - 2016 Restatement (incorporated herein by reference from registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, as filed with the SEC on July 29, 2016). 10.5* Form of Grant of Non-Qualified Stock Options granted under the Management Incentive Plan (incorporated herein by reference from the registrant's Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the SEC on February 24, 2012). 62 10.6* Standard Terms and Conditions for Non-Qualified Stock Options granted under the Management Incentive Plan (incorporated herein by reference from registrant's Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the SEC on February 24, 2012). 10.7* Form of Grant of Restricted Stock granted under the Management Incentive Plan (incorporated herein by reference from registrant's Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the SEC on February 24, 2012). 10.8* Standard Terms and Conditions for Restricted Stock granted under the Management Incentive Plan (incorporated herein by reference from registrant's Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the SEC on February 24, 2012). 10.9* Form of Performance-Based Restricted Stock Unit Agreement granted under the Management Incentive Plan (incorporated herein by reference from registrant's Current Report on Form 8-K, as filed with the SEC on March 13, 2017). 10.10* Form of Executive Continuity and Stay Incentive Agreement, by and between each of our executive officers and the registrant, (incorporated herein by reference from registrant's Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on February 19, 2016.) 10.11* Restricted Stock Unit Award Agreement, dated as of November 7, 2016, granted under the Management Incentive Plan, between the Company and Kevin Phillips. 10.12* Form of Time-Based Restricted Stock Unit Award Agreement granted under the Management Incentive Plan (incorporated herein by reference from registrant's Current Report on Form 8-K, as filed with the SEC on March 9, 2018). 21.1‡ Subsidiaries of the Registrant. 23.1‡ Independent Registered Public Accounting Firm Consent. 24.1 Power of Attorney (included on signature page). 31.1‡ Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. 31.2‡ Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. 32‡ Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. 101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). 101.SC I H nline XBRL Taxonomy Extension Schema Document. 101.CA I L nline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DE I F nline XBRL Taxonomy Extension Definition Linkbase Document. 101.LA I B nline XBRL Taxonomy Extension Labe a l Linkbase Document. 101.PR I E nline XBRL Taxonomy Extension Presentation Linkbase Document. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). * Management contract or compensatory plan or arrangement required to be filed as an Exhibit to this report pursuant to Item 15(a)(3). ‡ Filed herewith 63 Item 16. Form 10-K Summary. None. 64 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. MANTECH INTERNATIONAL CORPORATION By: /s/ KEVIN M. PHILLIPS Name: Kevin M. Phillips Title: Chairman, Chief Executive Officer and President Date: February 25, 2022 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. Each person whose signature appears below hereby constitutes and appoints each of Kevin M. Phillips or Michael Putnam as his/her attorney-in-fact and agent, with full power of substitution and resubstitution for him/her in any and all capacities, to sign any or all amendments to this Report and to file same, with exhibits thereto and other documents in connection therewith, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorney-in-fact and agent or his/her substitutes may do or cause to be done by virtue hereof. Name and Signature Title Date /s/ KEVIN M. PHILLIPS Chairman, Chief Executive Officer and President February 25, 2022 Kevin M. Phillips (Principal Executive Officer) /s/ JUDITH L. BJORNAAS R Chief Financial Offic f er February 25, 2022 Judith L. Bjornaas (Principal Financial Officer and Principal Accounting Offic f er) /s/ RICHARD L. ARMITAGE Director February 25, 2022 Richard L. Armitage /s/s MARY K. BUSH Director February 25, 2022 Mary K. Bush /s/s BARRY G. CAMPBELL Director February 25, 2022 Barry G. Campbell /s/ RICHARD J. KERR Director February 25, 2022 Richard J. Kerr /s/ PETER B. LAMONTAGNE Director February 25, 2022 Peter B. LaMontagne /s/ KENNETH A. MINIHAN Director February 25, 2022 Kenneth A. Minihan g 65 SCHEDULE II Valuation and Qualifying Accounts Activities in our allowance accounts for the years ended December 31, 2021, 2020 and 2019 were as follows (in thousands): Doubtful Accounts Balance at Beginning of Period Charged to Costs and Expenses Deductions Other* Balance at End of Period 2019 $ 6,233 3,000 — 2,345 $ 11,578 2020 $ 11,578 5,244 — 1,555 $ 18,377 2021 $ 18,377 (6,022) — 112 $ 12,467 * Other represents doubtful account reserves released or recorded as part of net revenues for estimated customer disallowances. Deferred Tax Asset