10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition period from                      to                    

Commission File No. 1-9410

COMPUTER TASK GROUP, INCORPORATED

(Exact name of registrant as specified in its charter)

New York	16-0912632
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
800 Delaware Avenue, Buffalo, New York	14209
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code: (716) 882-8000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $.01 par value	The NASDAQ Stock Market LLC
Rights to Purchase Series A Participating Preferred Stock	The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    YES  ¨    NO  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    YES  ¨    NO  x

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

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

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨ (Do not  check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    YES  ¨    NO  x

The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates, computed by reference to the price at which the common equity was last sold on the last business day of the registrant’s most recently completed second quarter was $227.1 million. Solely for the purposes of this calculation, all persons who are or may be executive officers or directors of the registrant have been deemed to be affiliates.

The total number of shares of Common Stock of the Registrant outstanding at February 20, 2015 was 18,748,625.

DOCUMENTS INCORPORATED BY REFERENCE

Certain sections of the Company’s definitive proxy statement to be filed with the Securities and Exchange Commission (SEC) within 120 days of the end of the Company’s fiscal year ended December 31, 2014, are incorporated by reference into Part III hereof. Except for those portions specifically incorporated by reference herein, such document shall not be deemed to be filed with the SEC as part of this annual report on Form 10-K.

SEC Form 10-K Index

Section		Page
Part I
Item 1.	Business	1
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	14
Item 2.	Properties	14
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	14
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15
Item 6.	Selected Financial Data	18
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 8.	Financial Statements and Supplementary Data	32
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	58
Item 9A.	Controls and Procedures	58
Item 9B.	Other Information	60
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	61
Item 11.	Executive Compensation	61
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	61
Item 13.	Certain Relationships and Related Transactions, and Director Independence	61
Item 14.	Principal Accounting Fees and Services	61
Part IV
Item 15.	Exhibits, Financial Statement Schedules	62

As used in this annual report on Form 10-K, references to “CTG,” “the Company” or “the Registrant” refer to Computer Task Group, Incorporated and its subsidiaries, unless the context suggests otherwise.

PART I

Forward-Looking Statements

This annual report on Form 10-K contains forward-looking statements made by the management of Computer Task Group, Incorporated (CTG, the Company or the Registrant) that are subject to a number of risks and uncertainties. These forward-looking statements are based on information as of the date of this report. The Company assumes no obligation to update these statements based on information from and after the date of this report. Generally, forward-looking statements include words or phrases such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “could,” “may,” “might,” “should,” “will” and words and phrases of similar impact. The forward-looking statements include, but are not limited to, statements regarding future operations, industry trends or conditions and the business environment, and statements regarding future levels of, or trends in business strategy and expectations, new business opportunities, cost control initiatives, business wins, market demand, revenue, operating expenses, capital expenditures, and financing. The forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Numerous factors could cause actual results to differ materially from those in the forward-looking statements, including the following: (i) the availability to CTG of qualified professional staff, (ii) domestic and foreign industry competition for customers and talent, (iii) increased bargaining power of large customers, (iv) the Company's ability to protect confidential client data, (v) the partial or complete loss of the revenue the Company generates from International Business Machines Corporation (IBM), (vi) the uncertainty of customers' implementations of cost reduction projects, (vii) the effect of healthcare reform and initiatives, (viii) the mix of work between staffing and solutions, (ix) currency exchange risks, (x) risks associated with operating in foreign jurisdictions, (xi) renegotiations, nullification, or breaches of contracts with customers, vendors, subcontractors or other parties, (xii) the change in valuation of recorded goodwill or capitalized software balances, (xiii) the impact of current and future laws and government regulation, as well as repeal or modification of such, affecting the information technology (IT) solutions and staffing industry, taxes and the Company's operations in particular, (xiv) industry and economic conditions, including fluctuations in demand for IT services, (xv) consolidation among the Company's competitors or customers, (xvi) the need to supplement or change our IT services in response to new offerings in the industry or changes in customer requirements for IT products and solutions, and (xvii) the risks described in Item 1A of this annual report on Form 10-K and from time to time in the Company's reports filed with the Securities and Exchange Commission (SEC).

Item 1. Business

Overview

CTG was incorporated in Buffalo, New York on March 11, 1966, and its corporate headquarters are located at 800 Delaware Avenue, Buffalo, New York 14209 (716-882-8000). CTG is an IT solutions and staffing services company with operations in North America and Europe. CTG employs approximately 3,800 people worldwide. During 2014, the Company had seven operating subsidiaries: Computer Task Group of Canada, Inc., providing services in Canada; and Computer Task Group Belgium N.V., CTG ITS S.A., Computer Task Group IT Solutions, S.A., Computer Task Group Luxembourg PSF, Computer Task Group (U.K.) Ltd., and etrinity N.V. (etrinity), each primarily providing services in Europe. Services provided in North America are primarily performed by the parent corporation, CTG.

Services

The Company operates in one industry segment, providing IT services to its clients. These services include IT Solutions and IT Staffing. CTG provides these primary services to all of the markets that it serves. The services provided typically encompass the IT business solution life cycle, including phases for planning, developing, implementing, managing, and ultimately maintaining the IT solution. A typical customer is an organization with large, complex information and data processing requirements. The Company’s IT Solutions and IT Staffing services are further described as follows:

• IT Solutions: CTG’s services in this area include helping clients assess their business needs and identifying the right IT solutions to meet these needs. The delivery of services includes the selection and implementation of packaged software and the design, development, testing, and integration of new

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systems, and the development and implementation of customized software and solutions designed to fit the needs of a specific client or vertical market.

Generally, IT Solutions services include taking responsibility for the service-related deliverables on a project and may include high-end consulting services. CTG has significant experience in implementing electronic health records (EHR) systems in integrated delivery networks and other provider organizations. CTG also provides IT services to health insurance companies, and to the start-up and development of Health Information Exchanges (HIEs). HIEs are consortiums of providers, payers, and government agencies at the local level that are charged with implementing secure community-wide electronic medical records.

Also included within IT Solutions is Transitional Application Management (TAM). In 2014, the healthcare market accounted for most of CTG’s TAM services. In a TAM engagement, the client hires CTG to manage an existing application for an extended time period, typically ranging from one to three years, while its internal IT staff focuses on implementation of a new application replacing the application being phased out. Additionally, CTG’s services in this area could include outsourcing support of single or multiple applications and help desk functions. Depending on client needs, these engagements are performed either at a client or CTG site, or remotely.

In 2014, CTG continued to invest in and expand new IT Solutions development, primarily targeted to the healthcare market, which supports cost reductions and productivity improvements. Previously, healthcare solutions under development moved from the pilot stage of testing using live data into the sales process as completed tools. In 2014, the Company continued to invest in certain of these tools to expand their capabilities, including the Company's solution that focuses on medical care and disease management. The Company has developed proprietary software to support these offerings which expands the potential market for sale and support of these solutions. These solutions primarily support the healthcare provider market.

• IT and Other Staffing: CTG recruits, retains, and manages IT and other talent for its clients, which are primarily large technology service providers and companies with multiple locations and significant need for high-volume external IT, administrative, or warehouse resources. The Company also supports larger companies and organizations that need to augment their own IT staff on a flexible basis. Our clients may require the services of our IT talent on a temporary or long-term basis. Our IT professionals generally work with the client’s internal IT staff at client sites. Our recruiting organization works with customers to define their staffing requirements and develop competitive pricing to meet those requirements. In certain limited instances for a small number of clients, the Company provides administrative or warehouse employees to clients to supplement the IT resources we place at those clients.

The primary focus of the Company’s staffing services is a managed services model that provides large clients with higher value support through cost-effective supply models customized to client needs, resource management support, vendor management programs, and a highly automated recruiting process and system with global reach.

Independent software testing is a common service in both our North American and European businesses, and represents a significant portion of the IT staffing services of CTG’s European operations. This comprehensive testing offering supports IT environments across multiple industries.

A trend affecting the staffing industry in recent years is that large users of external technology support are reducing their number of approved suppliers to fewer firms with a preference for those firms able to fulfill high volume requirements at competitive rates and to locate resources with specialized skills on a national level. CTG’s staffing services model fits this profile and it has consistently remained a preferred provider with large technology service providers and users that have reduced their lists of approved IT staffing suppliers.

IT solutions and staffing revenue as a percentage of consolidated revenue for the years ended December 31, 2014, 2013 and 2012 is as follows:

	2014		2013		2012
IT solutions	38.0	%	39.3	%	40.8	%
IT staffing	62.0	%	60.7	%	59.2	%
Total	100.0	%	100.0	%	100.0	%

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A major strategic initiative of the Company in recent years has been to focus on its IT solutions services, as operating margins generated by the IT solutions services are generally higher than those of the IT staffing services. However, growth from the IT solutions business unit has been challenging in the past several years. Overall, the Company’s revenue decreased $25.8 million or 6.1% from 2013 to 2014 due to a general reduction in spending by many of our healthcare clients (which is included in IT solutions services) in part due to the U.S. federal government sequestration which cut Medicare reimbursements to hospitals and health systems beginning on April 1, 2013. Additionally, there were reductions in demand from some of our IT staffing services clients. The higher margin IT solutions services business decreased$15.2 million or 9.2% from 2013 to 2014, while IT staffing services decreased$10.6 million or 4.2% in the same period. The Company’s operating margin in 2014 was 4.4%. The decrease in operating income in 2014 from 2013 was primarily due to reduced operating leverage due to lower consolidated revenue, a change in the business mix to a higher level of IT staffing services which has lower direct profit than the IT solutions business, competitive pricing pressure from a large IT staffing client, higher medical costs due to increased utilization of the Company's self insured medical plan, costs of $2.0 million associated with the death of the Company's Chairman and CEO in the 2014 fourth quarter, and the Company's decision to take an impairment charge of approximately $1.5 million for software costs capitalized for an IT solution. The Company’s operating margin was 5.9% in 2013, and 5.8% in 2012.

Vertical Markets

The Company promotes a majority of its services through four vertical market focus areas: Healthcare (which includes services provided to healthcare providers, health insurers (payers), and life sciences companies), Technology Service Providers, Financial Services, and Energy. The remainder of CTG’s revenue is derived from general markets.

CTG’s revenue by vertical market as a percentage of consolidated revenue for the years ended December 31, 2014, 2013 and 2012 is as follows:

	2014		2013		2012
Healthcare	28.6	%	31.4	%	33.0	%
Technology service providers	26.4	%	28.0	%	30.8	%
Financial services	7.9	%	6.8	%	6.1	%
Energy	6.1	%	6.2	%	6.0	%
General markets	31.0	%	27.6	%	24.1	%
Total	100.0	%	100.0	%	100.0	%

The Company’s growth efforts are primarily focused in the healthcare market based on its leading position in serving the provider market, and its expertise and experience serving other segments of this market (payers and life sciences companies). In 2012, there had been higher demand for solutions offerings and support from healthcare companies, and in general, higher demand compared with other sectors of the U.S. economy. However, in 2013 and 2014, the demand from our healthcare clients decreased. This decrease was directly related to the U.S. federal government sequestration which cut Medicare reimbursements to hospitals and health systems by 2% starting in April 2013. As a result, the Company’s healthcare revenue continued to decrease in 2014, decreasing $19.3 million or 14.7% from 2013.

Revenue for the Company's technology service providers vertical market as a percentage of total revenue decreased in 2014 as compared with 2013 due to weak demand from several of the Company's largest clients in its IT staffing services business unit, which are included in this vertical market.

During 2014, the percentage of revenue attributable to the financial services market increased from 2013, primarily due to strong demand in our European operations. In recent years, most of CTG’s revenue in the financial services market was generated from its European operations, which accounted for 97.3% of the Company’s total 2014 revenue from the financial services vertical market.

Revenue for the Company's energy vertical market remained consistent as a percentage of consolidated revenue in 2014 as compared with 2013 as demand in this vertical market declined with the overall revenue decrease of the Company of approximately 6.1%. Generally, the decrease in the price of oil caused several of our clients to reduce their overall spending, including requirements for IT services, during 2014.

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For the year ended December 31, 2014, CTG provided its services to approximately 475 clients in North America and Europe. In North America, the Company operates in the United States and Canada, with greater than 99% of 2014 North American revenue generated in the United States. In Europe, the Company operates in Belgium, Luxembourg, and the United Kingdom. Of total 2014 consolidated revenue of $393.3 million, approximately 80% was generated in North America and 20% in Europe. One client, International Business Machines Corporation (IBM), accounted for greater than 10% of CTG’s consolidated revenue in 2014, 2013, and 2012.

Pricing and Backlog

The Company recognizes revenue when persuasive evidence of an arrangement exists, when the services have been rendered, when the price is determinable, and when collectibility of the amounts due is reasonably assured. For time-and-material contracts, revenue is recognized as hours are incurred and costs are expended. For contracts with periodic billing schedules, primarily monthly, revenue is recognized as services are rendered to the customer. Revenue for fixed-price contracts is recognized per the proportional method of accounting using an input-based approach. On a given project, actual salary and indirect labor costs incurred are measured and compared against the total estimated costs of such items at the completion of the project. Revenue is recognized based upon the percentage-of-completion calculation of total incurred costs to total estimated costs. The Company infrequently works on fixed-price projects that include significant amounts of material or other non-labor related costs which could distort the percent complete within a percentage-of-completion calculation. The Company’s estimate of the total labor costs it expects to incur over the term of the contract is based on the nature of the project and our past experience on similar projects, and includes management judgments and estimates which affect the amount of revenue recognized on fixed-price contracts in any accounting period.

The Company’s revenue from contracts accounted for under time-and-material, progress billing, and percentage-of-completion methods as a percentage of consolidated revenue for the years ended December 31, 2014, 2013 and 2012 is as follows:

	2014		2013		2012
Time-and-material	86.2	%	88.8	%	90.3	%
Progress billing	11.2	%	8.8	%	7.9	%
Percentage-of-completion	2.6	%	2.4	%	1.8	%
Total	100.0	%	100.0	%	100.0	%

As of December 31, 2014 and 2013, the backlog for fixed-price and all managed-support contracts was approximately $41.8 million and $44.1 million, respectively. Approximately 69.2% or $28.9 million of the December 31, 2014 backlog is expected to be earned in 2015. Of the $44.1 million of backlog at December 31, 2013, approximately 73.8%, or $32.6 million was earned in 2014. Revenue is subject to slight seasonal variations, with a minor slowdown in months of high vacation and legal holidays (July, August, and December). Backlog does not tend to be seasonal; however, it does fluctuate based upon the timing of entry into long-term contracts.

Competition

The IT services market, for both IT solutions and IT staffing services, is highly competitive. The market is also highly fragmented with many providers and no single competitor maintaining clear market leadership. Competition varies by location, the type of service provided, and the customer to whom services are provided. The Company’s competition comes from four major channels: large national or international companies, including major accounting and consulting firms; hardware vendors and suppliers of packaged software systems; small local firms or individuals specializing in specific programming services or applications; and from a customer’s internal IT staff. CTG competes against all four of these channels for its share of the market. The Company believes that to compete successfully it is necessary to have a local geographic presence, offer appropriate IT solutions, provide skilled professional resources, and price its services competitively.

CTG has implemented a Global Management System, with the goal to achieve continuous, measured improvements in services and deliverables. As part of this program, CTG has developed specific methodologies for providing high value services that result in unique solutions and specified deliverables for its clients. The Company believes these methodologies will enhance its ability to compete. CTG initially achieved worldwide ISO 9001:1994 certification in June 2000. CTG received its worldwide ISO 9001:2000 certification in January 2003. The Company believes it is the only IT services company of its size to achieve worldwide certification.

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Intellectual Property

The Company has registered its symbol and logo with the U.S. Patent and Trademark Office and has taken steps to preserve its rights in other countries where it operates. We regard patents, trademarks, copyrights and other intellectual property as important to our success, and we rely on them in the United States and foreign countries to protect our investments in products and technology. Our patents expire at various times, but we believe that the loss or expiration of any individual patent would not materially affect our business. We, like any other company, may be subject to claims of alleged infringement of the patents, trademarks and other intellectual property rights of third parties from time to time in the ordinary course of business. CTG has entered into agreements with various software and hardware vendors from time to time in the normal course of business, and has capitalized certain costs under software development projects.

Employees

CTG’s business depends on the Company’s ability to attract and retain qualified professional staff to provide services to its customers. The Company has a structured recruiting organization that works with its clients to meet their requirements by recruiting and providing high quality, motivated staff. The Company employs approximately 3,800 employees worldwide, with approximately 3,200 in the United States and Canada and 600 in Europe. Of these employees, approximately 3,500 are IT professionals and 300 are individuals who work in sales, recruiting, delivery, administrative and support positions. The Company believes that its relationship with its employees is good. No employees are covered by a collective bargaining agreement or are represented by a labor union. CTG is an equal opportunity employer.

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Financial Information About Geographic Areas

The following table sets forth certain financial information relating to the performance of the Company for the years ended December 31, 2014, 2013, and 2012. This information should be read in conjunction with the audited consolidated financial statements and notes thereto included in Item 8, “Financial Statements and Supplementary Data” included in this report.

	2014		2013		2012
(amounts in thousands)
Revenue from External Customers:
United States	$	314,500	$	341,391	$	355,022
Belgium(1)	44,692		48,428		41,957
Other European countries	33,652		28,684		26,653
Other country	424		533		783
Total foreign revenue	78,768		77,645		69,393
Total revenue	$	393,268	$	419,036	$	424,415
Operating Income:
United States	$	14,196	$	21,828	$	21,203
Europe	2,923		2,864		3,209
Other country	33		35		50
Total foreign operating income	2,956		2,899		3,259
Total operating income	$	17,152	$	24,727	$	24,462
Total Assets:
United States	$	139,239	$	139,576	$	132,795
Belgium (1)	15,621		18,037		18,908
Other European countries	15,739		16,621		14,211
Other country	197		197		291
Total foreign assets	31,557		34,855		33,410
Total assets	$	170,796	$	174,431	$	166,205

(1) Revenue and total assets for our Belgium operations have been disclosed separately as they exceed 10% of the consolidated balances in certain of the years presented.

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Executive Officers of the Company

As of December 31, 2014, the following individuals were executive officers of the Company:

Name	Age	Office	Period During Which Served as Executive Officer	Other Positions and Offices with Registrant
Brendan M. Harrington	48	Interim Chief Executive Officer	October 15, 2014 to date	None
		Senior Vice President, Chief Financial Officer	September 13, 2006 to October 14, 2014
John M. Laubacker	48	Interim Chief Financial Officer	October 15, 2014 to date	Treasurer
Filip J. L. Gydé	54	Interim Executive Vice President of Operations	October 15, 2014 to date	None
		Senior Vice President	October 1, 2000 to October 14, 2014
Arthur W. Crumlish	60	Senior Vice President	September 24, 2001 to date	None
Peter P. Radetich	60	Senior Vice President, General Counsel	April 28, 1999 to date	Secretary
Ted Reynolds	59	Senior Vice President	November 11, 2014 to date	None
		Vice President, Health Solutions	March 7, 2011 to November 10, 2014

Mr. Harrington was promoted to Interim Chief Executive Officer on October 15, 2014. Previously he was Senior Vice President and Chief Financial Officer from September 13, 2006 to October 14, 2014, and Interim Chief Financial Officer and Treasurer from October 17, 2005 to September 12, 2006.  Mr. Harrington joined the Company in February 1994 and served in a number of managerial financial positions in the Company’s corporate and European operations, including as the Director of Accounting since 2003, before being appointed Corporate Controller in May 2005.

Mr. Laubacker was promoted to Interim Chief Financial Officer on October 15, 2014. He has served as the Company’s Treasurer since 2006, responsible for management of the Company’s treasury, audit and financial reporting functions. Prior to joining the Company in January 1996, Mr. Laubacker was a Senior Manager employed at KPMG from 1988 to 1996.

Mr. Gydé was promoted to Interim Executive Vice President of Operations on October 15, 2014, responsible for operating activities of the overall Company. Previously he was Senior Vice President and General Manager of CTG Europe from October 1, 2000 through October 14, 2014. Prior to that, Mr. Gydé was Managing Director of the Company’s operations in Belgium. Mr. Gydé has been with the Company since May 1987.

Mr. Crumlish was promoted to Senior Vice President in September 2001, and is currently responsible for the Company’s Strategic Staffing Services organization. Prior to that, Mr. Crumlish was the Financial Controller of the Company’s Strategic Staffing Services organization. Mr. Crumlish joined the Company in 1990.

Mr. Radetich joined the Company in June 1988 as Associate General Counsel, and was promoted to General Counsel and Secretary in April 1999.

Mr. Reynolds was promoted to Senior Vice President on November 11, 2014, and is currently responsible for the Company's healthcare IT business unit, CTG Health Solutions. Previously he was Vice President for CTG Health Solutions from March 7, 2011 through November 10, 2014. Prior to that, Mr. Reynolds served as the Company’s Client Services Executive for its Epic practice.  Mr. Reynolds joined CTG in 2006, and previously had approximately 30 years of experience in healthcare and IT.

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Available Company Information

The Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (Exchange Act), and reports pertaining to the Company filed under Section 16 of the Exchange Act are available without charge on the Company’s website at www.ctg.com as soon as reasonably practicable after the Company electronically files the information with, or furnishes it to, the SEC. The Company’s code of ethics (Code of Conduct), committee charters and governance policies are also available without charge on the Company’s website at http://investors.ctg.com/governance.cfm. The Company intends to disclose future amendments to, or waivers from, certain provisions of the Code of Conduct on the Company's website or in a current report on Form 8-K.

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Item 1A. Risk Factors

The following risk factors should be read carefully in connection with evaluating our business and the forward-looking information contained in this Annual Report on Form 10-K. The risk factors below represent what we believe are the known material risk factors with respect to the Company and our business. Any of the following risks could materially adversely affect our business, our operations, the industry in which we operate, our financial position or our future financial results.

Our business depends on the availability of a large number of highly qualified IT professionals and our ability to recruit and retain these professionals.

We actively compete with many other IT service providers for qualified professional staff. The availability of qualified professional staff may affect our ability to provide services and meet the needs of our customers in the future. An inability to fulfill customer requirements at agreed upon rates due to a lack of available qualified staff may adversely impact our revenue and operating results in the future.

Increased competition and the bargaining power of our large customers may cause our billing rates to decline, which would have an adverse effect on our revenue and, if we are unable to control our personnel costs accordingly, on our margins and operating results.

We have experienced reductions in the rates at which we bill some of our larger customers for services due to the highly competitive market conditions that exist at this time. Additionally, we actively compete against many other companies for business at new and existing clients. Billing rate reductions or competitive pressures may lead to a further decline in revenue. If we are unable to make commensurate reductions in our personnel costs, our margins and operating results in the future would be adversely affected.

We derive a significant portion of our revenue from a single customer and a significant reduction in the amount of IT services requested by this customer would have an adverse effect on our revenue and operating results.

IBM is CTG’s largest customer. CTG provides services to various IBM divisions in many locations. During 2014, the National Technical Services Agreement (NTS Agreement) with IBM was renewed for three years until December 31, 2017. In 2014, 2013, and 2012, IBM accounted for $90.5 million or 23.0%, $101.7 million or 24.3%, and $113.8 million or 26.8% of the Company’s consolidated revenue, respectively. No other customer accounted for more than 10% of the Company’s revenue in 2014, 2013 or 2012. The Company’s accounts receivable from IBM at December 31, 2014 and 2013 amounted to $7.8 million and $11.5 million, respectively. In January 2014, IBM announced its intention to sell off its x86 server division to Lenovo, and the initial closing of that sale occurred on September 29, 2014. A portion of the Company's 2014 and 2013 revenue from IBM was related to the x86 server division. Lenovo has not made any assurances that the Company will retain a significant share of the revenue derived from the x86 server division. If IBM or Lenovo were to significantly reduce the amount of IT services they purchase from the Company, our revenue and operating results would be adversely affected.

Our customer contracts generally have a short term or are terminable on short notice and a significant number of failures to renew contracts, early terminations or renegotiations of our existing customer contracts could adversely affect our results of operations.

Our clients typically retain us on a non-exclusive, engagement-by-engagement basis, rather than under exclusive long-term contracts. We performed 86.2% of our services on a time-and-materials basis during 2014. As such, our customers generally have the right to terminate a contract with us upon written notice without the payment of any financial penalty. Client projects may involve multiple engagements or stages, and there is a risk that a client may choose not to retain us for additional stages of a project, or that a client will cancel or delay additional planned engagements. These terminations, cancellations or delays could result from factors that are beyond our control and are unrelated to our work product or the progress of the project, but could be related to business or financial conditions of the client, changes in client strategies or the economy in general. When contracts are terminated, we lose the anticipated future revenue and we may not be able to eliminate the associated costs required to support those contracts in a timely manner. Consequently, our operating results in subsequent periods may be lower than expected. Our clients can cancel or reduce the scope of their engagements with us on short notice. If they do so, we may be unable to reassign our professionals to new engagements without delay. The cancellation or reduction in scope of an engagement could, therefore, reduce the utilization rate of our professionals, which would have a negative impact on our business, financial condition, and results of operations. As a result of these and other factors, our past financial performance should not be relied on as a guarantee of similar or better future

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performance. Due to these factors, we believe that our results from operations may fluctuate from period to period in the future.

A significant portion of our total assets consists of goodwill and capitalized software projects, which are subject to a periodic impairment analysis and a significant impairment determination in any future period could have an adverse effect on our results of operations even without a significant loss of revenue or increase in cash expenses attributable to such period.

We have goodwill recorded totaling approximately $37.4 million at December 31, 2014. We also have capitalized software projects recorded totaling $5.5 million at December 31, 2014. At least annually, we evaluate this goodwill and capitalized software for impairment. The goodwill is evaluated based on the fair value of the business operations or projects to which this goodwill relates. This estimated fair value could change if there is a significant decrease in the enterprise value of CTG, if we are unable to achieve operating results at the levels that have been forecasted, the market valuation of transactions involving similar companies decreases which could occur given the economic downturn in recent years in the countries in which the Company operates, or there is a permanent, negative change in the market demand for the services offered by this business unit, or in the case of capitalized software, there is an absence of historical or projected revenue for the solution. These changes could result in an impairment of the existing goodwill balance or the capitalized software costs that could require a material non-cash charge which would have an adverse impact on our results of operations.

The introduction of new IT products or services or changes in customer requirements for IT products or services may render our existing IT Solutions or IT Staffing offerings obsolete or unnecessary, which, if we are unable to keep pace with these corresponding changes, could have an adverse effect on our business.

