The Importance of Quality:Our Commitment to Integrity & Excellence

2

Achieving Quality the BKD Way

This is our report to you—sharing our structure, strategy and continued efforts to ensure quality. Your trust in our opinion and work demonstrates the value of services provided. When evaluating BKD as your firm, rest assured we take our responsibility to serve the public interest seriously and appreciate the opportunity to serve you.

The BKD Quality Report connects the results of the design and monitoring of our systems and policies with a broader look at how our culture promotes excellence. The quality of our work is a reflection of those we work with and how we develop our team.

Our report would be incomplete without discussing technology. Technological advances directly affect our processes and the measures necessary to protect you and the public. We want to be clear about our efforts regarding security and confidentiality as well as how we test and deploy technologies to improve effectiveness and efficiency.

Principles matter. Our firm handbook, The BKD Experience: Unmatched Client Service, provides a hierarchy of foundational guidance starting with Integrity First—the most important of our client service standards. Providing ethical counsel to clients as an independent auditor is critical. Even when not engaged as an auditor, we best serve our clients’ interests by holding ourselves accountable to integrity above profit.

We hope this report illustrates how our efforts, culture and commitment are intertwined with you in mind. We thank you for the opportunity to share this information and welcome your comments, either directly to your trusted BKD advisor or the firm’s chief risk officer.

Ted DickmanChief Executive Officer

Mike WolfeChief Risk Officer

3

Achieving Quality the BKD Way

Working with Great ClientsOur client base reflects on us as much as the selection of BKD reflects on our clients.

People First We achieve results with a strong team built to deliver unmatched client service.

Technical Ability & Leading the Process Strong technical skills are a baseline expectation for our team. Our experience with challenging and emerging issues sets us apart.

Audit Requirements & CultureA report on quality wouldn’t be complete without reviewing the core elements of our primary service to the public—our role as an auditor.

Using Technology to Advance Our CapabilityWhether it’s in our core tax and audit services or more broadly in our advisory work, our investments in technology have dramatically increased.

Protecting Information – Security & InfrastructureOur clients are increasingly interested in our efforts to protect confidentiality.

Delivering & Monitoring Quality ResultsWe believe clients deserve a detailed look at how we influence quality results and the internal and external oversight applied to our practice.

Our Legacy & Governance Learn more about our history, structure, strategic management and firmwide programs and statistics.

4

5

8

10

11

13

14

16

4

The most important element of BKD’s risk management process is careful selection of clients. We look for ethical behavior and strong operational capabilities in the clients we serve. Clients assess our ethics and quality when comparing firms—our experience shows they respect our interest in evaluating them, as well.

For any significant service, we gather background information to identify challenges facing an organization. These matters are sometimes complex, and surfacing potential challenges early is important. This evaluation extends beyond historical financial statements, tax returns or similar reports.

Professional standards also often require us to interview prior accountants about management and their evaluation of the client’s integrity, along with the existence of any fraud, illegal acts or related matters.

By strengthening our understanding, we’re more alert to challenging issues and possible risks.These efforts translate to a strong client base that enhances the work we do and protect our clients and BKD.

Working with Great Clients

Potential Client Considerations

• Nature and purpose of the services being performed

• Demographics (structure, team capabilities, etc.)

• Tax and regulatory history, including planning

• Economics, including industry and general performance

• Operations (life cycle, nature of product/services)

• Consistency in reporting and decision making that supports high integrity

• Quality of financial records, internal control

• Related parties, turnover, conflicts of interest

• Litigation history, both as a defendant and as a plaintiff

• Unique considerations of industry, nature of the entity or nature of the service BKD would provide

5

Making People a PriorityWe believe all three legs of our mission statement are critical—clients, people and professionally sound operations. Without strong clients, our people can’t have rewarding opportunities. And without a dedicated team, our clients can’t receive unmatched service. Our culture is defined by our PRIDE values, which establish expectations for a team member’s success.

