##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    April 30, 2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission File Number
    001-14505
      KORN/FERRY
    INTERNATIONAL
 (Exact Name of Registrant as
    Specified in its Charter)
  Delaware

95-2623879(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification Number)1900 Avenue of the Stars, Suite 2600,
    Los Angeles, California(Address of principal
    executive offices)

90067(Zip code)   (310) 552-1834
 (Registrants telephone
    number, including area code)
      Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value $0.01 per share

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  þ o
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




---



##### 





KORN/FERRY
    INTERNATIONAL
  Index to
    Annual Report on
    Form 10-K
    for the Fiscal Year Ended April 30, 2009
   
 Item #

Description

PagePART I.Item 1


Business


1Item 1A


Risk Factors


9Item 1B


Unresolved Staff Comments


13Item 2


Properties


13Item 3


Legal Proceedings


13Item 4


Submission of Matters to a Vote of Security
    Holders


13Executive Officers


13PART II.Item 5


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


14Item 6


Selected Financial Data


17Item 7


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


18Item 7A


Quantitative and Qualitative Disclosures About
    Market Risk


32Item 8


Financial Statements and Supplementary Data


33Item 9


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


33Item 9A


Controls and Procedures


33Item 9B


Other Information


34PART III.Item 10


Directors, Executive Officers and Corporate
    Governance


34Item 11


Executive Compensation


35Item 12


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


35Item 13


Certain Relationships and Related Transactions,
    and Director Independence


35Item 14


Principal Accountant Fees and Services


35PART IV.Item 15


Exhibit and Financial Statements


36Signatures


39Financial Statements and Financial Statement
    Schedules


F-1EX-10.44EX-10.45EX-10.50EX-10.51EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1




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##### Table of Contents



PART I.  Item 1.
    Business  Business
    Overview
        Executive Recruitment:
  Leadership and Talent Consulting (LTC) Leadership Development
    Solutions)
  Talent Acquisition Solutions:
  1-800-732-0330. www.sec.gov
  www.kornferry.com
  www.kornferry.com
 1




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##### Table of Contents



Industry
    Overview
  Executive Recruitment:
  Leadership and Talent Consulting:
  Talent Acquisition Solutions:
  Industry
    Trends
    Consolidation of Talent Management Solution
    Providers
  
    Companies are actively in search of preferred providers in order
    to create efficiencies and consolidate vendor relationships;
    Companies that can offer a full suite of talent management
    solutions are becoming increasingly attractive; and
    Clients seek trusted advisors who understand their business and
    unique organizational culture in order to manage the multiple
    needs of their business on a global scale.  Aging Population
  Globalization of Business
  Increased Outsourcing of Recruitment
    Functions
 2




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##### Table of Contents




    Have access to a diverse and highly qualified pool of candidates
    on an as-needed basis;
    Reduce or eliminate the costs required to maintain and train an
    in-house recruiting department in a rapidly changing industry;
    Benefit from the most updated industry and geographic market
    information;
    Access cutting-edge search technology software; and
    Maintain management focus on core strategic business issues.  Key Role of Advanced Technology
  Other Industry Trends
  
    Increasing demand for managers with broader qualifications;
    Increasing desire by candidates to more actively manage their
    careers;
    Increasing demand for senior executives with not just the right
    technical skills, but also the right leadership characteristics
    to meet the specific requirements of the position and
    organizational culture;
    Increasing demand for senior executives who can exceed the high
    standards of due diligence and public scrutiny as a result of
    new securities legislation;
    Decreasing executive management tenure and more frequent job
    changes; and
    Inadequate succession planning.  Growth
    Strategy
    Recruiting
    and Retaining Key Consultants
    Broadening
    our Product and Service Offerings
   3




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##### Table of Contents



Global
    Account Management
  Premier Client Partnerships
  Expanding
    our Market Reach and Presence through Technology and Assessment
    Solutions
  state-of-the-art e-Korn/Ferry Searcher Express Searcher Express Client Advantage Talent Dashboard Client Advantage Korn/Ferry Advantage
  multi-language
  Search Assessment Best-In-Class
  Talent Acquisition Solutions:
    Leveraging
    our Leadership and Brand Name in Executive
    Recruitment
   4




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##### Table of Contents



Our
    Services and Organization
    Executive
    Recruitment Services
  Overview.
  The Korn/Ferry Advantage
          Industry Specialization.
 5




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##### Table of Contents



Percentage
    of Fiscal 2009 Assignments by Industry Specialization
  Global Markets:Industrial


29
%Consumer


18
%Financial Services


18
%Technology


14
%Life Sciences


11
%Regional Specialties:Healthcare Provider


5
%Education/Not-for-profit


5
%   Functional Expertise.
  Percentage
    of Fiscal 2009 Assignments by Functional Expertise
  Board Level/CEO/CFO/Senior Executive and General Management


63
%Marketing and Sales


13
%Human Resources and Administration


8
%Manufacturing/Engineering/Research and Development/Technology


8
%Finance and Control


6
%Information Systems


2
%   Regions
  North America
  Europe, the Middle East and Africa
    (EMEA)
  Asia Pacific
  Latin America
 6




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##### Table of Contents



Client Base.
  Competition.
  Leadership and Talent Consulting. Leadership and Talent Consulting
          Talent
    Acquisition Solutions  Futurestep
  Overview.
     7




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##### Table of Contents



Regions.
  Competition.
    Organization
    Professional
    Staff and Employees
     8




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##### Table of Contents



Form 10-K.
  Operating


Number of


Number ofFee


Income


Offices as of


Consultants as ofRevenue


(Loss)


April 30, 2009


April 30, 2009(Dollars in thousands)Executive Recruitment:North America

$
309,514


$
37,516



22



230EMEA


143,184



2,061



22



124Asia Pacific


66,332



5,396



17



84South America


24,323



2,441



7



22Total Executive Recruitment


543,353



47,414



68



460Futurestep(1)


94,870



(12,003
)


10



155Corporate






(31,683
)






Total

$
638,223


$
3,728



78



615     (1)
    
    Futurestep partially occupies 21 of the executive recruitment
    offices globally in 15 countries.    Year Ended April 30,2009


2008


2007(In thousands)Fee Revenue:United States

$
305,472


$
368,039


$
324,349Canada


41,861



48,646



35,559EMEA


172,899



223,826



179,974Asia Pacific


93,668



124,503



96,114South America


24,323



25,556



17,426Total

$
638,223


$
790,570


$
653,422   Item 1A.
    Risk
    Factors  The risks described below are the material risks facing our
    Company. Additional risks not presently known to us or that we
    currently deem immaterial may also impair our business
    operations. Our business, financial condition or results of
    operations could be materially adversely affected by any of
    these risks.
  Competition
    in our industry could result in us losing market share and/or
    require us to charge lower prices for services, which could
    reduce our revenue.
  and/or
 9




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If we
    fail to attract and retain qualified and experienced
    consultants, our revenue could decline and our business could be
    harmed.
    Global
    economic developments and the conditions in the geographic
    regions and the industries from which we derive a significant
    portion of our fee revenue could negatively affect our business,
    financial condition and results of operations.
    If we
    are unable to retain our executive officers and key personnel,
    or integrate new members of our senior management who are
    critical to our business, we may not be able to successfully
    manage our business in the future.
    If we
    are unable to maintain our professional reputation and brand
    name, our business will be harmed.
      We are
    subject to potential legal liability from clients, employees and
    candidates for employment. Insurance coverage may not be
    available to cover all of our potential liability and available
    coverage may not be sufficient to cover all claims that we may
    incur.
   10




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##### Table of Contents



We
    rely heavily on our information systems and if we lose that
    technology, or fail to further develop our technology, our
    business could be harmed.
    We
    face risks associated with social and political instability,
    legal requirements, economic conditions and currency
    fluctuations in our international operations.
    
    changes in and compliance with applicable laws and regulatory
    requirements;
    difficulties in staffing and managing global operations;
    social and political instability;
    fluctuations in currency exchange rates;
    statutory equity requirements;
    repatriation controls; and
    potential adverse tax consequences.    We may
    be limited in our ability to recruit employees from our clients
    and we could lose those opportunities to our competition, which
    could harm our business.
   11




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##### Table of Contents



We
    have provisions that make an acquisition of us more difficult
    and expensive.
    
    a classified Board of Directors;
    limitations on the removal of directors;
    limitation on stockholder actions;
    advance notification requirements for director nominations and
    actions to be taken at stockholder meetings; and
    the ability to issue one or more series of preferred stock by
    action of our Board of Directors.    We
    have deferred tax assets that we may not be able to use under
    certain circumstances.
    An
    impairment in the carrying value of goodwill and other
    intangible assets could negatively impact our consolidated
    results of operations and net worth.
    Acquisitions
    may have an adverse effect on our business.
   12




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##### Table of Contents



We may
    not be able to align our cost structure with our revenue
    level.
    We may
    require additional capital in the future, which may not be
    available at all or may be available only on unfavorable
    terms.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders    Executive
    Officers of the Registrant
  Name

Age

PositionGary D. Burnison


48


Chief Executive OfficerMichael A. DiGregorio


54


Executive Vice President and Chief Financial OfficerAna Dutra


45


Executive Vice President and Chief Executive Officer of
    Leadership and Talent ConsultingRobert H. McNabb


62


Executive Vice President, Korn/Ferry and Chief Executive
    Officer, Futurestep     Gary D. Burnison
 13




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##### Table of Contents



Michael A. DiGregorio
  Ana Dutra
  Robert H. McNabb
 PART II.  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Common
    Stock
    High