Our success depends, in part, on our ability to implement and deliver IT Solutions or IT Staffing services that anticipate and keep pace with rapid and continuing changes in technology, industry standards and client preferences and requirements. We may not be successful in anticipating or responding to these developments on a timely basis, and our offerings may not be successful in the marketplace. Also, services, solutions and technologies developed by our competitors may make our solutions or staffing offerings uncompetitive or obsolete. Any one of these circumstances could have a material adverse effect on our ability to obtain and successfully complete client engagements.

We could be subject to liability and damage to our reputation resulting from cyber attacks or data breaches.

Information security risks for companies providing information technology (IT) and professional services, especially in Healthcare-related industries, have increased over recent years. This increase in risk may be attributed to the value of personally identifiable information or personal data used for identity theft and fraud, the increasing sophistication and activities of attackers including organized crime, hackers, terrorists, activists, and other third parties, and the reliance on Internet-based communications, and new technologies. The Company’s operations and business rely on the secure processing, transmission, storage and availability of information and resources provided by our information technology environment. This complex environment supports a variety of technologies, industries, and delivery teams across the United States and Europe.

Although the Company has not experienced any prior material data breaches or cyber incidents, its technical environment may become the target of cyber attacks or data breaches caused by external entities, third-party vendors, or the Company's personnel, both intentionally and unintentionally. These cyber attacks or data breaches could result in the disruption of the Company's internal and customer-facing business operations, and could also result in the unauthorized disclosure, misuse, loss, and destruction of both the Company’s and its customers’ confidential and regulated information, including United States designated personally identifiable information (PII), personal data under the European Union Data Protection Directive, or protected health information (PHI) under the United States Health Insurance Portability and Accountability Act of 1996 (HIPAA).

The Company’s failure to protect PII, personal data, or PHI could result in reputational damage, fines and penalties, litigation costs, external investigations, compensation costs including reimbursement and monetary awards, and/or additional compliance costs which could have a material, adverse impact. It could also have an adverse impact on the Company’s ability to execute contracts with customers that produce or work with this data, and make it more difficult to recruit qualified personnel to perform its services in the future. As the cyber threat landscape continues to evolve or the Company’s risk profile changes, it may be required to expend additional resources to enhance existing protective measures or implement new mitigation strategies.

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The foreign currency exchange, legislative, tax, regulatory and economic risks associated with international operations could have an adverse effect on our operating results if we are unable to mitigate or hedge these risks.

We have operations in the United States and Canada in North America, and in Belgium, Luxembourg, and the United Kingdom in Europe. Although our foreign operations conduct their business in their local currencies, these operations are subject to their own currency fluctuations, legislation, employment and tax law changes, and economic climates. These factors as they relate to our foreign operations are different than those of the United States. Although we actively manage these foreign operations with local management teams, our overall operating results may be negatively affected by local economic conditions, changes in foreign currency exchange rates, or tax, regulatory or other economic changes beyond our control.

Government cuts in healthcare programs, such as Medicare, and delays in legislative or regulatory healthcare mandates could cause a reduction in IT spending by our healthcare customers, which could materially and adversely affect our revenues and results of operations.

The Company’s growth efforts are primarily focused in the healthcare market. Growth in this market depends on continued spending by our healthcare customers on IT projects. Cuts in government healthcare programs, such as sequestration, which cut Medicare reimbursements to hospitals and health systems in April 2013, may result in reduced expenditures by our healthcare customers on IT projects. For example, the Company’s healthcare revenue decreased $19.3 million or 14.7% in 2014 from 2013. If further government cuts in healthcare programs were to occur, whether due to the failure of Congress to adopt a budget, pass appropriations bills or raise the U.S. debt ceiling or for other reasons, there may be delays, reductions or cessation of funding to our customers, which could cause them to purchase less IT services from us, which could materially and adversely affect our revenues and results of operations.

In addition, delays in implementation of legislative or regulatory healthcare mandates could adversely affect the IT spending by our healthcare customers to implement such mandates. For example, the implementation date for ICD-10, a diagnostic coding system used for billing in the healthcare industry, was delayed in early 2014 until October 1, 2015. This delay caused a number of our healthcare customers to defer spending allocated for 2014 for IT projects that would have updated their billings systems. If implementation of existing or contemplated legislative or regulatory healthcare mandates are further deferred, the resulting reduction in IT spending by our healthcare customers could materially and adversely affect our revenues and results of operations.

Changes in government regulations and laws affecting the IT services industry, and the industries in which our clients operate, including accounting principles and interpretations, and the taxation of domestic operations could adversely affect our results of operations.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Patient Protection and Affordable Care Act (PPACA), and new SEC regulations, create uncertainty for companies such as ours. These new or updated laws, regulations and standards are subject to varying interpretations which, in many instances, is due to their lack of specificity. As a result, the application of these new standards and regulations in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We are committed to maintaining high standards of corporate governance and public disclosure. As a result, our efforts to comply with evolving laws, tax regulations and other standards have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. In particular, our continuing efforts to comply with Section 404 of the Sarbanes-Oxley Act of 2002 and the related regulations regarding our required assessment of our internal controls over financial reporting and our independent auditors’ audit of internal control require the commitment of significant internal, financial and managerial resources.

The Financial Accounting Standards Board (FASB), the SEC, and the Public Company Accounting Oversight Board (PCAOB) or other accounting rule making authorities may issue new accounting rules or auditing standards that are different than those that we presently apply to our financial results. Such new accounting rules or auditing standards could require significant changes from the way we currently report our financial condition, results of operations or cash flows.

U.S. generally accepted accounting principles have been the subject of frequent changes in interpretations. As a result of the enactment of the Sarbanes-Oxley Act of 2002 and the review of accounting policies by the SEC as well as by national and international accounting standards bodies, the frequency of future accounting policy

11

changes may accelerate. Such future changes in financial accounting standards may have a significant effect on our reported results of operations, including results of transactions entered into before the effective date of the changes.

In 2014 and previous years, the Company offered limited healthcare coverage to its hourly employees, which includes nearly half of its total employees. Under the PPACA, the Company will be required to offer expanded healthcare coverage to those employees, or potentially pay financial penalties. Beginning in 2015, the Company is in the process of offering compliant healthcare coverage as required. Although it is difficult to estimate the financial impact of this healthcare coverage, the Company's intention is to pass the additional costs on to the customers where our hourly employees who elect this coverage are engaged. However, in the event the Company is not able to pass some or all of these costs to its customers, the Company’s operating results would be negatively impacted.

We are subject to income and other taxes in the United States (federal and state) and numerous foreign jurisdictions. Our provisions for income and other taxes and our tax liabilities in the future could be adversely affected by numerous factors. These factors include, but are not limited to, income before taxes being lower than anticipated in countries with lower statutory tax rates and higher than anticipated in countries with higher statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in various federal, state and international tax laws, regulations, accounting principles or interpretations thereof, which could adversely impact our financial condition, results of operations and cash flows in future periods.

During 2014 and 2013, the Company experienced higher unemployment tax rates in many of the states in which we do business, which increased our direct costs and negatively impacted our profitability. Considering current economic conditions in the U.S. in the markets in which we operate and the IT staffing nature of a large portion of our business, the Company expects these rates will not significantly change in 2015 and future years.

Existing and potential customers may outsource or consider outsourcing their IT requirements to foreign countries in which we may not currently have operations, which could have an adverse effect on our ability to obtain new customers or retain existing customers.

In the past few years, more companies have started using, or are considering using, low cost offshore outsourcing centers to perform technology-related work and complete projects. Currently, we have partnered with clients to perform services outside of North America to mitigate and reduce this risk to our Company. However, the risk of additional increases in the future in the outsourcing of IT solutions overseas to countries where we do not have operations could have a material, negative impact on our future operations.

Decreases in demand for IT Solutions and IT Staffing services in the future would cause an adverse effect on our revenue and operating results.

The Company’s revenue and operating results are significantly affected by changes in demand for its services. In the past, the U.S. economy, where the Company performs approximately 80% of its total business based upon revenue, significantly deteriorated primarily due to subprime mortgage issues, financial market conditions, and other economic concerns. In 2009, these economic pressures also extended to the European markets where the Company operates. These negative pressures on the economy led to a worldwide contraction of the credit markets, more severe recessionary conditions, and a decline in demand for the Company’s services which negatively affected the Company’s revenue and operating results in 2009 as compared with prior years. Economic pressures also led to customers’ reducing their spending on IT projects and external professional services. Overall economic conditions in 2010 through 2014 stabilized in the U.S., and in 2013 began to improve in Europe. While economic conditions improved in 2014 in the U.S., the Company experienced a decline in revenue for its electronic health record business as the April 2013 sequestration caused a reduction in demand for our services from our healthcare clients. Declines in spending for IT services in 2015 or future years may adversely affect our operating results as they have in the past.

The IT services industry is highly competitive and fragmented, which means that our customers have a number of choices for providers of IT services and we may not be able to compete effectively.

The market for our services is highly competitive. The market is fragmented, and no company holds a dominant position. Consequently, our competition for client requirements and experienced personnel varies significantly by geographic area and by the type of service provided. Some of our competitors are larger and have greater technical, financial, and marketing resources and greater name recognition than we have in the markets we collectively serve. In addition, clients may elect to increase their internal IT systems resources to satisfy their custom software development and integration needs. Finally, our industry is being impacted by the growing use of lower-cost offshore delivery capabilities (primarily India and other parts of Asia). There can be no assurance that

12

we will be able to continue to compete successfully with existing or future competitors or that future competition will not have a material adverse affect on our results of operations and financial condition.

If we are unable to collect our receivables or unbilled services, our results of operations, financial condition and cash flows could be adversely affected.

Our business depends on our ability to successfully obtain payment from our clients of the amounts they owe us for work performed. We evaluate the financial condition of our clients and typically bill and collect on reasonable cycles. We might, however, not accurately assess the creditworthiness of our clients, or macroeconomic conditions could also result in financial difficulties for our clients, including bankruptcy and insolvency. In certain industries, some clients have requested longer payment terms, which has adversely affected, and may continue to adversely affect, our cash flows. The timely collection of client balances also depends on our ability to complete our contractual commitments as required. If we are unable to meet our commitments, or bill our clients on a timely basis, our results of operations and cash flows could be adversely affected. We have established allowances for losses of receivables and unbilled services where we deem the amounts to be uncollectible. The uncollectible amounts due to the Company from clients could differ from those that we currently anticipate.

Our share price could fluctuate and be difficult to predict.

Our share price has fluctuated in the past and could continue to fluctuate in the future in response to various factors. These factors include changes in macroeconomic or political factors unrelated to our business in the geographies in which we operate, general or industry-specific market conditions or changes in financial markets, our failure to meet our growth and financial objectives, including revenue growth, operating margin expansion and earnings per share growth, our ability to generate enough cash flow to return cash to our shareholders at historical levels or levels expected by our shareholders, announcements by us or competitors about developments in our business or prospects, and projections or speculation about our business by the media or investment analysts.

If we repatriate our cash balances from our foreign operations, we may be subject to additional tax liabilities.

We earn a portion of our operating income outside of the United States, and any repatriation of funds currently held in foreign jurisdictions to the United States may result in higher effective tax rates and additional tax liabilities for the Company. In addition, there have been proposals to change the tax laws in the United States that would significantly impact how United States based multinational corporations are taxed on foreign earnings. Although we cannot predict whether or in what form, or in what time frame, any proposed legislation may be passed, if enacted, these tax laws could have a material adverse impact on our tax expense and cash flows.

Ineffective internal controls could impact the Company's business and operating results. 

The Company's internal control over financial reporting may not prevent or detect misstatements because of the inherent limitations of internal controls, including the possibility of human error, the circumvention or overriding of controls, poorly designed or ineffective controls, or fraud. Internal controls that are deemed to be effective can provide only reasonable assurance with respect to the preparation and fair presentation of the Company's financial statements. If the Company fails to maintain the adequacy of its internal controls, including the failure to implement new or improve existing controls, or fails to properly execute or properly test these controls, the Company's business and operating results could be negatively impacted and the Company could fail to meet its financial reporting obligations.

Changing economic conditions and the effect of such changes on accounting estimates could have a material impact on our results of operations.

The Company has also made a number of estimates and assumptions relating to the reporting of its assets and liabilities and the disclosure of contingent assets and liabilities to prepare its consolidated financial statements pursuant to the rules and regulations of the SEC and other accounting rulemaking authorities. Such estimates primarily relate to the valuation of goodwill, the valuation of stock options for recording equity-based compensation expense, allowances for doubtful accounts receivable, investment valuation, incurred but not recorded claims related to the Company's self insured medical plan, valuation allowances for deferred tax assets, legal matters, other contingencies and estimates of progress toward completion and direct profit or loss on contracts, as applicable. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. Changes in the economic climates in which the Company operates may affect these estimates and will be reflected in the Company’s financial statements in the event they occur. Such changes could result in a material impact on the Company’s results of operations.

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Company owns and occupies its headquarters building at 800 Delaware Avenue, and an office building at 700 Delaware Avenue, both located in Buffalo, New York. These buildings are operated by CTG of Buffalo, a subsidiary of the Company which is part of the Company’s North American operations. The corporate headquarters consists of approximately 48,000 square feet and is occupied by corporate administrative operations. The office building consists of approximately 42,000 square feet and is also occupied by corporate administrative operations. At December 31, 2014, these properties were not used as collateral as part of the Company’s existing demand credit agreement.

All of the remaining Company locations, totaling approximately 20 sites, are leased facilities. Most of these facilities are located in the United States, with approximately five of these locations in Europe in the countries of Belgium, Luxembourg and the United Kingdom, where our European operations are located. These facilities generally serve as sales and support offices and their size varies with the number of people employed at each office, ranging from 300 to 26,000 square feet. The Company’s lease terms generally vary from periods of less than a year to five years and typically have flexible renewal options. The Company believes that its presently owned and leased facilities are adequate to support its current and anticipated future needs.

Item 3. Legal Proceedings

The Company and its subsidiaries are involved from time to time in various legal proceedings arising in the ordinary course of business. Although the outcome of lawsuits or other proceedings involving the Company and its subsidiaries cannot be predicted with certainty and the amount of any liability that could arise with respect to such lawsuits or other proceedings cannot be predicted accurately, management does not expect these matters, if any, to have a material adverse effect on the financial position, results of operations, or cash flows of the Company.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Stock Market Information

The Company’s common stock is traded on The NASDAQ Stock Market LLC under the symbol CTG. The following table sets forth the high and low sales prices for the Company’s common stock for each quarter of the previous two years.

Stock Price	High		Low
Year Ended December 31, 2014
Fourth Quarter	$	11.84	$	8.15
Third Quarter	$	17.47	$	11.14
Second Quarter	$	17.46	$	13.90
First Quarter	$	19.02	$	13.57
Year Ended December 31, 2013
Fourth Quarter	$	19.20	$	15.51
Third Quarter	$	26.11	$	16.25
Second Quarter	$	24.70	$	18.80
First Quarter	$	23.08	$	18.29

On February 20, 2015, there were 1,566 holders of record of the Company’s common shares. Although the Company had not previously paid a dividend since 2000, it initiated a quarterly dividend of $0.05 per common share beginning in March 2013, and increased that dividend to $0.06 per common share beginning in March 2014. At December 31, 2012 and 2013, when the Company had a revolving line of credit in place, the Company was required to meet certain financial covenants under its current revolving credit agreement in order to pay dividends. The Company was in compliance with these financial covenants at both December 31, 2012 and 2013. There are no measured financial covenants under the Company's new demand line of credit. For additional information regarding such financial covenants, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition and Liquidity." The determination of the timing, amount and the continuation of the payment of dividends on the Company’s common stock in the future is at the discretion of the Board of Directors and will depend upon, among other things, the Company’s profitability, liquidity, financial condition, and capital requirements.

For information concerning common stock issued in connection with the Company’s equity compensation plans, see Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

15

Issuer Purchases of Equity Securities

The Company’s share repurchase program (originally announced on May 12, 2005) does not have an expiration date, nor was it terminated during the 2014 fourth quarter. The information in the table below does not include shares withheld by or surrendered to the Company either to satisfy the exercise cost for the cashless exercise of employee stock options, or to satisfy tax withholding obligations associated with employee equity awards.

Purchases by the Company of its common stock on the open market during the fourth quarter ended December 31, 2014 are as follows:

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 of Shares that May Yet be Purchased Under the Plans or Programs
September 27 - October 31	15,000	$	8.78	15,000	735,541
November 1 - November 30	35,400	$	8.90	35,400	700,141
December 1 - December 31	62,859	$	8.64	62,859	637,282
Total	113,259	$	8.74	113,259

* Excludes broker commissions

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Company Performance Graph

The following graph displays a five-year comparison of cumulative total shareholder returns for the Company’s common stock, the S&P 500 Index, and the Dow Jones U.S. Computer Services Index, assuming a base index of $100 at the end of 2009. The cumulative total return for each annual period within the five years presented is measured by dividing (1) the sum of (A) the cumulative amount of dividends for the period, assuming dividend reinvestment, and (B) the difference between the Company’s share price at the end and the beginning of the period by (2) the share price at the beginning of the period. The calculations were made excluding trading commissions and taxes.

	Base Period		Indexed Returns Years Ending
	December		December		December		December		December		December
	2009		2010		2011		2012		2013		2014
Computer Task Group, Inc.	$	100.00	$	135.83	$	175.78	$	227.59	$	237.50	$	122.49
S&P 500 Index	$	100.00	$	115.06	$	117.49	$	136.30	$	180.44	$	205.14
Dow Jones U.S. Computer Services Index	$	100.00	$	115.21	$	136.73	$	150.43	$	159.84	$	151.36

The information included under this section entitled “Company Performance Graph” is deemed not to be “soliciting material” or “filed” with the SEC, is not subject to the liabilities of Section 18 of the Exchange Act, and shall not be deemed incorporated by reference into any of the filings previously made or made in the future by the Company under the Exchange Act or the Securities Act of 1933, except to the extent the Company specifically incorporates any such information into a document that is filed.

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Item 6. Selected Financial Data

Consolidated Summary—Five-Year Selected Financial Information

The selected operating data and financial position information set forth below for each of the years in the five-year period ended December 31, 2014 has been derived from the Company’s audited consolidated financial statements. This information should be read in conjunction with the audited consolidated financial statements and notes thereto included in Item 8, “Financial Statements and Supplementary Data” included in this report.

	2014		2013		2012		2011		2010
(amounts in millions, except per-share data)	(1)				(2)
Operating Data
Revenue	$	393.3	$	419.0	$	424.4	$	396.3	$	331.4
Operating Income	$	17.2	$	24.7	$	24.5	$	19.3	$	13.9
Net Income	$	10.4	$	15.7	$	16.2	$	11.9	$	8.4
Basic net income per share	$	0.68	$	1.02	$	1.07	$	0.80	$	0.57
Diluted net income per share	$	0.64	$	0.92	$	0.96	$	0.71	$	0.52
Cash dividend per share	$	0.24	$	0.20	$	—	$	—	$	—
Financial Position
Working capital	$	69.2	$	67.5	$	63.5	$	45.4	$	33.0
Total assets	$	170.8	$	174.4	$	166.2	$	147.5	$	130.3
Long-term debt	$	—	$	—	$	—	$	—	$	—
Shareholders’ equity	$	111.0	$	113.8	$	102.8	$	88.8	$	77.9

(1) During 2014, the Company incurred $2.0 million in costs associated with the death of the Company's Chairman and CEO under his employment agreement. The Company also recorded an impairment charge totaling $1.5 million for capitalized software costs associated with one of its IT solutions. In total, these costs reduced operating income by $3.5 million, net income by $2.2 million, and basic and diluted net income per share by $0.14 and $0.13, respectively.

(2) During 2012, the Company received life insurance proceeds upon the death of two of its former executives. In total, the Company received $1.3 million, which is included in net income, and equaled $0.08 basic and diluted net income per share.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This annual report on Form 10-K contains forward-looking statements made by the management of Computer Task Group, Incorporated (CTG, the Company or the Registrant) that are subject to a number of risks and uncertainties. These forward-looking statements are based on information as of the date of this report. The Company assumes no obligation to update these statements based on information from and after the date of this report. Generally, forward-looking statements include words or phrases such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “could,” “may,” “might,” “should,” “will” and words and phrases of similar impact. The forward-looking statements include, but are not limited to, statements regarding future operations, industry trends or conditions and the business environment, and statements regarding future levels of, or trends in business strategy and expectations, new business opportunities, cost control initiatives, business wins, market demand, revenue, operating expenses, capital expenditures, and financing. The forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Numerous factors could cause actual results to differ materially from those in the forward-looking statements, including the following: (i) the availability to CTG of qualified professional staff, (ii) domestic and foreign industry competition for customers and talent, (iii) increased bargaining power of large customers, (iv) the Company's ability to protect confidential client data, (v) the partial or complete loss of the revenue the Company generates from International Business Machines Corporation (IBM), (vi) the uncertainty of customers' implementations of cost reduction projects, (vii) the effect of healthcare reform and initiatives, (viii) the mix of work between staffing and solutions, (ix) currency exchange risks, (x) risks associated with operating in foreign jurisdictions, (xi) renegotiations, nullification, or breaches of contracts with customers, vendors, subcontractors or other parties, (xii) the change in valuation of recorded goodwill or capitalized software balances, (xiii) the impact of current and future laws and government regulation, as well as repeal or modification of such, affecting the information technology (IT) solutions and staffing industry, taxes and the Company's operations in particular, (xiv) industry and economic conditions, including fluctuations in demand for IT services, (xv) consolidation among the Company's competitors or customers, (xvi) the need to supplement or change our IT services in response to new offerings in the industry or changes in customer requirements for IT products and solutions, and (xvii) the risks described in Item 1A of this annual report on Form 10-K and from time to time in the Company's reports filed with the Securities and Exchange Commission (SEC).

Industry Trends

The market demand for the Company’s services is heavily dependent on IT spending by major corporations, organizations and government entities in the markets and regions that we serve. The pace of technology advances and changes in business requirements and practices of our clients all have a significant impact on the demand for the services that we provide. Competition for new engagements and pricing pressure has been strong. In 2014 there was a further overall decline in demand for our services as compared with 2013 as many of our healthcare clients did not begin new projects when existing projects ended due to their capital constraints. This trend began when the U.S. government imposed the budget sequestration in April 2013. Additionally, the requirements for our personnel were also lower in our IT staffing business in 2014.

The Company operates in one industry segment, providing IT services to its clients. These services include IT solutions and IT and other staffing. With IT solutions services, we generally take responsibility for the deliverables on a project and the services may include high-end consulting services. When providing IT and other staffing services, we typically supply personnel to our customers who then, in turn, take their direction from the client’s managers. In certain limited instances for a small number of clients, the Company provides administrative or warehouse employees to clients to supplement the IT resources we place at those clients.

IT solutions and IT staffing revenue as a percentage of consolidated revenue for the years ended December 31, 2014, 2013 and 2012 is as follows:

	2014		2013		2012
IT solutions	38.0	%	39.3	%	40.8	%
IT staffing	62.0	%	60.7	%	59.2	%
Total	100.0	%	100.0	%	100.0	%

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The Company promotes a majority of its services through four vertical market focus areas: Healthcare (which includes services provided to healthcare providers, health insurers, and life sciences companies), Technology Service Providers, Financial Services, and Energy. The remainder of CTG’s revenue is derived from general markets.

CTG’s revenue by vertical market as a percentage of consolidated revenue for the years ended December 31, 2014, 2013 and 2012 is as follows:

	2014		2013		2012
Healthcare	28.6	%	31.4	%	33.0	%
Technology service providers	26.4	%	28.0	%	30.8	%
Financial services	7.9	%	6.8	%	6.1	%
Energy	6.1	%	6.2	%	6.0	%
General markets	31.0	%	27.6	%	24.1	%
Total	100.0	%	100.0	%	100.0	%

The IT services industry is extremely competitive and characterized by continuous changes in customer requirements and improvements in technologies. Our competition varies significantly by geographic region, as well as by the type of service provided. Many of our competitors are larger than CTG, and have greater financial, technical, sales and marketing resources. In addition, the Company frequently competes with a client’s own internal IT staff. Our industry is being impacted by the growing use of lower-cost offshore delivery capabilities (primarily India and other parts of Asia). There can be no assurance that we will be able to continue to compete successfully with existing or future competitors or that future competition will not have a material adverse effect on our results of operations and financial condition.

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, when the services have been rendered, when the price is determinable, and when collectibility of the amounts due is reasonably assured. For time-and-material contracts, revenue is recognized as hours are incurred and costs are expended. For contracts with periodic billing schedules, primarily monthly, revenue is recognized as services are rendered to the customer. Revenue for fixed-price contracts is recognized per the proportional method of accounting using an input-based approach. On a given project, actual salary and indirect labor costs incurred are measured and compared against the total estimated costs of such items at the completion of the project. Revenue is recognized based upon the percentage-of-completion calculation of total incurred costs to total estimated costs. The Company infrequently works on fixed-price projects that include significant amounts of material or other non-labor related costs which could distort the percent complete within a percentage-of-completion calculation. The Company’s estimate of the total labor costs it expects to incur over the term of the contract is based on the nature of the project and our past experience on similar projects, and includes management judgments and estimates which affect the amount of revenue recognized on fixed-price contracts in any accounting period.

In 2012 and 2013, the Company performed services for a customer under a series of contracts that provided for application customization and integration services, specifically utilizing one of the software tools the Company had developed for internal use. These services were provided under a software-as-a-service model. As the contracts were closely interrelated and dependent on each other, for accounting purposes the contracts were considered to be one arrangement. As the project included significant modification and customization services to transform the previously developed software tool into an expanded tool intended to meet the customer’s requirements, the percentage-of-completion method of contract accounting was utilized for the project.

The Company’s revenue from contracts accounted for under time-and-material, progress billing, and percentage-of-completion methods as a percentage of consolidated revenue for the years ended December 31, 2014, 2013 and 2012 is as follows:

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	2014		2013		2012
Time-and-material	86.2	%	88.8	%	90.3	%
Progress billing	11.2	%	8.8	%	7.9	%
Percentage-of-completion	2.6	%	2.4	%	1.8	%
Total	100.0	%	100.0	%	100.0	%

Results of Operations

The table below sets forth percentage information calculated as a percentage of consolidated revenue as reported on the Company’s consolidated statements of income as included in Item 8, “Financial Statements and Supplementary Data” in this report.