People First extends from our newest hires to our most tenured partners. We strive to enhance relationships and recognize individual performance within a strong team, rather than promote an “everyone gets a ribbon” culture. We want our best to stand out, and we support their long-term achievement.

Rewarding talented team members is the easy part; helping team members struggling to improve their skills, find a new seat on the BKD bus or make their way off our bus is far more challenging. We agree with Jim Collins in his book, Good to Great, that part of success is getting the right person in the right seat.

In our experience, managing people is so much more than a competitive salary, strong benefits package and the latest trends in coaching and mentoring (we provide all of these and more).

People First

Passion for service to others; for making tomorrow better than today

Respect for the differences that make our team strong; for our legacy and the benefits of change

Integrity to do the right thing; to be objective and independent

Discipline in process and innovation; to balance professional and personal commitments

Excellence in skills and competencies; in our quest to be the best

We create an environment that supports taking appropriate career risks while avoiding risks that compromise integrity and client service. And as you’ll see later in this report, we’re working hard to address leadership diversity through programs like SKY.

One event in particular captures the spirit of BKD. At our annual leadership conference, we present the PRIDE Award—an acknowledgment of an employee and partner who best exemplify our PRIDE values: passion, respect, integrity, discipline and excellence. With hundreds of team members in attendance, we celebrate these winners and their families. We permanently honor each of these winners in our National Office PRIDE hallway as a reminder of their outstanding performance.

Building the BKD TeamBuilding a team requires quality hiring and enriching training programs, combined with developing and promoting staff members who possess critical thinking and problem-solving skills.

BKD’s coaching program emphasizes and encourages career growth. As our professionals progress, they have opportunities to build their skills and expand their knowledge.

6

People First

Team DemographicsThe average tenure of BKD client service professionals is more than seven years, a stable statistic during the past five years. We closely monitor turnover statistics and the underlying causes—a common challenge in our profession, as talented team members find opportunities in the private sector, which values their expertise and training.

For statistics on our team member population, hiring patterns and turnover, refer to the Appendix on page 20.

TrainingFrom the beginning, we stress that learning is important. We support our newest associates with paid review courses for the CPA exam and passing bonuses to encourage and support their efforts.

training that matches individual areas of emphasis and development needs. Staff members also attend a series of core service line courses, i.e., tax and audit, over the first four years of their careers..For the last three years, BKD earned the distinction of Training magazine’s Training Top 125 and also received the Chief Learning Officer magazine’s LearningElite award in three of the last four years. These programs rank excellence in employer-sponsored training and recognize outstanding outcomes in learning and development.

Leverage & BalanceOne measure of service capacity is the mix of personnel relative to leadership. We find that a lower partner-to-staff ratio than larger firms allows a more hands-on experience for our clients and a higher-quality product. As a result, our clients and staff interact with engagement executives more and have access to their experience.

We also recognize that managing team member commitment is critical to our success. Our professionals seek challenges and work hard to serve their clients, but they also strive to balance personal commitments with their career aspirations.

Our profession requires a considerable amount of work, so we have to balance immediate needs with the long-term value our team provides. Our total and chargeable hour statistics are consistently similar to or lower than other national and regional firms, while substantially lower than international firms that often face more significant challenges with turnover, affecting long-term value.

Our staffing models include flexible and reduced-hour schedules that positively influence our retention results.

For statistics on our leverage ratios and work capacities, refer to the Appendix on page 20.

Core Competency Model OverviewCompetency Category Competency

Integrity First• Ethics• Risk Management

True Expertise• Excellence • Communication• Lifelong Learning

Professional Demeanor• Attitude• Behavior• Business Acumen

Responsive Reliability• Productivity• Responsiveness• Teamwork

Principled Innovation • Initiative

Our CPAs receive at least 120 hours of continuing professional education every three years. This training includes content from BKD University—internally developed industry seminars, webinars and other instructor-led trainings—paired with external

7

People First

Addressing Gender Gaps – BKD’s SKY InitiativeBKD maintains an affirmative action and equal opportunity policy designed to help ensure equal employment opportunities including, but not limited to, recruiting, hiring, training, promotions, pay practices, benefits, disciplinary actions and terminations. However, a policy doesn’t tell the story of a culture.