LowFiscal Year Ended April 30, 2009First Quarter

$
18.88


$
15.42Second Quarter

$
20.52


$
9.87Third Quarter

$
14.50


$
9.28Fourth Quarter

$
11.49


$
7.54Fiscal Year Ended April 30, 2008First Quarter

$
27.13


$
22.62Second Quarter

$
24.62


$
16.27Third Quarter

$
20.75


$
13.10Fourth Quarter

$
18.95


$
14.42    14




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##### Table of Contents



Performance
    Graph
      Form 10-K
  COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN* AMONG
    KORN/FERRY INTERNATIONAL, THE S&P 500 INDEX
    AND A PEER GROUP
  
  4/30/04
  ©  www.researchdatagroup.com/S&P.htm
  Dividends
    and Stock Repurchases
   15




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##### Table of Contents



Recent
    Sales of Unregistered Securities
        Issuer
    Purchases of Equity Securities
    Approximate DollarValue of SharesShares Purchased


that may Yet beas Part of Publicly-


Purchased UnderShares


Average Price


Announced Programs


the ProgramsPurchased


Paid per Share


(1), (2), (3) and (4)


(1), (2), (3) and (4)(Dollars in thousands)February 1, 2009  February 28, 2009





$







$
36.4 millionMarch 1, 2009  March 31, 2009


5,749
(5)

$
8.47






$
36.4 millionApril 1, 2009  April 30, 2009





$







$
36.4 millionTotal


5,749
(5)     (1)
    
    On December 7, 2005, the Board of Directors approved the
    repurchase of up to $50 million of the Companys
    common stock in a common stock repurchase program. The shares
    can be repurchased in open market transactions or privately
    negotiated transactions at the Companys discretion.(2)
    
    On June 8, 2006, the Board of Directors approved the
    repurchase of an additional $25 million of the
    Companys common stock in a common stock repurchase
    program. The shares can be repurchased in open market
    transactions or privately negotiated transactions at the
    Companys discretion.(3)
    
    On March 6, 2007, the Board of Directors approved the
    repurchase of an additional $50 million of the
    Companys common stock in a common stock repurchase
    program. The shares can be repurchased in open market
    transactions or privately negotiated transactions at the
    Companys discretion.(4)
    
    On November 2, 2007, the Board of Directors approved the
    repurchase of an additional $50 million of the
    Companys common stock in a common stock repurchase
    program. The shares can be repurchased in open market
    transactions or privately negotiated transactions at the
    Companys discretion.(5)
    
    Represents withholding of a portion of restricted shares to
    cover taxes on vested restricted shares. 16




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##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K. Form 10-K. Form 10-K
  Year Ended April 30,2009


2008


2007


2006


2005(In thousands, except per share data and other operating
    data)Selected Statement of Operations Data:Fee revenue

$
638,223


$
790,570


$
653,422


$
522,882


$
452,194Reimbursed
    out-of-pocket
    engagement expenses


37,905



45,072



35,779



28,887



24,183Total revenue


676,128



835,642



689,201



551,769



476,377Compensation and benefits


442,632



540,056



447,692



341,196



292,913General and administrative expenses


126,882



134,542



105,312



93,462



83,544Out-of-pocket
    engagement expenses


49,388



58,750



44,662



31,927



25,702Depreciation and amortization


11,583



10,441



9,280



9,002



8,437Restructuring charges(1)


41,915















Total operating expenses


672,400



743,789



606,946



475,587



410,596Operating income


3,728



91,853



82,255



76,182



65,781Interest and other income (loss), net


(10,391
)


11,949



10,416



11,086



3,360Interest expense


5,410



4,812



10,172



10,244



10,463Provision for income taxes


384



36,081



30,164



19,594



20,251Equity in earnings of unconsolidated subsidiaries, net


2,365



3,302



3,163



2,000



193Net (loss) income

$
(10,092
)

$
66,211


$
55,498


$
59,430


$
38,620Basic (loss) earnings per share

$
(0.23
)

$
1.50


$
1.40


$
1.49


$
1.00Diluted (loss) earnings per share

$
(0.23
)

$
1.46


$
1.24


$
1.32


$
0.90Basic weighted average common shares outstanding


43,522



44,012



39,774



39,890



38,516Diluted weighted average common shares outstanding


43,522



45,528



46,938



47,270



46,229Other Operating Data:Fee revenue by business segment:Executive recruitment:North America

$
309,514


$
374,891


$
329,065


$
259,089


$
225,850EMEA


143,184



183,042



146,155



120,059



110,455Asia Pacific


66,332



95,915



74,987



57,922



51,196South America


24,323



25,556



17,426



15,660



10,828Total executive recruitment


543,353



679,404



567,633



452,730



398,329Futurestep


94,870



111,166



85,789



70,152



53,865Total fee revenue

$
638,223


$
790,570


$
653,422


$
522,882


$
452,194Number of offices (at period end)


78



89



82



72



70Number of consultants (at period end)


615



684



601



507



474Number of new engagements opened


9,630



11,106



10,415



9,608



8,062Selected Balance Sheet Data as of April 30:Cash and cash equivalents(3)

$
255,000


$
305,296


$
226,137


$
211,753


$
178,906Marketable securities(3)


75,255



83,966



98,130



66,444



28,042Working capital(3)


198,250



196,259



193,716



197,540



138,179Total assets


740,879



880,214



761,491



635,491



534,168Total long-term debt(2)














45,147



44,949Mandatorily redeemable preferred stock(2)














10,989



10,795Total stockholders equity


459,099



496,134



432,955



323,751



252,902  17




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##### Table of Contents



(1)
    
    In response to deteriorating economic conditions encountered in
    fiscal 2009, we recognized $41.9 million of restructuring
    charges comprised of (a) severance charges of
    $26.9 million and (b) facilities charges of
    $15.0 million.(2)
    
    In the fourth quarter of fiscal 2007, we issued notice for the
    redemption of our 7.5% Convertible Series Subordinated
    Notes and 7.5% Convertible Series A Preferred Stock.
    In response, the holder of the notes and preferred stock
    exercised its option to convert the debt and preferred stock
    pursuant to the terms of the original agreements. The conversion
    resulted in approximately 5.6 million shares of our common
    stock being delivered to the debt and preferred stock holder in
    April 2007. As of April 30, 2009, we had no outstanding
    amounts related to these convertible securities. Conversion of
    debt is discussed in Item 7, Long-Term Debt.(3)
    
    Certain amounts in the consolidated balance sheet have been
    conformed to current year presentation.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Forward-looking
    Statements
  This Annual Report on
    Form 10-K
    may contain certain statements that we believe are, or may be
    considered to be, forward-looking statements, within
    the meaning of Section 27A of the Securities Act of 1933
    and Section 21E of the Securities Exchange Act of 1934.
    These forward-looking statements generally can be identified by
    use of statements that include phrases such as
    believe, expect, anticipate,
    intend, plan, foresee,
    may, will, estimates,
    potential, continue or other similar
    words or phrases. Similarly, statements that describe our
    objectives, plans or goals also are forward-looking statements.
    All of these forward-looking statements are subject to risks and
    uncertainties that could cause our actual results to differ
    materially from those contemplated by the relevant
    forward-looking statement. The principal risk factors that could
    cause actual performance and future actions to differ materially
    from the forward-looking statements include, but are not limited
    to, those set forth above under the caption, Risk
    Factors, including dependence on attracting and retaining
    qualified and experienced consultants, portability of client
    relationships, global, local political or economic developments
    in or affecting countries where we have operations, currency
    fluctuations in our international operations, ability to manage
    growth, competition, reliance on information processing systems,
    employment liability risk, an impairment in the carrying value
    of goodwill and other intangible assets, deferred tax assets
    that we may not be able to use and alignment of our cost
    structure to our revenue level, and also includes risks related
    to the integration of recently acquired businesses. Readers are
    urged to consider these factors carefully in evaluating the
    forward-looking statements. The forward-looking statements
    included in this Annual Report on
    Form 10-K
    are made only as of the date of this Annual Report on
    Form 10-K
    and we undertake no obligation to publicly update these
    forward-looking statements to reflect subsequent events or
    circumstances.
  The following presentation of managements discussion
    and analysis of our financial condition and results of
    operations should be read together with our consolidated
    financial statements and related notes included in this Annual
    Report on
    Form 10-K.
  Executive
    Summary
     18




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##### Table of Contents



Critical
    Accounting Policies
  Form 10-K
  Revenue Recognition.
  Deferred Compensation.
 19




---



##### Table of Contents



Carrying Values.
  Accounting
    Adjustment
  Considering the
    Effects of Prior Year Misstatements when Quantifying
    Misstatements in Current Year Financial Statements
  Results
    of Operations
    Year Ended April 30,2009


2008


2007Fee revenue


100.0
%


100.0
%


100.0
%Reimbursed
    out-of-pocket
    engagement expenses


5.9



5.7



5.5Revenue


105.9



105.7



105.5Compensation and benefits


69.3



68.3



68.5General and administrative expenses


19.9



17.0



16.1Out-of-pocket
    engagement expenses


7.7



7.4



6.8Depreciation and amortization


1.8



1.4



1.5Restructuring charges


6.6







Operating income


0.6



11.6



12.6Net (loss) income


(1.6
)%


8.4
%


8.5
%  20




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##### Table of Contents



Year Ended April 30,2009


2008


2007Dollars


%


Dollars


%


Dollars


%(Dollars in thousands)Fee revenueExecutive recruitment::North America

$
309,514



48.5
%

$
374,891



47.4
%

$
329,065



50.4
%EMEA


143,184



22.4



183,042



23.2



146,155



22.4Asia Pacific


66,332



10.4



95,915



12.1



74,987



11.5South America


24,323



3.8



25,556



3.2



17,426



2.6Total executive recruitment


543,353



85.1



679,404



85.9



567,633



86.9Futurestep


94,870



14.9



111,166



14.1



85,789



13.1Total fee revenue


638,223



100.0
%


790,570



100.0
%


653,422



100.0
%Reimbursed
    out-of-pocket
    engagement expense


37,905







45,072







35,779Total revenue

$
676,128






$
835,642






$
689,201   Year Ended April 30,2009


2008


2007Dollars


Margin(1)