Year Ended December 31,	2014		2013		2012
(percentage of revenue)
Revenue	100.0	%	100.0	%	100.0	%
Direct costs	79.8	%	78.8	%	78.4	%
Selling, general and administrative expenses	15.8	%	15.3	%	15.8	%
Operating income	4.4	%	5.9	%	5.8	%
Interest and other income (expense), net	(0.1	)%	(0.1	)%	0.2	%
Income before income taxes	4.3	%	5.8	%	6.0	%
Provision for income taxes	1.7	%	2.1	%	2.2	%
Net income	2.6	%	3.7	%	3.8	%

2014 as compared with 2013

The Company recorded revenue in 2014 and 2013 as follows:

Year Ended December 31,	% of total		2014		% of total		2013		Year-Over-Year Change
(dollars in thousands)
North America	80.1	%	$	314,924	81.6	%	$	341,924	(7.9	)%
Europe	19.9	%	78,344		18.4	%	77,112		1.6	%
Total	100.0	%	$	393,268	100.0	%	$	419,036	(6.1	)%

Reimbursable expenses billed to customers and included in revenue totaled $8.6 million and $11.8 million in 2014 and 2013, respectively.

On a consolidated basis, IT solutions revenue decreased$15.2 million or 9.2% in 2014 as compared with 2013. Also on a consolidated basis, IT staffing revenue decreased$10.6 million or 4.2% during 2014 as compared with 2013.

In North America, the revenue decrease in 2014 as compared with 2013 was primarily due to a significant reduction in demand from our customers in our IT solutions healthcare business and from several of our larger IT staffing customers. The decrease in IT solutions was driven in part by the sequestration that the U.S. federal government imposed during 2013, which, amongst other cuts, reduced Medicare reimbursements to hospitals and healthcare systems by 2% beginning on April 1, 2013. These cuts reduced revenue for many of our healthcare customers, causing them to reduce their expenses for much of 2014, including previously planned spending on IT projects. Additionally, the implementation date for ICD-10, a diagnostic coding system used for billing in the healthcare industry, was delayed in early 2014 until at least October 1, 2015 from the previous implementation date of October 1, 2014. This delay caused a number of our healthcare clients to defer or cancel spending allocated for 2014 for IT projects that would update their billings systems. The decrease in overall demand in our IT solutions business, and soft demand from several of our larger IT staffing customers, was partially offset by a large data analytics IT solutions project that ended on December 31, 2014. In total, data analytics projects added approximately $6.0 million in revenue and $0.20 per diluted share to net income during 2014, a significant portion of

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which was generated by this one contract. As this project ended in 2014, revenue will be slightly negatively affected, and diluted earnings per share will be significantly reduced in 2015 as compared with 2014 unless we are able to replace this project with a new project(s) that generate similar revenue and earnings for the Company.

The Company’s European operations include Belgium, Luxembourg and the United Kingdom. When considering the year-over-year change in revenue in constant currencies, the revenue from our European operations increased1.2%. This increase in year-over-year revenue was primarily due to a modest increase in demand in the Company’s European IT solutions services. The revenue increase was supported by the modest strength relative to the U.S. dollar of the currencies of Belgium, Luxembourg, and the United Kingdom. In Belgium and Luxembourg, the functional currency is the Euro, while in the United Kingdom the functional currency is the British Pound. In 2014 as compared with 2013, the average value of the Euro increased0.1%, while the average value of the British Pound increased5.3%. A significant portion of the Company's revenue from its European operations is generated in Belgium and Luxembourg. Had there been no change in these exchange rates from 2013 to 2014, total European revenue would have been approximately $0.2 millionlower, or $78.1 million as compared with the $78.3 million reported.

IBM is CTG’s largest customer. CTG provides services to various divisions in many locations. During the 2014 fourth quarter, the NTS Agreement with IBM was renewed for three years until December 31, 2017. As part of the NTS Agreement, the Company also provides its services as a predominant supplier to IBM’s Integrated Technology Services and the Systems and Technology Group business units. This agreement accounted for approximately 88.5% of all of the services provided to IBM by the Company in 2014. In 2014, 2013, and 2012, IBM accounted for $90.5 million or 23.0%, $101.7 million or 24.3%, and $113.8 million or 26.8% of the Company’s consolidated revenue, respectively. In 2012, IBM sold its retail business to another large company. While CTG retained the work, this reduced our revenue from IBM in 2012 by $3.2 million. We expect to continue to derive a significant portion of our revenue from IBM in future years. However, a significant decline or the loss of the revenue from IBM would have a significant negative effect on our operating results.

In January 2014, IBM announced its intention to sell its x86 server division to Lenovo, and the initial closing of that sale occurred on September 29, 2014. A portion of the Company's 2014 and 2013 revenue from IBM was related to the x86 server division. The Company expects to continue to retain a significant share of the revenue derived from the x86 server division despite the transition of the division from IBM to Lenovo.

The Company’s accounts receivable from IBM at December 31, 2014 and 2013 totaled $7.8 million and $11.5 million, respectively. No other customer accounted for more than 10% of the Company’s revenue in 2014, 2013 or 2012.

Direct costs, defined as costs for billable staff including billable out-of-pocket expenses, were 79.8% of consolidated revenue in 2014 and 78.8% of consolidated revenue in 2013. The increase in direct costs as a percentage of revenue in 2014 compared with 2013 was due to a shift in the Company's business mix to a lower percentage of IT solutions services (primarily related to EHR implementations) which has a lower direct cost as a percentage of revenue than our IT staffing services, and pricing pressure from a large customer in our IT staffing business. The increase in direct costs was also due to an increase in fringe benefit costs consisting primarily of medical expenses, resulting from higher utilization of the Company's self-insured medical plan throughout much of 2014. Finally, during the 2014 fourth quarter, the Company recorded an impairment charge totaling approximately $1.5 million to write-off the net book value of its medical fraud, waste, and abuse (FWA) software solution. The impairment charge for the FWA solution reflects nominal sales activity in recent years and the uncertainty of sales for the foreseeable future for this solution given that the target market is focused on other business priorities. The Company recorded the charge in the 2014 fourth quarter as several sales opportunities that had been considered viable throughout 2014 ended late in the year without any sales.

In 2014 and previous years, the Company offered limited healthcare coverage to its hourly employees, which includes nearly half of its total employees. Under the PPACA, the Company will be required to offer expanded healthcare coverage to those employees, or potentially pay financial penalties. Beginning in 2015, the Company is in the process of offering compliant healthcare coverage as required. Although it is difficult to estimate the financial impact of this healthcare coverage, the Company's intention is to pass the additional costs on to the customers where our hourly employees who elect this coverage are engaged. However, in the event the Company is not able to pass some or all of these costs to its customers, the Company’s direct costs as a percentage of revenue would increase.

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Selling, general and administrative (SG&A) expenses were 15.8% of revenue in 2014 as compared with 15.3% of revenue in 2013. The SG&A increase as a percentage of revenue in 2014 as compared with 2013 is primarily due to additional costs of $2.0 million associated with the death in the 2014 fourth quarter of the Company's Chairman and CEO under an employment agreement, the loss of operating leverage from lower revenue recorded in 2014, offset by lower incentive compensation expense in 2014 and disciplined cost management.

Operating income was 4.4% of revenue in 2014 as compared with 5.9% of revenue in 2013. The decrease in operating income year-over-year was primarily due to the change in the business mix to a lower percentage of IT solutions services, higher medical costs, the costs of $2.0 million associated with the death of the Company's Chairman and CEO, and the software impairment charge of $1.5 million, offset by lower incentive compensation in 2014 and the high level of profit from the data analytics project that ended on December 31, 2014. Operating income from North American operations was $14.2 million and $21.8 million in 2014 and 2013, respectively, while European operations generated operating income of $2.9 million in both 2014 and 2013. Operating income in 2014 in the Company’s European operations would have been approximately $0.1 millionhigher if there had been no change in foreign currency exchange rates year-over-year.

The Company’s effective tax rate (ETR) is calculated based upon the full year's operating results, and various tax related items. The Company’s normal ETR ranges from 38% to 40%. The ETR in 2014 was 38.9%, while the 2013 ETR was 35.6%. The 2013 ETR was lower than the normal range primarily due to the recording of approximately $0.7 million of tax credits related to research and development activities, and approximately $0.4 million of tax credits related to the Company’s participation in the Work Opportunity Tax Credit (WOTC) program offered by the federal government to companies who have hired individuals who have traditionally faced barriers to employment. The tax benefit for these two items for both 2013 and 2012 was recorded in 2013 as required under current accounting guidelines, as the legislation extending these tax credits, the American Taxpayer Relief Act of 2012, was not passed by the U.S. federal government until January 2013. The benefit of these tax credits was partially offset by an increase of approximately $0.1 million in the valuation allowance associated with net operating losses incurred by certain foreign subsidiaries.

Net income for 2014 was 2.6% of revenue or $0.64 per diluted share, compared with net income of 3.7% of revenue or $0.92 per diluted share in 2013. In total, data analytics projects added approximately $0.20 per diluted share to net income during 2014, a significant portion of which was generated by one contract which ended on December 31, 2014. Diluted earnings per share were calculated using 16.3 million weighted-average equivalent shares outstanding in 2014 and 17.0 million in 2013. The decrease in shares year-over-year is due to purchases of approximately 0.5 million shares for treasury by the Company during 2014, and a lesser dilutive effect of outstanding equity-based compensation grants in 2014.

2013 as compared with 2012

The Company recorded revenue in 2013 and 2012 as follows:

									Year-over-
Year Ended December 31,	% of total		2013		% of total		2012		Year Change
(dollars in thousands)
North America	81.6	%	$	341,924	83.8	%	$	355,805	(3.9	)%
Europe	18.4	%	77,112		16.2	%	68,610		12.4	%
Total	100.0	%	$	419,036	100.0	%	$	424,415	(1.3	)%

Reimbursable expenses billed to customers and included in revenue totaled $11.8 million and $13.4 million in 2013 and 2012, respectively.

In North America, the revenue decrease in 2013 as compared with 2012 was due to a reduction in demand from our healthcare customers and from our largest IT staffing customer. On a consolidated basis, IT solutions revenue decreased $9.2 million or 5.3% in 2013 as compared with 2012. The decrease was primarily driven by the sequestration that the U.S. federal government imposed during 2013, which, amongst other cuts, reduced Medicare reimbursements to hospitals and healthcare systems by 2% beginning on April 1, 2013. These cuts reduced revenue for many of our healthcare customers, causing them to reduce their expenses for much of 2013, including

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previously planned spending on IT projects. IT staffing revenue increased $3.8 million or 1.5% during 2013 as soft demand from our largest IT staffing customer was offset by strong demand from our other IT staffing customers.

The Company’s European operations include Belgium, Luxembourg and the United Kingdom. When considering the year-over-year change in revenue in constant currencies, 2013 revenue from our European operations increased 9.0% compared with 2012. This strong increase in year-over-year revenue was in part due to strength in the Company’s European IT solutions services, and in part by the January 2013 acquisition of etrinity which added approximately $2.8 million in revenue during the year. The revenue increase was supported by the strength relative to the U.S. dollar of the currencies of Belgium and Luxembourg, and slightly offset by the currency of the United Kingdom. In Belgium and Luxembourg, the functional currency is the Euro, while in the United Kingdom the functional currency is the British Pound. In 2013 as compared with 2012, the average value of the Euro increased 3.3%, while the average value of the British Pound decreased 1.3%. A significant portion of the Company's revenue from its European operations is generated in Belgium and Luxembourg. Had there been no change in these exchange rates from 2012 to 2013, total European revenue would have been approximately $2.3 million lower, or $74.8 million as compared with the $77.1 million reported.

IBM was CTG’s largest customer in 2012 and 2013. Agreements to provide services as a predominant supplier to IBM’s Integrated Technology Services unit and as the sole provider to the Systems and Technology Group business unit accounted for approximately 92.3% of all of the services provided to IBM by the Company in 2013. In 2013, 2012, and 2011, IBM accounted for $101.0 million or 24.1%, $113.5 million or 26.7%, and $116.5 million or 29.4% of the Company’s consolidated revenue, respectively. In 2012, IBM spun its retail business off into another large company. While CTG retained the work, this reduced our revenue from IBM in 2012 by $3.2 million. The Company’s accounts receivable from IBM at December 31, 2013 and 2012 amounted to $11.0 million and $12.6 million, respectively. No other customer accounted for more than 10% of the Company’s revenue in 2013 or 2012.

Direct costs were 78.8% of consolidated revenue in 2013 and 78.4% of consolidated revenue in 2012. The increase in direct costs as a percentage of revenue in 2013 compared with 2012 was due to a shift in the Company's business mix to a higher percentage of IT staffing services, which has a higher direct cost as a percentage of revenue than our IT solutions services.

SG&A expenses were 15.3% of revenue in 2013 as compared with 15.8% of revenue in 2012. The SG&A decrease as a percentage of revenue in 2013 as compared with 2012 is primarily due to lower levels of incentive compensation earned in 2013, and continued disciplined cost management.

Operating income was 5.9% of revenue in 2013 as compared with 5.8% of revenue in 2012. The increase in operating income year-over-year was primarily due to lower SG&A costs as a percentage of revenue. Operating income from North American operations was $21.8 million and $21.3 million in 2013 and 2012, respectively, while European operations generated operating income of $2.9 million and $3.2 million in 2013 and 2012, respectively. Operating income in 2013 would have been approximately $0.1 million lower if there had been no change in foreign currency exchange rates year-over-year.

Interest and other income (expense), net was (0.1)% of revenue in 2013 and 0.2% in 2012. Net other income in 2012 primarily resulted from the receipt of life insurance proceeds totaling approximately $1.3 million for two former executives who passed away during 2012. This income in 2012 was partially offset by bank fees.

The 2013 ETR was 35.6%, and the 2012 ETR was 36.5%. The ETR in 2013 was lower than the normal range primarily due to the recording of approximately $0.7 million of tax credits related to research and development activities, and approximately $0.4 million of tax credits related to the Company's participation in the Work Opportunity Tax Credit (WOTC) program offered by the federal government to companies who have hired individuals who have traditionally faced barriers to employment. The tax benefit for these two items for both 2013 and 2012 was recorded in 2013 as required under the applicable accounting guidelines, as the legislation extending these tax credits, the American Taxpayer Relief Act of 2012, was not passed by the U.S. federal government until January 2013. The benefit of these tax credits was partially offset by an increase of approximately $0.1 million in the valuation allowance associated with net operating losses incurred by certain foreign subsidiaries.

The 2012 ETR was lower than the normal range due to approximately $0.5 million in tax expense related to non-taxable life insurance proceeds received during the year. In addition, in 2012 the Company recorded an additional $0.2 million reduction of state tax expense as a result of the recording of certain favorable provision-to-return adjustments associated with the Company's 2011 income tax returns.

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Net income for 2013 was 3.7% of revenue or $0.92 per diluted share, compared with net income of 3.8% of revenue or $0.96 per diluted share in 2012. Diluted earnings per share were calculated using 17.0 million weighted-average equivalent shares outstanding in 2013 and 16.8 million in 2012. The increase in shares year-over-year was due to additional actual shares outstanding during 2013 as compared with 2012 due to a higher number of stock options exercised by optionees in 2012 and 2013. This increase was partially offset by purchases of approximately 0.4 million and 0.3 million shares for treasury by the Company during 2013 and 2012, respectively.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires the Company’s management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company’s significant accounting policies are included in note 1 to the consolidated financial statements contained in this annual report on Form 10-K under Item 8, “Financial Statements and Supplementary Data.” These policies, along with the underlying assumptions and judgments made by the Company’s management in their application, have a significant impact on the Company’s consolidated financial statements. The Company identifies its most critical accounting policies as those that are the most pervasive and important to the portrayal of the Company’s financial position and results of operations, and that require the most difficult, subjective and/or complex judgments by management regarding estimates about matters that are inherently uncertain. The Company’s critical accounting policies are those related to goodwill valuation, and the valuation allowance for deferred income taxes.

Goodwill Valuation

As of December 31, 2014, goodwill recorded on our Consolidated Balance Sheet totaled $37.4 million, all of which relates to our Healthcare Solutions reporting unit. In connection with our annual goodwill impairment test, we make various assumptions in determining the estimated fair value of the Healthcare Solutions reporting unit. We perform an annual impairment review in the fourth quarter of each year.

In accordance with current accounting guidance for “Intangibles - Goodwill and Other,” we perform goodwill impairment testing at least annually, unless indicators of impairment exist in interim periods. In 2014, the Company used the two-step approach to test goodwill for potential impairment. Step one compares the estimated fair value of a reporting unit with goodwill to its carrying value. If the carrying value exceeds the estimated fair value, step two must be performed. Step two compares the carrying value of the reporting unit to the fair value of all of the assets and liabilities of the reporting unit (including any unrecognized intangibles) as if the reporting unit was acquired in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of its goodwill, an impairment loss is recognized in an amount equal to the excess.

The impairment testing we perform may include estimates of future discounted cash flows, the appraised value of similar companies, or the appraised value of similar transactions from which the goodwill arose. On October 24, 2014, we performed our annual goodwill impairment test in conjunction with an external consultant and estimated the fair value of our Healthcare Solutions reporting unit based on a combination of the income and the market approach. The income approach uses a discounted cash flow (DCF) method which utilizes the present value of cash flows to estimate fair value of the reporting unit. The future cash flows for our Healthcare Solutions reporting unit were projected based on our estimates of future revenue, operating income and other factors such as working capital and capital expenditures. As part of our projections, we took into account expected industry and market conditions for the healthcare industry, as well as trends currently impacting our Healthcare Solutions business unit. The market approach utilizes multiples of revenue and earnings before interest expense, taxes, depreciation and amortization (EBITDA) to estimate the fair value of the reporting unit. The market multiples used for our Healthcare Solutions reporting unit were based on competitor industry data, along with the market multiples for the Company and other factors.

As part of our DCF analysis, we projected revenue and operating profit for 2015 through 2020, and assumed a long-term revenue growth rate of 3.0% in 2021, the “terminal year” for our analysis. We utilized a weighted-average cost of capital (WACC) of 15.0%, which reflected a 200 basis point increase related to additional risk in achieving our projections. Given the ongoing importance of technology solutions in supporting the continuing transformation within the healthcare industry, we believe our modest long-term growth rate and the WACC are reasonable to use for our future cash flow assumptions.

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Under the market approach, we estimated fair value based on comparable companies' market multiples of revenue and EBITDA and factored in a control premium.

Under both the income and market approaches, the estimate of the fair value of the reporting unit as of October 24, 2014 exceeded the carrying value by approximately 40%. Based upon our analysis completed during the annual impairment testing performed in 2013 and 2012, the estimated fair value of the unit exceeded the carrying value by approximately 65% in 2013, and over 100% in 2012.

Finally, we compared our estimates of fair value to the Company’s October 24, 2014 total public market capitalization, which included factoring in the business operations that do not have goodwill, and assessed implied control premiums. Based on the results of this analysis, we concluded that the estimated fair value determined under our approach for the annual goodwill impairment test for our Healthcare Solutions reporting unit was reasonable. Under both the income approach and market approach, the estimated fair value was substantially in excess of the carrying value.

We concluded that the goodwill assigned to the Healthcare Solution reporting unit as of October 24, 2014 was not impaired and that the reporting unit was not at risk of failing step one of the goodwill impairment test as prescribed under the current accounting guidelines. However, the estimates and assumptions on which the Company’s evaluations are based involve judgments and are based on currently available information, any of which could prove wrong or inaccurate when made, or become wrong or inaccurate as a result of subsequent events. In the event the business significantly under achieves its goals for revenue and profit growth in future years, the carrying value for this business unit may not be supportable using a discounted cash flow projection, and an impairment charge may exist.

In 2013 and 2012, the Company utilized the provisions under Accounting Standards Update No. 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment, which allows public entities to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under this process, an entity is no longer required to calculate the fair value of a reporting unit unless the qualitative assessment shows that it is more likely than not that its fair value is less than its carrying amount. There were no factors that arose in 2013 and 2012 that led management to believe the goodwill balance was impaired.

Income Taxes—Valuation Allowances on Deferred Tax Assets

At December 31, 2014, the Company had a total of approximately $7.4 million of current and non-current deferred tax assets, net of deferred tax liabilities, recorded on its consolidated balance sheet. The deferred tax assets, net, primarily consist of deferred compensation, loss carryforwards and state taxes. The changes in deferred tax assets and liabilities from period to period are determined based upon the changes in differences between the basis of assets and liabilities for financial reporting purposes and the basis of assets and liabilities for tax purposes, as measured by the enacted tax rates when these differences are estimated to reverse. The Company has made certain assumptions regarding the timing of the reversal of these assets and liabilities, and whether taxable income in future periods will be sufficient to recognize all or a part of any gross deferred tax asset of the Company.

At December 31, 2014, the Company had deferred tax assets recorded resulting from net operating losses in previous years totaling approximately $1.2 million. The Company has analyzed each jurisdiction’s tax position, including forecasting potential taxable income in future periods and the expiration of the net operating loss carryforwards as applicable, and determined that it is unclear whether all of these deferred tax assets will be realized at any point in the future. Accordingly, at December 31, 2014, the Company had offset a portion of these assets with a valuation allowance totaling approximately $1.1 million, resulting in a net deferred tax asset from net operating loss carryforwards of approximately $0.1 million.

The Company’s deferred tax assets and their potential realizability are evaluated each quarter to determine if any changes should be made to the valuation allowance. Any change in the valuation allowance in the future could result in a change in the Company’s ETR. A 1% change in the ETR in 2014 would have increased or decreased net income by approximately $169,400, or approximately $0.01 per diluted share.

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Other Estimates

The Company has also made a number of estimates and assumptions relating to the reporting of its assets and liabilities and the disclosure of contingent assets and liabilities to prepare the consolidated financial statements pursuant to the rules and regulations of the SEC, the FASB, and other regulatory authorities. Such estimates primarily relate to the valuation of stock options for recording equity-based compensation expense, allowances for doubtful accounts receivable, investment valuation, incurred but not reported healthcare claims, legal matters, and estimates of progress toward completion and direct profit or loss on contracts, as applicable. As future events and their effect on the Company's operating results cannot be determined with precision, actual results could differ from these estimates. Changes in the economic climates in which the Company operates may affect these estimates and will be reflected in the Company’s financial statements in the event they occur.

Financial Condition and Liquidity

Cash provided by operating activities was $6.7 million, $19.0 million and $21.2 million in 2014, 2013 and 2012, respectively. In 2014, net income was $10.4 million, while other non-cash adjustments, primarily consisting of depreciation expense, equity-based compensation, deferred income taxes, deferred compensation, and loss on the disposal of property, equipment and capitalized software totaled $7.7 million. In 2013 and 2012, net income was $15.7 million and $16.2 million, respectively, while the corresponding non-cash adjustments netted to $5.2 million and $5.9 million, respectively. The increase in non-cash adjustments in 2014 as compared with 2013 was primarily due to additional equity-based compensation expense of approximately $0.7 million associated with the death of the company's Chairman and CEO and a loss on impairment of the Company's IT solutions medical fraud, waste and abuse software solution. The decrease in non-cash adjustments in 2013 as compared with 2012 was primarily due to a decrease in deferred compensation of approximately $0.5 million.

Accounts receivable balances increased$2.6 million in 2014 as compared with 2013, decreased $5.2 million in 2013 as compared with 2012, and increased $2.2 million in 2012 as compared with 2011. The increase in the accounts receivable balance in 2014 resulted from an increase in days sales outstanding (DSO). DSO is calculated by dividing accounts receivable obtained from the consolidated balance sheet by average daily revenue for the fourth quarter of the respective year. DSO was 66 days at December 31, 2014, whereas the DSO at December 31, 2013 was 62 days. The increase in DSO was partially offset by a decrease in revenue in the 2014 fourth quarter of approximately 4.4% when compared with the 2013 fourth quarter. The decrease in the accounts receivable balance in 2013 as compared with 2012 resulted from a decrease in revenue in the 2013 fourth quarter of approximately 4.8% when compared with the 2012 fourth quarter. The decrease in revenue was offset by an increase in DSO of one day from 61 days at December 31, 2012. The increase in the accounts receivable balance in 2012 as compared with 2011 resulted from an increase in revenue in the 2012 fourth quarter of approximately 6.9% when compared with the 2011 fourth quarter. This increase in revenue was offset by a decrease in DSO of one day from 62 days at December 31, 2011.

Other assets increased$1.5 million in 2014, increased $1.6 million in 2013, and decreased less than $0.1 million in 2012. The increase in 2014 as compared with 2013 and the increase in 2013 as compared with 2012 were due to the Company electing to not borrow available funds from its life insurance policies which would have offset the increase in the cash surrender value of the policies. Accounts payable decreased$2.4 million in 2014, decreased$2.6 million in 2013, and decreased$0.3 million in 2012. The decrease in 2014 as compared with 2013 and decrease in 2013 as compared with 2012 was primarily due to the timing of certain payments near year-end. Accrued compensation decreased$3.2 million in 2014 primarily due to lower incentive compensation, decreased$1.1 million in 2013 primarily due to lower incentive compensation and headcount, and increased$1.0 million in 2012 primarily due to an increase in employee headcount of about 200 employees from 2011. Income taxes payable decreased$2.3 million in 2014 due to the timing of payments made in 2014 and lower taxable income, decreased$0.2 million in 2013, and decreased $1.1 million in 2012 due to the timing of payments made in 2012 and certain provision-to-return adjustments made when filing the Company's 2011 tax returns.

Investing activities used $3.0 million, $6.7 million, and $2.0 million of cash in 2014, 2013 and 2012, respectively, primarily due to additions to property, equipment and capitalized software of $3.1 million in 2014, $4.0 million in 2013, and $1.9 million in 2012. The Company has no significant commitments for the purchase of property or equipment at December 31, 2014, and does not expect the amount to be spent in 2015 on additions to property, equipment and capitalized software to significantly vary from the amount spent in 2014. Additionally, in 2013, the Company used approximately $2.5 million, net of cash received, to acquire etrinity, an IT services firm providing services in Belgium and the Netherlands.

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Financing activities used$7.8 million of cash in 2014, used$7.1 million of cash in 2013, and used$1.3 million of cash in 2012. The Company recorded $3.2 million, $1.7 million, and $3.8 million during 2014, 2013, and 2012, respectively, from the proceeds from stock option exercises and excess tax benefits from equity-based compensation transactions. These amounts increased in 2014 primarily due to additional excess tax benefits recorded from a higher level of stock option exercises and vestings of restricted stock grants due to the death of the Company's Chairman and CEO. The increase in these balances in 2012 was larger as compared with 2013 due to a significant increase in the Company’s stock price during 2012 which led to a higher level of stock option exercises.

The Company began to pay a dividend in the first quarter of 2013, and increased the payout rate in 2014 as compared with 2013, resulting in cash outflows of $3.4 million in 2014 and $2.3 million in 2013.

