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What changed in ASGN Inc's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ASGN Inc's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+200 added−199 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-27)

Top changes in ASGN Inc's 2023 10-K

200 paragraphs added · 199 removed · 147 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur performance management process emphasizes clear goals with timely and constructive feedback. We encourage you to visit the Sustainability section of our website for more detailed information regarding our workforce programs and initiatives. Nothing on our website shall be deemed incorporated by reference into this 2022 10-K.
Biggest changeFor more information about our workforce programs and initiatives, please visit the Sustainability section of our website: ASGN.com/Sustainability. Nothing on our website shall be deemed incorporated by reference into this 2023 10-K. Government Regulation We take reasonable steps to ensure that our billable professionals possess all current licenses and certifications required for each placement.
We intend to disclose any amendment to, or waiver from, a provision of our Code of Ethics for Principal Executive Officer and Senior Financial Officers on our website promptly after the amendment or waiver has been granted. 5
We intend to disclose any amendment to, or waiver from, a provision of our Code of Ethics for our Principal Executive Officer and Senior Financial Officers on our website promptly after the amendment or waiver has been granted. 5
The SEC maintains an internet site sec.gov that contains reports, proxy and information statements and other information technology regarding issuers that file electronically with the SEC. You may also read and copy any of our reports that are filed with the SEC by visiting: • Our website, asgn.com ; or • By contacting our Investor Relations Department at info@asgn.com.
The SEC maintains an internet site sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. You may also read and copy any of our reports that are filed with the SEC by visiting: • Our website, asgn.com ; or • By contacting our Investor Relations Department at info@asgn.com.
Many people seeking contract employment through us may also be pursuing employment through other means. Therefore, the speed at which we assign prospective professionals and the availability of attractive and appropriate assignments are important factors in our ability to fill open positions.
Many people seeking 3 contract employment through us may also be pursuing employment through other means. Therefore, the speed at which we assign prospective professionals, and the availability of attractive and appropriate assignments, are important factors in our ability to fill open positions.
Also available on our website are copies of our Code of Ethics for the Principal Executive Officer and Senior Financial Officers, Code of Business Conduct and Ethics, Corporate Governance Guidelines and the charters for the committees of our Board of Directors.
Also available on our website are copies of our Code of Ethics for the Principal Executive Officer and Senior Financial Officers, Code of Business Conduct and Ethics, Corporate Governance Guidelines, and the charters for the committees of our Board.
When we place these candidates on assignments or consulting projects with clients, they become our employees. Many of these contract professionals, and those we place via subcontractors, are paid hourly wage or contract rates based on their specific skills.
When we place these candidates on projects with clients, they become our employees. Many of these professionals, and those we place via subcontractors, are paid hourly wage or contract rates based on their specific skills.
Our strategic innovation efforts and technology investments focus on putting the best productivity tools in the hands of our recruiters, our candidates and our clients, so that it is seamless for clients and contract professionals to work with ASGN.
Our strategic innovation efforts and technology investments focus on putting the best productivity tools in the hands of our recruiters, our candidates, and our clients, so that it is seamless for clients and billable professionals to work with ASGN.
We compete with other large publicly-held and privately-owned providers of human capital in the professional staffing and IT and management consulting service segments on a local, regional, national and international basis across the commercial and government end markets.
Competition We compete with other large publicly-held and privately-owned providers of human capital in the IT consulting and professional services segments on a local, regional, national, and international basis across the commercial and government end markets.
Although we believe we compete favorably with respect to these factors and maintain an intimacy and institutional knowledge with our clients that enables us to successfully compete in the market, we expect competition to continue to increase.
Although we believe we compete favorably with respect to these factors and maintain an intimacy and institutional knowledge with our clients that enables us to successfully compete in the market, we expect competition to continue to increase particularly as we grow our IT consulting footprint.
Our acquisition strategy focuses on IT consulting companies that add new services, capabilities and contracts that support our commercial and federal government customer needs and that are in high demand by our customer base.
To achieve this goal, our acquisition strategy specifically focuses on IT consulting companies that add new services, technical capabilities, and contracts that support our commercial and federal government customer needs and that are in high demand by our customer base.
Unlike our competitors, particularly in the traditional consulting space, for the majority of our business we do not rely upon a bench to support us; rather, we use our database and a deep labor pool of highly-skilled technical talent developed over decades to provide and build teams that offer our clients a full suite of services from staff augmentation to traditional consulting.
In addition, unlike our competitors in the traditional consulting space, for the majority of our IT consulting business we do not rely upon a bench to support us; rather, we use our database and a deep labor pool of highly-skilled technical talent developed over decades to provide and build teams that offer our clients a full suite of services tailored to their individual needs.
Our business model continues to evolve in line with client needs and expectations to focus on higher-end, higher-margin IT consulting services and solutions capabilities, particularly those related to digital 2 transformation and other areas of technology change and specialization including data analytics, artificial intelligence/machine learning, big data, process automation and information security.
Our business model continues to evolve in line with client needs and expectations to focus on higher-end, higher-margin IT consulting services and solutions capabilities, particularly those related to digital transformation and other areas of technology change and specialization including data analytics, AI/ML, including both traditional and GenAI, big data, process automation, and information security.
ASGN helps leading corporate enterprises and government organizations develop, implement and operate critical IT and business solutions through its integrated offering of professional staffing and IT consulting services and solutions. Our total addressable market is approximately $572 billion. It includes $384 billion in commercial IT consulting, $124 billion in government IT services and solutions and $64 billion in professional staffing.
ASGN helps leading corporate enterprises and government organizations develop, implement, and operate critical IT and business solutions through its integrated offering of IT consulting and professional staffing. Our total addressable market is approximately $580 billion, which includes $400 billion in commercial IT consulting, $121 billion in government IT consulting, and $59 billion in professional staffing.
After achieving minimum service periods and/or hours worked, our contract professionals are offered access to medical and other voluntary benefit programs (e.g., dental, vision, disability) and the right to participate in our 401(k) retirement savings plan. Each contract professional’s employment relationship with us is terminable at will.
After achieving minimum service periods and/or hours worked, our professionals are offered access to medical and other voluntary benefit programs (e.g., dental, vision, disability) and the right to participate in our 401(k) retirement savings plan. Each professional’s employment relationship with us is terminable at will. In 2023, we employed approximately 23,500 billable professionals on a full-time-equivalent basis.
Item 1. Business Overview and History ASGN Incorporated ("ASGN," "we," or "us") is a leading provider of information technology (IT) services and professional solutions, including technology and creative digital marketing, across the commercial and government sectors. We operate through two segments, Commercial and Federal Government, which promote balance and strength through economic cycles.
Item 1. Business Overview and History ASGN Incorporated ("ASGN," "we," or "us") is a leading provider of information technology (IT) services and solutions to the commercial and government sectors. We operate through two segments, Commercial and Federal Government, and across six industry verticals, which together promote balance, strength, and resiliency throughout economic cycles.
We will invest in our organic growth while simultaneously looking to execute acquisitions in the commercial and federal government end markets focusing on consulting companies that provide us with new solution capabilities, industry expertise or government contract awards.
We will invest in our organic growth while simultaneously looking to execute acquisitions in the commercial and federal government end markets focusing on IT consulting companies that provide us with new solution capabilities, industry expertise, or government contract awards. Candidates We recruit candidates with backgrounds in IT and creative digital marketing who seek contract or permanent work opportunities.
Contracts range from approximately three to five years in length. We have contract backlog of $3.3 billion as of December 31, 2022, which represents the estimated amount of future revenues to be recognized under awarded contracts including task orders and options.
Contracts range from approximately three to five years in length, providing longer-term revenue visibility and countercyclical support throughout market cycles. We have contract backlog of $3.0 billion as of December 31, 2023, which represents the estimated amount of future revenues to be recognized under awarded contracts including task orders and options.
Corporate support activities are based in Fairfax, Virginia, and there are 28 branch offices located across the United States . Industry and Market Dynamics ASGN is a leading provider of IT services and professional solutions, including technology and creative digital marketing, across the commercial and government sectors.
Corporate support activities for this segment are based in Fairfax, Virginia, and there are 19 branch offices located across the United States. Industry and Market Dynamics ASGN is a leading provider of IT services and solutions to the commercial and government sectors.
Our roots in IT staffing offer a strong account base and foothold in our clients’ businesses, while our consulting offerings enable us to offer more value to our accounts, with higher growth and high-end, high margin work.
Our roots in IT staffing offer a strong account base and foothold in our clients’ businesses, while our consulting offerings enable us to offer more value to our accounts via higher-end, higher margin work including workforce mobilization, modern enterprise, and digital innovation IT consulting services.
Our clients set rigorous requirements for the talent they are seeking, and we use our extensive databases and deep relationships with our contract professionals to quickly identify and pre-screen candidates whose qualifications meet those requirements. We are responsible for recruiting, verifying credentials upon request, hiring, administering pay and benefits, compliance and training, as applicable.
To meet these talent requirements, we use our extensive databases and deep talent pool to quickly identify and pre-screen candidates. We are responsible for recruiting, verifying credentials upon request, hiring, administering pay and benefits, compliance and training, as applicable.
Consulting — We provide workforce mobilization, modern enterprise and digital innovation IT consulting services. Our contract professionals and subject matter experts deliver solutions that are customer focused and value driven. We provide a continuum of cloud, data and analytics, cyber/information security, artificial intelligence/machine learning and digital transformation solutions to support our clients’ modern enterprise and digital needs.
Our subject matter experts deliver solutions that are customer focused and value driven across a continuum of cloud, data and analytics, cyber/information security, artificial intelligence/machine learning ("AI/ML"), including generative AI (“GenAI”), and digital transformation solutions to support our clients’ modern enterprise and digital needs.
Federal Government Segment Our Federal Government Segment (25.0 percent of 2022 consolidated revenues) delivers advanced solutions in cloud and enterprise IT, cybersecurity, artificial intelligence, machine learning, application and digital transformation to some of the world's leading agencies in both the public and private sectors.
Federal Government Segment Our Federal Government Segment (28.7 percent of 2023 consolidated revenues), our sixth industry vertical, delivers advanced solutions in cloud and enterprise IT, cybersecurity, AI/ML, application, and digital transformation to some of the world's leading agencies in both the public and private sectors.
Our team of skilled experts tackle critical and highly-complex challenges for customers in the U.S. defense, intelligence and federal civilian agencies. We maintain relationships with leading cloud, cybersecurity and artificial intelligence/machine learning providers and hold specialized certifications in these technologies. The segment provides services under time-and-materials, cost reimbursable and firm-fixed-price contracts.
Our team of skilled experts tackle critical and highly-complex challenges for customers in the U.S. defense, 2 intelligence, and federal civilian agencies. We maintain relationships with leading cloud, cybersecurity, and AI/ML providers and hold specialized certifications in these technologies.
We reward employees with attractive compensation and benefits packages, which may include medical, dental and vision plans; short- and long-term disability; life and accident insurance; health savings accounts and flexible spending accounts; and savings plans. We further support our employees emotional and physical health with wellness programming and personal growth workshops.
Health, Safety, and Well-being — Our employees enjoy competitive compensation and benefits packages, which include medical, dental, and vision plans; flexible spending accounts; and savings plans. We further support our employees' emotional well-being and physical health with wellness programming and personal growth workshops .
Corporate support activities are primarily based in Richmond, Virginia, and there is a network of 97 branch offices across the United States, and six branch offices across Canada and Europe. In addition to our branch offices, we have one near-shore delivery center in Mexico and will open a second Mexican delivery center in early 2023 to expand our near-shore capabilities.
Corporate support activities for this segment are primarily based in Richmond, Virginia. We also have a network of 90 branch offices across the United States, and four branch offices across Canada and Europe. In addition, we have two near-shore delivery centers in Mexico, and we maintain a small delivery center in India.
We intend to continue to grow our diverse client base by focusing on large, stable accounts that are quick adopters of new technologies.