Dollars


Margin(1)


Dollars


Margin(1)(Dollars in thousands)Operating (loss) incomeExecutive recruitment::North America

$
37,516



12.1
%

$
70,628



18.8
%

$
69,815



21.2
%EMEA


2,061



1.4



29,820



16.3



24,166



16.5Asia Pacific


5,396



8.1



19,299



20.1



16,010



21.4South America


2,441



10.0



2,230



8.7



1,894



10.9Total executive recruitment


47,414



8.7



121,977



18.0



111,885



19.7Futurestep


(12,003
)


(12.7
)


8,545



7.7



7,854



9.2Corporate


(31,683
)






(38,669
)






(37,484
)Total operating income

$
3,728



0.6
%

$
91,853



11.6
%

$
82,255



12.6
%     (1)
    
    Margin calculated as a percentage of fee revenue by business
    segment.  Fiscal
    2009 Compared to Fiscal 2008
  Fee
    Revenue
  Fee Revenue.
  Executive Recruitment.
 21




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##### Table of Contents



Futurestep.
  Compensation
    and Benefits
     22




---



##### Table of Contents



Marketable Securities
  General
    and Administrative Expenses
          Out-of-Pocket
    Engagement Expenses
  Out-of-pocket Out-of-pocket Out-of-pocket
  Depreciation
    and Amortization Expenses
   23




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##### Table of Contents



Restructuring
    Charges
    Operating
    Income
        Interest
    Income and Other (Loss) Income, Net
  available-for-sale
  Interest
    Expense
    Provision
    for Income Taxes
  available-for-sale
  Equity
    in Earnings of Unconsolidated Subsidiary
   24




---



##### Table of Contents



Fiscal
    2008 Compared to Fiscal 2007
  Fee
    Revenue
    Executive Recruitment year-to-date
          Futurestep
 25




---



##### Table of Contents



Compensation
    and Benefits
          General
    and Administrative Expenses
          Out-of-Pocket
    Engagement
    Expenses. Out-of-pocket Out-of-pocket out-of-pocket
 26




---



##### Table of Contents



Depreciation and Amortization
    Expenses.
  Operating
    Income
        Interest Income and Other Income,
    Net.
  Interest Expense.
  Provision for Income Taxes.
  Equity in Earnings of Unconsolidated
    Subsidiaries.
  Liquidity
    and Capital Resources
   27




---



##### Table of Contents



Accounting for Certain
    Investments in Debt and Equity Securities available-for-sale
         28




---



##### Table of Contents



other-than-temporary available-for-sale
      Off-Balance
    Sheet Arrangements
    Contractual
    Obligations
    Payments Due in:Less Than








More ThanNote

Total


1 Year


1-3 Years


3-5 Years


5 Years(In thousands)Operating lease commitments

16

$
90,482


$
26,717


$
29,142


$
17,570


$
17,053Accrued restructuring charges(1)

6


13,642



7,439



4,325



1,487



391Total



$
104,124


$
34,156


$
33,467


$
19,057


$
17,444     (1)
    
    Represents rent payments, net of sublease income on an
    undiscounted basis. 29




---



##### Table of Contents



Deferred Compensation
    and Retirement Plans
  Long-Term Debt
    Long-Term
    Debt.
        Accounting
    Developments
  Recently
    Adopted Accounting Standards
  Employers Accounting for Defined Benefit Pension and
    Other Postretirement Plans  an amendment of FASB
    Statements No. 87, 88, 106 and 132(R) fiscal-year-end
 30




---



##### Table of Contents



Accounting for Uncertainty in Income Taxes, an interpretation
    of FASB Statement No. 109
  No. 06-4, Accounting for Deferred Compensation and Postretirement
    Benefit Aspects of Endorsement Split-Dollar Life Insurance
    Arrangements (EITF 06-4). EITF 06-4 EITF 06-4 EITF 06-4 EITF 06-4
  Fair Value Measurements
  The Fair Value Option for Financial Assets and Financial
    Liabilities
  Recently
    Issued Accounting Standards
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  An Amendment of ARB No. 51
 31




---



##### Table of Contents



The
    Hierarchy of Generally Accepted Accounting Principle The Meaning of Present
    Fairly in Conformity With Generally Accepted Accounting
    Principle
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Foreign
    Currency Risk.
        Interest
    Rate Risk.
   32




---



##### Table of Contents



Equity
    Risk.
  available-for-sale
  Item 8.
    Financial
    Statements and Supplementary Data  page F-1 Form 10-K.
  Quarterly
    Results
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures    Form 10-K, Rules 13a-15(e) 15d-15(e)
     33




---



##### Table of Contents



Annual
    Certifications
  Form 10-K
  Item 9B.
    Other
    Information  Restructuring
    Charges
    Renewal
    and Modification of McNabb Employment Agreement
    Modification
    to Burnison Compensation
   PART III.  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K
   34




---



##### Table of Contents



Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   35




---



##### 



PART IV.  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial
    Statements.
   
 Page1.


Index to Financial Statements:See Consolidated Financial Statements included as part of this
    Form 10-K.
    Pursuant to
    Rule 7-05
    of
    Regulation S-X,
    the schedules have been omitted as the information to be set
    forth therein is included in the notes of the audited
    consolidated financial statements.


F-1    Exhibits:
  ExhibitNumber

Description3
.1+

Certificate of Incorporation of the Company, filed as
    Exhibit 3.1 to the Companys Quarterly Report on
    Form 10-Q,
    filed December 15, 1999.3
.2+

Certificate of Designations of 7.5% Convertible Preferred
    Stock, filed as Exhibit 3.1 to the Companys Current
    Report on
    Form 8-K,
    filed June 18, 2002.3
.3+

Second Amended and Restated Bylaws of the Company, filed as
    Exhibit 3.1 to the Companys Current Report on
    Form 8-K,
    filed April 29, 2009.4
.1+

Form of Common Stock Certificate of the Company, filed as
    Exhibit 4.1 to the Companys Registration Statement on
    Form S-3
    (No. 333-49286),
    filed November 3, 2000.4
.2+

Form of 7.5% Convertible Subordinated Note Due 2010, filed
    as Exhibit 4.1 to the Companys Current Report on
    Form 8-K,
    filed June 18, 2002.4
.3+

Form of Stock Purchase Warrant, filed as Exhibit 4.2 to the
    Companys Current Report on
    Form 8-K,
    filed June 18, 2002.4
.4+

Subordination Agreement, dated as of June 13, 2002, made by
    Korn/Ferry International, a Delaware corporation, Friedman
    Fleischer & Lowe Capital Partners, L.P., a Delaware
    limited partnership, and FFL Executive Partners, L.P., a
    Delaware limited partnership in favor of Bank of America, N.A.,
    filed as Exhibit 4.3 to the Companys Current Report
    on
    Form 8-K,
    filed June 18, 2002.10
.1*+

Form of Indemnification Agreement between the Company and some
    of its executive officers and Directors, filed as
    Exhibit 10.1 to the Companys Registration Statement
    on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.2*+

Form of U.S. and International Worldwide Executive Benefit
    Retirement Plan, filed as Exhibit 10.3 to the
    Companys Registration Statement of
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.3*+

Form of U.S. and International Worldwide Executive Benefit Life
    Insurance Plan, filed as Exhibit 10.4 to the Companys
    Registration Statement on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.4*+

Worldwide Executive Benefit Disability Plan (in the form of
    Long-Term Disability Insurance Policy), filed as
    Exhibit 10.5 to the Companys Registration Statement
    on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.5*+

Form of U.S. and International Enhanced Executive Benefit and
    Wealth Accumulation Plan, filed as Exhibit 10.6 to the
    Companys Registration Statement on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.6*+

Form of U.S. and International Senior Executive Incentive Plan,
    filed as Exhibit 10.7 to the Companys Registration
    Statement on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.7*+

Executive Salary Continuation Plan, filed as Exhibit 10.8
    to the Companys Registration Statement on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.8*+

Form of Amended and Restated Stock Repurchase Agreement, filed
    as Exhibit 10.10 to the Companys Registration
    Statement on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.9*+

Form of Standard Employment Agreement, filed as
    Exhibit 10.11 to the Companys Registration Statement
    on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999.10
.10*+

Form of U.S. and Foreign Executive Participation Program, filed
    as Exhibit 10.27 to the Companys Registration
    Statement on
    Form S-1
    (No. 333-61697),
    effective February 10, 1999. 36




---



##### Table of Contents



ExhibitNumber

Description10
.11*+

Employment Agreement between the Company and Paul C. Reilly,
    dated May 24, 2001, filed as Exhibit 10.14 to the
    Companys Annual Report on
    Form 10-K,
    filed July 30, 2001.10
.12*+

Amendment to Employment Agreement between the Company and Paul
    C. Reilly, dated December 1, 2001, filed as
    Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q,
    filed December 17, 2001.10
.13*+

Second Amendment to Employment Agreement between the Company and
    Paul C. Reilly, dated July 1, 2003 filed as
    Exhibit 10.13 to the Companys Annual Report on
    Form 10-K,
    filed July 22, 2003.10
.14*+

Letter from the Company to Paul C. Reilly, dated June 6,
    2001, filed as Exhibit 10.2 to the Companys Quarterly
    Report on
    Form 10-Q,
    filed December 17, 2001.10
.15*+