During 2014, 2013 and 2012, the Company used $7.4 million, $7.3 million, and $4.6 million, respectively, to purchase approximately 0.5 million, 0.4 million, and 0.3 million shares of its stock for treasury. Approximately 0.6 million, 1.1 million, and 0.5 million shares remained authorized for future purchases under the Company’s share repurchase plan at December 31, 2014, 2013 and 2012, respectively. During October 2013, the Company's Board of Director's authorized 1.0 million additional shares for future stock repurchases under the program. At December 31, 2014, 2013 and 2012, the Company also experienced changes in its cash account overdrafts, which are primarily due to the timing of payments near year-end, of $0.4 million, $0.5 million, and $(0.8) million, respectively.

The Company's revolving credit agreement expired in April 2014 and previously allowed the Company to borrow up to $35.0 million. During April 2014, the Company entered into a new demand line of credit with its banks totaling $40.0 million, and did not have any amount outstanding under this credit agreement at December 31, 2014. Although the Company did not have any borrowings outstanding under its line of credit at December 31, 2013, there was a letter of credit issued as of that date totaling $0.6 million. The Company borrows or repays its debt as needed based upon its working capital obligations, including the timing of the U.S. bi-weekly payroll. The Company did not borrow any funds under its credit agreements during 2014, 2013 or 2012.

Previously under its revolving credit line, the Company was required to meet certain financial covenants in order to maintain borrowings, pay dividends, and make acquisitions. There are no measured financial covenants under the new demand line of credit. The Company was in compliance with its previously required covenants at December 31, 2013 and December 31, 2012.

Of the total cash and cash equivalents reported on the consolidated balance sheet at December 31, 2014 of $40.9 million, approximately $10.7 million is held by the Company’s foreign operations and is considered to be indefinitely reinvested in those operations. During January 2013, the Company used a net $2.5 million held by its foreign operations to purchase etrinity. The Company has not repatriated any of its cash and cash equivalents from its foreign operations in the past five years, and has no intention of doing so in the foreseeable future as the funds are generally required to meet the working capital needs of its foreign operations.

The Company believes existing internally available funds, cash potentially generated from future operations, and borrowings available under the Company's demand line of credit totaling $40.0 million at December 31, 2014 will be sufficient to meet foreseeable working capital and capital expenditure needs, pay dividends (if any are declared), fund stock repurchases (if any are made), and to allow for future internal growth and expansion.

Off-Balance Sheet Arrangements

The Company did not have off-balance sheet arrangements or transactions in 2014, 2013 or 2012 other than guarantees in our European operations which support office leases and performance under government contracts. These guarantees totaled approximately $1.6 million at December 31, 2014. The balance of the guarantees decreased in 2014 due to a renegotiation of the lease agreement associated with the Company's Belgium office, as well as due to a decrease in the value of the Euro as compared with the US dollar.

Quantitative and Qualitative Disclosures about Market Risk

The Company’s primary market risk exposure consists of foreign currency exchange risk associated with the Company’s European operations. See Item 7A, “Quantitative and Qualitative Disclosure about Market Risk” in this report.

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Recently Issued Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," ("ASU 2014-09"). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and footnote disclosures.

29

Contractual Obligations

The Company intends to satisfy its contractual obligations from operating cash flows, and, if necessary, from draws on its demand credit line. A summary of the Company’s contractual obligations at December 31, 2014 is as follows:

(in millions)		Total		Less than 1 year		Years 2-3		Years 4-5		More than 5 years
Long-term debt	A	$	—	$	—	$	—	$	—	$	—
Capital lease obligations	B	—		—		—		—		—
Operating lease obligations	C	12.6		5.0		6.2		1.4		—
Purchase obligations	D	2.9		2.3		0.6		—		—
Deferred compensation benefits (U.S.)	E	6.3		0.7		1.3		1.3		3.0
Deferred compensation benefits Europe	F	2.5		0.2		0.3		0.5		1.5
Other long-term liabilities	G	0.3		—		0.1		0.1		0.1
Total		$	24.6	$	8.2	$	8.5	$	3.3	$	4.6

A A $40.0 million demand credit line (LOC) was entered into in April 2014. The Company uses this LOC to fund its working capital obligations as needed, primarily funding the U.S. bi-weekly payroll. There were no borrowings outstanding under the Agreement at December 31, 2014.

B The Company does not have any capital lease obligations outstanding at December 31, 2014.

C Operating lease obligations relate to the rental of office space, office equipment, and automobiles leased in the Company’s European operations. Total rental expense under operating leases in 2014, 2013 and 2012 was approximately $7.0 million, $7.0 million, and $6.3 million, respectively.

D The Company’s purchase obligations in 2015, 2016 and 2017 total approximately $2.9 million, including $1.2 million for software maintenance, support and related fees, $0.6 million for telecommunications, $0.6 million for recruiting services, $0.4 million for professional organization memberships, and $0.1 million for computer-based training courses.

E The Company is committed for deferred compensation benefits in the U.S. under two plans. The Executive Supplemental Benefit Plan (ESBP) provides certain former key executives with deferred compensation benefits. The ESBP was amended as of November 30, 1994 to freeze benefits for participants at that time. Currently, 16 individuals are receiving benefits under this plan. The ESBP is deemed to be unfunded as the Company has not specifically identified Company assets to be used to discharge the deferred compensation benefit liabilities.

The Company also has a non-qualified defined-contribution deferred compensation plan for certain key executives. Contributions to this plan in 2014 were $0.2 million. The Company anticipates making contributions totaling approximately $0.1 million in 2015 to this plan for amounts earned in 2014.

F The Company retained a contributory defined-benefit plan for its previous employees located in the Netherlands when the Company disposed of its subsidiary, CTG Nederland B.V. This plan was curtailed on January 1, 2003 for additional contributions. The Company does not anticipate making additional contributions to fund the plan in future years.

G The Company has other long-term liabilities including payments for a postretirement benefit plan for several retired employees and their spouses, totaling less than 10 participants.

30

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

The Company’s primary market risk exposure consists of foreign currency exchange risk associated with the Company’s European operations.

During 2014, revenue was affected by the year-over-year foreign currency exchange rate changes of Belgium, Luxembourg, and the United Kingdom, the countries in which the Company’s European subsidiaries operate. In Belgium and Luxembourg, the functional currency is the Euro, while in the United Kingdom the functional currency is the British Pound. Had there been no change in these exchange rates from 2013 to 2014, total European revenue would have been approximately $0.2 millionlower in 2014, or $78.1 million as compared with the $78.3 million reported. Operating income in the Company’s European operations would have been approximately $0.1 millionhigher if there had been no change in foreign currency exchange rates year-over-year.

The Company has historically not used any market rate sensitive instruments to hedge its foreign currency exchange risk as it conducts its foreign operations in local currencies, which generally limits risk. The Company believes the market risk related to intercompany balances in future periods will not have a material effect on its results of operations.

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Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Computer Task Group, Incorporated:

We have audited the accompanying consolidated balance sheets of Computer Task Group, Incorporated and subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2014. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Computer Task Group, Incorporated and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the years in the three‑year period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Computer Task Group, Incorporated’s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)”, and our report dated February 25, 2015 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Buffalo, New York

February 25, 2015

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Consolidated Statements of Income

Year Ended December 31,	2014		2013		2012
(amounts in thousands, except per-share data)
Revenue	$	393,268	$	419,036	$	424,415
Direct costs	313,930		330,327		333,086
Selling, general and administrative expenses	62,186		63,982		66,867
Operating income	17,152		24,727		24,462
Interest and other income	111		58		156
Non-taxable life insurance proceeds	—		—		1,268
Interest and other expense	325		446		441
Income before income taxes	16,938		24,339		25,445
Provision for income taxes	6,588		8,660		9,280
Net income	$	10,350	$	15,679	$	16,165
Net income per share:
Basic	$	0.68	$	1.02	$	1.07
Diluted	$	0.64	$	0.92	$	0.96
Weighted average shares outstanding:
Basic	15,120		15,365		15,172
Diluted	16,260		16,954		16,841
Cash dividend declared per share	$	0.24	$	0.20	$	—

The accompanying notes are an integral part of these consolidated financial statements.

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Consolidated Statements of Comprehensive Income

Year Ended December 31,	2014			2013		2012
(amounts in thousands)
Net Income	$	10,350		$	15,679	$	16,165
Foreign currency adjustment	(2,274		)	717		370
Pension loss adjustment, net of taxes of $(428), $235, and $(396) in 2014, 2013, and 2012, respectively	(4,614		)	1,258		(2,820		)
Other comprehensive income (loss)	(6,888		)	1,975		(2,450		)
Comprehensive income	$	3,462		$	17,654	$	13,715

The accompanying notes are an integral part of these consolidated financial statements.

34

Consolidated Balance Sheets

December 31,	2014			2013
(amounts in thousands, except share balances)
Assets
Current Assets:
Cash and cash equivalents	$	40,862		$	46,227
Accounts receivable, net of allowances of $891 and $1,040 in 2014 and 2013, respectively	67,843			67,422
Prepaid and other current assets	1,817			1,657
Income taxes receivable	1,684			—
Deferred income taxes	1,079			1,113
Total current assets	113,285			116,419
Property, equipment and capitalized software, net	6,793			8,241
Goodwill	37,409			37,638
Deferred income taxes	6,364			6,487
Other assets	6,157			4,750
Investments	788			896
Total assets	$	170,796		$	174,431
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable	$	8,865		$	9,536
Accrued compensation	27,371			31,460
Advance billings on contracts	1,973			2,467
Dividend payable	896			748
Other current liabilities	4,955			4,086
Income taxes payable	—			632
Total current liabilities	44,060			48,929
Deferred compensation benefits	15,480			11,224
Other long-term liabilities	290			436
Total liabilities	59,830			60,589
Shareholders’ Equity:
Common stock, par value $0.01 per share, 150,000,000 shares authorized; 27,017,824 shares issued	270			270
Capital in excess of par value	125,884			122,531
Retained earnings	118,999			112,277
Less: Treasury stock of 8,486,172 and 8,488,404 shares at cost, in 2014 and 2013, respectively	(63,511		)	(57,163		)
Stock Trusts of 3,363,351 shares at cost in both periods	(55,083		)	(55,083		)
Other	—			(285		)
Accumulated other comprehensive loss	(15,593		)	(8,705		)
Total shareholders’ equity	110,966			113,842
Total liabilities and shareholders’ equity	$	170,796		$	174,431

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Cash Flows

Year Ended December 31,	2014			2013			2012
(amounts in thousands)
Cash flow from operating activities:
Net income	$	10,350		$	15,679		$	16,165
Adjustments:
Depreciation and amortization expense	2,974			2,796			2,919
Equity-based compensation expense	3,088			2,647			2,236
Deferred income taxes	204			(350		)	116
Deferred compensation	(103		)	128			600
Loss on disposals of property, equipment and capitalized software	1,546			—			20
Changes in assets and liabilities:
(Increase) decrease in accounts receivable	(2,594		)	5,213			(2,239		)
(Increase) decrease in prepaid and other current assets	(189		)	(154		)	403
(Increase) decrease in other assets	(1,537		)	(1,610		)	50
Decrease in accounts payable	(2,372		)	(2,607		)	(293		)
Increase (decrease) in accrued compensation	(3,230		)	(1,107		)	1,002
Decrease in income taxes payable	(2,261		)	(232		)	(1,067		)
Increase (decrease) in advance billings on contracts	(431		)	(361		)	707
Increase (decrease) in other current liabilities	1,050			(869		)	732
Increase (decrease) in other long-term liabilities	213			(182		)	(195		)
Net cash provided by operating activities	6,708			18,991			21,156
Cash flow from investing activities:
Acquisition of business, net of cash received	—			(2,488		)	—
Additions to property and equipment	(1,410		)	(2,266		)	(1,872		)
Additions to capitalized software	(1,683		)	(1,686		)	—
Deferred compensation plan investments, net	109			(269		)	(113		)
Proceeds from sales of property and equipment	—			—			5
Net cash used in investing activities	(2,984		)	(6,709		)	(1,980		)
Cash flow from financing activities:
Proceeds from stock option plan exercises	1,241			561			1,144
Excess tax benefits from equity-based compensation	1,964			1,119			2,615
Proceeds from Employee Stock Purchase Plan	323			368			294
Change in cash overdraft, net	(424		)	506			(777		)
Dividends paid	(3,422		)	(2,274		)	—
Purchase of stock for treasury	(7,432		)	(7,343		)	(4,591		)
Net cash used in financing activities	(7,750		)	(7,063		)	(1,315		)
Effect of exchange rates on cash and cash equivalents	(1,339		)	394			339
Net increase (decrease) in cash and cash equivalents	(5,365		)	5,613			18,200
Cash and cash equivalents at beginning of year	46,227			40,614			22,414
Cash and cash equivalents at end of year	$	40,862		$	46,227		$	40,614

The accompanying notes are an integral part of these consolidated financial statements.

35

Consolidated Statements of Changes in Shareholders’ Equity

																			Accumulated Other Comprehensive Income (loss)
	Common Stock			Capital in Excess of Par Value			Retained Earnings			Treasury Stock					Stock Trusts										Total Shareholders’ Equity
	Shares	Amount								Shares		Amount			Shares	Amount						Other
(amounts in thousands)
Balances as of December 31, 2011	27,018	$	270	$	115,895		$	83,479		8,541		$	(47,320	)	3,363	$	(55,083	)	$	(8,230	)	$	(206	)	$	88,805
Employee Stock Purchase Plan share issuance	—	—		181			—			(19	)	113			—	—			—			—			294
Stock Option Plan share issuance, net	—	—		(1,310		)	—			(476	)	1,533			—	—			—			—			223
Excess tax benefits from equity-based compensation	—	—		2,615			—			—		—			—	—			—			—			2,615
Restricted stock plan share issuance/forfeiture	—	—		(660		)	—			(70	)	(164		)	—	—			—			—			(824		)
Deferred compensation plan share issuance	—	—		226			—			(26	)	127			—	—			—			(45		)	308
Purchase of stock	—	—		—			—			326		(4,591		)	—	—			—			—			(4,591		)
Equity-based compensation	—	—		2,236			—			—		—			—	—			—			—			2,236
Net income	—	—		—			16,165			—		—			—	—			—			—			16,165
Foreign currency adjustment	—	—		—			—			—		—			—	—			370			—			370
Pension loss adjustment, net of tax	—	—		—			—			—		—			—	—			(2,820		)	—			(2,820		)
Balances as of December 31, 2012	27,018	270		119,183			99,644			8,276		(50,302		)	3,363	(55,083		)	(10,680		)	(251		)	102,781
Employee Stock Purchase Plan share issuance	—	—		248			—			(19	)	120			—	—			—			—			368
Stock Option Plan share issuance, net	—	—		(183		)	—			(110	)	687			—	—			—			—			504
Excess tax benefits from equity-based compensation	—	—		1,119			—			—		—			—	—			—			—			1,119
Restricted stock plan share issuance/forfeiture	—	—		(567		)	—			(52	)	(364		)	—	—			—			—			(931		)
Deferred compensation plan share issuance	—	—		84			—			(6	)	39			—	—			—			(34		)	89
Purchase of stock	—	—		—			—			399		(7,343		)	—	—			—			—			(7,343		)
Equity-based compensation	—	—		2,647			—			—		—			—	—			—			—			2,647
Net income	—	—		—			15,679			—		—			—	—			—			—			15,679
Dividends declared	—	—		—			(3,046		)	—		—			—	—			—			—			(3,046		)
Foreign currency adjustment	—	—		—			—			—		—			—	—			717			—			717
Pension loss adjustment, net of tax	—	—		—			—			—		—			—	—			1,258			—			1,258
Balances as of December 31, 2013	27,018	270		122,531			112,277			8,488		(57,163		)	3,363	(55,083		)	(8,705		)	(285		)	113,842

(continued on next page)

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																			Accumulated Other Comprehensive Income (loss)
	Common Stock			Capital in Excess of Par Value			Retained Earnings			Treasury Stock					Stock Trusts										Total Shareholders’ Equity
	Shares	Amount								Shares		Amount			Shares	Amount						Other
(amounts in thousands)
Balances as of December 31, 2013	27,018	270		122,531			112,277			8,488		(57,163		)	3,363	(55,083		)	(8,705		)	(285		)	113,842
Employee Stock Purchase Plan share issuance	—	—		145			—			(24	)	178			—	—			—			—			323
Stock Option Plan share issuance, net	—	—		(2,082		)	—			(513	)	3,056			—	—			—			—			974
Excess tax benefits from equity-based compensation	—	—		1,964			—			—		—			—	—			—			—			1,964
Restricted stock plan share issuance/forfeiture	—	—		(247		)	—			84		(2,498		)	—	—			—			—			(2,745		)
Deferred compensation plan share issuance	—	—		485			—			(48	)	348			—	—			—			285			1,118
Purchase of stock	—	—		—			—			499		(7,432		)	—	—			—			—			(7,432		)
Equity-based compensation	—	—		3,088			—			—		—			—	—			—			—			3,088
Net income	—	—		—			10,350			—		—			—	—			—			—			10,350
Dividends declared	—	—		—			(3,628		)	—		—			—	—			—			—			(3,628		)
Foreign currency adjustment	—	—		—			—			—		—			—	—			(2,274		)	—			(2,274		)
Pension loss adjustment, net of tax	—	—		—			—			—		—			—	—			(4,614		)	—			(4,614		)
Balances as of December 31, 2014	27,018	$	270	$	125,884		$	118,999		8,486		$	(63,511	)	3,363	$	(55,083	)	$	(15,593	)	$	—		$	110,966

The accompanying notes are an integral part of these consolidated financial statements.

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Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of Computer Task Group, Incorporated, and its subsidiaries (the Company or CTG), located primarily in North America and Europe. There are no unconsolidated entities, or off-balance sheet arrangements other than certain guarantees supporting office leases or the performance under government contracts in the Company's European operations. All inter-company accounts and transactions have been eliminated. Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with U.S. generally accepted accounting principles. Such estimates primarily relate to the valuation of goodwill, valuation allowances for deferred tax assets, actuarial assumptions including discount rates and expected rates of return, as applicable, for the Company’s defined benefit plans, the allowance for doubtful accounts receivable, assumptions underlying stock option valuation, investment valuation, estimates of progress toward completion and direct profit or loss on contracts, legal matters, and other contingencies. The current economic environments in the United States, Canada, and Western Europe where the Company has operations have increased the degree of uncertainty inherent in these estimates and assumptions. Actual results could differ from those estimates.

The Company operates in one industry segment, providing IT services to its clients. These services include IT Solutions and IT and other Staffing. CTG provides these primary services to all of the markets that it serves. The services provided typically encompass the IT business solution life cycle, including phases for planning, developing, implementing, managing, and ultimately maintaining the IT solution. A typical customer is an organization with large, complex information and data processing requirements. In certain limited instances for a small number of clients, the Company provides administrative or warehouse employees to clients to supplement the IT resources we place at those clients. The Company promotes a significant portion of its services through four vertical market focus areas: Healthcare (which includes services provided to healthcare providers, health insurers, and life sciences companies), Technology Service Providers, Financial Services, and Energy. The Company focuses on these four vertical areas as it believes that these areas are either higher growth markets than the general IT services market and the general economy, or are areas that provide greater potential for the Company’s growth due to the size of the vertical market. The remainder of CTG’s revenue is derived from general markets.

CTG’s revenue by vertical market as a percentage of consolidated revenue for the years ended December 31, 2014, 2013 and 2012 is as follows:

	2014		2013		2012
Healthcare	28.6	%	31.4	%	33.0	%
Technology service providers	26.4	%	28.0	%	30.8	%
Financial services	7.9	%	6.8	%	6.1	%
Energy	6.1	%	6.2	%	6.0	%
General markets	31.0	%	27.6	%	24.1	%
Total	100.0	%	100.0	%	100.0	%

Revenue and Cost Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, when the services have been rendered, when the price is determinable, and when collectibility of the amounts due is reasonably assured. For time-and-material contracts, revenue is recognized as hours are incurred and costs are expended. For contracts with periodic billing schedules, primarily monthly, revenue is recognized as services are rendered to the customer. Revenue for fixed-price contracts is recognized per the proportional method of accounting using an input-based approach. On a given project, actual salary and indirect labor costs incurred are measured and compared against the total estimated costs of such items at the completion of the project. Revenue is recognized based upon the percentage-of-completion calculation of total incurred costs to total estimated costs. The Company infrequently works on fixed-price projects that include significant amounts of material or other non-labor related costs which could distort the percent complete within a percentage-of-completion calculation. The Company’s estimate of the total labor costs it expects to incur over the term of the contract is based on the nature of the project

38

and our past experience on similar projects, and includes management judgments and estimates which affect the amount of revenue recognized on fixed-price contracts in any accounting period.

The Company’s revenue from contracts accounted for under time-and-material, progress billing, and percentage-of-completion methods as a percentage of consolidated revenue for the years ended December 31, 2014, 2013 and 2012 is as follows:

	2014		2013		2012
Time-and-material	86.2	%	88.8	%	90.3	%
Progress billing	11.2	%	8.8	%	7.9	%
Percentage-of-completion	2.6	%	2.4	%	1.8	%
Total	100.0	%	100.0	%	100.0	%

The Company includes billable expenses in its accounts as both revenue and direct costs. These billable expenses totaled $8.6 million, $11.8 million, and $13.4 million in 2014, 2013 and 2012, respectively.

Software Revenue Recognition

In 2012 and 2013, the Company performed services for a customer under a series of contracts that provided for application customization and integration services, specifically utilizing one of the software tools the Company had developed for internal use. These services were provided under a software-as-a-service model. As the contracts were closely interrelated and dependent on each other, for accounting purposes the contracts were considered to be one arrangement. As the project included significant modification and customization services to transform the previously developed software tool into an expanded tool intended to meet the customer’s requirements, the percentage-of-completion method of contract accounting was utilized for the project.

Fair Value

Fair value is defined as the exchange price that would be received for an asset or paid for a liability in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants. The Company utilizes a fair value hierarchy for its assets and liabilities, as applicable, based upon three levels of input, which are:

Level 1—quoted prices in active markets for identical assets or liabilities (observable)

Level 2—inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in inactive markets, or other inputs that are observable or can be supported by observable market data for essentially the full term of the asset or liability (observable)

Level 3—unobservable inputs that are supported by little or no market activity, but are significant to determining the fair value of the asset or liability (unobservable)

At December 31, 2014 and 2013, the carrying amounts of the Company’s cash of $40.9 million and $46.2 million, respectively, approximated fair value.

The Company is also allowed to elect an irrevocable option to measure, on a contract by contract basis, specific financial instruments and certain other items that are currently not being measured at fair value. The Company did not elect to apply the fair value provisions of this standard for any specific contracts during the years ended December 31, 2014 or 2013.

Life Insurance Policies

The Company has purchased life insurance on the lives of certain plan participants, all who were former employees, in the non-qualified defined benefit Executive Supplemental Benefit Plan. Those policies have generated cash surrender value, and the Company has taken loans against the policies. At December 31, 2014 and December 31, 2013, these insurance policies had a gross cash surrender value of $27.6 million and $26.2 million, respectively, loans had been taken totaling $23.1 million in both periods, and the net cash surrender value balance of $4.5 million and $3.1 million, respectively, was included on the consolidated balance sheet in “Other Assets” under non-current assets.

39

At December 31, 2014, the total death benefit for the remaining policies was approximately $38.8 million. Currently, upon the death of all of the remaining plan participants, the Company would expect to receive approximately $15.1 million after the payment of outstanding loans and other commitments, and record a gain of approximately $11.2 million.

Taxes Collected from Customers

In instances where the Company collects taxes from its customers for remittance to governmental authorities, primarily in its European operations, revenue and expenses are not presented on a gross basis in the consolidated financial statements as such taxes are recorded in the Company's accounts on a net basis.

Cash and Cash Equivalents, and Cash Overdrafts

For purposes of the statement of cash flows, cash and cash equivalents are defined as cash on hand, demand deposits, and short-term, highly liquid investments with a maturity of three months or less. As the Company does not fund its bank accounts for the checks it has written until the checks are presented to the bank for payment, the change in cash overdraft, net, on the consolidated statements of cash flows represents the increase or decrease in outstanding checks year-over-year.

Trade Accounts Receivable

Trade accounts receivable balances are expected to be received on average approximately 65 days from the date of invoice. Generally, the Company does not work on any projects where amounts due are expected to be received greater than one year from the date of the invoice. Accordingly, the recorded book value for the Company’s accounts receivable equals fair value. Outstanding trade accounts receivable are generally considered past due when they remain unpaid after the contractual due date has passed. An allowance for doubtful accounts receivable (allowance) is established using management’s judgment. Specific identification of balances that are significantly past due and where customer payments have not been recently received are generally added to the allowance unless the Company has direct knowledge that the customer intends to make payment. Additionally, any balances which relate to a customer that has declared bankruptcy or ceased its business operations are added to the allowance at the amount not expected to be received.

Bad debt expense, net of recoveries, was approximately $(31,000), $0.2 million, and $(40,000) in 2014, 2013, and 2012, respectively.

Property, Equipment and Capitalized Software Costs

Property and equipment are generally stated at historical cost less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives of one year to 30 years, and begins after an asset has been put into service. Leasehold improvements are generally depreciated over the shorter of the term of the lease or the useful life of the improvement. The cost of property or equipment sold or otherwise disposed of, along with related accumulated depreciation, is eliminated from the accounts, and the resulting gain or loss, if any, is reflected in current earnings. Maintenance and repairs are charged to expense when incurred, while significant improvements to existing assets are capitalized.

As of December 31, 2014 and December 31, 2013, the Company had capitalized costs relating to software projects developed for internal use. Amortization periods for these projects range from two to five years, and begin when the software, or enhancements thereto, is available for its intended use. Amortization periods are evaluated annually for propriety.

Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When such circumstances exist, the recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value less costs to sell. The Company does not have any long-lived assets that are impaired or that it intends to dispose of at December 31, 2014.

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Leases

The Company is obligated under a number of short and long-term operating leases, primarily for the rental of office space, office equipment, and for automobiles in our European operations. In instances where the Company has negotiated leases that contain rent holidays or escalation clauses, the expense for those leases is recognized monthly on a straight-line basis over the term of the lease.

Goodwill

The Company had a goodwill balance of $37.4 million at December 31, 2014. This balance increased by approximately $2.0 million during 2013 due to the acquisition of etrinity. The balance is evaluated annually as of the Company’s October fiscal month-end (the measurement date), or more frequently if facts and circumstances indicate impairment may exist. This evaluation, as applicable, is based on estimates and assumptions that may be used to analyze the appraised value of similar transactions from which the goodwill arose, the appraised value of similar companies, or estimates of future discounted cash flows. The estimates and assumptions on which the Company’s evaluations are based involve judgments and are based on currently available information, any of which could prove wrong or inaccurate when made, or become wrong or inaccurate as a result of subsequent events.