SKY is a firmwide initiative to emphasize and strengthen diversity and inclusion in our firm that has initially focused on attracting, retaining and developing women leaders. SKY’s goal is to identify and remove cultural barriers and biases that prevent BKDers—regardless of age, gender, race, ethnicity or other diverse backgrounds—from maximizing their potential.

We’re working to raise awareness and create a level playing field for all personnel while helping to attract and retain talented leaders.

Core Programs & BenefitsInvestments in our people are substantial and constantly evolving. A team of national, regional and local office human resources professionals supports our goals every day. In addition to the programs mentioned, we provide our teams with comprehensive health care, robust paid time off, travel awards, flexible work schedules, parental leave, profit-sharing and CPA exam bonuses.

90% I take pride in our firm culture

91% I am proud to work for BKD

90% BKD provides me with opportunity for learning and development

87% I have the training I need to do my job effectively

What Our People Say About BKDEvery two years, we perform an in-depth firmwide engagement and performance excellence survey to evaluate progress on areas identified in prior surveys and better understand concerns. The results are evaluated by local and national volunteer-led engagement councils along with local, regional and national leaders and our human resources team. Results for both performance excellence and team member engagement remain consistently high, with BKD ranking among the top 10 percent of professional services firms polled by our national vendor.

93% The behavior of our leadership is consistent with its values

97% BKD shows a commitment to ethical business decisions and conduct

8

Technical Ability & Leading the Process

PhilosophyBKD’s success is built on delivering excellent client service. Excellence is a combination of our collective experience and technical ability to deliver audit, tax and advisory services. Our technical commitment is driven by structure and talent development, which requires investment equal to our investments for growth.

Technical responsibilities and positions are highly respected within our firm. Technical excellence increases our ability to serve clients and is seen as a positive contributor. Technical roles aren’t “secondary,” as our compensation and career path model respects these contributions and places them on equal footing with direct client service and growth-oriented activities.

Audit Quality StructureOur audit practice evaluates risk characteristics to focus key resources on technical matters. Our risk analysis is tied to team member experience in the industry or subject matter area, and audit engagement leaders are assigned specific responsibilities. Our goal is to help ensure talented and experienced personnel are addressing our clients’ challenging needs.

Structurally, all BKD audit engagements are subject to quality review by a professional not otherwise involved in the details of a client relationship. This layer allows for a fresh perspective on each engagement.

In addition to engagement-based leadership, our professional practices team is vital to our results. Office-based accounting and auditing (A&A) directors form the first line of support for engagement teams and often serve as quality reviewers. Talented personnel are recruited for these positions based on the strength of their technical ability. A&A directors are supported through a firmwide network of similar personnel and with specific regional and national training and guidance.

Three regional A&A directors provide regional coordination and advanced expertise. An extension

of our national A&A leadership, they often assist with particularly challenging consultations on complex matters and support the technical needs of our broader practice. Regional and national resources are integral to the training provided to all auditors, interpretation of new standards and authorship of many of our technical positions.

Our national A&A leadership consists of partners, directors and others with broad responsibility for standards implementation, training, consultation, quality monitoring and overall management of our audits and related services. Key national personnel include our national directors of accounting, SEC and assurance services and supporting partners and assistant directors who consult with engagement teams on new, complex or high-risk subjects.

Similar roles exist throughout our service lines, including national, regional and local tax director roles with team development and technical responsibilities that include consultation on complex or high-risk tax issues. A national director of consulting establishes and enables similar, but more broadly adapted, procedures for our advisory practices—both in evaluating the quality of work and monitoring independence and other potential conflicts throughout our firm.

Thought LeadershipBKD advisors are thought leaders in the industries they serve. We provide BKD Thoughtware® webinars, videos, roundtables, seminars and articles to help clients and the public stay informed about emerging issues and regulatory and rule changes.