Valuation Balance at Beginning of Period Charged to Costs and Expenses Deductions Other Balance at End of Period 2019 $ 1,537 291 — — $ 1,828 2020 $ 1,828 143 — — $ 1,971 2021 $ 1,971 37 — — $ 2,008 66 CORPORATION INFORMATION Corporate Headquarters ManTech International Corporation 2251 Corporate Park Drive Herndon, VA 20171 703-218-6000 www.mantech.com Employment ManTech is committed to providing equal employment opportunities and an inclusive work environment for all employees. It is ManTech’s policy to ensure that all employment actions, including but not limited to recruiting, hiring, discipline, promotions and separations, occur without unlawful regard to any legally protected characteristic. SHAREHOLDER INFORMATION Transfer Agent Stockholders may obtain information with respect to share position, transfer requirements, address changes, lost stock certificates, and duplicate mailings by writing, emailing or telephoning: American Stock Transfer & Trust Co. 6201 15th Avenue Brooklyn, NY 11219 Attn: Shareholder Services help@astfinancial.com 800-937-5449 or 718-921-8124 www.astfinancial.com Annual Meeting ManTech’s Annual Meeting will be held on Friday, June 10, 2022, 2:00 PM ET, at 2251 Corporate Park Drive, Herndon, VA 20171. Stock Exchange Class A Common Stock Symbol: MANT Listed: Nasdaq Stock Market Independent Auditors Deloitte & Touche LLP McLean, VA Investor Relations Questions from shareholders, analysts and others can be directed to: Stephen Vather Vice President, Corporate Development & Investor Relations 703-218-6093 e-mail: Stephen.Vather@ManTech.com ManTech’s earnings announcements, news releases, SEC filings, and other investor information are available in the Investor Relations section of our website at investor.mantech.com. FORWARD-LOOKING STATEMENTS All statements and assumptions contained in this Annual Report that do not relate to historical facts constitute “forward-looking statements.” These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often include the use of words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” and words and terms of similar substance in connection with discussions of future events, situations or financial performance. While these statements represent our current expectations, no assurance can be given that the results or events described in such statements will be achieved. These forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes we anticipate. Factors that could cause actual results to differ materially from the results we anticipate include, but are not limited to, the following: failure to maintain our relationship with the U.S. government, or the failure to win new contract awards or to retain existing U.S. government contracts; disruptions to our business resulting from the COVID-19 pandemic or other similar global health epidemics, pandemics and/ or other disease outbreaks; adverse changes in U.S. government spending for programs we support, whether due to changing mission priorities, socio-economic policies or federal budget constraints generally; inability to recruit and retain a sufficient number of employees with specialized skill sets or necessary security clearances who are in great demand and limited supply; failure to compete effectively for awards procured through the competitive bidding process, and the adverse impact of delays resulting from our competitors’ protests of new contracts that are awarded to us; disruptions to our business or damage to our reputation resulting from cyberattacks and other security threats; failure to obtain option awards, task orders or funding under our contracts; the government renegotiating, modifying or terminating our contracts; failure to comply with, or adverse changes in, complex U.S. government laws and procurement regulations; adverse results of U.S. government audits or other investigations of our government contracts; failure to successfully integrate acquired companies or businesses into our operations or to realize any accretive or synergistic effects from such acquisitions; failure to mitigate risks associated with conducting business internationally; and adverse changes in business conditions that may cause our investments in recorded goodwill to become impaired. These and other risk factors are more fully discussed in the section entitled “Risk Factors” in ManTech’s Annual Report on Form 10-K previously filed with the Securities and Exchange Commission on Feb. 25, 2022, Item 1A of Part II of our Quarterly Reports on Form 10-Q, and, from time to time, in ManTech’s other filings with the Securities and Exchange Commission. We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report. We undertake no obligation to update any forward-looking statement made herein following the date of this Annual Report, whether as a result of new information, subsequent events or circumstances, changes in expectations or otherwise. 2021 ANNUAL REPORT 2251 Corporate Park Drive Herndon, Virginia 20171 www.mantech.com 3_22