At the respective measurement dates for 2014, 2013, and 2012, the Company completed its annual valuation of the business to which the Company’s goodwill relates. In 2014, the Company utilized the services of an external valuation consultant, while in 2013 and 2012, the Company utilized the provisions under Accounting Standards Update No. 2011-08, “Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment,” which allow public entities to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under this process, an entity is no longer required to calculate the fair value of a reporting unit unless the qualitative assessment shows that it is more likely than not that its fair value is less than its carrying amount. From its reviews, the Company believes the fair value of the business continues to be substantially in excess of the carrying value of the business. Additionally, there are no other facts or circumstances which arose during 2014, 2013 or 2012 that led management to believe the goodwill balance was impaired.

Other Intangible Assets

The Company recorded approximately $0.4 million of other intangible assets in 2013 resulting from the acquisition of etrinity. Previously, the Company did not have any other intangible assets recorded on its accounts. These intangible assets include customer relationships, trademarks, and non-compete agreements, and are being amortized over periods ranging from two to seven years. Total amortization expense recognized in both 2014 and 2013 was approximately $0.1 million.

Income Taxes

The Company provides for deferred income taxes for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. In assessing the realizability of deferred tax assets, management considers within each tax jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax-planning strategies in making this assessment. The Company recognizes, as applicable, accrued interest and penalties related to unrecognized tax benefits (if any) in tax expense.

Equity-Based Compensation

The Company records the fair value of equity-based compensation expense for all equity-based compensation awards granted subsequent to January 1, 2006. The calculated fair value cost of its equity-based compensation awards is recognized in the Company’s income statement over the period in which an employee or director is required to provide the services for the award. Compensation cost is not recognized for employees or directors that do not render the requisite services. The Company recognized the expense for equity-based compensation in its 2014, 2013, and 2012 statements of income on a straight-line basis based upon awards that are ultimately expected to vest. See note 10, “Equity-Based Compensation.”

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Net Income Per Share

Basic and diluted earnings per share (EPS) for the years ended December 31, 2014, 2013, and 2012 are as follows:

For the year ended	Net Income		Weighted Average Shares	Earnings per Share
(amounts in thousands, except per-share data)
December 31, 2014
Basic EPS	$	10,350	15,120	$	0.68
Dilutive effect of outstanding equity instruments	—		1,140	(0.04		)
Diluted EPS	$	10,350	16,260	$	0.64
December 31, 2013
Basic EPS	$	15,679	15,365	$	1.02
Dilutive effect of outstanding equity instruments	—		1,589	(0.10		)
Diluted EPS	$	15,679	16,954	$	0.92
December 31, 2012
Basic EPS	$	16,165	15,172	$	1.07
Dilutive effect of outstanding equity instruments	—		1,669	(0.11		)
Diluted EPS	$	16,165	16,841	$	0.96

Weighted-average shares represent the average number of issued shares less treasury shares and shares held in the Stock Trusts, and for the basic EPS calculations, unvested restricted stock.

Certain options representing 0.6 million, 0.1 million, and 0.1 million shares of common stock were outstanding at December 31, 2014, 2013, and 2012, respectively, but were not included in the computation of diluted earnings per share as their effect on the computation would have been anti-dilutive.

Accumulated Other Comprehensive Loss

The components that comprised accumulated other comprehensive loss on the consolidated balance sheets at December 31, 2014, 2013, and 2012 are as follows:

	2014			2013			2012
(amounts in thousands)
Foreign currency adjustment	$	(5,811	)	$	(3,537	)	$	(4,254	)
Pension loss adjustment, net of tax of $1,233 in 2014, $805 in 2013, and $1,040 in 2012	(9,782		)	(5,168		)	(6,426		)
	$	(15,593	)	$	(8,705	)	$	(10,680	)

During 2014 and 2013, actuarial losses were amortized to expense as follows:

(amounts in thousands)	2014			2013
Amortization of actuarial losses	$	201		$	277
Income tax	(51		)	(72		)
Net of tax	$	150		$	205

The amortization of actuarial losses is included in determining net periodic pension cost. See note 7, "Deferred Compensation Benefits" for additional information.

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Foreign Currency

The functional currency of the Company’s foreign subsidiaries is the applicable local currency. The translation of the applicable foreign currencies into U.S. dollars is performed for assets and liabilities using current exchange rates in effect at the balance sheet date, for equity accounts using historical exchange rates, and for revenue and expense activity using the applicable month’s average exchange rates. The Company recorded nominal losses in 2014, 2013, and 2012 from foreign currency transactions for balances settled during the year or intended to be settled as of each respective year-end.

Guarantees

The Company has a number of guarantees in place in our European operations which support office leases and performance under government projects. These guarantees totaled approximately $1.6 million and $2.7 million at December 31, 2014 and 2013, respectively, and generally have expiration dates ranging from January 2015 through June 2019. The dollar value of the guarantees decreased at December 31, 2014 as compared with December 31, 2013 due to a renegotiation of the office lease agreement for the Company's Belgium office as well as a decrease in the value of the Euro as compared with the US dollar during 2014.

Acquisition

In January 2013, the Company acquired etrinity, a provider of IT services to the healthcare market in Belgium and the Netherlands for approximately $2.8 million. Founded in 2000, etrinity's 2014, 2013 and 2012 revenue approximated U.S. $2.1 million, $2.8 million, and $3.0 million, respectively. The firm's IT services are targeted to the healthcare provider market and include clinical systems integration and implementation, application management, technology support for medical imaging, training, and technical resources.

Recently Issued Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," ("ASU 2014-09"). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and footnote disclosures.

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2.     Property, Equipment and Capitalized Software

Property, equipment and capitalized software at December 31, 2014 and 2013 are summarized as follows:

December 31,	Useful Life	2014			2013
(amounts in thousands)	(years)
Land	-	$	378		$	378
Buildings	30	4,342			4,342
Equipment	2 - 5	6,904			7,372
Furniture	5 - 10	3,224			3,088
Capitalized software	2 - 5	5,505			5,784
Other software	1 - 5	2,761			2,869
Leasehold improvements	3 - 10	4,521			4,554
		27,635			28,387
Accumulated depreciation and amortization		(20,842		)	(20,146		)
		$	6,793		$	8,241

The Company recorded additions to capitalized software of $1.7 million in both of the years ended December 31, 2014 and December 31, 2013. As of these dates the Company had capitalized a total of $5.5 million and $5.8 million, respectively, solely for software projects developed for internal use. Accumulated amortization for these projects totaled $4.2 million and $3.4 million as of December 31, 2014 and 2013, respectively.

Amortization expense for these projects totaled $1.2 million, $1.2 million, and $1.7 million in 2014, 2013, and 2012, respectively.

During the 2014 fourth quarter, the Company recorded the expense for the impairment of one of its capitalized software projects (fraud, waste and abuse software solution) after determining that it had no net realizable value. The impairment was a result of nominal sales results for this software solution in recent years, and the uncertainty of sales in the foreseeable future. The remaining net asset value, totaling approximately $1.5 million, was expensed to direct costs in the fourth quarter operating results. The Company recorded the charge in the 2014 fourth quarter as several sales opportunities that had been considered viable throughout 2014 ended late in the year without any sales.

3.     Investments

The Company’s investments consist of mutual funds which are part of the Computer Task Group, Incorporated Non-qualified Key Employee Deferred Compensation Plan. At December 31, 2014 and 2013, the Company’s investment balances, which are classified as trading securities, totaled approximately $0.8 million and $0.9 million, respectively, and were measured at fair value. As there is an active trading market for these funds, fair value was determined using Level 1 inputs (see note 1 “Summary of Significant Accounting Policies—Fair Value”). Unrealized gains and losses on these securities are recorded in earnings and were nominal in 2014, 2013, and 2012.

4. Debt

The Company's revolving credit agreement expired in April 2014 and previously allowed the Company to borrow up to $35.0 million. During April 2014, the Company entered into a new, demand line of credit with its banks totaling $40.0 million. At both December 31, 2014 and 2013, there were no amounts outstanding under either of these credit agreements. Although there were no borrowings outstanding, at December 31, 2013 there was a $0.6 million letter of credit issued under the revolving credit agreement. The Company borrows or repays its debt as needed based upon its working capital obligations, including the timing of the U.S. bi-weekly payroll. The Company did not borrow any funds under its credit agreements during 2014, 2013 or 2012.

The Company was previously required to meet certain financial covenants in order to maintain borrowings under its revolving credit line, pay dividends, and make acquisitions. There are no measured financial covenants under the new demand line of credit. The Company was in compliance with its previously required covenants

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at December 31, 2013. The Company incurred commitment fees totaling approximately $0.1 million in both 2013 and 2012 relating to the revolving credit agreement.

5.     Income Taxes

The provision for income taxes for 2014, 2013, and 2012 consists of the following:

	2014			2013			2012
(amounts in thousands)
Domestic and foreign components of income before income taxes are as follows:
Domestic	$	14,885		$	22,313		$	23,028
Foreign	2,053			2,026			2,417
Total income before income taxes	$	16,938		$	24,339		$	25,445
The provision (benefit) for income taxes consists of:
Current tax:
U.S. federal	$	4,023		$	6,133		$	6,778
Foreign	1,505			1,469			1,393
U.S. state and local	831			1,409			993
Total current tax	6,359			9,011			9,164
Deferred tax:
U.S. federal	273			(245		)	55
Foreign	(97		)	(34		)	—
U.S. state and local	53			(72		)	61
Total deferred tax	229			(351		)	116
Total tax	$	6,588		$	8,660		$	9,280
The effective and statutory income tax rate can be reconciled as follows:
Tax at statutory rate of 35% / 34%	$	5,928		$	8,519		$	8,906
State tax, net of federal benefit	578			877			685
Non-taxable income	(520		)	(563		)	(993		)
Non-deductible expenses	803			963			796
Change in estimate primarily related to foreign taxes	134			128			41
Change in estimate primarily related to state taxes and tax reserves	—			(172		)	50
Change in estimate primarily related to U.S. federal taxes	—			—			(157		)
Tax credits	(421		)	(1,117		)	—
Other, net	86			25			(48		)
Total tax	$	6,588		$	8,660		$	9,280
Effective income tax rate	38.9		%	35.6		%	36.5		%

The Company’s effective tax rate (ETR) is calculated based upon the full year's operating results, and various tax related items. The Company’s normal ETR ranges from 38% to 40%. The 2013 ETR was lower than the normal range primarily due to the recording of approximately $0.7 million of tax credits related to research and development activities, and approximately $0.4 million of tax credits related to the Company’s participation in the Work Opportunity Tax Credit (WOTC) program offered by the U.S. federal government to companies who have hired individuals who have traditionally faced barriers to employment. The tax benefit for these two items for both 2013 and 2012 was recorded in 2013 as required under current accounting guidelines, as the legislation extending these tax credits, the American Taxpayer Relief Act of 2012, was not passed by the U.S. federal government until January 2013. The benefit of these tax credits was partially offset by an increase of approximately $0.1 million in the valuation allowance associated with net operating losses incurred by certain foreign subsidiaries. The 2012 ETR was lower than the normal range due to approximately $0.5 million in tax expense related to non-taxable life insurance proceeds received during the year. In addition, in 2012 the Company recorded an additional $0.2 million

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reduction of state tax expense as a result of the recording of certain favorable provision-to-return adjustments associated with the Company’s 2011 income tax returns.

The expected relationship between foreign income before taxes and the foreign provision for income taxes differs from the actual relationship above as a result of certain foreign losses incurred for which no tax benefit has been recognized.  Management has determined that it is unclear whether operations in those jurisdictions will produce taxable income in future years sufficient to realize the benefit of the losses in those jurisdictions.  In addition, certain costs deducted for financial statement purposes are not deductible for tax purposes in some foreign jurisdictions, such as various employee benefit costs, resulting in a substantial increase to foreign taxable income.

The Company’s deferred tax assets and liabilities at December 31, 2014 and 2013 consist of the following:

December 31,	2014			2013
(amounts in thousands)
Assets
Deferred compensation	$	8,358		$	8,005
Loss carryforwards	1,240			1,208
Accruals deductible for tax purposes when paid	452			409
Depreciation	56			57
Allowance for doubtful accounts	300			324
State taxes	767			836
Gross deferred tax assets	11,173			10,839
Deferred tax asset valuation allowance	(3,135		)	(2,170		)
Gross deferred tax assets less valuation allowance	8,038			8,669
Liabilities
Depreciation	(470		)	(965		)
Other	(125		)	(197		)
Gross deferred tax liabilities	(595		)	(1,162		)
Net deferred tax assets	$	7,443		$	7,507
Net deferred tax assets and liabilities are recorded as follows:
Net current assets	$	1,079		$	1,113
Net non-current assets	6,364			6,487
Net non-current liabilities	—			(93		)
Net deferred tax assets	$	7,443		$	7,507

In assessing the realizability of deferred tax assets, management considers, within each taxing jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Factors that may affect the Company’s ability to achieve sufficient forecasted taxable income in future periods may include, but are not limited to, the following: increased competition, a decline in sales or margins, a loss of market share, the availability of qualified professional staff, and a decrease in demand for IT services. Based upon the levels of historical taxable income and projections for future taxable income over the years in which the deferred tax assets are deductible, at December 31, 2014, management believes that it is more likely than not that the Company will realize the benefits, net of the established valuation allowance, of these deferred tax assets in the future.

For tax purposes, the Company has various U.S. state net operating loss carryforwards which began to expire in 2011, and have approximately $0.1 million remaining. These net operating losses have a carryforward period of 5 to 20 years. The Netherlands net operating loss carryforward is approximately $1.4 million, and began to expire in 2014, while in the United Kingdom and Belgium, the net operating loss carryforwards are approximately $3.6 million and $0.2 million, respectively, and have no expiration date.

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At December 31, 2014, the Company has a deferred tax asset before the valuation allowance in the United States resulting from net operating losses in various states of approximately $0.1 million, in the United Kingdom of approximately $0.8 million, in Belgium of approximately $0.1 million, and in the Netherlands of approximately $0.4 million. Management has analyzed each jurisdiction’s tax position, including forecasting potential taxable income in future years, and the expiration of the net operating loss carryforwards as applicable, and determined that it is unclear whether all of the deferred tax asset totaling $1.2 million will be realized at any point in the future. Accordingly, at December 31, 2014, the Company has offset most of the asset with a valuation allowance totaling $1.1 million, resulting in a net deferred tax asset from net operating loss carryforwards of approximately $0.1 million. During 2014, the net increase in the valuation allowance was approximately $1.0 million.

The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to 2010.

A reconciliation of unrecognized tax benefits for 2014 and 2013 is as follows:

(amounts in thousands)
Balance at January 1, 2013	$	173
Additions based on tax positions related to the current year	—
Additions for tax positions of prior years	—
Reductions for lapse of statute of limitations	(24		)
Settlements	(149		)
Balance at December 31, 2013	—
Additions based on tax positions related to the current year	—
Additions for tax positions of prior years	—
Reductions for lapse of statute of limitations	—
Settlements	—
Balance at December 31, 2014	$	—

No significant increase in the total amount of unrecognized tax benefits is expected within the next twelve months. The Company recognizes accrued interest and penalties related to unrecognized tax benefits (if any) in tax expense, as applicable. At December 31, 2014, the Company had no accrual for the payment of interest and penalties.

The Company will establish an unrecognized tax benefit based upon the anticipated outcome of tax positions taken for financial statement purposes compared with positions taken on the Company’s tax returns. The Company records the benefit for unrecognized tax benefits only when it is more likely than not that the position will be sustained upon examination by the taxing authorities. The Company reviews its unrecognized tax benefits on a quarterly basis. Such reviews include consideration of factors such as the cause of the action, the degree of probability of an unfavorable outcome, the Company’s ability to estimate the liability, and the timing of the liability and how it will impact the Company’s other tax attributes. At December 31, 2014, the Company believes it has adequately provided for its tax-related liabilities, and that no reserve for unrecognized tax benefits is necessary.

At December 31, 2014, the undistributed earnings of foreign subsidiaries amounted to approximately $18.4 million. A deferred tax liability for the taxes related to these unremitted accumulated foreign earnings has not been provided for as the determination of the estimated liability is not practicable and because undistributed earnings of the Company’s foreign subsidiaries are considered to be indefinitely reinvested. Upon distribution of these earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries.

In 2014, 2013, and 2012, a total of 543,000, 87,000, and 461,000 shares of common stock, respectively, were issued through the exercise of non-qualified stock options or through the disqualifying disposition of incentive stock options. The tax benefit to the Company from these transactions, which was credited to capital in excess of par value rather than recognized as a reduction of income tax expense, was $2.0 million, $0.5 million, and $2.2 million in 2014, 2013, and 2012, respectively. These tax benefits have also been recognized in the consolidated balance sheets as a reduction of income taxes payable.

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Net income tax payments during 2014, 2013, and 2012 totaled $5.8 million, $7.1 million, and $6.5 million, respectively.

6. Lease Commitments

At December 31, 2014, the Company was obligated under a number of long-term operating leases, some of which contain renewal options with escalation clauses commensurate with local market fluctuations, however, generally limiting the increase to no more than 5.0% of the existing lease payment.

Minimum future obligations under such leases as of December 31, 2014 are summarized as follows:

(amounts in thousands)
2015	$	5,046
2016	3,740
2017	2,459
2018	1,091
2019	269
Later years	—
Minimum future obligations	$	12,605

The operating lease obligations relate to the rental of office space, office equipment, and automobiles leased in Europe. Total rental expense under such operating leases for 2014, 2013, and 2012 was approximately $7.0 million, $7.0 million, and $6.3 million, respectively.

7. Deferred Compensation Benefits

The Company maintains a non-qualified defined-benefit Executive Supplemental Benefit Plan (ESBP) that provides certain former key executives with deferred compensation benefits, based on years of service and base compensation, payable during retirement. The plan was amended as of November 30, 1994, to freeze benefits for the participants in the plan at that time.

Net periodic pension cost for the years ended December 31, 2014, 2013, and 2012 for the ESBP is as follows:

Net Periodic Pension Cost—ESBP	2014		2013		2012
(amounts in thousands)
Interest cost	$	276	$	243	$	338
Amortization of actuarial loss	138		191		279
Net periodic pension cost	$	414	$	434	$	617

The Company also retained a contributory defined-benefit plan for its previous employees located in the Netherlands (NDBP) when the Company disposed of its subsidiary, CTG Nederland, B.V. Benefits paid are a function of a percentage of career average pay. This plan was curtailed for additional contributions in January 2003. Net periodic pension cost was approximately $90,000, $49,000, and $118,000 for the years ending December 31, 2014, 2013 and 2012, respectively.

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The change in benefit obligation and reconciliation of fair value of plan assets for the years ended December 31, 2014 and 2013 for the ESBP and NDBP are as follows:

	ESBP						NDBP
Changes in Benefit Obligation	2014			2013			2014			2013
(amounts in thousands)
Benefit obligation at beginning of period	$	7,499		$	8,405		$	11,635		$	11,913
Interest cost	276			243			358			333
Benefits paid	(737		)	(720		)	(159		)	(141		)
Actuarial loss (gain)	1,236			(429		)	4,896			(939		)
Effect of exchange rate changes	—			—			(1,798		)	469
Benefit obligation at end of period	8,274			7,499			14,932			11,635
Reconciliation of Fair Value of Plan Assets
Fair value of plan assets at beginning of period	—			—			8,752			8,143
Actual return on plan assets	—			—			359			351
Employer contributions	737			720			—			—
Benefits paid	(737		)	(720		)	(159		)	(141		)
Administrative costs	—			—			—			52
Effect of exchange rate changes	—			—			(1,042		)	347
Fair value of plan assets at end of period	—			—			7,910			8,752
Accrued benefit cost	$	8,274		$	7,499		$	7,022		$	2,883
Accrued benefit cost is included in the consolidated balance sheet as follows:
Current liabilities	$	714		$	704		$	—		$	—
Non-current liabilities	$	7,560		$	6,795		$	7,022		$	2,883
Discount rates:
Benefit obligation	3.30		%	3.87		%	1.50		%	3.20		%
Net periodic pension cost	3.87		%	3.02		%	3.20		%	2.80		%
Salary increase rate	—		%	—		%	—		%	—		%
Expected return on plan assets	—		%	—		%	4.00		%	4.00		%

For the ESBP, the accumulated benefit obligation at December 31, 2014 and 2013 was $8.3 million and $7.5 million, respectively. The amounts included in other comprehensive loss relating to the pension loss adjustment in 2014 and 2013, net of tax, were approximately $0.7 million and $(0.4) million, respectively. The discount rate used in 2014 was 3.30%, which is reflective of a series of bonds that are included in the Moody’s Aa long-term corporate bond yield whose cash flow approximates the payments to participants under the ESBP for the remainder of the plan. This rate was a decrease of 57 basis points from the rate used in the prior year and resulted in an increase in the plan’s liabilities of approximately $0.4 million. Benefits paid to participants are funded by the Company as needed, and are expected to total approximately $0.7 million in 2015. The plan is deemed unfunded as the Company has not specifically identified Company assets to be used to discharge the deferred compensation benefit liabilities. The Company has purchased insurance on the lives of certain plan participants in amounts considered sufficient to reimburse the Company for the costs associated with the plan for those participants. The Company does not anticipate making contributions to the plan other than for current year benefit payments as required in 2015 or future years.

For the NDBP, the accumulated benefit obligation at December 31, 2014 and 2013 was $14.9 million and $11.6 million, respectively. The discount rate used in 2014 was 1.50%, which is reflective of a series of corporate bonds whose cash flow approximates the payments to participants under the NDBP for the remainder of the plan. This rate was a decrease of 170 basis points from the rate used in the prior year due to the declining economic environment in Europe, and resulted in an increase in the plan’s liabilities of $4.4 million in 2014.

The assets for the NDBP are held by Aegon, a financial services firm located in the Netherlands. The assets for the plan are included in a general portfolio of government bonds, a portion of which is allocated to the NDBP

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based upon the estimated pension liability associated with the plan. The fair market value of the plan’s assets equals the amount allocated to the NDBP in any given year. The fair value of the assets is determined using a Level 3 methodology (see note 1 “Summary of Significant Accounting Policies—Fair Value”). The calculation of fair value includes determining the present value of the future expected payments under the plan, including using assumptions such as expected market rates of return and discount rates. In 2014 and 2013, the plan investments had a targeted minimum return to the Company of 4.0%, which is consistent with historical returns and the 4.0% return guaranteed to the participants of the plan. The Company, in conjunction with Aegon, intends to maintain the current investment strategy of investing plan assets solely in government bonds in 2015.

Anticipated benefit payments for the ESBP and the NDBP expected to be paid in future years are as follows:

	ESBP		NDBP
(amounts in thousands)
2015	$	725	$	150
2016	670		165
2017	654		186
2018	655		227
2019	657		258
2020 - 2024	2,942		1,528
Total	$	6,303	$	2,514

For the ESBP and the NDBP, the amounts included in accumulated other comprehensive loss, net of tax, that have not yet been recognized as components of net periodic benefit cost as of December 31, 2014 are $2.0 million and $7.8 million, respectively, for unrecognized actuarial losses. The amounts included in accumulated other comprehensive loss, net of tax, that had not yet been recognized as components of net periodic benefit cost as of December 31, 2013 were $1.3 million and $3.9 million, respectively, also for unrecognized actuarial losses.

The amounts recognized in other comprehensive income (loss), net of tax, for 2014, 2013, and 2012, which primarily consist of an actuarial gain (loss), totaled $(4.6) million (primarily due to the decrease in the discount rate for the NDBP), $1.3 million, and $(2.8) million, respectively. Net periodic pension benefit (cost), and the amounts recognized in other comprehensive loss, net of tax, for the ESBP and the NDBP for 2014, 2013, and 2012 totaled $(5.1) million, $0.8 million, and $2.1 million, respectively.

The amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost during 2015 for the ESBP and the NDBP for unrecognized actuarial losses total $0.4 million.

The Company also maintains the Key Employee Non-Qualified Deferred Compensation Plan for certain key executives. Company contributions to this plan, if any, are based on annually defined financial performance objectives. There were $0.2 million in contributions to the plan in 2014 for amounts earned in 2013, $0.3 million in contributions to the plan in 2013 for amounts earned in 2012, and $0.4 million in contributions to the plan in 2012 for amounts earned in 2011. The Company anticipates making contributions in 2015 totaling approximately $0.1 million to this plan for amounts earned in 2014. The investments in the plan are included in the total assets of the Company, and are discussed in note 3, “Investments.” During 2014, 2013 and 2012, some participants in the plan exchanged a portion of their investments for stock units which represent shares of the Company’s common stock. In exchange for the funds received, the Company issued shares out of treasury stock equivalent to the number of share units received by the participants. These shares of common stock are not entitled to any voting rights, but will receive dividends if any are paid. The shares are being held by the Company, and will be released to the participants as prescribed by their payment election under the plan.

The Company maintains the Non-Employee Director Deferred Compensation Plan for its non-employee directors. Cash contributions were made to the plan for certain of these directors totaling approximately $0.4 million in 2014, and less than $0.1 million for both 2013 and 2012.  At the time the contributions were made, one of the non-employee directors elected to exchange his cash contributions to the plan for the purchase of stock units which represent shares of the Company’s common stock. Consistent with the Key Employee Non-Qualified Deferred Compensation Plan, in exchange for funds received, the Company issued stock out of treasury stock equivalent to the number of share units received by the participant.  These shares of common stock are not entitled to any voting rights, but will receive dividends if any are paid.  The shares are being held by the Company, and will be released to the non-employee director as prescribed by their payment election under the plan.

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8. Employee Benefits

401(k) Profit-Sharing Retirement Plan

The Company maintains a contributory 401(k) profit-sharing retirement plan covering substantially all U.S. employees. At its discretion, the Company may match up to 50% of the first 6% of eligible wages contributed by the participants. Company contributions, net of forfeitures, which currently consist of cash and may include the Company’s stock, were funded and charged to operations in the amounts of $2.3 million, $2.4 million, and $2.8 million for 2014, 2013, and 2012, respectively.

Other Retirement Plans

The Company maintains various other defined contribution retirement plans covering substantially all of the remaining European employees. Company contributions charged to operations were $0.2 million in 2014, and $0.1 million in both 2013, and 2012.