In 2017, BKD Thoughtware included more than 200 articles, 150 videos and 100 webinars distributed via more than 4 million emails.

In addition to BKD Thoughtware, our blogs, which include www.BKDForensics.com, www.BKDRisk.com and www.DynamicsGPInsights.com, and the Simply Tax podcast continue to leverage technology to reach clients and the public with timely and useful information.

9

Bryan Bodnar

Technical Issues Committee of the AICPA Private Companies Practice Section

Kimberly McKay

FASB Not-For-Profit Advisory Committee

Technical Ability & Leading the Process

Our industry and local teams work to regularly assess and address community and client needs. We host CEO and CFO roundtables, speak at local, regional and national industry conventions and deliver seminars on timely topics of interest. We’re often able to provide free continuing education credits to attendees who also are CPAs.

Leading the ProcessFinally, we’re proud of our tradition of leadership and volunteerism. In addition to our team’s broad community involvement, we also support our profession. Our leaders frequently serve on committees and boards of state CPA societies.

We’re pleased to have Chief Operating Officer Eric Hansen serving as chair of our global professional association and many other BKDers who have served or currently serve in other leadership roles or on various professional committees within the American Institute of CPAs (AICPA) and other professional organizations.

Eric Hansen

Chair of the American Institute of CPAs (AICPA)

10

Audit Requirements & Culture

Rules & StandardsBKD demands integrity, objectivity, competence and due care from engagement personnel. Specific to audits, we’re focused on high-quality professional performance and compliance with:

• Auditing standards generally accepted in the United States • Public Company Accounting Oversight Board (PCAOB) standards

BKD policies and procedures implement the quality control standards established by the AICPA and PCAOB. Our teams abide by the quality control manual, which drives the conduct and performance of our audits.

Delivering and Monitoring Quality Results (page 14) shares our performance relative to these standards.

Audit CultureOur team members shared these observations when asked to describe our audit philosophy:

• We recognize and protect our independence to perform an audit, but we don’t believe our audits are designed to be combative or negative. Our audit responsibility is our opinion, but we add value by helping clients improve as a result of our work.

• Integrity is an important characteristic—our responsibility is to the public. We can execute with integrity while appreciating the effect our audit has on our clients. Even in our most regulated client base, an audit has to be collaborative to be effective. Building appropriate relationships with our clients enhances our ability to do our work.

• Quality is what we do. While we strive to be efficient and manage costs relative to value, we don’t take shortcuts.

• Our clients are why we do the work we do. Delivering unmatched client service isn’t just a phrase, it’s the way we go about our day. We invest in ourselves and BKD to provide the experience and resources our clients need and to maintain the quality in our audit services.

Elements of BKD’s Quality Control Manual• Leadership responsibilities of quality • Relevant ethical requirements • Human resources • Acceptance and continuance of client relationships and specific engagements • Engagement performance • Monitoring

11

Using Technology to Advance Our Capability

Continuous Improvement & Cultural ChangeTechnological advances are pushing us to evolve BKD’s service delivery. Computing power, real-time data access and continued development of artificial intelligence and related tools are changing our methods and capabilities.

In 2016, BKD formed a joint venture with three large CPA firms to investigate and develop technology that would have been too costly to pursue individually. Independently, BKD leadership is focused on the cultural undertaking required to change how we do our work as we investigate technology and other changes.

In June 2017, the firm created the national director of assurance services (NDAS) position, which was filled by a former managing partner and Governing Board member. The NDAS leads efforts to address technical standards, technology implementation, change management and training requirements to identify and implement our strategies in collaboration with other leaders, including our chief innovation and information officers.

Investments & Changes MadeIn 2017 and 2018, we launched several audit tools and processes—some in a proof of concept or pilot phase, and others in full deployment. Investments include:

Analyzing Unstructured DataThrough our joint venture, we identified software that performs an initial overview of text-based documents, e.g., revenue agreements, lease contracts, debt agreements, etc. The system’s artificial intelligence ingests document content and summarizes elements for disclosure or financial consideration. Far from removing the need for an experienced review, the software accelerates data organization and improves the likelihood of identifying issues when assessing a large volume of documents.