By employing our professional staffing and consulting services, our clients benefit from cost structure advantages, flexibility to address fluctuating demand in business, and access to greater expertise. We intend to continue to grow our diverse client base by focusing on large, stable accounts that are quick adopters of new technologies.
This shared resource model provides sophisticated project delivery capabilities with a cost advantage that has enabled us to grow above industry averages. 3 Human Capital Our workforce is the heart of our business. Our diverse talent pool helps build and maintain our competitive advantage as a global IT staffing and consulting firm.
This sophisticated project delivery model offers us a cost advantage over the competition that has enabled us to grow above industry averages. Human Capital Our workforce is and will always be the core of our business.
Growth in this segment is being driven by digital transformation and innovation requirements, workforce mobilization and modern enterprise needs across five industry verticals and their respective subsectors. Our talent pool – which includes onshore, nearshore and offshore resources, can be deployed in short duration solution-specific engagements or long-term consultative roles.
Our robust commercial talent pool, which includes onshore, nearshore, and offshore professionals, can be deployed in short duration, solution-specific engagements, or on long-term consultative roles.
We also maintain a smaller delivery center in India. Assignment — We provide our clients with experienced IT and creative digital marketing contract professionals for temporary assignments and project engagements. Our contract professionals have knowledge and experience in specialized technical and creative digital marketing services that make them qualified to fill a given assignment or project.
Our billable professionals have knowledge and experience in specialized technical and creative digital marketing services that make them qualified to fill a given assignment or project. Assignment contracts may vary in length but typically range between three and six months in duration.
These expenses have a direct effect on our costs of services, margins and likelihood of achieving or maintaining profitability. For a further discussion of government regulation associated with our business, see Part I, Item 1A.
We provide workers’ compensation insurance, unemployment insurance, and professional liability insurance for our employees. For a further discussion of government regulation associated with our business, see Part I, Item 1A.
Our principal office is located at 4400 Cox Road, Suite 110, Glen Allen, Virginia 23060, and our telephone number is (888) 482-8068. Commercial Segment Our Commercial Segment (75.0 percent of 2022 consolidated revenues) provides a broad spectrum of IT services and solutions and creative digital marketing services primarily to Fortune 1000 and large enterprise clients.
Commercial Segment Our Commercial Segment (71.3 percent of 2023 consolidated revenues) provides a broad spectrum of IT services and solutions to Fortune 1000 and large enterprise clients.
Clients We serve our clients by effectively understanding their IT, consulting and digital creative marketing services needs and providing them qualified professionals with a unique combination of skills, experience and expertise to meet those needs.
From a client perspective, ASGN has grown by effectively understanding our clients’ IT needs and providing them with qualified professionals who maintain a unique combination of skills, experience, and expertise to meet those needs. Our clients set rigorous requirements for talent, which have only increased as we’ve evolved our business to offer higher-end, higher-value IT consulting solutions.
In 2022, revenues from contracts directly with U.S. federal government agencies were approximately 21 percent of consolidated revenues and no other client represented more than 10 percent of revenues. Candidates We recruit candidates with backgrounds in IT services and consulting and digital creative marketing who seek contract or permanent work opportunities.
As we support clients across a diverse set of industry verticals, no client, other than the U.S. federal government, represented more than 10 percent of revenues in 2023. Revenues from contracts directly with several U.S. federal government agencies combined were approximately 24.3 percent of 2023 consolidated revenues.
We are focused on high-margin work with high-volume scalable clients and projects, for large commercial enterprise accounts and federal government customers. We have built a sizable commercial consulting platform, and we plan to continue to grow our revenues both organically and through acquisitions.
We have built a sizable consulting platform, with over 55 percent of our revenues in a combination of commercial and federal government IT consulting work in the fourth quarter of 2023. We have grown our IT consulting revenues both organically and through acquisitions, and our goal is to continue this growth.
We position our teams to stay at the forefront of emerging trends in digitization and candidate sourcing to better position our businesses and improve how we serve clients and consultants. Competition We see ourselves as a hybrid between pure staff augmentation and pure-play consulting due to the way in which we provide human capital on a project-by-project basis.
We position our teams to stay at the forefront of emerging trends in digitization and candidate sourcing, including GenAI technologies that assist teams in creating robust models around candidate search and match to best position our businesses and continuously improve how we serve clients and consultants.
We employed approximately 50,000 contract professionals throughout 2022, or approximately 25,500 on a full-time-equivalent ("FTE") basis. Strategy ASGN's strategy is to be a leading provider of IT services and professional solutions, including technology and creative digital marketing, across the commercial and federal government sectors.
Strategy ASGN's strategy is to be a leading provider of IT services and professional solutions to the commercial and federal government sectors. We are focused on high-margin, scalable IT work for large commercial enterprise accounts and federal government customers.
ERGs are voluntary, employee-led groups whose aim is to foster a diverse and inclusive workplace aligned with the organizations they serve and are designed to provide personal support and/or career development and create a safe space where employees can bring their whole selves to the table.
ERGs are voluntary, employee-led groups whose aim is to create a safe space, foster an inclusive workplace, and provide support, while ECGs are voluntary social circles of employees who join based on shared values, interests, and goals.
Over the last five years, we acquired ECS Federal, LLC ("ECS") in April 2018 and 11 "tuck-in" acquisitions that align with our strategy to expand our IT consulting services and solutions capabilities in the commercial and federal government markets. ASGN was incorporated in 1992.
Each of these acquisitions align with our strategy to expand our IT consulting services and solutions capabilities, offer higher-value technical solutions, and become a leading provider of these high-end services to the commercial and federal government markets.
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Our Commercial Segment, which is our largest segment, provides consulting, creative digital marketing and permanent placement services primarily to large enterprises and Fortune 1000 companies. Our Federal Government Segment provides mission-critical solutions to the Department of Defense, the intelligence community and federal civilian agencies. We have grown through a combination of organic growth and strategic acquisitions.
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From a revenue and margin perspective, ASGN has grown through a combination of organic growth and strategic acquisitions. Over the last five years, we completed 11 "tuck-in" acquisitions.
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We anticipate that our clients will increase their use of contract labor, professional staffing and consulting services in 2023. By using our contract labor professional staffing and consulting services, our clients benefit from cost structure advantages, flexibility to address fluctuating demand in business, and access to greater expertise.
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From a business advancement perspective, ASGN invests in six core areas, including leadership, recruitment of in-demand skillsets, training and skill development, partnerships, internal artificial intelligence ("AI") tools, and client AI roadmaps. ASGN was incorporated in 1992. Our principal office is located at 4400 Cox Road, Suite 110, Glen Allen, Virginia 23060, and our telephone number is (888) 482-8068.
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During 2022, we employed approximately 4,000 internal employees, including sales directors, account managers, recruiters and corporate office employees. We support our employees and contract professionals through the following initiatives: Diversity, Equity and Inclusion — ASGN is committed to gender and racial equality goals across all levels of employment.
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Growth in this segment is being driven by digital transformation and innovation requirements, including, but not limited to, that of AI, workforce mobilization, and modern enterprise needs across five industry verticals: (i) Financial Services, (ii) Consumer and Industrial, (iii) Technology, Media and Telecom ("TMT"), (iv) Healthcare, and (v) Business and Government Services.
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We have diversity, equity and inclusion ("DEI") training, recruitment, retention and advancement programs across all brands, which include mandatory training to raise awareness and eliminate unconscious bias in hiring and promotion practices.
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Our clients are looking to meet their business challenges at greater speed and with more accuracy and precision. We are therefore harnessing developing technologies, such as Microsoft’s Copilot and Azure OpenAI, to increase the efficiency of our own teams, while at the same time developing AI roadmaps for our clients that leverage new generative technologies.
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Our DEI manager oversees a program designed to (i) encourage and support personal and professional development for employees from all ethnicities, races, religions and backgrounds and (ii) empower more women to become leaders. In 2022, a "mentee-led" mentorship pilot program was successful.
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Consulting — Our business focus and growth strategy of today lies in providing our clients with higher value IT consulting services. A byproduct of our decades-long, trusted client relationships over the years, our customers have engaged us in longer-term consulting contracts.
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Mentors reported the value of developing the next generation of leaders at ASGN while mentees reported help navigating interpersonal challenges as well as with preparations to take the next steps in their careers.
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Consulting contracts leverage the same talent pool as our assignment work but offer higher margin opportunities and increased revenue visibility. The average duration of commercial consulting projects is one year. Assignment — Our business heritage is in providing our clients with experienced IT and creative digital marketing billable professionals for temporary assignments and project engagements.
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Through our participation in the United Nations Global Compact’s Sustainable Development Goals (SDGs) Accelerator Program in 2022, ASGN aligned with SDG 5 (Gender Equality) and SDG 10 (Reduced Inequalities). To encourage more participation from, and support of, diverse businesses in our supply chain, ASGN established a Company-wide Vendor Diversity Policy.
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We have over 1,000 combined certifications, accreditations, and awards in AI/ML alone, and continue to invest in our traditional and generative AI skillsets through our Data and AI Center of Excellence, our hub for training and innovation that empowers federal agencies to harness the full potential of AI technology. The segment provides services under time-and-materials, cost reimbursable, and firm-fixed-price contracts.
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We exceeded our Company-wide commitment to employ at least 40 percent women and diverse people (including racial and ethnic diversity, sexual orientation, physical abilities, and veteran status) in senior executive positions, ahead of our target date of 2025.
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Our total addressable market has significantly expanded as clients have actively pulled us into higher-value consulting work for the commercial and government end markets.
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Also in 2022, ASGN proudly became a signatory to the UN’s Women’s Empowerment Principles (WEPs) to help guide us toward a more gender equal workplace.
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Nevertheless, our now larger total addressable market in IT consulting offers us a greater revenue opportunity.
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Women accounted for over 40 percent of our internal workforce and employees from underrepresented racial and ethnic groups accounted for over 30 percent of our internal workforce based on our census data as of December 31, 2022. Three of ASGN’s eleven Board of Directors are women, and two members identify as being from an underrepresented group.
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Our diverse talent pool strengthens our position as a leading global IT professional services firm, and we aim to recruit diverse leaders in their respective areas of expertise that support ASGN’s high-performance, innovative, and collaborative culture. In 2023, we employed approximately 3,700 internal employees, including sales directors, account managers, recruiters, and corporate office employees.
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Health, Safety and Well-being — Our training and development opportunities aim to address, among other things, ethics and integrity; diversity and workplace inclusion; discrimination and harassment; unconscious bias; cybersecurity, privacy and information security; and workplace safety.
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We support our employees and billable professionals through the following initiatives: Culture and Belonging — At ASGN, we strive for equity across all levels of employment. Our efforts include training, recruitment, retention, and advancement programs. These programs aim to remove bias in hiring and promotions.
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In 2022 we adopted Company-wide Employee Wellness and Workplace Health and Safety policies. ASGN focused on providing a safe and healthy workplace. We understand that taking care of our employees’ health is an expression of our values, essential to our business, and a vital aspect of building a happier workplace.
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Our Diversity, Equity, and Inclusion (“DEI”) Director leads programs aimed at promoting personal and professional growth for employees from diverse backgrounds, providing our employees with increased opportunities to feel motivated, valued, and fulfilled as they achieve personal and professional successes at ASGN.
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Through our employee wellness programming, we aspire to help our employees reduce stress, improve their physical health and stamina, and flourish mentally and emotionally. Finally, in the wake of COVID-19, and to support work-life balance, ASGN is continuing to offer flexible work schedules.
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Over 40 percent of our senior level management positions are diverse by racial and ethnic diversity, sexual orientation, gender, disability, or veteran status. While we believe we have assembled a diverse workforce and leadership team, we are committed to continuous improvement to foster an increased sense of belonging.