Employee Health Insurance

The Company provides various health insurance plans for its employees, including a self-insured plan for its salaried employees in the U.S. In 2014 and previous years, the Company offered limited healthcare coverage to its hourly employees, which includes nearly half of its total employees. Under the PPACA, the Company will be required to offer expanded healthcare coverage to those employees, or potentially pay financial penalties. Beginning in 2015, the Company is in the process of offering compliant healthcare coverage as required.

9. Shareholders’ Equity

Employee Stock Purchase Plan

Under the Company’s First Employee Stock Purchase Plan (ESPP), employees may apply up to 10% of their compensation to purchase the Company’s common stock. Shares are purchased at the closing market price on the business day preceding the date of purchase. At the Company's annual meeting in May 2012, the Company's shareholders approved the addition of 250,000 shares for this plan. As of December 31, 2014, approximately 218,000 shares remain unissued under the ESPP. During 2014, 2013, and 2012, approximately 24,000, 19,000, and 19,000 shares, respectively, were purchased under the ESPP at an average price of $13.35, $19.72, and $15.29 per share, respectively.

Stock Trusts

The Company maintains a Stock Employee Compensation Trust (SECT) to provide funding for existing employee stock plans and benefit programs. Shares of the Company’s common stock are purchased by and released from the SECT by the trustee of the SECT at the request of the compensation committee of the Board of Directors. As of December 31, 2014, all shares remaining in the SECT were unallocated and, therefore, are not considered outstanding for purposes of calculating earnings per share. There were no shares purchased or released by the SECT during 2014, 2013, or 2012, and there were 3.3 million shares in the SECT at each of December 31, 2014, 2013 and 2012.

The Company created an Omnibus Stock Trust (OST) to provide funding for various employee benefit programs. Shares of the Company’s common stock are released from the OST by the trustee at the request of the compensation committee of the Board of Directors. There were no shares purchased or released by the OST during 2014, 2013, or 2012, and there were 59,000 shares in the OST at each of December 31, 2014, 2013 and 2012.

Preferred Stock

At December 31, 2014 and 2013, the Company had 2.5 million shares of par value $0.01 preferred stock authorized for issuance, but none outstanding.

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10.     Equity-Based Compensation

The Company issues stock options and restricted stock in exchange for employee and director services. In accordance with current accounting standards, the calculated cost of its equity-based compensation awards is recognized in the Company’s consolidated statements of income over the period in which an employee or director is required to provide the services for the award. Compensation cost will not be recognized for employees or directors that do not render the requisite services. The Company recognizes the expense for equity-based compensation in its consolidated income statements on a straight-line basis based upon the number of awards that are ultimately expected to vest.

Equity-based compensation expense, the corresponding tax benefit and net equity-based compensation expense for 2014, 2013 and 2012 are as follows:

	2014		2013		2012
(amounts in thousands)
Equity-based compensation expense	$	3,088	$	2,647	$	2,236
Tax benefit	1,098		935		788
Net equity-based compensation expense	$	1,990	$	1,712	$	1,448

On May 12, 2010, the shareholders approved the Company’s 2010 Equity Award Plan (2010 Plan). Under the provisions of the 2010 Plan, stock options, restricted stock, stock appreciation rights, and other awards may be granted or awarded to employees and directors of the Company, as well as non-employees. The compensation committee of the Board of Directors determines the nature, amount, pricing and vesting of the grants or awards. All options and awards remain in effect until the earliest of the expiration, exercise, or surrender date. Options generally become exercisable in four equal installments, typically beginning one year from the date of grant, and expire no more than 15 years from the date of grant. A total of 1,300,000 shares may be granted or awarded under the 2010 plan, 628,000 of which are available for grant as of December 31, 2014.

On April 26, 2000, the shareholders approved the Company’s 2000 Equity Award Plan (Equity Plan). Under the provisions of the Equity Plan, stock options, restricted stock, stock appreciation rights, and other awards could previously be granted or awarded to employees and directors of the Company. The compensation committee of the Board of Directors determined the nature, amount, pricing, and vesting of the grants or awards. All options and awards remain in effect until the earlier of the expiration, exercise, or surrender date. Options generally become exercisable in three or four equal annual installments, typically beginning one year from the date of grant, and expire no more than 15 years from the date of grant. In certain limited instances, options granted at fair market value were expected to vest nine and one-half years from the date of grant. There are no shares or options available for grant under this plan as of December 31, 2014.

On April 24, 1991, the shareholders approved the Company’s 1991 Employee Stock Option Plan (1991 Plan). Under the provisions of the 1991 Plan, options could previously be granted to employees and directors of the Company. The exercise price for options granted under this plan was equal to or greater than the fair market value of the Company’s common stock on the date the option was granted. All options remain in effect until the earlier of the expiration, exercise, or surrender date. There are no shares or options available for grant under this plan as of December 31, 2014.

Under the Company’s 1991 Restricted Stock Plan, a total of 800,000 shares of restricted stock may be granted to certain key employees, 95,000 of which are available for grant as of December 31, 2014.

The Company utilizes the Black-Scholes option-pricing model to estimate the fair value of stock options granted on the date of grant. The per-option weighted-average fair value on the date of grant of stock options granted in 2014, 2013, and 2012 was $5.91, $5.78, and $5.47, respectively.

The fair value of the options at the date of grant was estimated using the following weighted-average assumptions for the years ended December 31, 2014, 2013 and 2012:

	2014		2013		2012
Expected life (years)	4.1		2.7		2.7
Dividend yield	1.4	%	1.0	%	0.0	%
Risk-free interest rate	1.2	%	0.4	%	0.4	%
Expected volatility	48.0	%	44.4	%	61.3	%

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The Company used historical volatility calculated using daily closing prices for its common stock over periods that match the expected term of the options granted to estimate the expected volatility for the grants made in 2012, 2013 and 2014. The risk-free interest rate assumption was based upon U.S. Treasury yields appropriate for the expected term of the Company’s stock options based upon the date of grant. The expected term of the stock options granted was based upon the options expected vesting schedule and historical exercise patterns. The expected dividend yield was based upon the Company’s recent history of beginning to pay dividends in 2013, and the expectation of paying dividends in the foreseeable future.

During 2012, 2013 and 2014, the Company issued restricted stock to certain employees. The stock vests over a period of four years, with 25% of the stock issued vesting one year from the date of grant, and another 25% vesting each year thereafter until the stock is fully vested. The Company is recognizing compensation expense for these shares ratably over the expected term of the restricted stock, or four years. In the event the Company issued stock to its independent directors, the stock vests at retirement. As the directors are eligible for retirement from the Company’s Board of Directors at any point in time, the Company will recognize the expense associated with these shares on the date of grant. The shares of restricted stock issued are considered outstanding, can be voted, and are eligible to receive dividends, if any are paid. However, the restricted shares do not include a non-forfeitable right for the holder to receive dividends and none will be paid in the event the awards do not vest. Accordingly, only vested shares of outstanding restricted stock are included in the calculation of basic earnings per share.

As of December 31, 2014, total remaining stock-based compensation expense for non-vested equity-based compensation was approximately $2.7 million, which is expected to be recognized on a weighted-average basis over the next 15 months. Historically, the Company has issued shares out of treasury stock or the SECT to fulfill the share requirements from stock option exercises and restricted stock grants.

A summary of stock option activity under the 2010 Plan and Equity Plan is as follows:

	2010 Plan Options		Weighted- Average Exercise Price		Equity Plan Options		Weighted- Average Exercise Price
Outstanding at December 31, 2011	265,500		$	12.89	3,175,075		$	4.49
Granted	225,596		$	14.41	—		$	—
Exercised	(20,750	)	$	13.53	(574,353	)	$	3.58
Canceled or forfeited	(9,000	)	$	13.55	(13,175	)	$	5.42
Expired	—		$	—	(3,000	)	$	3.56
Outstanding at December 31, 2012	461,346		$	13.59	2,584,547		$	4.68
Granted	207,000		$	21.03	—		$	—
Exercised	(2,875	)	$	13.50	(107,775	)	$	4.93
Canceled or forfeited	(5,000	)	$	13.18	(2,000	)	$	5.92
Expired	—		$	—	(2,625	)	$	3.45
Outstanding at December 31, 2013	660,471		$	15.93	2,472,147		$	4.67
Granted	107,000		$	16.93	—		$	—
Exercised	(5,000	)	$	13.18	(601,800	)	$	4.23
Canceled or forfeited	(130,625	)	$	17.02	—		$	—
Expired	—		$	—	(1,750	)	$	4.34
Outstanding at December 31, 2014	631,846		$	15.89	1,868,597		$	4.82
Options Exercisable at December 31, 2014	477,722		$	15.56	1,868,597		$	4.82

For 2014, there were 5,000 shares exercised under the 2010 plan, and the intrinsic value of those exercised shares was $18,000. There were 2,875 and 20,750 shares exercised under the 2010 plan in 2013 and 2012, respectively. The intrinsic value of those shares was $17,000 and $55,000, respectively. For 2014, 2013, and 2012, the intrinsic value of the options exercised under the Equity Plan was $5.8 million, $1.6 million, and $7.4 million, respectively. At December 31, 2014, there were 135,060 options remaining outstanding under the 1991 Plan. There were no shares exercised under the 1991 Plan during 2014, 2013, or 2012.

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A summary of restricted stock activity under the Equity Plan and the 1991 Restricted Stock Plan is as follows:

	Equity Plan Restricted Stock		Weighted- Average Fair Value		1991 Restricted Stock Plan		Weighted- Average Fair Value
Outstanding at December 31, 2011	221,500		$	5.01	262,375		$	9.57
Granted	—		$	—	127,500		$	15.04
Released	(40,000	)	$	4.97	(90,626	)	$	8.38
Canceled or forfeited	—		$	—	(7,500	)	$	11.14
Outstanding at December 31, 2012	181,500		$	5.02	291,749		$	12.29
Granted	—		$	—	98,000		$	20.68
Released	(40,000	)	$	4.97	(106,626	)	$	10.77
Canceled or forfeited	—		$	—	(1,600	)	$	18.04
Outstanding at December 31, 2013	141,500		$	5.04	281,523		$	15.75
Granted	—		$	—	125,200		$	16.62
Released	—		$	—	(193,652	)	$	15.26
Canceled or forfeited	—		$	—	(39,838	)	$	16.71
Outstanding at December 31, 2014	141,500		$	5.04	173,233		$	16.70

During 2014, there were 11,700 shares of restricted stock granted under the 2010 Plan, with a weighted-average fair value of $16.93. There were no releases or cancellations of these shares during 2014.

Options Outstanding at December 31, 2014

A summary of stock options that were outstanding at December 31, 2014 for the 2010 Plan and the Equity Plan is as follows:

Range of Exercise Prices:	Number of Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
2010 Plan
$12.16 - $13.75	314,250	$	13.10	9.3	$	—
$15.04 - $16.93	148,096	$	15.84	8.2	—
$20.68 - $21.41	169,500	$	21.11	11.1	—
	631,846	$	15.89	9.5	$	—
Equity Plan
$2.35 - $3.26	292,500	$	3.20	4.0	$	1,852,825
$3.48 - $4.90	1,007,972	$	4.54	3.0	5,032,901
$5.25 - $7.18	568,125	$	6.14	5.3	1,923,534
	1,868,597	$	4.82	3.9	$	8,809,260

At December 31, 2014, there were also 135,060 options remaining outstanding under the 1991 stock option plan, with 127,000 options ranging in prices from $2.88 to $6.00, and 8,000 options with a price of $16.19, all with a remaining average contractual life of 0.5 years, and having an intrinsic value of $0.5 million.

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Options Exercisable at December 31, 2014

A summary of stock options that are exercisable at December 31, 2014 for the 2010 Plan and the Equity Plan is as follows:

Range of Exercise Prices:	Number of Options Exercisable	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
2010 Plan
$12.16 - $13.75	289,750	$	13.16	9.7	$	—
$15.04 - $16.93	62,348	$	15.22	7.9	—
$20.68 - $21.41	125,624	$	21.26	12.2	—
	477,722	$	15.56	10.1	$	—
Equity Plan
$2.35 - $3.26	292,500	$	3.20	4.0	$	1,852,825
$3.48 - $4.90	1,007,972	$	4.54	3.0	5,032,901
$5.25 - $7.18	568,125	$	6.14	5.3	1,923,534
	1,868,597	$	4.82	3.9	$	8,809,260

At December 31, 2014, there were also 135,060 options exercisable under the 1991 stock option plan, with 127,000 options ranging in prices from $2.88 to $6.00, and 8,000 options with a price of $16.19, all with a remaining average contractual life of 0.5 years, and having an intrinsic value of $0.5 million.

The aggregate intrinsic values as calculated in the above charts detailing options that are outstanding and those that are exercisable, respectively, are based upon the Company’s closing stock price on December 31, 2014 of $9.53 per share.

11.     Significant Customer

International Business Machines Corporation (IBM) is the Company’s largest customer. During the 2014 fourth quarter, our contract with IBM was renewed for three years until December 31, 2017. In 2014, 2013, and 2012, IBM accounted for $90.5 million or 23.0%, $101.7 million or 24.3%, and $113.8 million or 26.8% of the Company’s consolidated revenue, respectively. In 2012, IBM sold its retail business to another large company. While CTG retained the work, this reduced our revenue from IBM in 2012 by $3.2 million. The Company’s accounts receivable from IBM at December 31, 2014 and 2013 amounted to $7.8 million and $11.5 million, respectively. No other customer accounted for more than 10% of revenue in 2014, 2013, or 2012.

In January 2014, IBM announced its intention to sell its x86 server division to Lenovo, and the initial closing of that sale occurred on September 29, 2014. A portion of the Company's 2014 and 2013 revenue from IBM was related to the x86 server division. The Company expects to continue to retain a significant share of the revenue derived from the x86 server division despite the transition of the division from IBM to Lenovo.

12. Contingencies

The Company and its subsidiaries are involved from time to time in various legal proceedings and tax audits arising in the ordinary course of business. At December 31, 2014 and 2013, the Company was in discussion with various governmental agencies relative to tax matters, including income, sales and use, and property and franchise taxes. The outcome of these audits and legal proceedings, as applicable, involving the Company and its subsidiaries cannot be predicted with certainty, and the amount of any liability that could arise with respect to such audits cannot be accurately predicted. However, as none of these matters are individually or in the aggregate significant, and as management has recorded an estimate of its potential liability for these audits at December 31, 2014 and 2013, and the Company does not have any open legal proceedings, the Company does not expect the conclusion of these matters to have a material adverse effect on the financial position, results of operations, or cash flows of the Company.

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13.     Enterprise-Wide Disclosures

The Company operates in one industry segment, providing IT services to its clients. The services provided include managed and flexible staffing and the planning, design, implementation, and maintenance of comprehensive IT solutions. All of the Company’s revenue is generated from these services.

CTG’s reportable information is based on geographical areas. The accounting policies of the individual geographical areas are the same as those described in note 1, “Summary of Significant Accounting Policies.”

Financial Information About Geographic Areas	2014		2013		2012
(amounts in thousands)
Revenue from External Customers:
United States	$	314,500	$	341,391	$	355,022
Belgium(1)	44,692		48,428		41,957
Other European countries	33,652		28,684		26,653
Other country	424		533		783
Total foreign revenue	78,768		77,645		69,393
Total revenue	$	393,268	$	419,036	$	424,415
Long-lived Assets:
United States	$	5,759	$	7,169	$	6,102
Europe	1,034		1,072		814
Total long-lived assets	$	6,793	$	8,241	$	6,916
Deferred Tax Assets, Net of Valuation Allowance:
United States	$	7,982	$	8,669	$	8,485
Europe	56		—		—
Total deferred tax assets, net	$	8,038	$	8,669	$	8,485

(1) Revenue for our Belgium operations has been disclosed separately as it exceeds 10% of consolidated revenue for certain of the years presented

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14.     Quarterly Financial Data (Unaudited)

	Quarters
	First			Second			Third			Fourth (1)(2)			Total
(amounts in thousands, except per-share data)
2014
Revenue	$	97,911		$	100,331		$	96,760		$	98,266		$	393,268
Direct costs	76,979			79,133			77,723			80,095			313,930
Gross profit	20,932			21,198			19,037			18,171			79,338
Selling, general, and administrative expenses	15,457			15,728			14,466			16,535			62,186
Operating income	5,475			5,470			4,571			1,636			17,152
Interest and other expense, net	(97		)	(55		)	(33		)	(29		)	(214		)
Income before income taxes	5,378			5,415			4,538			1,607			16,938
Provision for income taxes	2,212			2,182			1,812			382			6,588
Net income	$	3,166		$	3,233		$	2,726		$	1,225		$	10,350
Basic net income per share	$	0.21		$	0.22		$	0.18		$	0.08		$	0.68
Diluted net income per share	$	0.19		$	0.20		$	0.17		$	0.08		$	0.64
Cash dividend declared per share	$	0.06		$	0.06		$	0.06		$	0.06		$	0.24

(1) Included in fourth quarter direct costs is approximately $1.5 million, or $0.9 million, net of tax, or $0.06 basic and diluted net income per share, relating to the disposal of one of the Company's capitalized software projects.

(2) Included in fourth quarter selling, general, and administrative expenses is approximately $2.0 million, or $1.2 million, net of tax, or $0.08 basic and $0.07 diluted net income per share, of costs relating to the death of the Company's Chairman and Chief Executive Officer under his employment agreement.

	Quarters
	First			Second			Third			Fourth			Total
(amounts in thousands, except per-share data)
2013
Revenue	$	108,495		$	107,117		$	100,689		$	102,735		$	419,036
Direct costs	85,896			84,470			79,506			80,455			330,327
Gross profit	22,599			22,647			21,183			22,280			88,709
Selling, general, and administrative expenses	16,417			16,248			15,129			16,188			63,982
Operating income	6,182			6,399			6,054			6,092			24,727
Interest and other income (expense), net	(109		)	(106		)	(91		)	(82		)	(388		)
Income before income taxes	6,073			6,293			5,963			6,010			24,339
Provision for income taxes	2,016			2,238			2,100			2,306			8,660
Net income	$	4,057		$	4,055		$	3,863		$	3,704		$	15,679
Basic net income per share	$	0.26		$	0.26		$	0.25		$	0.24		$	1.02
Diluted net income per share	$	0.24		$	0.24		$	0.23		$	0.22		$	0.92
Cash dividend declared per share	$	0.05		$	0.05		$	0.05		$	0.05		$	0.20

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management has evaluated, under the supervision and with the participation of the Company’s Interim Chief Executive Officer and Interim Chief Financial Officer, the effectiveness of the design and operations of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this annual report. Based on that evaluation, the Company’s Interim Chief Executive Officer and Interim Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this annual report.

(a) Management’s Annual Report on Internal Control Over Financial Reporting

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

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Further, because of changes in conditions, effectiveness of internal control over financial reporting may deteriorate.

Management of the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the Internal Control-Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, the Company’s management did not identify any control deficiencies it considered to be material weaknesses under the rules specified by the Public Company Accounting Oversight Board’s Auditing Standard No. 5, and therefore concluded that its internal control over financial reporting was effective as of December 31, 2014.

Our independent registered public accounting firm has issued an attestation report on the Company’s effectiveness of internal control over financial reporting. Their report appears in Item 9A(b), Attestation Report of the Registered Public Accounting Firm.

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(b) Attestation Report of the Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Computer Task Group, Incorporated:

We have audited Computer Task Group, Incorporated’s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)”. Computer Task Group, Incorporated’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting (Item 9A(a)). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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

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

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

In our opinion, Computer Task Group, Incorporated maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)”.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Computer Task Group, Incorporated as of December 31, 2014 and 2013, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2014, and our report dated February 25, 2015 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Buffalo, New York

February 25, 2015

59

(c) Changes in Internal Control Over Financial Reporting

The Company reviews, revises and improves the effectiveness of the Company’s internal controls on a continuous basis. The Company’s management, including its Interim Chief Executive Officer and Interim Chief Financial Officer, evaluated the effectiveness of the Company’s internal control over financial reporting as of the end of the period covered by this annual report. There were no changes in the Company’s internal control over financial reporting that occurred during the Company's last fiscal quarter, which ended on December 31, 2014, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

In October 2014, the Company entered into an employment agreement (the “Employment Agreement”) with Mr. Brendan M. Harrington, the Company’s Interim Chief Executive Officer. Pursuant to the Employment Agreement:

• Mr. Harrington's compensation will be reviewed and adjusted annually by the Compensation Committee as appropriate;

• either party may terminate the employment relationship upon sixty (60) days prior written notice to the other;

• competitive activities, and other activities adverse to the Company's interests, are prohibited during the term of the employment relationship and for a one (1) year period after termination thereof.

The Employment Agreement also provides severance compensation in the event of termination. In the event of termination by Mr. Harrington for Good Reason (as defined in the Employment Agreement), or by the Company other than for Cause (as defined in the Employment Agreement), or if he dies or becomes disabled, Mr. Harrington will receive a lump sum cash payment equal to the average annual total cash compensation paid to him in the three (3) years leading up to the actual date of termination. Mr. Harrington will also continue to receive medical and dental benefits for a period of twelve (12) months. In the event Mr. Harrington remains unemployed following the six (6) month anniversary of the date of termination, he will receive a second lump sum cash payment equal to fifty percent (50%) of the initial lump sum payment received.

On November 11, 2014, the Company entered into a new change in control agreement with Mr. Harrington. The agreement provides that upon the occurrence of a change in control, Mr. Harrington will become fully vested in and entitled to exercise immediately all stock related awards he has been granted under any plans or agreements of the Company. The agreement goes on to provide that upon the termination of Mr. Harrington’s employment (a) without cause by the Company or by him with good reason within 6 months before a change in control or between 6 months and 24 months following a change in control or (b) by him for any reason within 6 months after a change in control, Mr. Harrington will receive a lump sum payment equal to 2.99 times his full salary and 2.99 times his highest annual Incentive over the last three years as well as an additional lump sum to cover fringe benefits. A change in control will occur if (1) the Company’s stockholders approve (a) the dissolution or liquidation of the Company, (b) the merger or consolidation or other reorganization of the Company with any other entity other than a subsidiary of the Company, or (c) the sale of all or substantially all of the Company’s business or assets or (2) any person other than the Company or its subsidiaries or employee benefit plans becomes the beneficial owner of more than 20% of the combined voting power of the Company’s then outstanding securities or (3) during any period not longer than two consecutive years, individuals who at the beginning of such period constituted the Board cease to constitute at least a majority thereof, unless the election of each new Board member was approved by a vote of at least three-quarters of the Board members then still in office who were Board members at the beginning of such period.

60

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required in response to this item is incorporated herein by reference to the information set forth under “Election of Directors,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “The Board of Directors and Committees” in relation to the “Audit Committee” and “Nominating and Corporate Governance Committee and Director Nomination Process” subsections, and “Corporate Governance and Website Information” in the Company’s Proxy Statement for the Annual Meeting of Stockholders scheduled to be held on May 6, 2015 (Proxy Statement) to be filed with the SEC not later than 120 days after the end of the year ended December 31, 2014, except insofar as information with respect to executive officers is presented in Part I, Item 1 of this report pursuant to General Instruction G(3) of Form 10-K.

Item 11. Executive Compensation

The information required in response to this item is incorporated herein by reference to the information under the caption “The Board of Directors and Committees” and “Compensation Discussion and Analysis” (including all compensation tables) presented in the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Except as set forth below, the information required in response to this item is incorporated herein by reference to the information under the caption “Security Ownership of the Company’s Common Shares by Certain Beneficial Owners and by Management” presented in the Proxy Statement.

The following table sets forth, as of December 31, 2014, certain information related to the Company’s compensation plans under which shares of its common stock are authorized for issuance:

	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities listed in column (a)) (c)
Equity compensation plans approved by security holders:
2010 Equity Award Plan	631,846	$	15.89	628,000
2000 Equity Award Plan	1,868,597	$	4.82	—
1991 Employee Stock Option Plan	135,060	$	6.56	—
1991 Restricted Stock Plan	—	$	—	95,000
Equity compensation plans not approved by security holders:
None	—	$	—	—
	2,635,503	$	7.56	723,000

At December 31, 2014, the Company did not have any outstanding rights or warrants. All outstanding awards are either stock options or restricted stock.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required in response to this item is incorporated herein by reference to the information under the caption “Certain Relationships and Related Person Transactions,” "Audit Committee Review of Related Person Transactions," "The Board of Directors and Committees," and “Director Independence and Executive Sessions” presented in the Proxy Statement.

Item 14.     Principal Accounting Fees and Services

The information required in response to this item is incorporated herein by reference to the information under the caption “Appointment of Auditors and Fees” presented in the Proxy Statement.

61

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)	Index to Consolidated Financial Statements and Financial Statement Schedule
(1)	Financial Statements:
	Report of Independent Registered Public Accounting Firm	32
	Consolidated Statements of Income	33
	Consolidated Statements of Comprehensive Income	34
	Consolidated Balance Sheets	35
	Consolidated Statements of Cash Flows	35
	Consolidated Statements of Changes in Shareholders’ Equity	36
	Notes to Consolidated Financial Statements	38
(2)	Index to Consolidated Financial Statement Schedule
	Report of Independent Registered Public Accounting Firm on Financial Statement Schedule	63
	Financial statement schedule:
	Schedule II—Valuation and Qualifying Accounts	64
(b)	Exhibits
	The Exhibits to this annual report on Form 10-K are listed on the attached Exhibit Index

62

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Computer Task Group, Incorporated:

Under date of February 25, 2015, we reported on the consolidated balance sheets of Computer Task Group, Incorporated and subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2014, as contained in the annual report on Form 10-K for the year 2014. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule as listed in the accompanying index. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.