Enhanced Resource Management & Business Process ToolsProject management is critical to client service and delivery expectations. We’ve deployed enhanced scheduling and management tools that give our teams better insight into capacity and deadlines. These tools are designed to reduce redundant data entry and improve our capacity to interact with clients.

Trend Analysis & Anomaly DetectionOur joint venture identified and contracted with a company to build a custom tool. This tool has the potential to bring additional artificial intelligence capabilities through analysis of transaction-level detail in general ledgers. The result should enhance our audit planning and revenue-oriented analytics.

12

Using Technology to Advance Our Capability

Audit Methodology Re-EngineeringWe’re in the early stages of enhancing our audit methodology process. Our NDAS-led team has identified opportunities to improve client and auditor experience in the areas of onboarding new engagements and evaluating internal controls. Supported in part by new technology, we’re taking a fresh look at potential redundancies or low-value activities that can be improved.

An Enhanced Client PortalIn 2017, we launched our second-generation client portal—BKDconnect. This portal builds on our first effort to create a faster and more intuitive drag-and-drop experience for clients while maintaining and enhancing our security posture relative to shared data. Our ongoing development plan includes increased transparency, more effective delivery of information and better project management.

Our advisory practice frequently identifies new client needs and must adapt to deliver new services. Our tax practice is completing a firmwide standardization initiative aimed at enhancing quality and efficiency and more effectively cross-utilizing talent. The tax department also is piloting client-facing technology to improve the collection and sharing of information while tackling the significant planning opportunities resulting from the Tax Cuts and Jobs Act signed into law in late 2017.

ExpectationsIn today’s technology environment, information value and security expectations have never been higher. Clients expect that information shared with BKD will be safeguarded. Protected health information (PHI), personally identifiable information (PII) and payment card industry (PCI) information are among many data types with high sensitivity that must be protected.

Confidentiality and security aren’t negotiable. We manage data over a secure network and maintain electronic content management systems for audit, tax and many consulting services. We believe secure electronic file sharing and less paper improves the security and effectiveness of our services.

Our Technology Advisory Committee works hand in hand with our chief information officer to identify client needs and expectations in evaluating priorities for technology investments in all aspects of our business, including security. Technologies used to store, transmit or consume client-provided information are subject to BKD’s annual security assessments and risk mitigation efforts.

Execution BKD’s professional services are governed by the AICPA Code of Professional Conduct, which establishes a duty of confidentiality regarding client information. BKD’s security includes end-user education, policies and procedures and physical and electronic safeguards.

We work to stay ahead of the latest threats and meet the relevant expectations of regulated clients. Our dedicated team of information security analysts and engineers works to address client concerns.

Protecting Information – Security & Infrastructure

Security Highlights• BKD personnel receive specific training on confidentiality of client information and best practices for protecting sensitive information

• Employment contracts include confidentiality provisions, and background checks are performed on all new hires

• Firm PC hard drives employ full disk encryption in compliance with NIST SP 800- 111, which safeguards data in the event of an accidental loss or theft

• Mobile device management technology enables remote wipe and data protection on devices

• Automated patch management keeps systems up to date with security patches

• Endpoint malware protection installed on all firm PCs with automated signature updates

• BKD’s next generation firewall blocks access to dangerous sites, content, spyware, malware and phishing

• Our robust firewall solution uses the best-practice approach of “deny all, permit some”

• 256-bit encryption used on USB drives for storing confidential information

• Files uploaded to hosted services and BKDconnect are encrypted in transit and at rest and are further protected by authentication and access controls

• External access to BKD’s network is secured by a multifactor authenticated (MFA) virtual private network (VPN)

• A secure email system, compliant with FIPS 140-2, ensures confidential data is protected

• Secure emails and file-transfer solutions are used when emailing sensitive information to/ from clients

14

Delivering & Monitoring Quality Results

Memberships & RegulatorsBKD maintains high professional practice standards, including a strong system emphasizing independence and objectivity. In 1974, even before the AICPA issued national A&A standards, BKD appointed a firmwide A&A specialist. We were represented on the original AICPA quality review committee that developed the national peer review program in the mid-1970s. We also were a founding member of the AICPA’s Center for Audit Quality.