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Employee Engagement, Retention and Development — We are committed to career advancement through training and development that supports both personal and professional growth. Employees are provided with a comprehensive training program of continuing education and professional development that helps them stay ahead and deliver excellent results.
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In 2023, we launched a Company-wide inclusion council to collaborate, strategize, and implement initiatives that enrich our workplaces, nurture inclusivity, and drive sustainable growth. Women comprise 27 percent of ASGN’s Board of Directors ("Board") and 18 percent of its members identify as being from an underrepresented group.
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In 2022, we implemented our first Company-wide employee engagement survey and we achieved a 71 percent overall participation rate. To promote more employee engagement in areas that are most meaningful to our diverse array of employees, we support Employee Resource Groups ("ERGs").
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Guided by our Company-wide Employee Wellness and Workplace Health and Safety policies, we continue to seek opportunities to expand our offerings where feasible. Further, ASGN offers flexible and hybrid work schedules to support work-life balance and contribute to the well-being of our employees at work and at home.
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They are also designed to help diverse employees be better prepared to move up within the organization. All our Commercial Segment divisions have ERGs in place, while our Federal Government Segment plans to roll out 11 new ERGs in 2023. ERGs at ASGN include: Black, 50Forward, Pride, Valor, Families and Women.
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Our goal is to create and maintain a safe, healthy, and happy workplace that motivates and leads to retention across the Company. Employee Engagement, Retention and Development — We prioritize career growth through ongoing education and professional development.
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In addition to ERGs, ASGN and its brands also support Employee Community Groups (ECGs), voluntary social circles of employees who join based on shared values, interests, perspectives or goals. ECGs at ASGN include: Caregivers, Environment and Wellness. Both types of employee groups enhance the well-being of the employees who choose to participate.
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Employees are provided with comprehensive training, including programming on ethics and integrity, workplace inclusion and belonging, discrimination and harassment, cybersecurity, workplace safety, and career-specific modules. We achieved a 72 percent overall participation rate in our 2023 employee engagement survey.
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Collaborative Performance Management — We strongly support the belief that our employees should be the primary drivers of their own career growth. Employees are encouraged to seek opportunities that align with their long-term career goals, whether that be lateral job changes, cross-functional training, serving on committees or special projects, or any activity that will help to progress their career.
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We continue to support ASGN’s Employee Resource Groups (“ERGs”) and Employee Community Groups (“ECGs”) across our brands to foster a diverse and inclusive environment.
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Government Regulation We take reasonable steps to ensure that our contract professionals possess all current licenses and certifications required for each placement. We provide state-mandated workers’ compensation insurance, unemployment insurance and professional liability insurance for our internal employees and our contract professionals who are our employees.
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We have initiated a mentorship program (“ASGN Engage & Empower”) which is a cornerstone of our commitment to foster an environment where every employee has the opportunity to grow, learn, and contribute to their fullest potential. Mentors value the fresh perspectives of the mentees, while mentees feel supported and gain insights into different business areas.
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Collaborative Performance Management — We believe in empowering our employees to drive their career growth. This includes seeking varied job roles, cross-functional training, and participating in special projects.
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Our performance management process focuses on developing clear goals at the start of each calendar year (or at the beginning of one’s term of employment) and providing constructive feedback and support throughout the year to best develop our employees’ careers and position them for success.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAudits by U.S. government agencies for contracts with federal government clients could result in unfavorable audit results that could subject us to a variety of penalties and sanctions and could harm our reputation and relationships with our customers and adversely impact results of operations.
Biggest changeMoreover, our revenues and operating results could be adversely affected if any prime contractor chose to offer directly to the customer services of the type that we provide, or if they team with other companies to provide those services. 10 Audits by U.S. government agencies for contracts with federal government clients could result in unfavorable audit results that could subject us to a variety of penalties and sanctions and could harm our reputation and relationships with our customers and adversely impact results of operations.
If we are unable to win particular contracts, we may be prevented from providing services to customers that are purchased under those contracts for a number of years. In addition, upon the expiration of a contract, if the customer requires further services of the type provided by the contract, there is frequently a competitive rebidding process.
If we are unable to win particular contracts, we may be prevented from providing services to customers that are purchased under those contracts for a number of years. In addition, upon the expiration of a contract, if the customer requires further services of the type provided by the contract, 9 there is frequently a competitive rebidding process.
We may have disputes with our subcontractors arising from, among other things, the quality and timeliness of work performed by the subcontractor, customer concerns about the subcontractor, our failure to extend existing task orders or issue new task orders under a subcontract, our hiring of a subcontractor’s personnel or the subcontractor’s failure to comply with applicable 9 law.
We may have disputes with our subcontractors arising from, among other things, the quality and timeliness of work performed by the subcontractor, customer concerns about the subcontractor, our failure to extend existing task orders or issue new task orders under a subcontract, our hiring of a subcontractor’s personnel, or the subcontractor’s failure to comply with applicable law.
In addition, our quarterly and annual revenue growth rates and expenses as a percentage of our revenues may differ significantly from our historical rates, and our future operating results may fall below expectations. Our environmental, social and governance (ESG) commitments and disclosures may expose us to reputational risks and legal liability.
In addition, our quarterly and annual revenue growth rates and expenses as a percentage of our revenues may differ significantly from our historical rates, and our future operating results may fall below expectations. 8 Our environmental, social and governance (ESG) commitments and disclosures may expose us to reputational risks and legal liability.
Any security incident that results in the compromise of personal information we collect and retain, or that otherwise disrupts or negatively impacts our operations, could harm our reputation, lead to customer attrition, and expose us to regulatory enforcement action or litigation.
Any security incident that results in the compromise of personal information we collect and retain, or that otherwise disrupts or negatively impacts our operations, could harm our reputation, lead to customer or employee attrition, and expose us to regulatory enforcement action or litigation.
We are subject to federal, state and local laws and regulations governing the employer/employee relationship, such as those related to payment of federal, state and local payroll and unemployment taxes for our corporate employees and contractor professional employees, tax withholding, social security or retirement benefits, licensing, wage and hour requirements, paid sick leave, paid family leave and other leaves, employee benefits, pay equity, non-discrimination, sexual harassment and workers’ compensation; and we must further comply with immigration laws and a wide variety of notice and administrative requirements, such as record keeping, written contracts, notification and reporting.
We are subject to federal, state, and local laws and regulations governing the employer/employee relationship, such as those related to payment of federal, state, and local payroll and unemployment taxes for our corporate employees and billable professional employees, tax withholding, social security or retirement benefits, licensing, wage and hour requirements, paid sick leave, paid family leave and other leaves, employee benefits, pay equity, non-discrimination, sexual harassment, and workers’ compensation; and we must further comply with immigration laws and a wide variety of notice and administrative requirements, such as record keeping, written contracts, notification, and reporting.
Our daily business operations depend on our information technology systems for a wide variety of functions, including, among other things, identifying staffing resources, matching personnel with client assignments and managing our accounting and financial reporting functions.
Our daily business operations depend on our information technology systems for a wide variety of functions, including, among other things, identifying consulting and staffing resources, matching personnel with client assignments, and managing our accounting and financial reporting functions.
Our growth could be adversely affected by many factors, including future technology industry conditions, macroeconomic events such as inflation, recession, and interest rate increases, competition, and labor market trends or regulations.
Our growth could be adversely affected by many other factors, including future technology industry conditions, macroeconomic events such as inflation, recession, and interest rate increases, competition, and labor market trends or regulations.
The U.S. government's ability to not exercise contract options, to reduce orders, or to modify, curtail or terminate our contracts makes the calculation of 8 our Federal Government Segment contract backlog subject to numerous uncertainties.
The U.S. government’s ability to not exercise contract options, to reduce orders, or to modify, curtail or terminate our contracts, makes the calculation of our Federal Government Segment contract backlog subject to numerous uncertainties.
We have provided short-term and long-term incentive compensation to our key management in an effort to retain them, and have prepared succession plans at such time their employment ends.
We have provided short-term and long-term incentive compensation to our key management in an effort to retain them, and have prepared succession plans at such time as their employment ends.
The market price of our stock has fluctuated substantially in the past and could fluctuate substantially in the future, based on a variety of factors, including our operating results, changes in general conditions in the economy, and the staffing and consulting industries, announcements by our competitors, involvement in a significant litigation matter, a major change in our management or Board of Directors, short sales, hedging and other derivative transactions in shares of our common stock.
The market price of our stock has fluctuated substantially in the past and could fluctuate substantially in the future, based on a variety of factors, including our operating results; changes in general conditions in the economy and/or the staffing and consulting industries; announcements by our competitors; involvement in a significant litigation matter; a major change in our management; and short sales, hedging, and other derivative transactions in shares of our common stock.
Our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or may not meet the expectations of investors or other stakeholders.
Our selection or application of disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or may not meet the expectations of investors or other stakeholders.
We are also subject to U.S. laws and regulations relating to government contracts with federal agencies. In certain other countries, we may not be considered the legal employers of our temporary personnel, however we are still responsible for collecting taxes and social security deductions and transmitting these amounts to the taxing authorities.
We are also subject to U.S. laws and regulations relating to government contracts with federal agencies. In certain other countries, we may not be considered the legal employer of our temporary personnel, however we are still responsible for collecting taxes and social security deductions and transmitting these amounts to the taxing authorities.
The impact of a health crisis such as the COVID-19 pandemic on our business, operations, and future financial performance could include, but is not limited to, adverse impacts to our operating income, operating margin, net income, earnings per share and operating cash flows, as expenses may not decrease at the same rate as revenues decline.
The impact of a health crisis such as a pandemic on our business, operations, and future financial performance could include, but is not limited to, adverse impacts to our operating income, operating margin, net income, earnings per share and operating cash flows, as expenses may not decrease at the same rate as revenues decline.
Our business is particularly susceptible to economic conditions in the United States where our clients or operations are concentrated. As economic activity slows, many clients or potential clients reduce their use of and reliance upon contract professionals, which reduces the demand for the Company’s services and could significantly decrease the Company’s revenues and profits.
Our business is particularly susceptible to economic conditions in the United States where our clients or operations are concentrated. As economic activity slows, many clients or potential clients reduce their use of and reliance upon billable professionals, which reduces the demand for the Company’s services and could significantly decrease the Company’s revenues and profits.
In periods of low unemployment, there may be a shortage of and significant competition for, the skilled contract professionals sought by our clients. If we are unable to attract and retain a sufficient number of contract professionals to meet client demand, we may be required to forgo revenue opportunities, which may hurt the growth of our business.
In periods of low unemployment, there may be a shortage of, and significant competition for, the skilled professionals sought by our clients. If we are unable to attract and retain a sufficient number of billable professionals to meet client demand, we may be required to forgo revenue opportunities, which may hurt the growth of our business.
These provisions of Delaware law may have the impact of delaying, deferring, or preventing a change of control and may discourage bids for our common stock at a premium over its market price. In addition, our Board could rely on these provisions of Delaware law to discourage, prevent, or delay an acquisition of us. Item 1B.
These provisions of Delaware law may have the impact of delaying, deferring, or preventing a change of control and may discourage bids for our common stock at a premium over its market price. In addition, our Board could rely on these provisions of Delaware law to discourage, prevent, or delay an acquisition of us.
Cybersecurity and Technology Risks The failure to prevent a cybersecurity incident affecting our systems could result in the disruption of our services or the disclosure or misuse of sensitive information, which could harm our reputation, decrease demand for our services and products, expose us to liability, penalties and remedial costs, or otherwise adversely affect our financial performance.
The failure to prevent a cybersecurity incident affecting our systems could result in the disruption of our services or the disclosure or misuse of sensitive information, which could harm our reputation, decrease demand for our services and products, expose us to liability, penalties, and remedial costs, or otherwise adversely affect our financial performance.
Claims raised by clients stemming from the improper actions of our contract professionals, even if without merit, could cause us to incur significant expense associated with the costs or damages related to such claims. Further, such claims by clients could damage our business reputation and result in the discontinuation of client relationships.