In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

Buffalo, New York

February 25, 2015

63

COMPUTER TASK GROUP, INCORPORATED

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

(amounts in thousands)

	Balance at January 1		Additions		Deductions			Balance at December 31
2014
Accounts deducted from accounts receivable -
Allowance for doubtful accounts	$	1,040	55	A	(204	)	A	$	891
Accounts deducted from deferred tax assets -
Deferred tax asset valuation allowance	$	2,170	1,233	B	(268	)	B	$	3,135
2013
Accounts deducted from accounts receivable -
Allowance for doubtful accounts	$	862	178	A	—		A	$	1,040
Accounts deducted from deferred tax assets -
Deferred tax asset valuation allowance	$	2,269	233	B	(332	)	B	$	2,170
2012
Accounts deducted from accounts receivable -
Allowance for doubtful accounts	$	965	326	A	(429	)	A	$	862
Accounts deducted from deferred tax assets -
Deferred tax asset valuation allowance	$	1,404	1,000	B	(135	)	B	$	2,269

A These balances primarily reflect additions to the allowance charged to expense resulting from the normal course of business, less deductions for recovery of accounts that were previously reserved, and additions and deductions for foreign currency translation

B These balances primarily reflect additions for an increase in the valuation reserve associated with certain deferred tax assets related to the Netherlands defined-benefit plan

64

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

COMPUTER TASK GROUP, INCORPORATED
By	/s/ Brendan M. Harrington
	Brendan M. Harrington
	Interim Chief Executive Officer

Dated: February 25, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	Signature	Title	Date
(i)	Principal Executive Officer	Interim Chief Executive Officer	February 25, 2015
	/s/ Brendan M. Harrington
	Brendan M. Harrington
(ii)	Principal Accounting and Principal Financial Officer	Interim Chief Financial Officer	February 25, 2015
	/s/ John M. Laubacker
	John M. Laubacker
(iii)	Directors
	/s/ Thomas E. Baker	Director	February 25, 2015
	Thomas E. Baker
	/s/ Randall L. Clark	Director	February 25, 2015
	Randall L. Clark
	/s/ David H. Klein	Director	February 25, 2015
	David H. Klein
	/s/ William D. McGuire	Director	February 25, 2015
	William D. McGuire
	/s/ Daniel J. Sullivan	Chairman of the Board of Directors	February 25, 2015
	Daniel J. Sullivan

65

EXHIBIT INDEX

Exhibit		Description	Reference
3.	(a)	Restated Certificate of Incorporation of Registrant	(1)
	(b)	Restated By-laws of Registrant	(2)
4.	(a)	Restated Certificate of Incorporation of Registrant	(1)
	(b)	Restated By-laws of Registrant	(2)
	(c)	Specimen Common Stock Certificate	(1)
10.	(a)	Stock Employee Compensation Trust Agreement, dated May 3, 1994, between Registrant and Thomas R. Beecher, Jr., as trustee	(3) +
	(b)	Demand Grid Note, dated October 29, 1997, between Registrant and Computer Task Group, Incorporated Stock Employee Compensation Trust	(3) +
	(c)	Pledge Agreement, between the Registrant and Thomas R. Beecher, Jr., as Trustee of the Computer Task Group, Incorporated Stock Employee Compensation Trust	(3) +
	(d)	2014 Key Employee Compensation Plans	(4) +
	(e)	Computer Task Group, Incorporated Non-Qualified Key Employee Deferred Compensation Plan 2007 Restatement	(3) +
	(f)	Computer Task Group, Incorporated 1991 Restricted Stock Plan	(1) +
	(g)	Computer Task Group, Incorporated 2000 Equity Award Plan	(5) +
	(h)	Computer Task Group, Incorporated Executive Supplemental Benefit Plan 1997 Restatement	(1) +
	(i)	First Amendment to the Computer Task Group, Incorporated Executive Supplemental Benefit Plan 1997 Restatement	(1) +
	(j)	Compensation Arrangements for the Named Executive Officers	# +
	(k)	Change in Control Agreement, dated January 1, 2009, between the Registrant and James R. Boldt, as amended and restated	(6) +
	(l)	Employment Agreement, dated January 1, 2009, between the Registrant and James R. Boldt, as amended and restated	(6) +
	(m)	Officer Change in Control Agreement	(6) +
	#	Filed herewith
	+	Management contract or compensatory plan or arrangement
	(1)	Filed as an Exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007, and incorporated herein by reference (file No. 001-09410 filed on March 10, 2008)
	(2)	Filed as an Exhibit to the Registrant’s Form 8-K on February 20, 2015, and incorporated herein by reference (file No. 001-09410)
	(3)	Filed as an Exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2006, and incorporated herein by reference (file No. 001-09410 filed on March 7, 2007)
	(4)	Included in the Registrant’s definitive Proxy Statement dated April 2015 under the caption entitled “Baseline Compensation – Performance-Based Incentives - Annual Cash Incentive Compensation,” and incorporated herein by reference
	(5)	Filed as an Exhibit to the Registrant’s Form 8-K on November 18, 2008, and incorporated herein by reference (file No. 001-09410)
	(6)	Filed as an Exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008, and incorporated herein by reference (file No. 001-09410 filed on February 26, 2009)

66

EXHIBIT INDEX (Continued)

Exhibit		Description	Reference
	(n)	Computer Task Group, Incorporated First Employee Stock Purchase Plan (Ninth Amendment and Restatement)	(7) +
	(o)	Computer Task Group, Incorporated 1991 Employee Stock Option Plan	(8) +
	(p)	Computer Task Group, Incorporated 2010 Equity Award Plan	(9) +
	(q)	Computer Task Group, Incorporated Non-Employee Director Deferred Compensation Plan	(10) +
	(r)	Loan Agreement, dated as of May 1, 2014, among Computer Task Group, Incorporated, Manufacturers and Traders Trust Company and KeyBank National Association.	(11) +
	(s)	Employment Agreement, dated October 2014, between the Registrant and Brendan M. Harrington	#
	(t)	Change in Control Agreement, dated November 11, 2014, between the Registrant and Brendan M. Harrington	#
14.		Code of Ethics	(12)
21.		Subsidiaries of the Registrant	#
23.		Consent of Experts and Counsel	#
31.	(a)	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	#
	(b)	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	#
32.		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	##
101.INS		XBRL Instance Document	#
101.SCH		XBRL Taxonomy Extension Schema Document	#
101.CAL		XBRL Taxonomy Extension Calculation Linkbase	#
101.LAB		XBRL Taxonomy Extension Label Linkbase	#
101.PRE		XBRL Taxonomy Extension Presentation Linkbase	#
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document	#
	#	Filed herewith
	##	Furnished herewith
	(7)	Filed as Exhibit A to the Registrant's Proxy Statement on Schedule 14A dated April 4, 2012, for its Annual Meeting of Shareholders held on May 9, 2012 (file No. 001-09410 filed on April 4, 2012)
	(8)	Filed as an Exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1996, and incorporated herein by reference (file No. 001-09410 filed on March 28,1997)
	(9)	Filed as Appendix B to the Registrant's Proxy Statement on Schedule 14A, dated April 2, 2010, for its Annual Meeting of Shareholders held on May 12, 2010 (file No. 001-09410 filed on March 31, 2010)
	(10)	Filed as Appendix A to the Registrant's Proxy Statement on Schedule 14A, dated April 2, 2010, for its Annual Meeting of Shareholders held on May 12, 2010 (file No. 001-09410 filed on March 31, 2010)
	(11)	Filed as an Exhibit to the Registrant’s Form 8-K on May 2, 2014, and incorporated herein by reference (file No. 001-09410)
	(12)	Included at the internet address specified in the Registrant’s definitive Proxy Statement dated April 2015 under the caption entitled “Corporate Governance and Website Information,” and incorporated herein by reference

67

EX-10.J

EXHIBIT 10 (j)

COMPUTER TASK GROUP, INCORPORATED

COMPENSATION ARRANGEMENTS FOR THE NAMED EXECUTIVE OFFICERS

Set forth below is a summary of the annual and incentive compensation paid by Computer Task Group, Incorporated (the Company) to its named executive officers (defined in Regulation S-K Item 402(a)(3)) in their current positions as of the date of the filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2014. All of the Company's executive officers are at-will employees whose compensation and employment status may be changed at any time at the discretion of the Company's Board of Directors, subject only to the terms of employment agreements, as applicable, between the Company and these executive officers.

Effective January 1, 2015, the named executive officers are scheduled to receive the following annual base salaries in their current positions:

	Current Annual Salary
Brendan M. Harrington Interim Chief Executive Officer	$	400,000
John M. Laubacker Interim Chief Financial Officer	$	215,000
Filip J.L. Gyde (1) Interim Executive Vice President of Operations	$	408,700
Arthur W. Crumlish Senior Vice President, General Manager, Strategic Staffing Solutions	$	277,000
Ted Reynolds Senior Vice President, Solutions	$	301,000

Executive officers are also eligible to receive incentive compensation each year primarily based upon the achievement of certain targets. These targets may include specific levels of revenue growth, gross profit, operating income or earnings per share. Bonuses were awarded to the named executives for 2014 as follows:

	2014 Bonus
Brendan M. Harrington	$	44,643
John M. Laubacker	$	17,061
Filip J.L. Gyde	$	97,596
Arthur W. Crumlish	$	73,085
Ted Reynolds	$	93,754

(1) Mr. Gyde is paid in Euros. This amount represents his base pay of 336,600 Euros translated into U.S. dollars at the January 1, 2015 exchange rate.

EX-10.S

EXHIBIT 10 (s)

EMPLOYMENT AGREEMENT

THIS AGREEMENT, effective as of November 11, 2014 is between Computer Task Group, Incorporated, a New York corporation with its executive offices at 800 Delaware Avenue, Buffalo, New York 14209 (the "Corporation"), and Brendan M. Harrington, an individual residing at 46 Rankin Road, Snyder, New York 14226 (the "Executive").

RECITALS:

WHEREAS, the Executive has agreed to accept the position of Chief Executive Officer of the Corporation on a temporary basis until such time as the Board of Directors appoints another individual as the permanent Chief Executive Officer of the Corporation; and

WHEREAS, the Corporation and the Executive desire to set forth the terms upon which the Executive will be employed by the Corporation.

NOW, THEREFORE, in consideration of the promises and of the covenants contained in this Agreement, the Corporation and the Executive agree as follows:

1. DEFINITIONS. The following definitions apply for purposes of this Agreement.

(a) "Board of Directors" or "Board" means the Board of Directors of the Corporation.

(b) "Cause" means a finding by the Board of Directors that any of following conditions exist:

(i) The Executive's willful and continued failure to substantially perform his material duties under this Agreement (other than as a result of his Disability) if such failure is not substantially cured within 15 days after written notice is provided to the Executive.

(ii) The Executive's willful breach in a substantive and material manner of his fiduciary duty or duty of loyalty to the Corporation which is injurious to the financial condition in more than a de minimus manner or the business reputation of the Corporation.

(iii) The Executive's indictment for a felony offense under the laws of the United States or any state thereof (other than for a violation of motor or vehicular laws).

(iv) Material breach by the Executive of any restrictive covenant contained in Sections 10 and 11 of this Agreement. For purposes of this definition, no act or failure to act will be deemed "willful" unless effected by the Executive not in good faith and without a reasonable belief that his action or failure to act was in or not opposed to the Corporation's best interests.

(c) “Change in Control Agreement” means a certain change in control agreement between the Corporation and the Executive which is effective as of November 11, 2014, as such agreement may be amended.

(d) "Code" means the Internal Revenue Code of 1986, as amended.

(e) "Corporation" means Computer Task Group, Incorporated, or any successor organization.

(f) "Disability" means a disability that has existed for a period of 6 consecutive months and because of which the Executive is physically or mentally unable to substantially perform his regular duties as Chief Executive Officer of the Corporation, as the case may be.

(g) "Effective Date" means November 11, 2014.

(i) "Good Reason" means the occurrence of one or more of the following events, provided that the Executive shall give the Corporation a written notice, within 90 days following the initial occurrence of the event, describing the

event that the Executive claims to be Good Reason and stating the Executive’s intention to terminate employment unless the Corporation takes appropriate corrective action:

(i) A material diminution in the Executive's responsibilities, duties, title, reporting responsibilities within the business organization, status, role or authority.

(ii) A material reduction by the Corporation in the Executive's annual base salary as in effect from time to time.

(iii) A material reduction by the Corporation in the aggregate value of benefits provided to the Executive, as in effect from time to time except where such reduction is applied uniformly to all officers or all employees of the Corporation, as applicable. "Benefits" includes all profit sharing, 401(k), retirement, pension, health, medical, dental, disability, insurance, automobile, severance, vacation, leave, reimbursement, and similar benefits.

(iv) A material breach by the Corporation of any provision of this Agreement or of any other agreement requiring the payment of compensation to the Executive.

(v) Removal from, or failure to re-elect, the Executive to the position of Chief Executive Officer.

(vi) A requirement, in the Executive's reasonable judgment, that the services required to be performed by the Executive would necessitate the Executive moving his residence at least 50 miles from the Buffalo, New York area.

The Corporation shall have 30 days following the date of receipt of the written notice from the Executive stating his claim of Good Reason in which to take appropriate corrective action. If the Corporation does not correct the Good Reason condition, the Executive’s Good Reason termination will be deemed to have occurred on the day following the 30-day period. For purposes of this Agreement, the term “Good Reason” shall not include the voluntary resignation by the Executive from the position of Chief Executive Officer or the termination of the Executive pursuant to paragraph 7(a) below from the position of Chief Executive Officer upon the appointment by the Board of Directors of a different individual as Chief Executive Officer of the Corporation.

(j ) “Regulation” means Treasury Regulations promulgated under Code Section 409A as amended.

(k) “Specified Employee” has the meaning provided in Regulation §1.409A-1(i). The default rules for said definition shall apply unless the Corporation has adopted other rules in a duly adopted instrument applicable with respect to all nonqualified deferred compensation plans of the Corporation.

(l) “Termination of Employment” has the meaning provided in Regulation §1.409A-1(h)(1)(ii). If the Executive provides services as an independent contractor, the Executive will not be considered to have a Termination of Employment until the Executive has ceased providing services both as an employee and as an independent contractor. The preceding sentence shall not apply with respect to a nonqualified deferred compensation plan in which the Executive participates as an employee to the extent that the Executive’s sole activity as an independent contractor with respect to the Corporation is to serve on the Corporation’s Board of Directors.

2. EMPLOYMENT; DUTIES. Subject to the terms and conditions set forth in this Agreement, the Corporation hereby agrees to employ the Executive, and the Executive hereby will assume the positions of Chief Executive Officer of the Corporation, in full charge of the operation of its business and affairs, subject to the provisions of the by-laws of the Corporation in respect of the duties and responsibilities assigned from time to time by the Board of Directors to the Chief Executive Officer, and subject also at all times to the control of the Board of Directors. Subject to the yearly election by the Board of Directors in the exercise of its judgment, it is contemplated that the Executive will continue to be elected to the position of Chief Executive Officer. The Executive will perform those duties and discharge those responsibilities as are commensurate with his position, and as the Board of Directors may from time to time reasonably direct, that are commensurate with his position. The Executive agrees to perform his duties and discharge his responsibilities in a faithful manner and to the best of his ability and to use all reasonable efforts to promote the interests of the Corporation. The Executive may not accept other gainful employment except with the prior consent of the Board of Directors of the Corporation. With the prior consent of the Board of Directors of the Corporation, the Executive may become a director, trustee or other fiduciary of other corporations, trusts or entities. Notwithstanding the foregoing, the Executive may manage his passive investments and be involved in charitable, civic and religious interests so long as they do not materially interfere with the performance of the Executive's duties hereunder.

3. COMPENSATION.

(a) During the term of the Executive's employment under this Agreement, the Executive will receive a base salary at the rate of Four Hundred Thousand ($400,000.00) Dollars per year, payable in equal bi-weekly installments. On an annual basis, the Compensation Committee of the Board of Directors will, in good faith, review the base salary of the Executive to consider appropriate increases (but not decreases) in the base salary. If the Executive dies during the period of time of his service under this Agreement, service for any part of the month of his death will be considered service for the entire month.

(b) During the term of the Executive's employment under this Agreement, the Executive will be eligible to receive an annual cash incentive from the Corporation as determined by the Board of Directors.

(c) The Corporation will deduct or withhold from all salary and incentive payments, and from all other payments made to the Executive pursuant to this Agreement, all amounts that may be required to be deducted or withheld under any applicable Social Security contribution, income tax withholding or other similar law now in effect or that may become effective during the term of this Agreement.

4. OTHER BENEFITS AND TERMS. During the term of the Executive's employment under this Agreement, the Executive will be entitled to the following additional benefits:

(a) The Executive will be entitled to participate in, the Corporation's health and medical benefit plans, any pension, profit sharing and retirement plans, and any insurance policies or programs from time to time generally offered to all or substantially all executive employees who are employed by the Corporation. These plans, policies and programs are subject to change at the sole discretion of the Corporation.

(b) The Executive will also receive the following:

(i) Life insurance benefits will be provided at an amount not less than three times base salary (subject to a physical examination);

(ii) Disability insurance in an amount equal to two-thirds anticipated total annual cash compensation;

(iii) Executive Supplemental Medical Plan which will provide up to $10,000.00 per year in supplemental medical and dental coverage for items not covered under other CTG medical and dental plans or HMOs (but not including voluntary cosmetic surgery);

(iv) Travel insurance with aggregate coverage inclusive of the insurance provided under the Corporation's American Express card program, in an amount equal to four times base compensation;

(v) Reimbursement of up to $4,000.00 per year for personal tax advice;

(vi) Participation in the Corporation's Deferred Compensation Plan subject to the contribution rates as determined by the Compensation Committee; and

(vii) Annual luncheon club dues.

5. VACATIONS. The Executive will be entitled to five (5)weeks of paid vacation and nine paid holidays each year. Unused vacation in any year may not be carried over to subsequent years.

6. REIMBURSEMENT FOR EXPENSES. The Corporation will reimburse the Executive in accordance with its expense reimbursement policy for expenses that the Executive may from time to time reasonably incur on behalf of the Corporation in the performance of his responsibilities and duties.

7. PERIOD OF EMPLOYMENT. Subject to the provisions of this Section, the period of employment of the Executive under this Agreement will begin on the Effective Date and shall continue until 60 days after either party provides 60 days prior written notice to the other party that it desires to terminate the Executive's employment.

Notwithstanding the foregoing:

(a) The Executive'semployment will terminate: (i) on the date determined by the Corporation if the Corporation believes it has Cause, (ii) on the 30th day following the date on which the Corporation receives the written notice described in Section 1(g) if the Executive has claimed the existence of Good Reason and the Corporation has failed to take appropriate corrective action, (iii) on the date of the Executive’s death, (iv) on the date on which the Executive has incurred a Disability, as agreed by the Executive and the Corporation or, if they are unable to agree, on the date a physician’s written determination that the Executive has incurred a Disability is delivered to the Corporation and the Executive in accordance with Section 9(e), (v) on the date of the appointment of another individual by the Board of Directors to the position of Chief Executive Officer, or (vi) such other date as is mutually agreed upon by the Executive and the Corporation.

(b) In the event the Executive's employment is terminated for any reason, the Executive shall resign on the date of such termination of employment from any and all positions he may have as a director of the Corporation and its subsidiary corporations. The Executive understands and agrees that the Corporation shall be entitled to have such equitable relief, including the right to specific performance, to enforce the provisions of this Section.

Any notice of termination of employment given by a party must specify the particular termination provision of this Agreement relied upon by the party and must set forth in reasonable detail the facts and circumstances that provide a basis for the termination.

(c) In the event the Executive’s employment is terminated pursuant to paragraph 7(a)(v) above, the Board of Directors shall offer the Executive the right to resume his position as Senior Vice President and Chief Financial Officer upon such terms and conditions as the parties shall mutually agree.

8. INDEMNIFICATION. The Corporation agrees that if the Executive is made a party, or is threatened to be made a party, to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding"), by reason of the fact that he is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether or not the basis of such Proceeding is the Executive's alleged action in an official capacity while serving as a director, officer, member, employee or agent, the Executive shall be indemnified and held harmless by the Corporation to the fullest extent legally permitted or authorized by the Corporation's certificate of incorporation or bylaws or resolutions of the Corporation's Board of Directors or, if greater, by the laws of the State of New York, against all cost, expense, liability and loss (including, without limitation, attorney's fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive's heirs, executors and administrators.

The Corporation also agrees that if the Executive is made a party, or is threatened to be made a party, to any action, suit or proceeding by reason of the termination of his employment with his prior employer or his accepting employment with the Corporation, he shall be indemnified and held harmless by the Corporation against all cost, expense, liability and loss (including attorney's fees) reasonably incurred or suffered by the Executive in connection therewith.

9. BENEFITS UPON TERMINATION. The Corporation will provide the following benefits upon the termination of the Executive's employment with the Corporation.

(a) UPON TERMINATION BY THE CORPORATION OTHER THAN FOR CAUSE OR UPON TERMINATION BY THE EXECUTIVE FOR GOOD REASON. Upon the Executive's termination of his employment for Good Reason or the Corporation's termination of the Executive's employment for any reason other than Cause, the Corporation will provide, in exchange for the Executive signing a mutually acceptable release agreement, the following:

(i) SALARY AND MEDICAL BENEFITS.

(A) Current Salary and Medical Benefits. The Executive will receive his full salary and fringe benefits through the date of Termination of Employment together with any unpaid incentive for a prior period that is then due and owing to the Executive.

(B) Post-Termination Salary. The Executive shall receive an amount equal to the average of the "annual total compensation" paid to the Executive in the rolling 3-year period ending on the date of the Executive’s Termination of Employment. For purposes of this Section 9, the term "annual total

compensation" shall mean only the base cash compensation paid to the Executive only in his capacity as Chief Executive Officer in bi-weekly amounts plus any cash incentive compensation actually paid to the Executive during such rolling 3-year period. Such term shall not include any other form of compensation or benefit paid or provided to the Executive. Such amount shall be paid to the Executive in a lump sum within 30 days following the date of the Executive’s Termination of Employment or, if later, within 30 days following the date on which the Executive signs a mutually acceptable release agreement provided, however, that in all events such amount shall be paid before March 15 of the calendar year following the calendar year in which occurs the Executive’s Termination of Employment. The parties affirm that it is their intent that such amount be excluded from the application of Code Section 409A by reason of the “short-term deferral” rule set forth at Regulation §1.409A-1(b)(4).

(C) Post-Termination Medical Benefits. During the 12-month period following the date of the Executive’s Termination of Employment, the Executive shall continue to receive medical and dental benefits pursuant to such plans as are in effect on the date of Termination of Employment provided, however, that in the event that the Executive is a Specified Employee, the Executive shall pay for any such benefits received during the first six months following termination of employment to the extent, if any, that such benefits are not allowable as a deduction under Code Section 213 (disregarding the requirement of section 213(a) that the deduction is available only to the extent that such expenses exceed 7.5 percent of adjusted gross income).

(D) Extension of Post-Termination Salary. The Executive shall receive a second payment on the day following the six month anniversary of the date of his Termination of Employment which second payment shall be a lump sum amount equal to 50% of the amount paid to the Executive pursuant to Section 9(a)(i)(B). The payments pursuant to Section 9(a)(i)(B) and this Section 9(a)(i)(D) are intended by the parties to constitute separate “payments” within the meaning of Regulation §1.409A-2(b)(2). In the event that the Executive is employed by another firm or entity or is otherwise providing his services to anyone in return for compensation before the last day of the eighteenth calendar month beginning on or after his Termination of Employment, the Executive shall promptly repay to the Corporation all or a portion of the amount paid to the Executive pursuant to this Section 9(a)(i)(D). The amount to be repaid shall be determined by multiplying the amount paid to the Executive pursuant to this Section 9(a)(i)(D) times a fraction where the numerator is the number of days during which the Executive is employed by another firm or entity or is otherwise providing his services to anyone in return for compensation during the six calendar month period beginning with the thirteenth calendar month beginning on or after his Termination of Employment and the denominator is the total number of days in such six calendar month period. The Executive agrees to immediately notify the Corporation once he becomes so employed or provides his services in return for compensation.

(E) Extension of Post-Termination Medical Benefits. During the six calendar month period beginning on or after the twelve month anniversary of the Executive’s Termination of Employment, the Executive shall continue to receive medical and dental benefits pursuant to such plans as are in effect on the date of Termination of Employment paid for by the Corporation provided, however, that the Corporation shall cease to have any obligation to pay for such benefits after the calendar month in which the Executive becomes employed or provides his services for compensation.

(ii) ACCRUED VACATION. The Executive will receive payment for accrued but unused vacation, which payment will be equitably prorated based on the period of active employment for that portion of the fiscal year in which the Executive's termination of employment becomes effective. Payment for accrued but unused vacation will be paid in one lump sum within 30 days following the date of the Executive’s Termination of Employment.

(b) UPON TERMINATION BY THE EXECUTIVE ABSENT GOOD REASON OR BY THE CORPORATION FOR CAUSE. Upon the Executive's termination of employment absent Good Reason or by the Corporation for Cause, the Corporation will provide the following:

(i) SALARY. The Executive will receive only his bi-weekly salary and fringe benefits through the date of Termination of Employment together with any unpaid incentive for a prior period that is then due and owing to the Executive.

(ii) ACCRUED VACATION. The Executive will receive payment for accrued but unused vacation, which payment will be equitably prorated based on the period of active employment for that portion of the fiscal year in which the Executive's termination of employment becomes effective. Payment for accrued but unused vacation will be paid in one lump sum within 30 days following the date of the Executive’s Termination of Employment.

(c) UPON TERMINATION FOR DEATH OR DISABILITY. Upon termination of the Executive's employment because of death, the Corporation will pay an amount equal to the post-termination salary provided for in Section 9(a)(i)(B) above to the Executive’s estate in a lump sum. Upon termination of the Executive's employment because of Disability, the Corporation will pay an amount equal to the post-termination salary provided for in Section 9(a)(i)(B) to the Executive in a lump sum and will provide the post-termination medical benefits provided for in Section 9(a)(i)(C). A lump sum payment made pursuant to this Section 9(c) shall be made as soon as practicable following the Executive’s Termination of Employment but, in all events, shall be made before March 15 of the calendar year following the calendar year in which the Executive’s death or Disability occurs.

(d) UPON TERMINATION FOLLOWING A CHANGE IN CONTROL. In the event that a “Change in Control” (as defined in the Change in Control Agreement) occurs on or before the six month anniversary of the Executive’s Termination of Employment by the Corporation for any reason other than Cause, or by the Executive for Good Reason, the Corporation shall pay the Executive the amounts provided in Sections 9(a)(i)(A) and (B), and Section 9(a)(ii), and shall provide the Executive the medical benefits provide for in Section 9(a)(i)(C) through the last day of the calendar month in which the Change in Control occurs. No other payments shall be made under this Section 9. All other amounts payable to the Executive shall be governed by the terms of the aforementioned Change in Control Agreement in lieu of any other payments or benefits under this Agreement.

(e) DETERMINATION OF DISABILITY. Any question as to the existence of a physical or mental condition which would give rise to the Disability of the Executive upon which the Executive and the Corporation cannot agree will be determined by a qualified independent physician selected by the Executive and reasonably acceptable to the Corporation (or, if the Executive is unable to make a selection, the selection of the physician will be made by any adult member of his immediate family). The physician's written determination to the Corporation and to the Executive will be final and conclusive for all purposes of this Agreement.

(f) CONTINUATION OF HEALTHCARE COVERAGE. For purposes of COBRA continuation healthcare coverage, the "qualifying event" will be deemed to have occurred on the effective date of termination of the Executive's employment.