We’re active in our profession, including the AICPA and many state CPA societies. BKD also is subject to the oversight of various regulators, including periodic review of our work subject to the rules of those regulators.

Monitoring IndependenceBKD has a responsibility to maintain its independence. We work to comply with related policies and monitor results to help confirm our compliance.

• All client service personnel are annually required to confirm their independence with respect to the firm’s assurance clients.

• Clients with publicly available debt or equity securities are evaluated firmwide at the time of potential engagement, with affirmative confirmation of independence from partners and others required prior to accepting an engagement.

• Our national A&A director and director of consulting are responsible for overseeing this process and making judgments on the application of independence rules.

• Our professional education requirements include annual ethics training often focused on independence.

Internal InspectionsBKD annually conducts rigorous internal inspections of its own work.

Every three years, each office is inspected by BKD team members from other geographic areas. During the third year, we also engage external inspectors to perform our required peer review. Internal inspections are performed by experienced firm partners, directors and senior managers from unrelated offices with experience in the relevant industry and service areas. Internal inspections and any necessary remediation are coordinated through our National Office.

Peer ReviewAs required by professional standards, we submit our work to external reviewers every three years. These reviewers select engagements to evaluate from our entire population of work (excluding work subject to PCAOB review) and then challenge our approach and findings.

The peer review evaluates BKD’s quality control system applicable to nonpublic clients. Our most recent report contained a rating of “Pass,” which is the best peer review rating available under current standards. The review report can be found at www.aicpa.org.

PCAOB InspectionsBKD’s most recent inspections of its public company audit practice occurred in 2016 and 2014. Similar to other large firms, the inspection team identified deficiencies in some individual engagements.

The application of auditing standards requires significant judgment, and in specific circumstances, regulators and auditors may have differing views on the appropriate application of principles and standards. We’ve carefully evaluated the matters

BKD Registrations & Memberships PCAOB registration AICPA Centers for Audit Quality, Employee Benefit Plan Audit Quality and Government Audit Quality

AICPA Private Companies Practice Section

15

Delivering & Monitoring Quality Results

described in the inspection report and believe we’ve addressed each matter in accordance with PCAOB standards.

BKD remains committed to the highest audit quality standards and fully supports the PCAOB’s inspection process.

The full report can be found at www.pcaobus.org.

Partner RotationIn our public company practice, SEC rules require a change in lead engagement partners and quality reviewers (but not firms) on no less than a five-year basis, a rule stemming from high-profile audit failures in the early 2000s. A few regulators require a similar rotation, e.g., banks subject to the Federal Deposit Insurance Corporation Improvement Act of 1991. Many of our clients subject to these regulations have been served by BKD and various team members for years.

Other oversight agencies that considered required rotation concluded that, on the whole, partner rotation didn’t have a meaningful impact. In its 2003 report, Required Study on the Potential Effects of Mandatory Audit Firm Rotation, the Government Accountability Office (formerly the General Accounting Office) noted that one of the highest risks of audit failures was in initial audits performed by a new auditor who lacked familiarity with client operations and controls. This report acknowledged value in rotation, but also noted an offsetting cost in the loss of audit experience. Balancing value and cost is why we invest so much effort in the BKD Smooth Transition™ process when onboarding a new client, particularly in our broad understanding of operations, controls and environment.

Outside of our public company practice, BKD has no formal policies regarding the length of time personnel are assigned to engagements. We keep a fresh perspective through continuous education, creating a level of unpredictability in our audit procedures and continued evolution in our audit methodologies.

Accountability for QualityThe importance of quality work is a constant BKD conversation and not an objective we take for granted.