Employment Agreement between the Company and
    Gary C. Hourihan effective March 6, 2000, filed
    as Exhibit 10.22 to the Companys Annual Report on
    Form 10-K,
    filed July 31, 2000.10
.16*+

Korn/Ferry International Special Severance Pay Policy, dated
    January 1, 2000, filed as Exhibit 10.2 to the
    Companys Quarterly Report on
    Form 10-Q,
    filed March 19, 2001.10
.17*+

Korn/Ferry International Second Amended and Restated Performance
    Award Plan, filed as Appendix A to the Companys
    Definitive Proxy Statement, filed August 12, 2004.10
.18+

Investor Rights Agreement, dated as of June 13, 2002, by
    and among Korn/Ferry International, a Delaware corporation,
    Friedman Fleischer & Lowe Capital Partners, L.P., a
    Delaware limited partnership, and FFL Executive Partners, L.P.,
    a Delaware limited partnership, filed as Exhibit 10.1 to
    the Companys Current Report on
    Form 8-K,
    filed June 18, 2002.10
.19*+

Letter from Korn/Ferry International Futurestep, Inc. to Robert
    H. McNabb, dated December 3, 2001, filed as
    Exhibit 10.29 to the Companys Amended Annual Report
    on
    Form 10-K/A,
    filed August 12, 2002.10
.20*+

Letter from the Company to Robert H. McNabb, dated
    November 29, 2001, filed as Exhibit 10.30 to the
    Companys Amended Annual Report on
    Form 10-K/A,
    filed August 12, 2002.10
.21*+

Employment Agreement between the Company and Robert H. McNabb,
    dated October 1, 2003, filed as Exhibit 10.2 to the
    Companys Quarterly Report on
    Form 10-Q,
    filed December 12, 2003.10
.22*+

Employee Stock Purchase Plan filed as Exhibit 10.29 to the
    Companys Annual Report on
    Form 10-K,
    filed July 22, 2003.10
.23*+

Employment Agreement between the Company and Gary D. Burnison,
    dated October 1, 2003, filed as Exhibit 10.2 to the
    Companys Quarterly Report on
    Form 10-Q,
    filed March 12, 2004.10
.24+

Letter Agreement, dated December 31, 2003, among the
    Company, Friedman Fleischer & Lowe Capital Partners,
    L.P. and FFL Executive Partners, L.P., filed as
    Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q,
    filed March 12, 2004.10
.25*+

Third Amendment to the Employment Agreement between the Company
    and Paul C. Reilly, dated March 10, 2004, filed as
    Exhibit 10.3 to the Companys Quarterly Report on
    Form 10-Q,
    filed March 12, 2004.10
.26*+

Form of Indemnification Agreement between the Company and some
    of its executive officers and directors, filed as
    Exhibit 10.4 to the Companys Quarterly Report on
    Form 10-Q,
    filed March 12, 2004.10
.27*+

Fourth Amendment to the Employment Agreement between the Company
    and Paul C. Reilly, dated March 7, 2005, filed as
    Exhibit 10.32 to the Companys Annual Report on
    Form 10-K,
    filed July 14, 2005.10
.28+

Summary of Non-Employee Director Compensation, filed as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    filed January 12, 2006.10
.29*+

Fifth Amendment to the Employment Agreement between the Company
    and Paul C. Reilly, dated April 26, 2006, filed as
    Exhibit 10.32 to the Companys Annual Report on
    Form 10-K,
    filed July 14, 2006.10
.30*+

Form of Restricted Stock Award Agreement to Employees Under the
    Performance Award Plan filed as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    filed June 29, 2006.10
.31*+

Form of Restricted Stock Award Agreement to Non-Employee
    Directors Under the Performance Award Plan filed as
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K,
    filed June 29, 2006.10
.32*+

Stock and Asset Purchase Agreement dated as of August 8,
    2006 by and among Lominger Limited, Inc., Lominger Consulting,
    Inc., Michael M. Lombardo, Robert W. Eichinger, and the Company
    filed as Exhibit 10.1 to the Companys Quarterly
    Report on
    Form 10-Q,
    filed September 8, 2006.10
.33*+

Letter Agreement between the Company and Robert H. McNabb dated
    as of September 29, 2006, filed as Exhibit 10.1 to the
    Companys Quarterly Report on
    Form 10-Q,
    filed December 11, 2006. 37




---



##### Table of Contents



ExhibitNumber

Description10
.34*+

Letter Agreement dated December 14, 2006 by and among the
    Company and Gary C. Hourihan, Executive Vice President of
    the Company and President of Leadership Development Solutions,
    modifying the terms of Mr. Hourihans Employment
    Agreement, dated March 6, 2000, filed as Exhibit 10.1
    to the Companys Quarterly Report on
    Form 10-Q,
    filed March 12, 2007.10
.35*+

Letter from the Company to Gary Burnison, dated March 30,
    2007, filed as Exhibit 10.38 to the Companys Annual
    Report on
    Form 10-K,
    filed June 29, 2007.10
.36*+

Non Renewal of Employment Agreement between the Company and Paul
    C. Reilly, dated April 24, 2007, filed as
    Exhibit 10.39 to the Companys Annual Report on
    Form 10-K,
    filed June 29, 2007.10
.37*+

Employment Agreement between the Company and Paul C. Reilly,
    dated April 24, 2007, filed as Exhibit 10.40 to the
    Companys Annual Report on
    Form 10-K,
    filed June 29, 2007.10
.38*+

Employment Agreement between the Company and Gary Burnison,
    dated April 24, 2007, filed as Exhibit 10.41 to the
    Companys Annual Report on
    Form 10-K,
    filed June 29, 2007.10
.39*+

Employment Agreement between the Company and Stephen J. Giusto,
    dated October 10, 2007, filed as Exhibit 10.1 to the
    Companys Quarterly Report on
    Form 10-Q,
    filed December 10, 2007.10
.40*+

Form of Restricted Stock Unit Award Agreement to Directors Under
    the Performance Award Plan, filed as Exhibit 10.2 to the
    Companys Quarterly Report on
    Form 10-Q,
    filed December 10, 2007.10
.41*+

Letter from the Company to Ana Dutra, dated January 16,
    2008, filed as Exhibit 10.1 to the Companys Quarterly
    Report on
    Form 10-Q,
    filed March 11, 2008.10
.42*+

Offer of Employment Letter between the Company and Paul C.
    Reilly, dated June 26, 2008, filed as Exhibit 10.1 to
    the Companys Quarterly Report on
    Form 10-Q,
    filed September 9, 2008.10
.43*+

Reimbursement Letter Agreement between the Company and Paul C.
    Reilly, dated March 1, 2008, filed as Exhibit 10.2 to
    the Companys Quarterly Report on
    Form 10-Q,
    filed September 9, 2008.10
.44*

Employment Agreement between the Company and Stephen J. Giusto
    dated March 17, 2009.10
.45*

Employment Agreement between the Company and Michael A.
    DiGregorio.10
.46*+

Korn/Ferry 2008 Stock Incentive Plan, filed as Exhibit 99.1
    to the Companys Registration Statement on
    Form S-8
    (No. 333-158632),
    filed April 17, 2009.10
.47*+

Form of Restricted Stock Award Agreement to Employees and
    Non-Employee Directors Under the Korn/Ferry International 2008
    Stock Incentive Plan, filed as Exhibit 10.2 to the
    Companys Current Report on
    Form 8-K,
    filed June 12, 2009.10
.48*+

Form of Stock Option Agreement to Employees and Non-Employee
    Directors Under the Korn/Ferry International 2008 Stock
    Incentive Plan, filed as Exhibit 10.3 to the Companys
    Current Report on
    Form 8-K,
    filed June 12, 2009.10
.49*+

Korn/Ferry International Executive Capital Accumulation Plan,
    filed as Exhibit 4.1 to the Companys Registration
    Statement on
    Form S-8
    (No. 333-111038),
    filed December 10, 2003.10
.50*

Letter Agreement dated June 25, 2009, by and among the
    Company and Robert McNabb, modifying the terms of
    Mr. McNabbs Employment Agreement, dated
    October 1, 2003, as renewed and amended on September on
    September 29, 2006.10
.51*

Letter Agreement between the Company and Gary D. Burnison dated
    June 25, 2009.21
.1

Subsidiaries of Korn/Ferry International.23
.1

Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm.24
.1

Power of Attorney (contained on signature page).31
.1

Chief Executive Officer Certification pursuant to
    Rule 13a-14(a)
    under the Exchange Act.31
.2

Chief Financial Officer Certification pursuant to
    Rule 13a-14(a)
    under the Exchange Act.32
.1

Chief Executive Officer and Chief Financial Officer
    Certification pursuant to 18 U.S.C. Section 1350.     *
    
    Management contract, compensatory plan or arrangement.+
    
    Incorporated herein by reference. 38




---



##### Table of Contents



SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) of
    the Securities Exchange Act of 1934, as amended, the registrant
    has duly caused this report to be signed on its behalf by the
    undersigned, thereunto duly authorized.
  Korn/Ferry International
  By:
    /s/  Michael
    A. DiGregorio  Michael A. DiGregorio
 Executive Vice President and
 Chief Financial Officer
    POWER OF
    ATTORNEY
      Signature

Title

Date/s/  Kenneth
    WhippleKenneth
    Whipple

Chairman of the Board and Director

June 29, 2009/s/  Gary
    D. BurnisonGary
    D. Burnison

Chief Executive Officer (Principal Executive Officer)and
    Director

June 29, 2009/s/  Michael
    A. DigregorioMichael
    A. DiGregorio

Executive Vice President and Chief Financial Officer
    (Principal Financial Officer)