Claims raised by clients stemming from the improper actions of our billable professionals, even if without merit, could cause us to incur significant expense associated with the costs or damages related to such claims. Further, such claims by clients could damage our business reputation and result in the discontinuation of client relationships.
Our business is subject to government regulation, which in the future could restrict the types of employment services we are permitted to offer or result in additional or increased costs that reduce our revenues and earnings. The professional staffing and IT services industry is regulated in the United States and other countries in which we operate.
Our business is subject to government regulation, which in the future could restrict the types of employment services we are permitted to offer or result in additional or increased costs that reduce our revenues and earnings. The IT consulting and staffing services industry is regulated in the United States and other countries in which we operate.
Item 1A. Risk Factors Our business is subject to various risks, including, but not limited to those described below, all of which could adversely affect our results of operations and financial condition, and as a result, could cause a decline in the trading price of our common stock.
Item 1A. Risk Factors Our business is subject to various risks, including, but not limited to those described below, any of which could adversely affect our results of operations and financial condition, and as a result, could cause a decline in the trading price of our common stock.
Risks Related to Government Contracts We derive significant revenues from contracts and task orders awarded through a competitive bidding process. Our revenues and profitability may be adversely impacted if we fail to compete effectively in such processes. Our contracts and task orders with the federal government are awarded through a competitive bidding process, which creates significant competition and pricing pressure.
We derive significant revenues from contracts and task orders awarded through a competitive bidding process. Our revenues and profitability may be adversely impacted if we fail to compete effectively in such processes. Our contracts and task orders with the federal government are awarded through a competitive bidding process, which creates significant competition and pricing pressure.
Legal and Regulatory Risks Significant legal actions and claims could subject us to substantial uninsured liabilities, result in damage to our business reputation, result in the discontinuation of our client relationships, and adversely affect our recruitment and retention efforts. We employ people internally and in the workplaces of other businesses.
Legal and Regulatory Risks Significant legal actions, claims or investigations could subject us to substantial uninsured liabilities, result in damage to our business reputation, result in the discontinuation of our client relationships, and adversely affect our recruitment and retention efforts. We employ people internally and in the workplaces of other businesses.
Our revenues, cash flows and operating results could be adversely affected by spending caps or changes in budgetary priorities, as well as by delays in the government budget process, program starts or the award of contracts or task orders under contracts.
Our revenues, cash flows, and operating results could be adversely affected by spending caps or changes in budgetary priorities, as well as by delays in the government budget process, program starts, the award of contracts or task orders under contracts, or by a government shutdown.
The cost of attracting and retaining contract professionals in the future may be higher than we anticipate if there is an increase in competitive wages and benefits and, as a result, if we are unable to pass these costs on to our clients, our likelihood of achieving or maintaining profitability could decline.
The cost of attracting and retaining billable professionals may be higher than we anticipate if there is an increase in competitive wages and benefits and, as a result, if we are unable to pass these costs on to our clients, our likelihood of achieving or maintaining profitability could decline.
If we are unable to attract and retain qualified contract professionals, our business could be adversely affected. Our business is substantially dependent upon our ability to attract and retain contract professionals who possess the skills, experience, advanced degrees, certifications, and licenses which may be required to meet the specified requirements of our clients.
If we are unable to attract and retain qualified billable professionals, our business could be adversely affected. Our business is substantially dependent upon our ability to attract and retain billable professionals who possess the skills, experience, advanced degrees, certifications, licenses, and clearances which may be required to meet the specified requirements of our clients.
We could incur significant costs to improve the climate-related resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate the effects of climate changes. Our insurance may not be sufficient to cover losses or additional expenses that we may sustain.
Further, our insurance may not be sufficient to cover losses or additional expenses that we may sustain. In addition, we could incur significant costs to improve the climate-related resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate the effects of climate changes.
Our international operations, which in the aggregate represented approximately two percent of our consolidated revenues in 2022, expose us to, among other things, operational, regulatory and political risks in the countries in which we operate. 11 General Risks The loss of key members of our senior management team could adversely affect the execution of our business strategy and our financial results.
Our international operations, which represented approximately two percent of our consolidated revenues in 2023, expose us to, among other things, operational, regulatory, and political risks in the countries in which we operate. General Risks The loss of key members of our senior management team could adversely affect the execution of our business strategy and our financial results.
If our growth rate slows, or we fail to grow at the pace anticipated and we are unsuccessful in our growth initiatives and strategies, our financial results could be less than our expectations or those of investors or analysts.
If our growth rate continues to decline, or we fail to grow at the pace anticipated and we are unsuccessful in our growth initiatives and strategies, our financial results could be less than our expectations or those of investors or analysts.
Any associated negative publicity could adversely affect our ability to attract and retain qualified contract professionals in the future. We proactively address many of these issues with our robust compliance program.
Any associated negative publicity could adversely affect our ability to attract and retain clients and qualified billable professionals in the future. We proactively address many of these issues with our robust compliance program.
As of December 31, 2022, we had $1.9 billion of goodwill and $569.6 million of net acquired intangible assets. We review goodwill and indefinite-lived intangible assets (consisting entirely of trademarks) for impairment at least annually and when events or changes in circumstances indicate that the carrying amount may not be recoverable.
As of December 31, 2023, we had $1.9 billion of goodwill and $497.9 million of net acquired intangible assets. We review goodwill and indefinite-lived intangible assets (consisting entirely of trademarks) for impairment at least annually, and when events or changes in circumstances indicate that the carrying amount may not be recoverable.
U.S. and global market and economic developments could adversely affect our business, financial condition and results of operations. Demand for the professional staffing and consulting services that we provide is significantly affected by global market and economic conditions, including recessions, inflation, interest rates, tax rates, and economic uncertainty.
U.S. and global market and economic developments could adversely affect our business, financial condition, and results of operations. Demand for the IT services and solutions that we provide is significantly affected by global market and economic conditions, including recessions, inflation, interest rates, tax rates, and economic uncertainty.
Contract backlog consists of contracts for which funding has been formally awarded (funded backlog of $0.6 billion at December 31, 2022) and unfunded backlog, which represents the estimated future revenues to be earned from negotiated contract awards for which funding has not been awarded and from unexercised contract options (unfunded backlog of $2.7 billion at December 31, 2022).
Contract backlog consists of contracts for which funding has been formally awarded (funded backlog of $0.5 billion at December 31, 2023) and unfunded backlog, which represents the estimated future revenues to be earned from negotiated contract awards for which funding has not been awarded, and from unexercised contract options (unfunded backlog of $2.5 billion at December 31, 2023).
We compete for such contract professionals with other staffing and consulting companies, government contractors, and our clients and potential clients. There can be no assurance that qualified professionals will be available to us in adequate numbers to staff our temporary assignments.
We compete for such billable professionals with other staffing and consulting companies, government contractors, and our clients and potential clients. There can be no assurance that qualified professionals will be available to us in adequate numbers to staff our temporary assignments or client projects.
We expect to use cash on hand and cash flows from operations to pay our expenses and repay our debt. If we do not have enough money, we may be required to refinance all or part of our existing debt, sell assets or borrow additional funds.
We expect to use cash on hand and cash provided by operations to pay our expenses and repay our debt. If we do not have enough cash, we may be required to refinance all or part of our existing debt, sell assets or borrow additional funds.
Our term loan has a variable interest rate, making us more vulnerable to increases in interest rates. Additionally, we use a portion of our cash flow from operations for interest payments on our debt rather than for our operations.
Our term loan has a variable interest rate, making us vulnerable to increases in interest rates. Additionally, we use a portion of our cash provided by operations for interest payments on our debt rather than for our operations.
Moreover, our contract professionals are often hired to become regular employees of our clients and their employment is terminable at will. Attracting and retaining contract professionals depends on several factors, including our ability to provide contract professionals with desirable assignments and competitive wages and benefits.
Moreover, the employment of our temporary billable professionals is terminable at will and they are often hired to become regular employees of our clients. Attracting and retaining billable professionals depends on several factors, including our ability to provide billable professionals with desirable assignments and competitive wages and benefits.
We compete with other companies in the professional staffing and consulting industries for acquisition opportunities and there can be no assurance that we will be able to successfully identify suitable acquisition candidates or be able to complete future acquisitions on favorable terms, if at all.
We compete with other companies for acquisition opportunities and there can be no assurance that we will be able to successfully identify suitable acquisition candidates or be able to complete future acquisitions on favorable terms, if at all.
There also can be no assurance that we will realize the benefits expected from any transaction or receive a favorable return on investment from our acquisitions. All of our acquisitions have been integrated into the business. The integration of an acquisition involves a number of factors that may affect our operations.
There also can be no assurance that we will realize the benefits expected from any transaction or receive a favorable return on investment from our acquisitions. 7 The integration of an acquisition involves a number of factors that may affect our operations.
As the Company is expecting to have key personnel retire over the next few years, we need to implement appropriate succession plans, and if we cannot attract and retain qualified personnel or effectively implement appropriate succession plans, it could have a material adverse impact to our business, financial condition and/or results of operations.
As the Company continues to expect to have key personnel retire, we need to implement appropriate succession plans, and if we cannot attract and retain qualified personnel or effectively implement appropriate succession plans, it could have a material adverse impact to our business, financial condition, and/or results of operations.
Furthermore, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, would be detected, particularly in our newly acquired companies and international operations. If our internal controls are unsuccessful, our business and results of operations could be adversely affected.
Furthermore, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, would be detected, particularly in our newly acquired companies and international operations.
Over the past several years, we have experienced revenue and earnings growth both organically and through acquisitions. There is no assurance that we will be able to continue this pace of growth in the future or meet our strategic objectives for growth.
In prior years, we have experienced revenue and earnings growth both organically and through acquisitions. There is no assurance that we will be able to continue this pace of growth in the future or meet our strategic objectives for growth, and in fact our growth declined this past year due to macroeconomic conditions.
Although we maintain disaster recovery plans, such events could disrupt our operations or those of our customers and suppliers, including through the inability of employees and contract professionals to work, destruction of facilities, loss of life, and adverse effects on supply chains, power, infrastructure and the integrity of information technology systems, all of which could materially increase our costs and 7 expenses, delay or decrease revenue from our customers and disrupt our ability to maintain business continuity.
Although we maintain disaster recovery plans, such events could disrupt our operations or those of our customers and suppliers, including through the inability of employees and billable professionals to work, destruction of facilities, loss of life, and adverse effects on supply chains, power, infrastructure and the integrity of information technology systems, any of which could materially increase our costs and expenses, delay or decrease revenue from our customers, disrupt our ability to maintain business continuity, or otherwise have a material adverse effect on our business, results of operations, financial condition, and prospects.
The success of our business depends upon our ability to continually secure new orders from clients and to fill those orders with our contract professionals. Most of our agreements with clients do not provide for exclusive use of our services and many of our agreements may be terminated at will.
The success of our business depends upon our ability to continually secure new consulting projects and assignment contracts from clients and to fill them with our billable professionals. Most of our agreements with clients do not provide for exclusive use of our services and many of our agreements may be terminated at will.
Our business depends upon continued U.S. government expenditures on cybersecurity, cloud and enterprise IT, artificial intelligence/machine learning, digital transformation, and other programs that we support. During 2022, revenues from contracts directly with U.S. federal government agencies were approximately 21 percent of consolidated revenues.
Our business depends upon continued U.S. government expenditures on cybersecurity, cloud and enterprise IT, AI/ML, digital transformation, and other programs that we support. During 2023, revenues from contracts directly with U.S. federal government agencies were approximately 24.3 percent of consolidated revenues.
If a government audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or debarment from doing business with federal government agencies. We depend on our teaming arrangements and relationships with other contractors and subcontractors.
If a government audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines, and suspension or debarment from doing business with federal government agencies in the future.
As the employer of record of our contract professionals, we incur a risk of liability to our contract professionals for various workplace events, including claims of physical injury, discrimination, harassment or failure to protect confidential personal information.