Our PRIDE values—particularly integrity and excellence—play a part in achieving quality, but we find that consistency in the fourth element—discipline—makes the difference. Our rigorous processes and consistent adherence to them help us achieve results.

Our engagement reviews and annual appraisals include specific questions about quality. We share inspection results with leadership and our teams so they’re aware of shortcomings and successes.

Quality is part of our evaluation in compensation, advancement and promotion. Technical leaders and committees are required to evaluate promotion candidates (senior manager through partner) and provide feedback for potential promotions.

Among other safeguards, we evaluate trends and comparatives to challenge the compensation for quality-oriented roles.

16

Who We AreBKD is a purpose-driven organization focused on people, clients and communities. Our success is driven by local office leadership and entrepreneurial spirit balanced by a philosophy of operating as one great firm.

Our industry-focused resources develop a strong and diverse client base. Our attention to quality is why BKD has an excellent history of limited litigation and regulatory matters and positions us to support future investments and attract and retain high-quality professionals.

In addition to our consulting, tax, assurance and accounting outsourcing business, we also operate:

• BKD Corporate Finance, LLC, which providesinvestment banking, merger and acquisition, sales,management buyout, employee stock ownershipprogram, recapitalization and financing services(member of FINRA and SIPC)

• BKD Wealth Advisors, LLC, an investment advisoryfirm registered with the SEC providing personalwealth planning, investment management andestate planning

• BKD Foundation, a 501(c)(3) not-for-profitfoundation that invests in BKD’s communities and beyond with our time, volunteerism andfinancial support

Governance & OrganizationBKD is a registered limited liability partnership under Missouri law. Our partners elect a governing board and our CEO, who together are responsible for strategic direction and major firm decisions. Our CEO is supported by various other leaders in operations, client service and risk management.

Our marketing and service-line expertise is led by national industry partners and technical directors. Operationally, we have four regional managing partners who oversee three geographic regions and a virtual region housing our national consulting practices. Day-to-day authority for most activity resides with the managing partners of our practice units.

The mission of BKD is to always strive for excellence in providing services to clients, create rewarding career opportunities and maintain sound professional, business and financial standards.

BKD Quick Facts

12th-largest firm & Best of the Best2011–2017, INSIDE Public Accounting

Fiscal year-end: May 31

$564 million net revenues (2017)

36 offices in 16 states serving clients in all50 states and internationally

~280 partners & principals

~2,650 total personnel

Our Legacy & Governance

17

Our Legacy & Governance

Client PortfolioOur client portfolio ranges from individuals and small businesses to complex, multinational organizations. We focus on industry specialization and the types of clients that expertise draws. While the largest international firms dominate the public company space, our current portfolio ranks BKD as the 24th firm in number of registrant clients.

Most of our clients are privately held (individual, family, private equity-owned) companies, not-for-profit and governmental organizations and high-wealth individuals. As of December 31, 2017, BKD served roughly 45,000 entities and individuals.

Concentration by Client Total Fees

PraxityBKD is one of the largest U.S. members of Praxity, AISBL, a global alliance of independent firms. We offer multinational clients a gateway to the global marketplace through alliance firms committed to the highest international business standards.

Praxity™ is the world’s sixth-largest accounting organization, according to the International

Accounting Bulletin World Table 2018. Praxity is a recognized name within the international accounting sector, having been named Association of the Year at the 2017 and 2016 Accountant & International Accounting Bulletin awards. Praxity member firms share a global vision and entrepreneurial attitude. Member firms are highly rated by their clients and peers.

The Praxity alliance facilitates access to an international selection of quality firms with appropriate senior-level talent, genuine local reputation, expertise and knowledge. Praxity’s network extends to more than 100 countries and approximately 45,000 personnel. Member firm global revenues in 2017 were $4.75 billion.