June 29, 2009/s/  Mark
    NealMark
    Neal

Vice President, Finance (Principal Accounting Officer)

June 29, 2009/s/  James
    E. BarlettJames
    E. Barlett

Director

June 29, 2009 39




---



##### Table of Contents



Signature

Title

Date/s/  Patti
    S. HartPatti
    S. Hart

Director

June 29, 2009/s/  Edward
    D. MillerEdward
    D. Miller

Director

June 29, 2009/s/  Debra
    PerryDebra
    Perry

Director

June 29, 2009/s/  Ihno
    SchneevoigtIhno
    Schneevoigt

Director

June 29, 2009/s/  Gerhard
    SchulmeyerGerhard
    Schulmeyer

Director

June 29, 2009/s/  Harry
    L. YouHarry
    L. You

Director

June 29, 2009  40




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  INDEX
    TO CONSOLIDATED FINANCIAL STATEMENTS
  APRIL 30,
    2009
  PageManagements Report on Internal Control over
    Financial Reporting


F-2Report of Independent Registered Public
    Accounting Firm on Internal Control over Financial Reporting


F-3Report of Independent Registered Public
    Accounting Firm


F-4Consolidated Balance Sheets as of April 30,
    2009 and 2008


F-5Consolidated Statements of Operations for the
    years ended April 30, 2009, 2008 and 2007


F-6Consolidated Statements of Stockholders
    Equity for the years ended April 30, 2009, 2008 and 2007


F-7Consolidated Statements of Cash Flows for the
    years ended April 30, 2009, 2008 and 2007


F-8Notes to Consolidated Financial Statements


F-9  F-1




---



##### Table of Contents



MANAGEMENTS
    REPORT ON
    INTERNAL CONTROL OVER FINANCIAL REPORTING
        Internal
    Control  Integrated Framework
    Form 10-K.
   F-2




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON INTERNAL CONTROL OVER FINANCIAL REPORTING                 
    F-3




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED
    PUBLIC ACCOUNTING FIRM               
    F-4




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  April 30,2009


2008(In thousands, except per share data)ASSETSCash and cash equivalents

$
255,000


$
305,296Marketable securities


4,263



5,940Receivables due from clients, net of allowance for doubtful
    accounts of $11,197 and $11,504, respectively


67,308



119,952Income taxes and other receivables


9,001



7,071Deferred income taxes


14,583



10,401Prepaid expenses and other assets


21,442



20,057Total current assets


371,597



468,717Marketable securities, noncurrent


70,992



78,026Property and equipment, net


27,970



32,462Cash surrender value of company owned life insurance policies,
    net of loans


63,108



81,377Deferred income taxes


45,141



47,128Goodwill


133,331



142,699Intangible assets, net


16,928



15,519Investments and other assets


11,812



14,286Total assets

$
740,879


$
880,214LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable

$
10,282


$
15,309Income taxes payable


2,059



20,948Compensation and benefits payable


116,705



199,081Other accrued liabilities


44,301



37,120Total current liabilities


173,347



272,458Deferred compensation and other retirement plans


99,238



105,719Other liabilities


9,195



5,903Total liabilities


281,780



384,080Commitments and contingenciesStockholders equity:Common stock: $0.01 par value, 150,000 shares
    authorized, 56,185 and 54,786 shares issued and 44,729 and
    44,593 shares outstanding, respectively


368,430



358,568Retained earnings


84,922



95,014Accumulated other comprehensive income, net


6,285



43,097Stockholders equity


459,637



496,679Less: notes receivable from stockholders


(538
)


(545
)Total stockholders equity


459,099



496,134Total liabilities and stockholders equity

$
740,879


$
880,214    F-5




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF OPERATIONS Year Ended April 30,2009


2008


2007(In thousands, except per share data)Fee revenue

$
638,223


$
790,570


$
653,422Reimbursed
    out-of-pocket
    engagement expenses


37,905



45,072



35,779Total revenue


676,128



835,642



689,201Compensation and benefits


442,632



540,056



447,692General and administrative expenses


126,882



134,542



105,312Out-of-pocket
    engagement expenses


49,388



58,750



44,662Depreciation and amortization


11,583



10,441



9,280Restructuring charges


41,915







Total operating expenses


672,400



743,789



606,946Operating income


3,728



91,853



82,255Interest and other (loss) income, net


(10,391
)


11,949



10,416Interest expense


5,410



4,812



10,172(Loss) income before provision for income taxes and equity in
    earnings of unconsolidated subsidiaries


(12,073
)


98,990



82,499Provision for income taxes


384



36,081



30,164Equity in earnings of unconsolidated subsidiaries, net


2,365



3,302



3,163Net (loss) income

$
(10,092
)

$
66,211


$
55,498(Loss) earnings per common share:Basic

$
(0.23
)

$
1.50


$
1.40Diluted

$
(0.23
)

$
1.46


$
1.24Weighted-average common shares outstanding:Basic


43,522



44,012



39,774Diluted


43,522



45,528



46,938    F-6




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY  Unearned


AccumulatedRestricted


OtherCommon Stock


Retained


Stock


ComprehensiveShares


Amount


Earnings


Compensation


Income, Net


Total(In thousands)Balance at May 1, 2006


41,201


$
344,285


$
(23,154
)

$
(7,731
)

$
10,910


$
324,310Comprehensive income:Net income










55,498











55,498Other comprehensive income, net of tax:Unrealized gain on marketable securities, net of taxes


















844



844Foreign currency translation adjustments


















9,186



9,186Total comprehensive income






















65,528Adjustment from adoption of SFAS No. 123(R)






(7,731
)






7,731







Purchase of stock


(2,722
)


(57,622
)














(57,622
)Issuance of stock


1,975



22,986















22,986Conversion of 7.5% Convertible Series A Preferred Stock


1,117



11,257















11,257Conversion of 7.5% Convertible Subordinated Notes


4,469



45,043















45,043Variable stock-based compensation






(339
)














(339
)Stock-based compensation






15,669















15,669Tax benefit from exercise of stock options






7,011















7,011Adjustment from adoption of SFAS No. 158, net of taxes


















(335
)


(335
)Balance at April 30, 2007


46,040



380,559



32,344







20,605



433,508Comprehensive income:Net income










66,211











66,211Other comprehensive income, net of tax:Unrealized loss on marketable securities, net of taxes


















(3,516
)


(3,516
)Foreign currency translation adjustments


















24,894



24,894Defined benefit plan


















1,114



1,114Total comprehensive income






















88,703Purchase of stock


(3,099
)


(60,950
)














(60,950
)Issuance of stock


1,652



18,736















18,736Variable stock-based compensation






(76
)














(76
)Stock-based compensation






15,429















15,429Tax benefit from exercise of stock options






5,096















5,096Cumulative effect of the adoption of FIN 48










(3,541
)










(3,541
)Purchase of minority shares






(226
)














(226
)Balance at April 30, 2008


44,593



358,568



95,014







43,097



496,679Comprehensive loss:Net loss










(10,092
)










(10,092
)Other comprehensive loss, net of tax:Unrealized loss on marketable securities, net of taxes


















(3,624
)


(3,624
)Reclassification of unrealized losses on marketable securities,
    net of taxes to
    other-than-temporary
    impairment and upon transfer of securities from
    available-for-sale
    to trading


















5,514



5,514Foreign currency translation adjustments


















(40,685
)


(40,685
)Defined benefit plan


















1,983



1,983Total comprehensive loss






















(46,904
)Purchase of stock


(709
)


(9,588
)














(9,588
)Issuance of stock


845



3,609















3,609Stock-based compensation






16,495















16,495Tax benefit from exercise of stock options






(654
)














(654
)Balance at April 30, 2009


44,729


$
368,430


$
84,922


$



$
6,285


$
459,637    F-7




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Year Ended April 30,2009


2008


2007(In thousands)Cash flows from operating activities:Net (loss) income

$
(10,092
)

$
66,211


$
55,498Adjustments to reconcile net (loss) income to net cash (used in)
    provided by operating activities:Depreciation and amortization


11,583



10,441



9,280Stock-based compensation expense


16,301



15,949



15,556Interest paid in kind and amortization of discount on
    convertible securities










915Loss on disposition of property and equipment


3,740



561



Provision for doubtful accounts


9,127



10,299



6,583Loss (gain) on cash surrender value of life insurance policies


3,578



(3,780
)


(5,647
)Realized loss (gain) on marketable securities


5,040



(5,555
)


(2,138
)Other-than-temporary
    impairment on
    available-for-sale
    securities, net of unrealized gains reclassified to other income
    upon the transfer of
    available-for-sale
    securities to trading


9,967







Deferred income taxes


(4,354
)


(5,992
)


(12,571
)Change in other assets and liabilities, net of effect of
    acquisitions:Deferred compensation


(3,085
)


14,359



19,570Receivables


44,639



(23,214
)


(25,966
)Prepaid expenses


(1,340
)


(3,143
)


(2,332
)Investment in unconsolidated subsidiaries


(2,365
)


(4,180
)


(3,668
)Income taxes payable


(18,909
)


(5,282
)


5,178Accounts payable and accrued liabilities


(82,236
)


47,802



44,328Other


21,577



(4,965
)


(2,255
)Net cash provided by operating activities


3,171



109,511



102,331Cash flows from investing activities:Purchase of property and equipment


(11,947
)


(16,976
)


(14,108
)(Purchase of) proceeds from marketable securities, net


(4,104
)


14,038



(28,049
)Cash paid for acquisitions, net of cash acquired


(12,900
)


(3,622
)


(24,129
)Premiums on life insurance policies


(1,781
)


(1,835
)


(1,844
)Dividends received from unconsolidated subsidiaries


2,952



2,923



2,429Net cash used in investing activities


(27,780
)