As the employer of record of our billable professionals, we incur a risk of liability due to the actions of our billable professionals at client sites or with client information and systems, and to our billable professionals for various workplace events, including claims of physical injury, discrimination, harassment, or failure to protect confidential personal information.
In periods of high unemployment, contract professionals frequently opt for full-time employment directly with clients and, due to a large pool of available candidates, clients are able to directly hire and recruit qualified candidates without the involvement of staffing agencies. Sometimes we utilize subcontractors to provide us with qualified professionals.
In periods of high unemployment, due to a large pool of available candidates, clients are able to directly hire and recruit qualified candidates without the involvement of our services. Sometimes we utilize subcontractors to provide us with qualified professionals.
Failure to comply with regulations and required practices and procedures could harm our reputation or influence the award of new contracts. Changes in U.S. government spending or budgetary priorities, the failure of government budgets to be approved on a timely basis, or delays in contract awards and other procurement activity may significantly and adversely affect our future financial results.
Changes in U.S. government spending or budgetary priorities, the failure of government budgets to be approved on a timely basis, or delays in contract awards and other procurement activity may significantly and adversely affect our future financial results.
Our results of operations could be adversely affected if we cannot successfully keep pace with technological changes in the development and implementation of our services. Our success depends on our ability to keep pace with rapid technological changes in the development and implementation of our services.
If we or our partners fail to deliver services on time, our ability to complete the contracts may be adversely affected. Our results of operations could be adversely affected if we cannot successfully keep pace with technological changes in the development and implementation of our services.
In conducting our business, we routinely collect and retain personal information on these systems about our employees and contract professionals and their dependents including, without limitation, full names, social security numbers, addresses, birth dates and payroll-related information. Any information-technology systems are at risk of being compromised, whether through malicious activity or human or technological error.
In conducting our business, we routinely collect and retain personal information on these systems about our employees and billing professionals and their dependents. Any information-technology systems are at risk of being compromised, whether through malicious activity or human or technological error.
Future changes in the laws or governmental regulations affecting our business may result in the prohibition or restriction of certain types of employment services that we are permitted to offer, or the imposition of new or additional compliance requirements that could increase our costs and reduce our revenues and earnings.
Any non-compliance with the data privacy laws applicable to our business could result in governmental enforcement actions, fines, and other penalties that could potentially have an adverse effect on our operations and reputation. 11 Future changes in the laws or governmental regulations affecting our business may result in the prohibition or restriction of certain types of employment services that we are permitted to offer, or the imposition of new or additional compliance requirements that could increase our costs and reduce our revenues and earnings.
We rely on a variety of technologies to support important functions in our business, including the recruitment, placement and monitoring of our contract professionals, our billings, and candidate and client data analytics.
Our success depends on our ability to keep pace with rapid technological changes in the development and implementation of our services. We rely on a variety of technologies to support important functions in our business, including the recruitment, placement and monitoring of our billable professionals, our billings, and candidate and client data analytics.
Moreover, in most instances, we are required to indemnify clients against some or all of these risks and we could be required to pay substantial sums to fulfill our indemnification obligations. 10 A failure of any of our employees internally, or contract professionals in clients' workplaces, to observe our policies and guidelines intended to reduce these risks could result in negative publicity, injunctive relief, criminal investigations and/or charges, payment of monetary damages or fines, or other material adverse impacts on our business.
A failure of any of our employees internally, or billable professionals in clients' workplaces, to observe our policies and guidelines intended to reduce these risks could result in negative publicity, injunctive relief, investigations and/or charges, payment of monetary damages or fines, or other material adverse impacts on our business.
Our processes and controls for reporting ESG matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting ESG metrics, including ESG-related disclosures that may be required by the SEC, European and other regulators, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.
Our processes and controls for reporting ESG matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting ESG metrics, including ESG-related disclosures that may be required by the SEC, European, and other regulators.
Our outstanding debt at December 31, 2022 included a term loan of $490.8 million under our senior secured credit facility due 2025, $550.0 million of 4.625 percent unsecured senior notes due 2028, and $31.5 million outstanding on our senior secured revolving credit facility due 2024.
Our outstanding debt at December 31, 2023 included a term loan of $498.8 million under our senior secured credit facility due 2030, and $550.0 million of 4.625 percent unsecured senior notes due 2028. We have a $500.0 million senior secured revolving credit facility due 2028, which is fully available as of December 31, 2023.
Our business operations are subject to interruption from earthquakes, hurricanes, tornadoes, floods, fires, extreme weather events, power shortages, pandemics such as COVID-19, terrorism, political unrest, telecommunications failure, vandalism, cyber-attacks, geopolitical instability, war, the effects of climate change, and other events beyond our control.
Our business operations are subject to interruption from earthquakes, hurricanes, tornadoes, floods, fires, severe weather, power shortages, pandemics and other public health concerns, terrorism, political unrest, telecommunications failure, vandalism, cyber-attacks, geopolitical instability, war and other actual or threatened military conflicts, the effects of climate change, actions taken by the U.S. or other governments in response to any of the foregoing, and other events beyond our control.
We may not realize the full value of our Federal Government Segment contract backlog, which may result in lower revenues than anticipated. Contract backlog, which was $3.3 billion at December 31, 2022, is a useful measure of potential future revenues for our Federal Government Segment.
Contract backlog, which was $3.0 billion at December 31, 2023, is a useful measure of potential future revenues for our Federal Government Segment.
We act as a contractor and a subcontractor to the U.S. federal government and many of its agencies. Some government contracts require us to maintain facility security clearances and require some of our employees to have advanced degrees and/or to maintain individual security clearances.
Some government contracts require us to maintain facility security clearances and require some of our employees to have advanced degrees and/or to maintain individual security clearances.
Due to the uncertain nature of our contracts with the U.S. government, we may never realize revenue from some of the contracts that are included in our contract backlog. A significant loss or suspension of our facility security clearances with the federal government could lead to a reduction in our revenues, cash flows and operating results.
Due to the uncertain nature of our contracts with the U.S. government, we may never realize revenue from some of the contracts that are included in our contract backlog.
A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met.
Failure of internal controls may leave us susceptible to errors and fraud. Management does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met.
As part of our growth strategy, we have made numerous acquisitions, and we intend to continue to pursue select acquisitions in the future.
For information on our cybersecurity risk management, strategy, and governance, see Item 1C. Cybersecurity. We may not successfully make or integrate acquisitions, which could harm our business and growth. As part of our growth strategy, we have made numerous acquisitions, and we intend to continue to pursue select acquisitions in the future.
If we are not successful in implementing our integration and optimization efforts, our business, financial condition and results of operations could be adversely affected. We may not successfully make or integrate acquisitions, which could harm our business and growth.
If we are not successful in implementing our integration and optimization efforts, our business, financial condition, and results of operations could be adversely affected. Performance under contracts, including those on which we have partnered with third parties, may be adversely affected if we or the third parties fail to deliver on commitments or otherwise breach obligations to our clients.
The trading price of our common stock has experienced significant volatility.
If our internal controls are unsuccessful, our business and results of operations could be adversely affected. 12 The trading price of our common stock has experienced significant volatility.
Our brand and reputation are associated with our public commitments to various corporate environmental, social and governance (ESG) initiatives, including our goals relating to sustainability and diversity and inclusion.
Such increased scrutiny may result in increased costs, enhanced compliance or disclosure obligations, or other adverse impacts on our business, financial condition, or results of operations. Further, our brand and reputation are associated with our public commitments to various corporate ESG initiatives, including our goals relating to sustainability.
A significant natural disaster or other event that disrupts our operations or those of our customers or suppliers could have a material adverse effect on our business, results of operations, financial condition, and prospects. Our business relies heavily on the health and safety of our employees, contract professionals and customers.
Our business relies heavily on the health and safety of our employees, billable professionals, and customers.
Removed
Moreover, our revenues and operating results could be adversely affected if any prime contractor chose to offer directly to the customer services of the type that we provide, or if they team with other companies to provide those services.
Added
Our contracts are complex and, in some instances, may require that we partner with other parties, including software and hardware vendors, to provide the complex solutions required by our clients.
Removed
Any non-compliance with the data privacy laws applicable to our business could result in governmental enforcement actions, fines and other penalties that could potentially have an adverse effect our operations and reputation.
Added
Our ability to deliver the solutions and provide the services required by our clients is dependent on our and our partners’ ability to meet our clients’ delivery schedules and other expectations.
Removed
Failure of internal controls may leave us susceptible to errors and fraud. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and internal controls will prevent all errors and all fraud.
Added
Our partners may at times be impacted by global events, the changing macroeconomic environment and supply chain disruptions, as well as rapid increases in demand for their products and services, any of which may impact their ability to provide their products and services within our expected timeframes or at anticipated prices.
Added
AI, including GenAI, is a growing component of our business in both the commercial market and government space. We work both internally and with our enterprise customer base to develop strategic use cases for GenAI technologies.
Added
For example, we recently announced a collaboration with Microsoft to invest in and pilot NextGen AI technologies, including Copilot for Microsoft 365 and Azure OpenAI Service.
Added
AI technologies are complex and rapidly evolving, and we face significant competition, including from our own clients, who may develop their own internal AI-related capabilities, which in each case, can lead to reduced demand for our services or solutions. As these technologies evolve, some services and tasks currently performed by our people will likely be replaced by automation.
Added
We, as with other companies, are facing increasing scrutiny related to our environmental, social and governance (“ESG”) practices and disclosures from certain investors, shareholder advocacy groups, customers, employees, federal, state, and local governments, and other stakeholders. With this increased focus, public reporting regarding ESG practices is becoming more broadly expected.
Added
Such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future. Risks Related to Government Contracts We may not realize the full value of our Federal Government Segment contract backlog, which may result in lower revenues than anticipated.
Added
Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the U.S. government. Because the U.S. Congress did not complete a budget before the end of the 2023 fiscal year, government operations are currently being funded through short-term continuing resolutions.
Added
These continuing resolutions authorize agencies of the U.S. government to continue to operate, but do not authorize new spending initiatives. When the U.S. government operates under a continuing resolution, contract awards may be delayed, canceled, or funded at lower levels which could adversely impact our operations, cash flows, and financial results.
Added
Failure to complete a budget for fiscal year 2024 or to provide for another continuing resolution by applicable deadlines may result in a federal government shutdown, which could cause us to incur labor or other costs without reimbursement under customer contracts or the delay or cancellation of key programs, and could adversely impact our operations, cash flows, and financial results.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Square Feet Lease Expiration ASGN and Commercial Segment Headquarters Richmond, Virginia 78,000 October 2024 Federal Government Segment Headquarters Fairfax, Virginia 46,200 June 2024 Branch offices (1) United States, Canada, United Kingdom, and Spain 771,300 January 2023 through May 2028 Delivery Centers Mexico and India 84,700 May 2023, August 2026 and December 2027 ___________________ (1) We have 131 branch office locations that occupy spaces ranging from approximately 195 to 47,000 square feet with lease terms that range from three months to 8.5 years.
Biggest changeLocation Square Feet Lease Expiration ASGN and Commercial Segment Headquarters Richmond, Virginia 78,000 April 2027 Federal Government Segment Headquarters Fairfax, Virginia 46,200 November 2029 Branch offices (1) United States, Canada, United Kingdom, and Spain 695,200 January 2024 through January 2030 Delivery Centers Mexico and India 84,700 May 2024 through December 2027 ___________________ (1) We have 113 branch office locations that occupy spaces ranging from approximately 1,683 to 47,000 square feet with lease terms that range from one year to 12.6 years.
Item 2. Properties As of December 31, 2022, we leased office space in the following locations. We believe that our facilities are suitable and adequate for our current operations.