Service & Industry Mix

42+25+30+3+A 42%

2.9%

29.5%

25.6%

■ Assurance ■ Consulting

■ Tax ■ Accounting Outsourcing

7+18+11+19+45+A6.9%

18%

10.8%

19.5%

44.8%

■ $500,000 + ■ $150,001–$500,000■ $100,001–$150,000

■ $50,000–$100,000■ Under $50,000

Our Legacy & Governance

18

Our Legacy & Governance

Community Connection & Our FoundationOur team serves on boards and committees for charitable organizations and offers our help as neighbors and friends. Since 2000, the BKD Foundation has raised and distributed more than $14 million to qualifying charitable organizations. The foundation supports not-for-profit organizations of all types and sizes, including a number of organizations where BKD partners and employees serve in volunteer roles. In addition, BKD partners and team members provide substantial support to local United Way chapters and participate in Days of Caring to assist local not-for-profits.

Other Ways BKD Serves ClientsWe know clients look to us for more than compliance. When permitted by professional standards and regulatory expectations (considering independence and conflicts of interest), we can deliver so much more.

BKD Service Examples• BKD Wealth Advisors

• Transaction Advisory

• Performance Advisory

• Risk Advisory

• National Tax Services

Visit bkd.com/services for an ever-changing but comprehensive list of ways we can help you seize opportunities or tackle difficult challenges.

19

CHICAGOAlzheimer’s Association,

Greater Illinois ChapterWalk to End Alzheimer’s

More than 50 Chicago BKDers participated in the Alzheimer’s Association’s Walk to End Alzheimer’s. BKD was a Premier Partner, giving through both the foundation and personal donations. The event was personal for many employees whose families have been affected by the degenerative disease.

20

Audit Tax AdvisoryAvg Years of Experience

# # #

Partners & Managing Directors 173 84 57 22

Directors 96 65 81 11

Senior Managers 59 52 81 8.5

Managers 101 48 98 6

Seniors 182 101 110 3.5

Associates 302 133 65 1.5

Others 1 33 71

Total 914 516 563

Client-Facing Team Member Population by Service Line as of December 31, 2017

2017 % 2016 % 2015 %

Partners & Managing Directors 349 14% 330 13% 314 13%

Directors 243 10% 234 9% 209 9%

Senior Managers 193 7% 201 8% 208 9%

Managers 247 10% 241 9% 190 8%

Seniors 393 15% 424 16% 374 15%

Associates 500 20% 551 21% 526 22%

Other Client-Facing Personnel & Firm Personnel Support 605 24% 617 24% 588 24%

Total 2530 100% 2598 100% 2409 100%

All Team Member Population Totals (2015–2017)

Appendix – Personnel Statistics

21

Audit Tax

2017 2016 2015 2017 2016 2015

Partners to All Other Client-Facing Personnel 1:5 1:6 1:5 1:6 1:6 1:6

Partners & Managing Directors to All Other Client-Facing Personnel 1:4 1:5 1:5 1:5 1:6 1:5

Partners, Managing Directors, Directors, Senior Managers & Managers to Seniors & Associates 1:1 1:1 1:1 1:1 1:1 1:1

Partner-to-Staff Leverage Ratio for Audit & Tax Personnel (2015–2017)

2017 2016 2015

New Graduate – Entry-Level Hires 260 260 272

Experienced Hires 120 166 147

Total New BKD Client Service Team Members 380 426 419

Annual Voluntary Turnover % 18.6% 12.6% 17.4%

Client-Facing Team Member Hiring & Voluntary Turnover Statistics (2015–2017)

Client Service Work Capacity (Hours Worked 2015–2017)

2017Charge / Total

2016Charge / Total

2015Charge / Total

Partners & Managing Directors 1022 / 2574 1046 / 2588 1061 / 2569

Directors 1262 / 2515 1321 / 2514 1385 / 2516

Senior Managers 1300 / 2359 1403 / 2397 1426 / 2410

Managers 1595 / 2406 1597 / 2383 1617 / 2349

Seniors 1698 / 2389 1731 / 2391 1748 / 2369

Associates 1519 / 2245 1559 / 2253 1536 / 2224

Appendix – Personnel Statistics

bkd.com | @bkdllp