(5,472
)


(65,701
)Cash flows from financing activities:Payments on life insurance policy loans


(770
)


(1,012
)


Borrowings under life insurance policies


1,721



1,736



1,617Purchase of common stock


(9,588
)


(64,162
)


(57,622
)Proceeds from issuance of common stock upon exercise of employee
    stock options and in connection with an employee stock purchase
    plan


3,609



17,436



22,975Tax benefit from exercise of stock options


(654
)


4,612



7,011Net cash used in financing activities


(5,682
)


(41,390
)


(26,019
)Effect of exchange rate changes on cash and cash equivalents


(20,005
)


16,510



3,773Net (decrease) increase in cash and cash equivalents


(50,296
)


79,159



14,384Cash and cash equivalents at beginning of year


305,296



226,137



211,753Cash and cash equivalents at end of year

$
255,000


$
305,296


$
226,137Supplemental cash flow information:Cash used to pay interest

$
5,969


$
4,379


$
10,019Cash used to pay income taxes

$
24,369


$
47,760


$
27,951Supplemental non-cash investing and financing activities:Conversion of debt to equity

$



$



$
56,300    F-8




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2009 1.
    Organization
    and Summary of Significant Accounting Policies  Nature
    of Business
    Basis
    of Consolidation and Presentation
      Use of
    Estimates and Uncertainties
    Revenue
    Recognition
    Reimbursements
  out-of-pocket out-of-pocket No. 01-14, Income Statement Characterization of Reimbursements Received
    for
    Out-of-Pocket
    Expenses Incurred
  Allowance
    for Doubtful Accounts
   F-9




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Cash
    and Cash Equivalents
    Marketable
    Securities
  available-for-sale Accounting for Certain
    Investments in Debt and Equity Securities
  available-for-sale
    Available-for-sale available-for-sale other-than-temporary, other-than-temporary other-than-temporary other-than-temporary
  Property
    and Equipment
  98-1, Accounting for the Cost of Computer Software Developed or
    Obtained for Internal Use
   F-10




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Goodwill
    and Intangible Assets
    Goodwill and Other
    Intangible Assets
    Stock-Based
    Compensation
  Share-Based Payments
    Year Ended April 30,2009


2008


2007(In thousands)Stock options and SARs

$
210


$
1,806


$
4,974Restricted stock


15,633



13,590



10,086ESPP


458



553



496Total stock-based compensation expense, pre-tax


16,301



15,949



15,556Tax benefit from stock-based compensation expense


(5,950
)


(5,821
)


(5,875
)Total stock-based compensation expense, net of tax

$
10,351


$
10,128


$
9,681    F-11




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended April 302009


2008


2007Expected volatility


44.11
%


44.42
%


48.05
%Risk-free interest rate


3.27
%


4.60
%


4.95
%Expected option life (in years)


4.25



4.00



4.00Expected dividend yield


0.00
%


0.00
%


0.00
%     Restructuring
    Charges
  Accounting for Costs Associated
    with Exit or Disposal Activities
  Translation
    of Foreign Currencies
    Income
    Taxes
  Accounting for Income Taxes Accounting for Uncertainty in Income Taxes, an
    interpretation of FASB Statement No. 109
   F-12




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair
    Value of Financial Instruments
  Fair Value Measurements
  
    Level 1:  Observable inputs such as quoted
    prices (unadjusted) in active markets that are accessible at the
    measurement date for identical, unrestricted assets or
    liabilities.
    Level 2:  Inputs other than quoted prices
    that are observable for the asset or liability, either directly
    or indirectly. These include quoted prices for similar assets or
    liabilities in active markets and quoted prices for identical or
    similar assets or liabilities in markets that are not active.
    Level 3:  Unobservable inputs that reflect
    the reporting entitys own assumptions.    Concentration
    of Credit Risk
    Cash
    Surrender Value of Life Insurance
    Accounting
    Adjustment
  Considering the
    Effects of Prior Year
 F-13




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Misstatements when Quantifying Misstatements in Current Year
    Financial Statements
  Reclassifications
    Recently
    Adopted Accounting Standards
  Employers Accounting for Defined Benefit Pension and
    Other Postretirement Plans  an amendment of FASB
    Statements No. 87, 88, 106 and 132(R) fiscal-year-end
    No. 06-4, Accounting for Deferred Compensation and Postretirement
    Benefit Aspects of Endorsement Split-Dollar Life Insurance
    Arrangements (EITF 06-4). EITF 06-4 EITF 06-4 EITF 06-4 EITF 06-4
   F-14




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  The Fair Value Option for Financial Assets and Financial
    Liabilities
  Recently
    Issued Accounting Standards
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  An Amendment of ARB No. 51
  The
    Hierarchy of Generally Accepted Accounting Principle The Meaning of Present
    Fairly in Conformity With Generally Accepted Accounting
    Principle
  2.
    Basic and
    Diluted (Loss) Earnings Per Share   F-15




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  in-the-money
    Year Ended April 30,2009


2008


2007(In thousands, except per share data)Net (loss) earnings:Net (loss) earnings

$
(10,092
)

$
66,211


$
55,498Interest expense on convertible securities, net of related tax
    effects






145



2,863Net (loss) earnings attributable to common stockholders

$
(10,092
)

$
66,356


$
58,361Weighted-average common shares outstanding:Basic weighted-average number of common shares outstanding


43,522



44,012



39,774Effect of dilutive securities:Convertible subordinated notes










4,083Convertible preferred stock










1,016Warrants






109



123Restricted stock






319



274Stock options






1,078



1,665Employee stock purchase plan






10



3Diluted weighted-average number of common shares outstanding


43,522



45,528



46,938Net (loss) earnings per common share:Basic (loss) earnings per share

$
(0.23
)

$
1.50


$
1.40Diluted (loss) earnings per share

$
(0.23
)

$
1.46


$
1.24  F-16




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3.
    Comprehensive
    (Loss) Income      Year Ended April 30,2009


2008


2007(In thousands)Net (loss) income

$
(10,092
)

$
66,211


$
55,498Unrealized (loss) gain on marketable securities, net of taxes


(3,624
)


(1,890
)


1,626Reclassification of unrealized losses (gains) on marketable
    securities, net of taxes to other-than-temporary impairment and
    upon the transfer of available-for-sale securities to trading


5,514



(1,626
)


(782
)Foreign currency translation adjustments


(40,685
)


24,894



9,186Defined benefit plans


1,983



1,114



Comprehensive (loss) income

$
(46,904
)

$
88,703


$
65,528     April 30,2009


2008(In thousands)Foreign currency translation adjustments

$
3,523


$
44,208Unrealized losses on available-for-sale marketable securities,
    net of taxes






(1,890
)SFAS 158 adjustments, net of taxes


2,762



779Accumulated other comprehensive income

$
6,285


$
43,097   4.
    Employee
    Stock Plans  Stock
    Option Plans
     F-17




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    April 30,2009


2008


2007Weighted-





Weighted-





Weighted-Average





Average





AverageExercise





Exercise





ExerciseOptions


Price


Options


Price


Options


Price(In thousands, except per share data)Outstanding, beginning of year


3,564


$
14.79



4,738


$
14.52



6,742


$
13.42Granted


6


$
14.54



6


$
21.11



113


$
21.09Exercised


(127
)

$
8.91



(1,095
)

$
13.29



(1,945
)

$
10.88Forfeited/expired


(330
)

$
16.61



(85
)

$
19.71



(172
)

$
16.74Outstanding, end of year


3,113


$
14.83



3,564


$
14.79



4,738


$
14.52Exercisable, end of year


3,042


$
14.74



3,257


$
14.41



3,973


$
13.72         April 30, 2009Options Outstanding


Options ExercisableWeighted-








Weighted-Average








AverageRemaining


Weighted-





Remaining


Weighted-Contractual


Average





Contractual


AverageLife


Exercise





Life


ExerciseRange of Exercise Prices

Shares


(In years)


Price


Shares


(In Years)


Price(In thousands, except per share data)$ 6.28 - $ 8.08


538



2.9


$
7.40



538



2.9


$
7.40$ 8.09 - $15.50


866



3.8


$
9.71



863



3.8


$
9.70$15.51 - $19.25


815



5.1


$
17.63



766



5.0


$
17.55$19.26 - $36.19


894



3.5


$
21.73



875



3.4


$
21.753,113



3.9


$
14.83



3,042



3.8


$
14.74     Year Ended April 30,2009


2008


2007(In thousands, except per share data)Weighted-average fair value of stock options granted

$
5.77


$
8.54


$
9.12Total fair value of stock options and SARs vested


1,986



4,103



10,245Total intrinsic value of stock options exercised


640



12,552



20,422Total intrinsic value of SARs paid










319  F-18




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Restricted
    Stock Plan
      April 30,2009


2008


2007Weighted-





Weighted-





Weighted-Average





Average





AverageGrant Date





Grant Date





Grant DateShares


Fair Value


Shares


Fair Value


Shares


Fair Value(In thousands, except per share data)Non-vested, beginning of year


1,952


$
22.01



1,356


$
19.26



687


$
16.63Granted


1,288


$
17.57



1,216


$
24.16



1,187


$
19.64Vested


(602
)

$
21.25



(506
)

$
19.88



(444
)

$
16.35Forfeited/expired


(251
)

$
19.67



(114
)

$
22.49



(74
)

$
18.38Non-vested, end of year


2,387


$
15.50



1,952


$
22.01



1,356


$
19.26     Employee
    Stock Purchase Plan
   F-19




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    Marketable
    Securities    April 30, 2009Available-for-Trading


Sale(1)


Total(In thousands)Auction rate securities

$
11,329


$



$
11,329Auction rate securities put option


1,096







1,096Equity securities(2)