Item 2. Properties As of December 31, 2023, we leased office space in the following locations. We believe that our facilities are suitable and adequate for our current operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, based on the facts currently available, we do not believe that the disposition of matters that are pending or asserted will have a material effect on our financial position, results of operations or cash flows. Item 4. Mine Safety Disclosures Not applicable. 13 PART II
Biggest changeHowever, based on the facts currently available, we do not believe that the disposition of matters that are pending or asserted will have a material effect on our financial position, results of operations, or cash flows. Item 4. Mine Safety Disclosures Not applicable. 15 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnder these programs, the Company repurchased 2.8 million shares of its common stock at a cost of $281.4 million in 2022. Under terms of the programs, purchases can be made in the open market or under a Rule 10b5-1 trading plan.
Biggest changeUnder terms of the programs, purchases can be made in the open market or under a Rule 10b5-1 trading plan. The stock repurchase program does not obligate the Company to acquire any particular amount of the Company's stock and may be suspended at any time at the Company's discretion.
Securities Authorized for Issuance Under Equity Compensation Plan — Information responsive to this item will be set forth in the Company’s definitive proxy statement for use in connection with its 2023 Annual Meeting of Stockholders (the "2023 Proxy Statement") to be filed with the SEC within 120 days after the end of the Company’s fiscal year and is incorporated herein by reference.
Securities Authorized for Issuance Under Equity Compensation Plan — Information responsive to this item will be set forth in the Company’s definitive proxy statement for use in connection with its 2024 Annual Meeting of Stockholders (the "2024 Proxy Statement") to be filed with the SEC within 120 days after the end of the Company’s fiscal year and is incorporated herein by reference.
The graph depicts the results of investing $100 in our common stock, the NYSE market index, and an index of the companies listed in the SIC Code No. 736 on December 31, 2017, and assumes that dividends were reinvested, where applicable, during the period.
The graph depicts the results of investing $100 in our common stock, the NYSE market index, and an index of the companies listed in the SIC Code No. 736 on December 31, 2018, and assumes that dividends were reinvested, where applicable, during the period.
The Company's repurchases of its common stock during the three months ended December 31, 2022, and the approximate dollar value of shares that may be purchased under the program as of December 31, 2022, are shown in the table below.
The Company's repurchases of its common stock during the three months ended December 31, 2023, and the approximate dollar value of shares that may be purchased under the program as of December 31, 2023, are shown in the table below.
Stock Performance Graph — The following graph compares the performance of ASGN’s common stock price during the period from December 31, 2017 to December 31, 2022 with the composite prices of companies listed on the NYSE and of companies included in the SIC Code No. 736—Personnel Supply Services Companies Index.
Stock Performance Graph — The following graph compares the performance of ASGN’s common stock price during the period from December 31, 2018 to December 31, 2023 with the composite prices of companies listed on the NYSE and of companies included in the SIC Code No. 736—Personnel Supply Services Companies Index.
At February 17, 2023 we had 49.3 million shares outstanding, 22 holders of record and an indeterminate number of beneficial owners of our common stock held through brokers and other intermediaries.
At February 15, 2024 we had 46.5 million shares outstanding, 23 holders of record and an indeterminate number of beneficial owners of our common stock held through brokers and other intermediaries.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet be Purchased Under the Plans or Programs (in millions) October 129,933 $ 91.96 129,933 $ 356.5 November 239,653 $ 86.70 239,653 $ 335.7 December 262,063 $ 83.26 262,063 $ 313.9 Total 631,649 $ 86.35 631,649 $ 313.9 In connection with our stock-based compensation plans, during the three months ended December 31, 2022, 43,316 shares of our common stock with an aggregate value of $3.8 million were tendered by employees for payment of applicable statutory tax withholdings.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares That May Yet be Purchased Under the Plan (in millions) October 320,306 $ 81.10 320,306 $ 323.1 November 335,701 $ 87.67 335,701 $ 293.7 December 213,340 $ 93.71 213,340 $ 273.7 Total 869,347 $ 86.73 869,347 $ 273.7 In connection with our stock-based compensation plans, during the three months ended December 31, 2023, common stock totaling 30,130 shares with an aggregate value of $2.6 million were tendered by employees for payment of applicable statutory tax withholdings.
Common Stock Repurchases —On December 9, 2021, the Board of Directors approved a two-year stock repurchase program under which the Company may repurchase up to $350.0 million of its common stock. On July 27, 2022, the Board of Directors approved a new two-year stock repurchase program under which the Company may repurchase up to $400.0 million of its common stock.
Common Stock Repurchases — On April 24, 2023, the Company's Board approved a new stock repurchase program under which the Company may repurchase up to $500.0 million of its common stock over the following two years and this replaces the previous program.
At December 31, 2017 2018 2019 2020 2021 2022 ASGN $ 100.00 $ 84.80 $ 110.42 $ 129.97 $ 192.00 $ 126.76 SIC Code No. 736 Index $ 100.00 $ 81.73 $ 100.48 $ 108.17 $ 147.43 $ 106.05 NYSE Market Index $ 100.00 $ 91.21 $ 114.69 $ 122.70 $ 148.07 $ 134.22 14 Recent Sales of Unregistered Securities — None.
At December 31, 2018 2019 2020 2021 2022 2023 ASGN $ 100.00 $ 130.22 $ 153.27 $ 226.42 $ 149.50 $ 176.46 SIC Code No. 736 Index $ 100.00 $ 122.83 $ 132.23 $ 180.23 $ 128.44 $ 138.26 NYSE Market Index $ 100.00 $ 125.74 $ 134.53 $ 162.34 $ 147.16 $ 167.43 16 Recent Sales of Unregistered Securities — None.
Removed
The companies listed in the SIC Code No. 736 include peer companies in the same industry or line of business as ASGN.
Added
These shares are excluded from the table above. During the three months ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. Item 6. Selected Financial Data None.
Removed
These shares are excluded from the table above. Item 6. Selected Financial Data None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeDecember 31, (In millions) 2022 2021 2020 Funded Contract Backlog $ 582.3 $ 529.2 $ 444.5 Negotiated Unfunded Contract Backlog 2,681.2 2,472.0 2,201.7 Contract Backlog $ 3,263.5 $ 3,001.2 $ 2,646.2 The book-to-bill ratio for our Federal Government Segment was 0.9 to 1.0 for the year ended December 31, 2022.
Biggest changeContract backlog coverage ratio is calculated as total Contract Backlog divided by TTM revenues. 17 Year Ended December 31, (Dollars in millions) 2023 2022 2021 New Contract Awards $ 1,022.2 $ 1,073.3 $ 1,157.0 Book-to-Bill Ratio 0.8 to 1 0.9 to 1 1.1 to 1 December 31, (Dollars in millions) 2023 2022 2021 Funded Contract Backlog $ 543.5 $ 582.3 $ 529.2 Negotiated Unfunded Contract Backlog 2,466.0 2,681.2 2,472.0 Contract Backlog $ 3,009.5 $ 3,263.5 $ 3,001.2 Contract Backlog Coverage Ratio 2.4 to 1 2.9 to 1 2.6 to 1 Liquidity and Capital Resources Our working capital, which is current assets less current liabilities, at December 31, 2023 was $579.2 million, and our cash and cash equivalents were $175.9 million.
Net cash used in investing activities in 2022 was $510.0 million and included $484.6 million used to acquire two IT consulting businesses and $37.5 million in capital expenditures.
In 2022, net cash used in investing activities was $510.0 million and included $484.6 million used to acquire two IT consulting businesses and $37.5 million in capital expenditures.
Recoverability of Goodwill and Acquired Intangible Assets — Goodwill is evaluated for impairment annually or more frequently if an event occurs or circumstances change, such as material deterioration in performance that would indicate an impairment may exist. We perform an annual impairment assessment as of October 31st for each of our reporting units.
Recoverability of Goodwill and Acquired Intangible Assets — Goodwill is evaluated for impairment annually or more frequently if an event occurs or circumstances change, such as a material deterioration in performance that would indicate an impairment may exist. We perform an annual impairment assessment as of October 31st for each of our reporting units.
For a discussion of the year ended December 31, 2021 compared with the year ended December 31, 2020, please refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2021.
For a discussion of the year ended December 31, 2022 compared with the year ended December 31, 2021, please refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022.
Stock-Based Compensation and Other Employee Benefit Plans in Item 8. Financial Statements and Supplementary Data ). Off-Balance Sheet Arrangements As of December 31, 2022, we had no off-balance sheet arrangements. Accounting Standards Updates See Note 3. Accounting Standards Update in Item 8. Financial Statements and Supplementary Data for a discussion of new accounting pronouncements. 17
Stock-Based Compensation and Other Employee Benefit Plans in Item 8. Financial Statements and Supplementary Data ). Off-Balance Sheet Arrangements As of December 31, 2023, we had no off-balance sheet arrangements. Accounting Standards Updates See Note 3. Accounting Standards Update in Item 8. Financial Statements and Supplementary Data for a discussion of new accounting pronouncements.
(2) Represents the future minimum lease payments for non-cancelable operating leases. (3) Purchase obligations are non-cancelable job board service agreements and software subscriptions, maintenance and license agreements. For additional information about these contractual cash obligations, see Notes 5. Leases, 9. Long-Term Debt and 10. Commitments and Contingencies in Item 8. Financial Statements and Supplementary Data .
(2) Represents the future minimum lease payments for non-cancelable operating leases. (3) Purchase obligations are non-cancelable job board service agreements and software subscriptions, maintenance, and license agreements. For additional information about these contractual cash obligations, see Notes 5. Leases, 9. Long-Term Debt and 10. Commitments and Contingencies in Item 8.
RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2022 COMPARED WITH THE YEAR ENDED DECEMBER 31, 2021 In this section, we discuss the results of our operations for the year ended December 31, 2022 compared with the year ended December 31, 2021.
RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2023 COMPARED WITH THE YEAR ENDED DECEMBER 31, 2022 In this section, we discuss the results of our operations for the year ended December 31, 2023 compared with the year ended December 31, 2022.
We have retention policies for our workers’ compensation liability exposures. The workers' compensation loss reserves are based upon an actuarial report obtained from a third party and determined based on claims filed and claims incurred but not reported.
Financial Statements and Supplementary Data . 18 We have retention policies for our workers’ compensation liability exposures. The workers' compensation loss reserves are based upon an actuarial report obtained from a third party and determined based on claims filed and claims incurred but not reported.
Critical Accounting Policies and Estimates Our financial statements are prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), which require us to make certain assumptions and related estimates affecting the amounts reported in the consolidated financial statements. Actual results could differ from those estimates.
Virtually all of the Company's revenues are generated in the United States. Critical Accounting Policies and Estimates Our financial statements are prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), which require us to make certain assumptions and related estimates affecting the amounts reported in the consolidated financial statements. Actual results could differ from those estimates.
The workers' compensation loss reserves were $2.6 million and $2.4 million, net of anticipated insurance and indemnification recoveries of $10.2 million and $10.4 million, at December 31, 2022 and 2021, respectively. We have undrawn stand-by letters of credit outstanding to secure obligations for workers’ compensation claims and other obligations.
The workers' compensation loss reserves were $3.0 million and $2.6 million, net of anticipated insurance and indemnification recoveries of $10.5 million and $10.2 million, at December 31, 2023 and 2022, respectively. We have undrawn stand-by letters of credit outstanding to secure obligations for workers’ compensation claims and other obligations.
By review of macroeconomic conditions, industry and market conditions, cost factors, overall financial performance compared with prior projections, and other relevant entity-specific events, we determined it was more likely than not that the fair value of each reporting unit exceeded its carrying amount. Therefore it was concluded that there were no indicators of impairment.
By review of macroeconomic conditions, industry and market conditions, cost factors, overall financial performance compared with prior projections, and other relevant entity-specific events, we determined it was more likely than not that the fair value of each reporting unit exceeded its carrying amount.
The undrawn stand-by letters of credit were $4.0 million at December 31, 2022 and 2021. We have a deferred compensation plan liability of $13.6 million and $15.6 million at December 31, 2022 and 2021, which was primarily included in other long-term liabilities. We established a rabbi trust to fund the deferred compensation plan (see Note 12.
The undrawn stand-by letters of credit were $3.9 million at December 31, 2023 and 2022. We have a deferred compensation plan liability of $16.6 million and $13.6 million at December 31, 2023 and 2022, which was primarily included in other long-term liabilities. We established a rabbi trust to fund the deferred compensation plan (see Note 12.
Year Ended December 31, (Dollars in millions) 2022 2021 2020 Bookings $ 1,192.2 $ 810.3 $ 479.4 Book-to-Bill Ratio 1.2 to 1 1.3 to 1 1.3 to 1 Federal Government Segment Metrics Contract backlog for our Federal Government Segment represents the estimated amount of future revenues to be recognized under awarded contracts including task orders and options.
Year Ended December 31, (Dollars in millions) 2023 2022 2021 Bookings $ 1,351.9 $ 1,192.2 $ 810.3 Book-to-Bill Ratio 1.2 to 1 1.2 to 1 1.3 to 1 Federal Government Segment Metrics Contract backlog for our Federal Government Segment represents the estimated amount of future revenues to be recognized under awarded contracts, including task orders and options, at a point in time ("Contract Backlog").
These estimates are subject to change and may be affected by the execution of new contracts, the extension or early termination of existing contracts, the non-renewal or completion of current contracts and adjustments to estimates for previously included contracts. Changes in the funded contract backlog are also affected by the funding cycles of the government.
These estimates are subject to change and may be affected by the execution of new contracts, the extension or early termination of existing contracts, the non-renewal or completion of current contracts, and adjustments to estimates for previously included contracts.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the other sections of this 2022 10-K, including the Special Note on Forward-Looking Statements and Part I, Item 1A. Risk Factors.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the other sections of this 2023 10-K, including the Special Note on Forward-Looking Statements and Part I, Item 1A. Risk Factors. OVERVIEW ASGN provides information technology ("IT") services and solutions across the commercial and government sectors.
From an industry perspective, Commercial revenues fall into five broad industry verticals: (i) Financial Services, (ii) Consumer and Industrials, (iii) Healthcare, (iv) Technology, Media and Telecom and (v) Business and Government Services. Four out of our five industry verticals achieved double-digit growth year-over-year, while our Business and Government Services vertical was slightly up over the prior year.
Commercial revenues fall into five broad industry verticals: (i) Financial Services, (ii) Consumer and Industrials, (iii) Healthcare, (iv) Technology, Media and Telecom, and (v) Business and Government Services. The Consumer and Industrials industry vertical had low single-digit growth, while the remaining four industry verticals declined year-over-year.
Commitments and Contingencies — The following table sets forth, on an aggregate basis, the amounts of specified contractual cash obligations required to be paid in the future periods shown (in millions): Contractual Obligations Less than 1 year 1-3 years 3-5 years More than 5 years Total Long-term debt obligations (1) $ 58.2 $ 613.3 $ 50.9 $ 559.4 $ 1,281.8 Operating Leases (2) 24.5 24.2 9.6 0.2 58.5 Purchase obligations (3) 18.0 34.4 6.6 — 59.0 $ 100.7 $ 671.9 $ 67.1 $ 559.6 $ 1,399.3 _______ (1) Long-term debt obligations include interest calculated based on the rates in effect at December 31, 2022.
Commitments and Contingencies — The following table sets forth, on an aggregate basis, the amounts of specified contractual cash obligations required to be paid in the future periods shown (in millions): Contractual Obligations Less than 1 year 1-3 years 3-5 years More than 5 years Total Long-term debt obligations (1) $ 69.8 $ 138.4 $ 669.6 $ 533.4 $ 1,411.2 Operating Leases (2) 22.8 34.4 16.3 2.5 76.0 Purchase obligations (3) 23.2 24.4 0.1 — 47.7 $ 115.8 $ 197.2 $ 686.0 $ 535.9 $ 1,534.9 _______ (1) Long-term debt obligations include principal payments and estimated interest and fees calculated based on the rates in effect at December 31, 2023.
Net income of $409.9 million in 2021 was comprised of income from continuing operations of $231.8 million and income from discontinued operations of $178.1 million. 15 Commercial Segment - Consulting Metrics Commercial consulting bookings are defined as the value of new contracts entered into during a specified period, including adjustments for the effects of changes in contract scope and contract terminations.
Net Income Net income was $219.3 million in 2023, down from $268.1 million in 2022. Commercial Segment - Consulting Metrics Commercial consulting bookings are the value of new contracts entered into during a specified period, including adjustments for the effects of changes in contract scope and contract terminations ("Bookings").
At December 31, 2022, we had $31.5 million outstanding under our $460.0 million revolving credit facility. We believe that our cash and cash equivalents on hand, expected operating cash flows and availability under our revolving credit facility will be sufficient to fulfill our obligations, working capital requirements and capital expenditures for the next 12 months.
We believe that our cash and cash equivalents on hand, expected operating cash flows, and availability under our revolving credit facility will be sufficient to fulfill our obligations, working capital requirements, and capital expenditures for the next 12 months. Net cash provided by operating activities was $456.9 million in 2023, compared with $307.8 million in 2022.
If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge would be recorded to reduce the carrying amount to its estimated fair value.
If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge would be recorded to reduce the carrying amount to its estimated fair value. We performed a qualitative assessment for the October 31, 2023 annual impairment evaluation for all reporting units.
The weighted-average outstanding borrowings were approximately $1.0 billion for 2022 and 2021 and the weighted-average interest rate was 4.1 percent, up from 3.4 percent in 2021. Provision for Income Taxes The provision for income taxes was $96.7 million, up from $81.6 million in 2021, related to the growth in income before income taxes.
The weighted-average outstanding borrowings and cash-based interest rate were $1.1 billion and 5.9 percent (excluding costs related to the aforementioned amendments) in 2023, and $1.0 billion and 4.1 percent in 2022. Provision for Income Taxes The provision for income taxes was $78.4 million, down from $96.7 million in 2022 due to lower income before income taxes.
The underlying contracts are terminable by the client on short notice with little or no termination penalties. The book-to-bill ratio for our commercial consulting revenues is the ratio of our commercial consulting bookings to the commercial consulting revenues for a specified period. The average duration of commercial consulting projects is one year.
The book-to-bill ratio for our commercial consulting revenues is the ratio of Bookings to commercial consulting revenues for a specified period. The average duration of commercial consulting projects is one year.
The table below shows our revenues by segment (in millions). % of Total 2022 2021 Change 2022 2021 Change Commercial: Assignment $ 2,476.1 $ 2,285.9 8.3 % 54.1 % 57.0 % (2.9) % Consulting 959.6 641.2 49.7 % 20.9 % 16.0 % 4.9 % 3,435.7 2,927.1 17.4 % 75.0 % 73.0 % 2.0 % Federal Government 1,145.4 1,082.4 5.8 % 25.0 % 27.0 % (2.0) % Consolidated $ 4,581.1 $ 4,009.5 14.3 % 100.0 % 100.0 % Commercial Segment — Revenues from our Commercial Segment (75.0 percent of revenues) were up 17.4 percent from 2021.
The table below shows our revenues by segment (in millions). % of Total 2023 2022 Change 2023 2022 Change Commercial: Assignment $ 2,078.9 $ 2,476.1 (16.0) % 46.7 % 54.1 % (7.4) % Consulting 1,095.5 959.6 14.2 % 24.6 % 20.9 % 3.7 % 3,174.4 3,435.7 (7.6) % 71.3 % 75.0 % (3.7) % Federal Government 1,276.2 1,145.4 11.4 % 28.7 % 25.0 % 3.7 % Consolidated $ 4,450.6 $ 4,581.1 (2.8) % 100.0 % 100.0 % From an industry perspective, the Company operates in six broad industry verticals.
Liquidity and Capital Resources Our working capital at December 31, 2022 was $539.2 million, and our cash and cash equivalents were $70.3 million. Our cash flows from operating activities have been our primary source of liquidity and have been sufficient to fund our working capital and capital expenditure needs.
Our cash flows from operating activities have been our primary source of liquidity and have been sufficient to fund our working capital and capital expenditure needs. At December 31, 2023, we had full availability of our $500.0 million revolving credit facility.
Interest Expense Interest expense was $45.9 million, up from $37.5 million in 2021, primarily as a result of higher interest rates on the senior secured credit facility. Interest expense was comprised of $25.4 million of interest on the unsecured senior notes, $18.4 million of interest on the senior secured credit facility and $2.1 million in amortization of deferred loan costs.
This increase reflects a full year of amortization from businesses acquired in 2022. Interest Expense Interest expense was $66.4 million up from $45.9 million in 2022, primarily as a result of higher interest rates on the senior secured credit facility, and also included $2.3 million of costs related to the August 2023 amendments to the senior secured credit facility.
The effective tax rate of 26.6 percent was slightly higher than the effective tax rate of 26.0 percent for 2021. Income from Continuing Operations Income from continuing operations was $266.9 million, up from $231.8 million in 2021, driven by the growth in the business and expansion of our gross margin.
The effective tax rate of 26.3 percent was slightly lower than the effective tax rate of 26.6 percent for 2022. Income from Continuing Operations Income from continuing operations was $219.3 million, down from $266.9 million in 2022. Income from Discontinued Operations Income from discontinued operations was $1.2 million in 2022.
Gross Profit Gross Margin 2022 2021 Change 2022 2021 Change Commercial 1,126.2 934.8 20.5 % 32.8 % 31.9 % 0.9 % Federal Government 243.4 207.6 17.2 % 21.3 % 19.2 % 2.1 % Consolidated $ 1,369.6 $ 1,142.4 19.9 % 29.9 % 28.5 % 1.4 % Consolidated gross profit was up 19.9 percent on revenue growth of 14.3 percent.
Gross Profit Gross Margin 2023 2022 Change 2023 2022 Change Commercial $ 1,017.6 $ 1,126.2 (9.6) % 32.1 % 32.8 % (0.7) % Federal Government 262.4 243.4 7.8 % 20.6 % 21.3 % (0.7) % Consolidated $ 1,280.0 $ 1,369.6 (6.5) % 28.8 % 29.9 % (1.1) % Gross profit is comprised of revenues less costs of services, which consist primarily of compensation for our billable professionals, other direct costs, and reimbursable out-of-pocket expenses.
The Commercial Segment provides IT services and solutions, digital and creative services to Fortune 1000 and large enterprise clients across the United States, Canada and Europe. The Federal Government Segment delivers advanced solutions in cloud and enterprise IT, cybersecurity, artificial intelligence, machine learning and digital transformation to meet the mission critical needs of defense, intelligence and federal civilian agencies.
ASGN operates through two segments, Commercial and Federal Government. The Commercial Segment, which is the largest segment, provides consulting, creative digital marketing, and permanent placement services primarily to large enterprises and Fortune 1000 companies. The Federal Government Segment provides mission-critical solutions to the Department of Defense, the intelligence community, and federal civilian agencies.
Selling, General and Administrative Expenses Selling, general and administrative ("SG&A") expenses were $895.0 million (19.5 percent of revenues), compared with $735.8 million (18.4 percent of revenues) in 2021. The increase was commensurate with the growth in the business, changes in business mix and investments to support the future growth of the business.
Selling, General, and Administrative Expenses Selling, general, and administrative ("SG&A") expenses were $844.2 million (19.0 percent of revenues), compared with $895.0 million (19.5 percent of revenues) in 2022. This improvement was primarily due to lower incentive compensation expense. Amortization of Intangible Assets Amortization of intangible assets was $71.7 million, up from $65.1 million in 2022.