23,816







23,816Fixed income mutual fund(2)


14,320







14,320Non-current money market(2)


22,692







22,692Time deposits






2,002



2,002Total


73,253



2,002



75,255Less: current portion of marketable securities


(2,261
)


(2,002
)


(4,263
)Long-term marketable securities

$
70,992


$



$
70,992     (1)
    
    Due to the short maturities for these instruments fair value
    approximates amortized cost.(2)
    
    These investments are held in trust for settlement of the
    Companys obligations under certain of its deferred
    compensation plans with $2.3 million classified as current
    assets (see Note 8).    April 30, 2008Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses(2)


Fair Value(In thousands)Auction rate securities

$
21,450


$



$
(975
)

$
20,475Equity securities(1)


39,469



529



(2,459
)


37,539Fixed income mutual fund(1)


11,993



337







12,330Non-current money market(1)


13,622











13,622Total

$
86,534


$
866


$
(3,434
)

$
83,966     (1)
    
    These investments are held in trust for settlement of the
    Companys obligations under certain of its deferred
    compensation plans with $5.9 million classified as current
    assets (see Note 8).(2)
    
    The Companys gross unrealized losses of $3.4 million
    related to its ARS and equity securities as of April 30,
    2008 had been in a loss position for less than twelve months.     F-20




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         F-21




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    April 30, 2009Total


Level 1


Level 2


Level 3(In thousands)Cash equivalents

$
165,590


$
165,590


$



$
Auction rate securities


11,329











11,329Auction rate securities put option


1,096











1,096Equity securities


23,816



23,816







Fixed income mutual fund


14,320



14,320







Noncurrent money market mutual funds


22,692



22,692







Time deposits


2,002



2,002







Total

$
240,845


$
228,420


$



$
12,425     Auction RateSecurities(In thousands)Balance, beginning of year

$
20,475Auction rate securities put option


1,096Reversal of unrealized loss associated with transfer of
    securities to trading


780Unrealized gain (loss) included income


(1,096
)Unrealized loss included in accumulated other comprehensive
    (loss) income


(586
)Sale of securities


(9,025
)Reversal of unrealized loss associated with sales of securities
    at par


781Balance, end of year

$
12,425   6.
    Restructuring
    Charges   F-22




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Severance


Facilities


Total(In thousands)Liability as of May 1, 2007

$
60


$
2,963


$
3,023Reductions for cash payments


(60
)


(699
)


(759
)Liability as of April 30, 2008






2,264



2,264Additions charged to expense


26,857



15,058



41,915Non-cash items


(678
)


(2,921
)


(3,599
)Reductions for cash payments


(15,668
)


(1,692
)


(17,360
)Exchange rate fluctuations


43



98



141Liability as of April 30, 2009

$
10,554


$
12,807


$
23,361       April 30, 2009Severance


Facilities


Total(In thousands)Executive RecruitmentNorth America

$
3,052


$
3,187


$
6,239Europe, Middle East and Africa (EMEA)


4,714



2,514



7,228Asia Pacific


48



1,243



1,291South America


787



334



1,121Total Executive Recruitment


8,601



7,278



15,879Futurestep


1,953



5,529



7,482Corporate










Liability as of April 30, 2009

$
10,554


$
12,807


$
23,361   April 30, 2008Severance


Facilities


Total(In thousands)Executive RecruitmentNorth America

$



$
768


$
768EMEA






489



489Asia Pacific










South America










Total Executive Recruitment






1,257



1,257Futurestep






1,007



1,007Corporate










Liability as of April 30, 2009

$



$
2,264


$
2,264  F-23




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    Employee
    Tax Deferred Savings Plan    8.
    Deferred
    Compensation and Retirement Plans    Year Ended April 30,2009


2008(In thousands)Deferred compensation plans

$
48,367


$
51,465Pension plans


2,974



2,986Retirement plans


2,854



3,701ECAP


45,043



47,567Total long-term benefit obligation

$
99,238


$
105,719   Deferred
    Compensation Plans
      Pension
    Plan
   F-24




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting
    for Deferred Compensation and Pension Plans
          Deferred
    Compensation Plan
    Year Ended April 30,2009


2008


2007(In thousands)Change in benefit obligation:Benefit obligation, beginning of year

$
54,749


$
54,873


$
50,031Service cost


696



1,067



1,210Interest cost


3,432



3,140



3,030Plan participants contributions with interest


367



561



798Actuarial (gain) loss


(3,263
)


(1,560
)


3,199Benefits paid


(3,832
)


(3,332
)


(3,395
)Benefit obligation, end of year


52,149



54,749



54,873Less: current portion of benefit obligation


(3,782
)


(3,284
)


(3,069
)Long-term benefit obligation

$
48,367


$
51,465


$
51,804  F-25




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009


2008


2007(In thousands)Service cost

$
696


$
1,067


$
1,210Interest cost


3,432



3,140



3,030Amortization of net transition obligation


212



212



212Net periodic benefit cost

$
4,340


$
4,419


$
4,452     2009


2008


2007Discount rate, beginning of year


6.50
%


5.90
%


6.25
%Discount rate, end of year


7.10
%


6.50
%


5.90
%Rate of compensation increase


0.00
%


0.00
%


0.00
%   Pension
    Plan
    Year Ended April 30,2009


2008


2007(In thousands)Change in benefit obligation:Benefit obligation, beginning of year

$
3,119


$
3,300


$
3,098Interest cost


196



188



188Actuarial (gain) loss


(4
)


(152
)


136Benefits paid


(186
)


(217
)


(122
)Benefit obligation, end of year


3,125



3,119



3,300Less: current portion of benefit obligation


(151
)


(133
)


(140
)Long-term benefit obligation

$
2,974


$
2,986


$
3,160     2009


2008


2007(In thousands)Interest cost

$
196


$
188


$
188Amortization of actuarial gain


(84
)


(71
)


(95
)Net periodic benefit cost

$
112


$
117


$
93     2009


2008


2007Discount rate, beginning of year


6.50
%


5.90
%


6.25
%Discount rate, end of year


7.10
%


6.50
%


5.90
%Rate of compensation increase


0.00
%


0.00
%


0.00
%  F-26




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    DeferredCompensation


PensionYear Ending April 30,

Plans


Benefits(In thousands)2010

$
4,026


$
2162011


4,511



2462012


4,514



2562013


4,657



2652014


4,869



2822015-2019


23,613



1,310   International
    Retirement Plans
    Executive
    Capital Accumulation Plan (ECAP)
  and/or
    EITF 97-14, Accounting for Deferred Compensation Arrangements Where
    Amounts Earned Are Held in a Rabbi Trust and Invested (EITF 97-14),
 F-27




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##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended April 30,2009


2008(In thousands)Balance, beginning of year

$
48,655


$
33,732Employee contributions


5,071



6,985Amortization of employer contributions


6,692



8,935(Loss) gain on investment


(10,468
)


115Employee distributions


(4,929
)


(1,112
)Exchange rate translations


81



Balance, end of year


45,102



48,655Current portion


(59
)


(1,088
)Long-term portion, end of year

$
45,043


$
47,567   Company
    Owned Life Insurance (COLI)
    9.
    Income
    Taxes   F-28




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended April 30,2009


2008


2007(In thousands)Current income taxes:Federal

$
3,378


$
14,788


$
18,353State


601



5,658



6,543Foreign


4,859



21,627



14,869Current provision for income taxes


8,838



42,073



39,765Deferred income taxes:Federal


(4,459
)


(1,699
)


(5,525
)State


(1,002
)


(1,805
)


(1,543
)Foreign


(2,993
)


(2,488
)


(2,533
)Deferred (benefit) provision for income taxes


(8,454
)


(5,992
)


(9,601
)Total provision for income taxes

$
384


$
36,081


$
30,164     Year Ended April 30,2009


2008


2007(In thousands)Domestic

$
(7,806
)

$
38,865


$
38,008Foreign


(4,267
)


60,125



44,491(Loss) income before (benefit) provision for income taxes and
    equity in earnings of unconsolidated subsidiaries

$
(12,073
)

$
98,990


$
82,499     Year Ended April 30,2009


2008


2007U.S. federal statutory income tax rate


35.0
%


35.0
%


35.0
%Foreign source income, net of credits used


1.8



2.1



3.1Income subject to net differing foreign tax rates


(27.8
)


(1.9
)


(3.9
)Foreign tax credits generated


47.0







COLI increase, net


(1.3
)


(1.7
)


(2.6
)Repatriation of foreign earnings






0.3



1.9State income taxes, net of federal benefit


2.2



3.9



5.9Non-deductible interest expense










0.4Adjustments for contingencies and valuation allowance


(54.7
)


(1.5
)


(2.5
)Tax exempt interest income


2.0



(0.5
)


(0.5
)Expense disallowances


(3.4
)


0.5



0.4Other


(4.0
)


0.2



(0.6
)Effective income tax rate


(3.2
)%


36.4
%


36.6
%  F-29




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    April 30,2009


2008(In thousands)Deferred tax assets:Deferred compensation

$
40,861


$
46,240Allowance for doubtful accounts


1,658



1,450Unrealized losses


4,130



Property and equipment


1,315



1,961Loss and credit carryforwards


24,513



15,003Other


8,198



6,116Gross deferred tax assets


80,675



70,770Deferred tax liabilities:Intangibles


(5,513
)


(4,730
)Other


(5,703
)


(6,474
)Gross deferred tax liabilities


(11,216
)


(11,204
)Valuation allowances


(9,735
)


(2,037
)Net deferred tax asset

$
59,724


$
57,529       April 30,2009


2008(In thousands)Current:Deferred tax assets

$
15,447


$
11,197Deferred tax liabilities


(864
)


(796
)Current deferred tax asset, net


14,583



10,401Non-current:Deferred tax asset


65,228



59,594Deferred tax liabilities


(10,352
)


(10,444
)Non-current deferred tax asset, gross


54,876



49,150Valuation allowance


(9,735
)


(2,022
)Non-current deferred tax asset, net


45,141



47,128Net deferred tax assets

$
59,724


$
57,529    F-30




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            April 30,2009


2008(In thousands)Unrecognized tax benefits, beginning of year

$
10,770


$
10,150Additions based on tax positions related to the current year


2,000



Estimated interest for the year


622



620Unrecognized tax benefits, end of year

$
13,392


$
10,770      F-31




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  10.
    Property
    and Equipment    April 30,2009


2008(In thousands)Computer equipment and software

$
60,274


$
65,005Furniture and fixtures


21,757



24,397Leasehold improvements


21,865



24,644Automobiles


2,414



3,193106,310



117,239Less: accumulated depreciation and amortization


(78,340
)


(84,777
)Property and equipment, net

$
27,970


$
32,462   11.
    Stockholders
    Equity      12.
    Long-Term
    Debt     F-32




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  13.
    Business
    Segments      Year Ended April 30, 2009Executive RecruitmentNorth





Asia


SouthAmerica


EMEA


Pacific


America


Subtotal


Futurestep


Corporate


Consolidated(In thousands)Fee revenue

$
309,514


$
143,184


$
66,332


$
24,323


$
543,353


$
94,870


$



$
638,223Total revenue

$
330,453


$
149,016


$
67,983


$
24,841


$
572,293


$
103,835


$



$
676,128Operating income (loss)

$
37,516


$
2,061


$
5,396


$
2,441


$
47,414


$
(12,003
)

$
(31,683
)

$
3,728Depreciation and amortization

$
4,003


$
2,003


$
1,621


$
371


$
7,998


$
1,873


$
1,712


$
11,583Identifiable assets(1)

$
254,123


$
113,489


$
70,463


$
20,236


$
458,311


$
65,094


$
217,474


$
740,879Long-lived assets(1)

$
8,621


$
3,120


$
1,850


$
1,100


$
14,691


$
3,112


$
10,167


$
27,970Goodwill(1)

$
71,131


$
31,331


$
972


$



$
103,434


$
29,897


$



$
133,331   Year Ended April 30, 2008Executive RecruitmentNorth





Asia


SouthAmerica


EMEA


Pacific


America


Subtotal


Futurestep


Corporate


Consolidated(In thousands)Fee revenue

$
374,891


$
183,042


$
95,915


$
25,556


$
679,404


$
111,166


$



$
790,570Total revenue

$
395,320


$
189,203


$
98,288


$
25,964


$
708,775


$
126,867


$



$
835,642Operating income (loss)

$
70,628


$
29,820


$
19,299


$
2,230


$
121,977


$
8,545


$
(38,669
)

$
91,853Depreciation and amortization

$
2,915


$
2,299


$
1,766


$
371


$
7,351


$
1,816


$
1,274


$
10,441Identifiable assets(1)

$
269,407


$
162,756


$
97,762


$
19,072


$
548,997


$
87,665


$
243,552


$
880,214Long-lived assets(1)

$
9,000


$
5,578


$
3,209


$
1,504


$
19,291


$
4,540


$
8,631


$
32,462Goodwill(1)

$
69,533


$
37,379


$
972


$



$
107,884


$
34,815


$



$
142,699   F-33




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended April 30, 2007Executive RecruitmentNorth





Asia


SouthAmerica


EMEA


Pacific


America


Subtotal


Futurestep


Corporate


Consolidated(In thousands)Fee revenue

$
329,065


$
146,155


$
74,987


$
17,426


$
567,633


$
85,789


$



$
653,422Total revenue

$
348,780


$
151,606


$
76,650


$
17,912


$
594,948


$
94,253


$



$
689,201Operating income (loss)

$
69,815


$
24,166


$
16,010


$
1,894


$
111,885


$
7,854


$
(37,484
)

$
82,255Depreciation and amortization

$
3,032


$
2,344


$
1,317


$
317


$
7,010


$
1,502


$
768


$
9,280Identifiable assets(1)

$
287,024


$
123,904


$
75,883


$
12,589


$
499,400


$
68,841


$
193,250


$
761,491Long-lived assets(1)

$
7,841


$
6,184


$
2,685


$
1,146


$
17,856


$
4,391


$
3,752


$
25,999Goodwill(1)

$
63,767


$
31,721


$
972


$



$
96,460


$
27,808


$



$
124,268     (1)
    
    As of the end of the fiscal year.    14.
    Acquisitions    Year Ended April 30, (1)2009(2)


2008(3)


2007(4)(In thousands)Assets acquired

$
4,676


$
406


$
4,935Intangibles acquired


2,115







16,000Liabilities acquired


2,451



307



5,000Net assets acquired


4,340



99



15,935Purchase price


13,189



3,622



28,355Goodwill

$
8,849


$
3,523


$
12,420Goodwill by segment:Executive recruitment

$
8,849


$
493


$
12,420Futurestep






3,030



Goodwill

$
8,849


$
3,523


$
12,420Acquisition costs (included in purchase price)

$
535


$
323


$
355     (1)
    
    Certain employees who joined the Company through these
    acquisitions will be eligible to receive earn-out payments of up
    to $10.2 million over the next three years if certain
    financial metrics are achieved during that period.(2)
    
    On November 3, 2008, the Company acquired Lore
    International, Inc, a Delaware corporation (Lore).
    Actual results of operations of Lore are included in the
    Companys consolidated financial statements from
    November 3, 2008, the effective date of the acquisition.(3)
    
    During fiscal 2009, adjustments to the preliminary purchase
    price allocation for an acquisition in fiscal 2008 resulted in a
    $1.9 million reduction in goodwill. F-34




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (4)
    
    On August 8, 2006, the Company acquired Lominger Limited,
    Inc., a Minnesota corporation, and Lominger Consulting, Inc., a
    Minnesota corporation (together referred to as the
    Lominger Entities), as well as all of the
    intellectual property rights of Drs. Robert W. Eichinger
    and Michael M. Lombardo (the co-founders of the Lominger
    Entities). During fiscal 2008, adjustments to the preliminary
    purchase price allocation resulted in a reclassification of
    $2.1 million from purchased intangibles to goodwill on the
    consolidated balance sheet. Actual results of operations of the
    Lominger Entities are included in the Companys
    consolidated financial statements from August 8, 2006, the
    effective date of this acquisition. The Company also completed
    other smaller acquisitions during fiscal 2007. The acquired
    consultants in these acquisitions will be eligible to receive
    earn-out payments of up to $4.5 million over the next five
    years if certain financial metrics are achieved during that
    period.  15.
    Goodwill
    and Intangible Assets    Executive RecruitmentNorth





AsiaAmerica


EMEA


Pacific


Subtotal


Futurestep


Consolidated(In thousands)Balance as of April 30, 2007

$
63,767


$
31,721


$
972


$
96,460


$
27,808


$
124,268Additions


493



1,230







1,723



3,030



4,753Reclassifications


2,100











2,100







2,100Exchange rate fluctuations


3,173



4,428







7,601



3,977



11,578Balance as of April 30, 2008


69,533



37,379



972



107,884



34,815



142,699Additions


8,849











8,849







8,849Reclassifications


(1,834
)










(1,834
)






(1,834
)Exchange rate fluctuations


(5,417
)


(6,048
)






(11,465
)


(4,918
)


(16,383
)Balance as of April 30, 2009

$
71,131


$
31,331


$
972


$
103,434


$
29,897


$
133,331     Weighted-Average


April 30,Amortization Period


2009


2008(In thousands)Amortized intangible assets:Non-compete agreements


5 years


$
400


$
Customer lists(1)


9 years



2,060



800Proprietary databases


10 years



450



Intellectual property


24 years



11,400



11,40014,310



12,200Accumulated amortization






(1,182
)


(481
)13,128



11,719Unamortized intangible assets:Trademarks






3,800



3,800Intangible assets





$
16,928


$
15,519     (1)
    
    During fiscal 2008, customer list was reduced by
    $2.1 million as a result of the final purchase price
    allocation related to the Companys acquisition of the
    Lominger Entities. F-35




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     EstimatedAnnualAmortizationYear Ending April 30,

Expense(In thousands)2010

$
8382011


8382012


8382013


8382014


838Thereafter


8,938$
13,128     16.
    Commitments
    and Contingencies  Lease
    Commitment
      Year Ending April 30,

Lease Commitment(In thousands)2010

$
26,7172011


17,0002012


12,1422013


8,9402014


8,630Thereafter


17,053$
90,482   Letters
    of Credit
    Employment
    Agreements
   F-36




---



##### Table of Contents



KORN/FERRY
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        17.
    Quarterly
    Results (Unaudited)    Quarters EndedFiscal 2009


Fiscal 2008April 30


January 31


October 31


July 31


April 30


January 31


October 31


July 31(In thousands, except per share data)Fee revenue

$
106,980


$
136,210


$
189,300


$
205,733


$
208,204


$
201,156


$
195,857


$
185,353Operating (loss) income


(30,256
)


(11,258
)


21,488



23,754



20,178



21,180



25,382



25,113Net (loss) income


(17,200
)


(22,356
)


13,560



15,904



15,746



16,256



17,109



17,100Net (loss) income per shareBasic


(0.40
)


(0.52
)


0.31



0.37



0.36



0.38



0.38



0.38Diluted


(0.40
)


(0.52
)


0.30



0.36



0.36



0.37



0.37



0.36  F-37