In 2021, investing activities generated net cash of $246.5 million and included cash proceeds (before income taxes) of $503.8 million from the sale of the Oxford business, as well as $222.8 million used to acquire three IT consulting businesses and $34.7 million in capital expenditures. 16 Net cash used in financing activities in 2022 was $256.5 million and included $281.4 million to repurchase the Company's common stock, as well as net borrowings under the revolving credit facility totaling $31.5 million.
In 2022, net cash used in financing activities was $256.5 million and primarily consisted of $281.4 million of stock repurchases, as well as net borrowings under the revolving credit facility totaling $31.5 million. For details on the Company’s senior secured credit facility, comprised of a revolving credit facility and term loan B, and unsecured senior notes, see Note 9.
Removed
OVERVIEW ASGN provides information technology and professional services in the technology and creative digital marketing fields across the commercial and government sectors. ASGN operates through its Commercial and Federal Government segments. Virtually all of the Company's revenues are generated in the United States.
Added
Revenues Revenues for the year were $4.5 billion, down 2.8 percent year-over-year. Revenues in 2023 included approximately $128.0 million from businesses acquired in the prior year through their acquisition date anniversaries. Excluding the contributions from acquisitions, revenues declined 5.6 percent year-over-year.
Removed
Recognition of Goodwill and Acquired Intangible Assets — Determining the fair value of goodwill and intangible assets requires management's judgment, the use of significant estimates and assumptions and, in some cases, the utilization of independent valuation experts.
Added
Commercial Segment revenues (71.3 percent of total revenues) were down 7.6 percent year-over-year and included $53.6 million of revenues from the GlideFast business through its acquisition date anniversary, which was at the beginning of July 2023.
Removed
The most critical assumptions utilized in this determination are the future cash flow estimates associated with the acquired businesses, as well as discount rates and royalty rates applied to those cash flow estimates.
Added
Federal Government Segment revenues (28.7 percent of total revenues), the sixth industry vertical, were up 11.4 percent year-over-year and included $74.3 million from Iron Vine through its acquisition date anniversary, which was at the beginning of October 2023. Total IT consulting services revenues were $2.4 billion (53.3 percent of total revenues), up 12.7 percent year-over-year.
Removed
Given there were no impairment factors identified in the prior year, and there were no negative trends in the current year, we performed a qualitative assessment for the October 31, 2022 annual impairment evaluation for all reporting units.
Added
Federal Government Segment revenues, which are all consulting revenues, were $1.3 billion, up 11.4 percent year-over-year as stated above, and Commercial Segment consulting revenues were $1.1 billion, up 14.2 percent year-over-year.
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Revenues Revenues for the year were $4.6 billion, up 14.3 percent from 2021 primarily as a result of double-digit organic growth of our Commercial Segment and the contribution of $158.0 million from acquired businesses. Excluding the contribution from acquisitions, revenues were up 10.3 percent.
Added
The growth in IT consulting services revenues was offset by a 16.0 percent year-over-year decline in assignment revenues which totaled $2.1 billion (46.7 percent of total revenues), reflecting continued softness in the more discretionary and cyclical portions of the Commercial Segment business. Gross Profit and Gross Margin The table below shows gross profit and gross margin by segment (in millions).
Removed
Assignment revenues were $2.5 billion (72.1 percent of the segment's revenues), up 8.3 percent year-over-year. Consulting services revenues were $959.6 million (27.9 percent of the segment's revenues), up 49.7 percent year-over-year. Excluding the contribution of $69.0 million from acquired businesses, consulting services revenues were up 38.9 percent year-over-year.
Added
Consolidated gross profit declined 6.5 percent on revenue decline of 2.8 percent. Gross margin was 28.8 percent, a compression of 110 basis points year-over-year.
Removed
Within the Commercial Segment, IT services and solutions revenues, which accounted for 83.7 percent of the segment's revenues, were up 18.2 percent year-over-year, driven by high growth in consulting services, the contribution from acquired businesses, and high-single-digit growth in IT staffing services.
Added
The compression mainly related to business mix: (i) within the Commercial Segment, a lower mix of certain high- margin assignment revenues, namely, creative digital marketing and permanent placement revenues, which was partially offset by a higher mix of high-margin IT consulting revenues with a year-over-year expansion in margin, and (ii) a higher mix of revenues from the Federal Government Segment, which have a lower gross margin than commercial revenues.
Removed
Creative digital marketing and permanent placement revenues, which combined accounted for 16.3 percent of the segment's revenues, were up 13.4 percent over the prior year. Federal Government Segment — Revenues from our Federal Government Segment (25.0 percent of revenues) were up 5.8 percent year-over-year. Revenues included a contribution of $89.0 million from acquired businesses.
Added
The underlying contracts are terminable by the client on short notice with little or no termination penalties. Measuring Bookings involves the use of estimates and judgments and there are no independent standards or requirements governing the calculation of bookings. Information regarding Bookings is not comparable to, nor should it be substituted for, an analysis of reported revenues.
Removed
Excluding that contribution, revenues were slightly below 2021, which had benefited from higher spending levels under two cost reimbursable contracts and approximately $38.6 million in revenues from a low-margin web services contract that the segment elected to not renew in the third quarter of the prior year.
Added
The timing of the execution of new contracts and other changes are affected by the funding cycles of the government and can vary from quarter to quarter. New contract awards are the estimated amount of future revenues to be recognized under contracts awarded during a specified period, including adjustments to estimates for contracts awarded in previous periods (“New Contract Awards”).
Removed
Gross Profit and Gross Margin The table below shows gross profit and gross margin by segment (in millions).
Added
Information regarding New Contract Awards is not comparable to, nor should it be substituted for, an analysis of reported revenues. Due to variability, New Contract Awards are presented on a trailing-twelve-months (“TTM”) basis. The book-to-bill ratio for our Federal Government Segment is the ratio of New Contract Awards to revenues for a specified period.
Removed
Gross margin was 29.9 percent, an expansion of 140 basis points from 2021. Both segments reported expansion in gross margin. The expansion in gross margin for the Commercial Segment was driven by double-digit growth of its high-margin services (commercial consulting, creative digital marketing and permanent placement services).
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Net cash provided by operating activities before changes in operating assets and liabilities was $400.8 million, compared with $448.5 million in 2022. Changes in operating assets and liabilities resulted in net cash generation of $56.1 million, compared with net cash usage of $140.7 million in 2022.
Removed
The expansion in gross margin of the Federal Government Segment was driven by changes in business mix, including: (i) the contribution from acquired high-margin businesses; (ii) a lower contribution from cost reimbursable contracts, which carry a lower margin than other contract types; and (iii) the decision not to renew a low-margin web services resale program in the third quarter of last year.
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This year-over-year change primarily related to lower accounts receivable due to lower revenues as well as improvement in accounts receivable days sales outstanding ("DSO"), compared with 2022 which had increasing accounts receivable due to revenue growth as well as an increase in DSO. Net cash used in investing activities in 2023 was $40.5 million and primarily consisted of capital expenditures.
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These investments were mainly in headcount, employee compensation and IT applications and systems. Amortization of Intangible Assets Amortization of intangible assets was $65.1 million, up from $55.7 million in 2021. This increase reflects a full year of amortization from businesses acquired in 2021 and amortization from the two businesses acquired in 2022.
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Net cash used in financing activities in 2023 was $310.9 million, and primarily consisted of $273.1 million to repurchase the Company's common stock, net repayments of borrowings under the revolving credit facility totaling $31.5 million, a required quarterly principal payment of $1.3 million on the term loan B, as well as the effects of the August 2023 amendments to the Company's senior secured credit facility which generated net proceeds of $8.0 million that were offset by related amendment costs.
Removed
Income from Discontinued Operations Income from discontinued operations was $1.2 million, down from $178.1 million in 2021. In 2021, virtually all of the income from discontinued operations related to the gain, net of income taxes, on the sale of the Oxford business.
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Long-Term Debt in Item 8. Financial Statements and Supplementary Data.
Removed
Net Income Net income of $268.1 million in 2022 was comprised of income from continuing operations of $266.9 million and discontinued operations of $1.2 million.
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Contract backlog does not include potential value from contract awards that have been protested by competitors until the protest is resolved in our favor. Contract backlog does not include any estimate of future work expected under indefinite delivery, indefinite quantity contracts or U.S. General Services Administration schedules.
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Contract backlog is segregated into funded contract backlog and negotiated unfunded contract backlog, which together make up total contract backlog.
Removed
Funded contract backlog for contracts with U.S. government agencies primarily represents contracts for which funding has been formally awarded less revenues previously recognized on these contracts and does not include the unfunded portion of contracts where funding is incrementally awarded or authorized by the U.S. government even though the contract may call for performance over a number of years.
Removed
Funded contract backlog for contracts with non-government agencies represents the estimated value of contracts, which may cover multiple future years, less revenues previously recognized on these contracts. Negotiated unfunded contract backlog represents the estimated future revenues to be earned from negotiated contract awards for which funding has not yet been awarded or authorized and from unexercised priced contract options.
Removed
The book-to-bill ratio was calculated as the sum of the change in total contract backlog during the period plus revenues for the period, divided by revenues for the period. The contract backlog coverage ratio (backlog at December 31, 2022 divided by trailing-twelve-months of Federal Government Segment revenues) was 2.9 to 1.0.
Removed
Net cash provided by operating activities was $307.8 million in 2022, compared with $193.7 million in 2021. The year-over-year increase is mainly the result of income tax payments totaling $91.5 million in the prior year that related to the gain on the sale of the Oxford business.
Removed
In 2021, net cash used in financing activities was $184.4 million and primarily consisted of $181.3 million of stock repurchases.
Removed
Senior Secured Credit Facility — On November 22, 2022, the Company entered into the ninth amendment to its senior secured credit facility (the "facility'), which (i) increased the capacity of its revolving credit facility (the "revolver") to $460.0 million from $250.0 million; and (ii) replaced the LIBOR reference rate with the secured overnight financing rate plus a 10 basis points adjustment ("SOFR").
Removed
The facility consists of a term B loan and the aforementioned $460.0 million revolver. At December 31, 2022, the Company had $490.8 million outstanding under the term B loan and $31.5 million outstanding borrowings under the revolver. Borrowings under the term B loan bear interest at SOFR plus 1.75 percent, or the bank’s base rate plus 0.75 percent.
Removed
Borrowings under the revolver bear interest at SOFR plus 1.25 to 2.25 percent, or the bank’s base rate plus 0.25 to 1.25 percent, depending on leverage levels. A commitment fee of 0.20 to 0.35 percent is payable on the undrawn portion of the revolver. There are no required minimum principal payments on the facility until maturity.
Removed
The facility is secured by substantially all of the Company's assets and includes various restrictive covenants. The facility permitted the sale of its Oxford business in 2021 and the net cash proceeds (approximately $0.4 billion) were used for the acquisition of GlideFast on July 6, 2022 and other permitted investments within the required timeframe.
Removed
At December 31, 2022, the Company was in compliance with its debt covenants. Unsecured Senior Notes — The Company has $550.0 million of unsecured senior notes due in 2028, which bear interest at 4.625 percent payable semiannually in arrears on May 15 and November 15. These notes are unsecured obligations and subordinate to the senior secured credit facility.
Removed
These notes contain certain customary limitations including, among other terms and conditions, our ability to incur additional indebtedness, engage in mergers and acquisitions, transfer or sell assets and make certain distributions.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFinancial Statements and Supplementary Data for a further description of our debt instruments. A hypothetical 100 basis-point change in interest rates on variable-rate debt would have resulted in interest expense fluctuating approximately $5.2 million based on $522.3 million of debt outstanding for any 12-month period. We have not entered into any market risk sensitive instruments for trading purposes. 18
Biggest changeFinancial Statements and Supplementary Data for a further description of our debt instruments. A hypothetical 100 basis-point change in interest rates on variable-rate debt would have resulted in interest expense fluctuating approximately $5.0 million based on $498.8 million of debt outstanding for any 12-month period. We have not entered into any market risk sensitive instruments for trading purposes. 19

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