10. CONFIDENTIALITY\ASSIGNMENT OF RIGHTS. During the course of his employment, the Executive will have access to confidential information relating to the lines of business of the Corporation, its trade secrets, marketing techniques, technical and cost data, information concerning customers and suppliers, information relating to product lines, and other valuable and confidential information relating to the business operations of the Corporation not generally available to the public (the "Confidential Information"). The parties hereby acknowledge that any unauthorized disclosure or misuse of the Confidential Information could cause irreparable damage to the Corporation. The parties also agree that covenants by the Executive not to make unauthorized use or disclosures of the Confidential Information are essential to the growth and stability of the business of the Corporation. Accordingly, the Executive agrees to the confidentiality covenants set forth in this Section.

The Executive agrees that, except as required by his duties with the Corporation or as authorized by the Corporation in writing, he will not use or disclose to anyone at any time, regardless of whether before or after the Executive ceases to be employed by the Corporation, any of the Confidential Information obtained by him in the course of his employment with the Corporation. The Executive shall not be deemed to have violated this Section 10 by disclosure of Confidential Information that at the time of disclosure (a) is publicly available or becomes publicly available through no act or omission of the Executive, or (b) is disclosed as required by court order or as otherwise required by law, on the condition that notice of the requirement for such disclosure is given to the Corporation prior to make any disclosure.

The Executive agrees that since irreparable damage could result from his breach of the covenants in this Section, in addition to any and all other remedies available to the Corporation, the Corporation will have the remedies of a restraining order, injunction or other equitable relief to enforce the provisions thereof. The Executive consents to jurisdiction in Erie County, New York on the date of the commencement of any action for purposes of any claims under this Section. In addition, the Executive agrees that the issues in any action brought under this Section will be limited

to claims under this Section, and all other claims or counterclaims under other provisions of this Agreement will be excluded.

The Executive hereby sells, assigns and transfers to the Corporation all of his right, title and interest in and to all inventions, discoveries, improvements and copyrightable subject matter (the "rights") which during the term of the Executive's employment are made or conceived by him, alone or with others and which are within or arise out of any general field of the Corporation's business or arise out of any work he performs or information he receives regarding the business of the Corporation while employed by the Corporation. The Executive shall fully disclose to the Corporation as promptly as available all information known or possessed by him concerning the rights referred to in the preceding sentence, and upon request by the Corporation and without any further remuneration in any form to him by the Corporation, but at the expense of the Corporation, execute all applications for patents and for copyright registration, assignments thereof and other instruments and do all things which the Corporation may deem necessary to vest and maintain in it the entire right, title and interest in and to all such rights.

11. NON-COMPETITION. In consideration of the compensation and other benefits to be paid to the Executive under and in connection with this Agreement, the Executive agrees that, beginning on the Effective Date of this Agreement and continuing until the Covenant Expiration Date (as defined in Subsection (b) below), he will not, directly or indirectly, for his own account or as agent, employee, officer, director, trustee, consultant, partner, stockholder or equity owner of any corporation or any other entity (except that he may passively own securities constituting less than 1% of any class of securities of a public company), or member of any firm or otherwise,

(i) engage or attempt to engage, in the Restricted Territory (as defined in Subsection (d) below), in any business activity which is directly or indirectly competitive with the business conducted by the Corporation or any Affiliate at the Reference Date (as defined in Subsection (c) below),

(ii) employ or solicit the employment of any person who is employed by the Corporation or any Affiliate at the Reference Date or at any time during the six-month period preceding the Reference Date, except that the Executive will be free to employ or solicit the employment of any such person whose employment with the Corporation or any Affiliate has terminated for any reason (without any interference from the Executive) and who has not been employed by the Corporation or any Affiliate for at least 6 months,

(iii) canvass or solicit business in competition with any business conducted by the Corporation or any Affiliate at the Reference Date from any person or entity who during the six-month period preceding the Reference Date was a customer of the Corporation or any Affiliate or from any person or entity which the Executive has reason to believe might in the future become a customer of the Corporation or any Affiliate as a result of marketing efforts, contacts or other facts and circumstances of which the Executive is aware,

(iv) willfully dissuade or discourage any person or entity from using, employing or conducting business with the Corporation or any Affiliate or

(v) intentionally disrupt or interfere with, or seek to disrupt or interfere with, the business or contractual relationship between the Corporation or any Affiliate and any supplier who during the six-month period preceding the Reference Date shall have supplied components, materials or services to the Corporation or any Affiliate.

Notwithstanding the foregoing, the restrictions imposed by this Section shall not in any manner be construed to prohibit, directly or indirectly, the Executive from serving as an employee or consultant of the Corporation or any Affiliate. For purposes of this Agreement, the following terms have the meanings given to them below:

a. "AFFILIATE" means any joint venture, partnership or subsidiary now or hereafter directly or indirectly owned or controlled by the Corporation. For purposes of clarification, an entity shall not be deemed to be indirectly or directly owned or controlled by the Corporation solely by reason of the ownership or control of such entity by shareholders of the Corporation.

b. "COVENANT EXPIRATION DATE" means the date which is one (1) year after the Termination Date (as defined in this Section).

c. "REFERENCE DATE" means (A) for purposes of applying the covenants set forth in this Section at any time prior to the Termination Date, the then current date, or (B) for purposes of applying the covenants set forth in this Section at any time on or after the Termination Date, the Termination Date.

d. "RESTRICTED TERRITORY" means anywhere in the world where the Corporation or any Affiliate conducts or plans to conduct the Business or any other business activity, as the case may be, at the Reference Date.

e. "TERMINATION DATE" means the date of termination of the Executive's employment with the Corporation; PROVIDED, HOWEVER, that the Executive's employment will not be deemed to have terminated so long as the Executive continues to be employed or engaged as an employee or consultant of the Corporation or any Affiliate, even if such employment or engagement continues after the expiration of the term of this Agreement, whether pursuant to this Agreement or otherwise.

12. SUCCESSORS. This Agreement is personal to the Executive and may not be assigned by the Executive other than by will or the laws of descent and distribution. This Agreement will inure to the benefit of and be enforceable by the Executive's legal representatives or successors in interest. Notwithstanding any other provision of this Agreement, the Executive may designate a successor or successors in interest to receive any amounts due under this Agreement after the Executive's death. If he has not designated a successor in interest, payment of benefits under this Agreement will be made to his wife, if surviving, and if not surviving, to his estate. A designation of a successor in interest must be made in writing, signed by the Executive, and delivered to the Employer pursuant to Section 16. Except as otherwise provided in this Agreement, if the Executive has not designated a successor in interest, payment of benefits under this Agreement will be made to the Executive's estate. This Section will not supersede any designation of beneficiary or successor in interest made by the Executive or provided for under any other plan, practice, or program of the Employer.

This Agreement will inure to the benefit of and be binding upon the Corporation and its successors and assigns.

The Corporation will require any successor (whether direct or indirect, by acquisition of assets, merger, consolidation or otherwise) to all or substantially all of the operations or assets of the Corporation or any successor and without regard to the form of transaction used to acquire the operations or assets of the Corporation, to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no succession had taken place. As used in this Agreement, "Corporation" means the Corporation and any successor to its operations or assets as set forth in this Section that is required by this clause to assume and agree to perform this Agreement or that otherwise assumes and agrees to perform this Agreement.

13. FAILURE, DELAY OR WAIVER. No course of action or failure to act by the Corporation or the Executive will constitute a waiver by the party of any right or remedy under this Agreement, and no waiver by either party of any right or remedy under this Agreement will be effective unless made in writing.

14. SEVERABILITY. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be enforceable under applicable law. However, if any provision of this Agreement is deemed unenforceable under applicable law by a court having jurisdiction, the provision will be unenforceable only to the extent necessary to make it enforceable without invalidating the remainder thereof or any of the remaining provisions of this Agreement.

15. NOTICE. All written communications to parties required hereunder must be in writing and (a) delivered in person, (b) mailed by registered or certified mail, return receipt requested, (such mailed notice to be effective 4 days after the date it is mailed) or (c) sent by facsimile transmission, with confirmation sent by way of one of the above methods, to the party at the address given below for the party (or to any other address as the party designates in a writing complying with this Section, delivered to the other party):

If to the Corporation:

Computer Task Group, Incorporated

800 Delaware Avenue

Buffalo, New York 14209

Attention: General Counsel

Telephone: 716-882-8000

Telecopier: 716-887-7370

If to the Executive:

Brendan M. Harrington

46 Rankin Road

Snyder, New York 14226

Telephone: 716-839-4495

16. MISCELLANEOUS. This Agreement may not be amended, modified or terminated orally or by any course of conduct pursued by the Corporation or the Executive, but may be amended, modified or terminated only by a written agreement duly executed by the Corporation and the Executive and is binding upon and inures to the benefit of the Corporation and the Executive and each of their respective heirs, representatives, successors and assignees, except that the Executive may not assign any of his rights or obligations pursuant to this Agreement. Except as otherwise provided in this Agreement, this Agreement constitutes the entire agreement between the Corporation and the Executive with respect to the subject matter of this Agreement, and supersedes all oral and written proposals, representations, understandings and agreements previously made or existing with respect to such subject matter.

17. TERMINATION OF THIS AGREEMENT. This Agreement will terminate when the Corporation has made the last payment provided for hereunder; provided, however, that the obligations set forth under Sections 8, 9, 10 and 11 of this Agreement will survive any termination and will remain in full force and effect.

18. MULTIPLE COUNTERPARTS. This Agreement may be executed in one or more counter parts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any party may execute this Agreement by facsimile signature and the other party shall be entitled to rely on such facsimile signature as evidence that this Agreement has been duly executed by such party. Any party executing this Agreement by facsimile signature shall immediately forward to the other party an original page by overnight mail.

19. GOVERNING LAW. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York without reference to principles of conflict of laws.

20. REPRESENTATION BY EXECUTIVE. The Executive represents to the Corporation that he is not subject to any agreement between him and any other person, firm or organization that prevents or restricts in any way his ability to provide services to the Corporation pursuant to this Agreement or that would otherwise be violated by the performance of his obligations under this Agreement. The Executive understands and agrees that a breach of this representation shall be considered to be a material breach of this Agreement and shall be grounds for immediate termination of employment and shall be treated in the same manner as termination for Cause.

21. RULE GOVERNING PAYMENT DATES. In any case where this Agreement requires the payment of an amount during a period of two or more days that overlaps two calendar years, the payee shall have no right to determine the calendar year in which payment actually occurs.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.

Computer Task Group, Incorporated

By______________________________

Daniel J. Sullivan

Title_____________________________

Chairman of the Board of Directors

Executive

_________________________________

Brendan M. Harrington

EX-10.T

EXHIBIT 10 (t)

CHANGE IN CONTROL AGREEMENT

THIS AGREEMENT, effective as of November 11, 2014 (the "Effective Date"),is between Computer Task Group, Incorporated, a New York corporation with its executive offices at 800 Delaware Avenue, Buffalo, New York 14209 (the "Corporation"), and Brendan M. Harrington, an individual residing at 46 Rankin Road, Snyder, New York 14226 (the "Executive").

RECITALS:

WHEREAS, the Executive is employed as the Chief Executive Officer of the Corporation; and

WHEREAS, it is in the best interests of the Corporation to reinforce and encourage the Executive's continued disinterested full attention and undistracted dedication to the duties of the Executive currently and in the potentially disturbing circumstances of a possible change in control of the Corporation by providing some degree of personal financial security to the Executive; and

WHEREAS, it is in the best interests of the Corporation to enable the Executive, without being influenced by the uncertainties of the Executive's own situation, to assess and advise the Corporation whether proposals concerning any potential change in control are in the best interests of the Corporation and its shareholders and to take other action regarding these proposals as the Corporation might determine to be appropriate; and

WHEREAS, to induce the Executive to remain in the employ of the Corporation, the Board of Directors has determined it is desirable to pay the Executive the compensation set forth below if the Executive's employment with the Corporation terminates in one of the circumstances described below in connection with a change in control of the Corporation; and

WHEREAS, this Agreement includes provisions intended to comply with final regulations promulgated under Internal Revenue Code (“Code”) Section 409A and shall be construed to the extent practicable so as to avoid causing any amounts payable to the Executive hereunder to be includable in his gross income under Code Section 409A(a)(1).

NOW, THEREFORE, in consideration of the promises and of the covenants contained in this Agreement, the Corporation and the Executive agree as follows:

1. DEFINITIONS. The following definitions apply for purposes of this Agreement.

(a) "Aggregate Exercise Price" means:

(i) in the case of options to acquire common stock of the Corporation owned by the Executive, the total amount of cash or immediately available funds the Executive would be required to pay to the Corporation to purchase all of the common stock of the Corporation that, on the date as of which the Aggregate Exercise Price is to be determined, the Executive is entitled to purchase under the terms of all issued, outstanding and unexercised options to purchase common stock of the Corporation that are outstanding and exercisable on the date as of which the Aggregate Exercise Price of those options is to be determined; and

(ii) in the case of options to acquire Successor Equity, the total amount of cash or immediately available funds the Executive would be required to pay to the Successor to purchase all the Successor Equity that, on the date as of which the Aggregate Exercise Price is to be determined, the Executive is entitled to purchase under the terms of all issued, outstanding and unexercised options to purchase Successor Equity that are outstanding and exercisable on the date as of which the Aggregate Exercise Price of those options is to be determined.

(b) "Built in Gain" means an amount equal to:

(i) the Highest Sale Price as of the date of a Change in Control multiplied by the total number of shares of common stock of the Corporation that the Executive could acquire by exercising all of the options to acquire common stock of the Corporation that, as of the date of the Change in Control, were issued to the Executive, outstanding and unexercised, minus

(ii) the Aggregate Exercise Price of those options.

(c) "Board of Directors" or "Board" means the Board of Directors of the Corporation.

(d) "Cause" means a finding by the Board of Directors, with notice in writing to the Executive setting forth in reasonable detail its reasons, that any of the following conditions exist:

(i) The Executive's willful and continued failure to substantially perform his duties as Interim Chief Executive Officer (other than as a result of the Executive's Disability).

(ii) A willful act or omission by the Executive constituting fraud or other malfeasance, including without limitation acts of dishonesty constituting a felony offense under the laws of the United States or any state thereof, and any act or omission by the Executive constituting immoral conduct, which in any such case is injurious to the financial condition or business reputation of the Corporation.

(iii) A material breach by the Executive of the Employment Agreement.

For purposes of this definition, an act or failure to act will be deemed “willful" only if it is effected by the Executive not in good faith and without a reasonable belief that his action or failure to act was in or not opposed to the Corporation's best interests.

(e) "Change in Control" means any one of the following occurrences:

(i) Approval by the stockholders of the Corporation of the dissolution or liquidation of the Corporation;

(ii) Approval by the stockholders of the Corporation of an agreement to merge or consolidate, or otherwise reorganize, with or into one or more entities that are not Subsidiaries or other affiliates, as a result of which less than 50% of the outstanding voting securities of the surviving or resulting entity immediately after the reorganization are, or will be, owned, directly or indirectly, by stockholders of the Corporation immediately before such reorganization (assuming for purposes of such determination that there is no change in the record ownership of the Corporation's securities from the record date for such approval until such reorganization and that such record owners hold no securities of the other parties to such reorganization, but including in such determination any securities of the other parties to such reorganization held by affiliates of the Corporation);

(iii) Approval by the stockholders of the Corporation of the sale of substantially all of the Corporation's business and/or assets to a person or entity that is not a Subsidiary or other affiliate; or

(iv) Any "Person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended from time to time, but excluding any person described in and satisfying the conditions of Rule 13d-1(b)(1) thereunder), other than the Corporation, any Subsidiary of the Corporation, any employee benefit plan of the Corporation or of any of its Subsidiaries or any Person holding common shares of the Corporation for or pursuant to the terms of any such employee benefit plan, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing more than 20% of the combined voting power of the Corporation's then outstanding securities entitled to then vote generally in the election of directors of the Corporation; or

(v) During any period not longer than two consecutive years, individuals who at the beginning of such period constituted the Board cease to constitute at least a majority thereof, unless the election, or the nomination for election by the Corporation's stockholders, of each new Board member was approved by a vote of at least three-quarters of the Board members then still in office who were Board members at the beginning of such period (including for these purposes, new members whose election or nomination was so approved).

(f) "Code" means the Internal Revenue Code of1986, as amended.

(g) "Conversion Options" means an option or options to purchase Successor Equity, which option or options may be granted by the Successor to the Executive and are exercisable in full immediately following the Change in Control for an Aggregate Exercise Price that does not exceed the Aggregate Exercise Price of the options to purchase common stock of the Corporation owned by the Executive on the date of the Change in Control and which options, if exercised by the Executive in full immediately following that Change in Control, would provide for the ownership by the Executive of Successor Equity that, immediately following the acquisition of that Successor Equity by the Executive, may be sold by the Executive, free of any restrictions imposed on the sale of securities by the Securities Act of 1933, and which satisfy the requirements of Regulation §1.409A-1(b)(5)(v)(D) so that the exchange of options to purchase stock of the Corporation for Conversion Options will not be treated as the grant of a new stock right or change in the form of payment for purposes of said Regulation. Under no circumstances is the Executive required to accept a grant of Conversion Options from the Successor.

(h) "Corporation" means Computer Task Group, Incorporated.

(i) "Disability" means a disability that exists for a period of at least 12 months and because of which the Executive is physically or mentally unable to substantially perform his regular duties as President or Chief Executive Officer of the Corporation, as the case may be.

(j) “Employment Agreement” means a certain employment agreement between the Corporation and the Executive which is effective as of November 11, 2014, as such agreement may be amended or superseded.

(k) "Good Reason" means the occurrence of one or more of the following events, provided that the Executive shall give the Corporation a written notice, within 90 days following the initial occurrence of the event, describing the event that the Executive claims to be Good Reason and stating the Executive’s intention to terminate employment unless the Corporation takes appropriate corrective action:

(i) A material diminution in the Executive's responsibilities, duties, title, reporting responsibilities within the business organization, status, role or authority.

(ii) A material reduction by the Corporation in the Executive's annual base salary as in effect on the date of a Change in Control or as in effect thereafter if that base salary has been increased.

(iii) A material reduction by the Corporation in the aggregate value of benefits provided to the Executive, as in effect on the date of a Change in Control or as in effect after that date if those benefits have been increased. "Benefits" includes all profit sharing, 401(k), retirement, pension, health, medical, dental, disability, insurance, automobile, severance, vacation, leave, reimbursement, and similar benefits.

(iv) A material breach by the Corporation of any provision of this Agreement or of any other agreement requiring the payment of compensation to the Executive.

(v) Removal from, or failure to re-elect, the Executive to the position of Interim Chief Executive Officer.

(vi) A requirement, in the Executive's reasonable judgment, that the services required to be performed by the Executive would necessitate the Executive moving his residence at least 50 miles from the Buffalo, New York area.

The Corporation shall have 30 days following the date of receipt of the written notice from the Executive stating his claim of Good Reason in which to take appropriate corrective action. If the Corporation does not correct the Good Reason condition, the Executive’s Good Reason termination will be deemed to have occurred on the day following the 30-day period. For purposes of this Agreement, the term “Good Reason” shall not include the voluntary resignation by the Executive or the termination of the Executive from the position of Chief Executive Officer upon the appointment by the Board of Directors of another individual as Chief Executive Officer of the Corporation.

(l) "Highest Sale Price" means:

(i) with respect to the common stock of the Corporation, the highest closing sale price at which common stock of the Corporation has been sold, in an established securities market, during the 12 consecutive month period ending on the date as of which the Highest Sale Price of the common stock of the Corporation is to be determined; and

(ii) with respect to Successor Equity, the highest closing sale price at which Successor Equity has been sold, in an established securities market, during the 12 consecutive month period ending on the date of which the Highest Sale Price of the Successor Equity is to be determined.

(m) “Regulation” means Treasury Regulations promulgated under Code Section 409A as amended.

(n) "Subsidiary" means any corporation or other entity a majority of whose outstanding voting stock or voting power is beneficially owned directly or indirectly by the Corporation.

(o) "Successor" means, the person, firm, corporation or other entity that, as a result of a Change in Control, has succeeded, directly or indirectly, to all or substantially all the assets, rights, properties, liabilities and obligations of the Corporation.

(p) "Successor Equity" means capital stock or any other equity interest in the Successor.

(q) “Termination of Employment” has the meaning provided in Regulation §1.409A-1(h)(1)(ii). If the Executive provides services as an independent contractor, the Executive will not be considered to have a Termination of Employment until the Executive has ceased providing services both as an employee and as an independent contractor. The preceding sentence shall not apply with respect to nonqualified deferred compensation plan in which the Executive participates as an employee to the extent that the Executive’s sole activity as an independent contractor with respect to the Corporation is to serve on the Corporation’s Board of Directors.

2. BENEFITS UPON CHANGE IN CONTROL. The Corporation will provide the benefits listed below in Sections 2(a) and 2(b) on a Change in Control. All amounts payable on a Change in Control under all subsections of this Section will be made by bank check or wire transfer at the Change in Control, or, if that is not within the control of the Corporation, not later than the tenth business day following the Change in Control except as otherwise provided in Section 2(a) or 2(b). For purposes of this Section, references to payments by the Corporation include payments from any entity related to the Corporation, such as the Corporation's Stock Employee Compensation Trusts.

(a) STOCK RIGHTS. As of the date of the Change in Control, the Executive will become fully vested in, and entitled to exercise immediately all stock-related awards he has been granted under any plans or agreements of the Corporation, including without limitation, awards under the 1991 Stock Option Plan, the 1991 Restricted Stock Plan, the 2000 Equity Award Plan and the 2010 Equity Award Plan, other than any stock-related award that constitutes a “deferral of compensation” within the meaning of Code Section 409A and the Regulations. The Executive will be entitled to exercise all these awards for a period of not less than 12 months following the Change in Control provided that such exercise period shall not in any event extend beyond the last day of the original exercise period of the relevant stock-related award. The acceleration of vesting and exercisability under this Section will apply notwithstanding any provision in the 2000 Equity Award Plan or any other plan or agreement that would prevent the acceleration and vesting of the awards or cause them to be canceled, rescinded or otherwise impaired.

(b) DEFERRED COMPENSATION. All deferred or otherwise contingent compensation of the Executive will become (i) vested and (ii) immediately payable in cash provided, however, that any such compensation that constitutes deferred compensation within the meaning of Code Section 409A and the Regulations thereunder shall be payable only at the time and in the manner provided under the relevant deferred compensation plan. For purposes only of (ii) in the preceding sentence, a Change in Control under Section 1(e)(ii) will be determined only by substituting 70% for 50% in that Section 1(e)(ii).

3. BENEFITS UPON TERMINATION. The Corporation will provide the benefits listed below in subsections (a) through (f) on the termination of the Executive's employment (i) by the Corporation for any reason other than Cause or by the Executive for Good Reason (“Involuntary Termination”) in either case within 6 months before or between 6 and 24

months after a Change in Control, or (ii) by the Executive for any reason (“Voluntary Termination”) within 6 months after a Change in Control. For purposes of this Section, references to payments by the Corporation include payments from any entity related to the Corporation, such as the Stock Employee Compensation Trusts. Also, references to payments by the Successor include payments from the Corporation's Stock Employee Compensation Trusts if those trusts are permitted to make the payments.

(a) SALARY.

(i) Payment In Event of Executive’s Involuntary Termination.

(A) First Payment. If the Executive has an Involuntary Termination of Employment (I) during the period beginning 6 months before and ending on the day before the date of a Change in Control, or (II) during the period beginning on the 6-month anniversary of and ending 24 months after the date of a Change in Control, the Executive shall receive an initial lump sum payment at the time and in the amount provided under Section 9(a)(i)(B) of the Employment Agreement (“annual total compensation”).

(B) Second Payment. If the Executive becomes entitled to the First Payment under Section 3(a)(i)(A), the Executive shall receive a second lump sum payment equal to 2.99 times his full rate of salary in effect, including directors' fees, if any, (whether or not deferred) on the date immediately prior to the Change in Control or, if greater, the amount in effect at any date after the Change in Control provided, however, that the amount of payment under this Section 3(a)(i)(B) shall be reduced by the amount payable under Section 3(a)(i)(A). The lump sum payment pursuant to this Section 3(a)(i)(B) shall be made on the day following the 6-month anniversary of the Executive’s Termination of Employment. The payments pursuant to Section 3(a)(i)(A) and this Section 3(a)(i)(B) are intended to constitute separate “payments” within the meaning of Regulation §1.409A-2(b)(2).

(ii) Voluntary Termination. If the Executive has a Voluntary Termination of Employment during the period beginning on the date of the Change in Control and ending on the day before the 6-month anniversary of said date, the Executive shall receive an lump sum payment equal to 2.99 times his full rate of salary in effect, including directors' fees, if any, (whether or not deferred) on the date immediately prior to the Change in Control or, if greater, the amount in effect at any date after the Change in Control. The lump sum payment shall be made on the day following the 6-month anniversary of the Executive’s Termination of Employment.

(b) BONUS. The Executive will receive a cash bonus equal to 2.99 times the highest annual bonus payable (whether or not deferred) to him in the 3 calendar years preceding the year in which the Change in Control occurs.

(c) FRINGE BENEFITS. The Executive will receive a lump sum payment equal to 25% of the sum of (i) one times his full rate of salary, as defined in (a), and (ii) highest annual bonus, as defined in (b). This payment represents the value to which the parties agree the Executive otherwise would be entitled with respect to fringe benefits (including without limitation profit sharing, 401(k), retirement, pension, health, medical, dental, disability, insurance, automobile, severance, vacation, leave, reimbursement, and similar benefits) for 36 months. Notwithstanding any payment under this Section 3(c), the Executive shall remain entitled to exercise his COBRA rights under any group health plan maintained by the Corporation or the Successor as applicable.

(d) INDEMNIFICATION. For a 60-month period following the date of the Executive's termination of employment, the Corporation will continue any indemnification agreement with the Executive and will provide directors' and officers' liability insurance insuring the Executive that coverage will have limits and scope of coverage not less than that in effect immediately prior to the Change in Control.

(e) CASH-OUT OF STOCK OPTIONS AND OTHER EQUITY-RELATED COMPENSATION.

(i) IN CORPORATION. If the Executive continues to own, on the later of the date of his Termination of Employment or the date of the Change in Control (the “Determination Date”), unexercised options to purchase common stock of the Corporation, the options shall be cancelled, and the Executive shall receive a lump sum amount equal to:

(A) the Highest Sale Price of the common stock of the Corporation determined as of the Determination Date; MULTIPLIED BY

(B) the aggregate number of shares of common stock of the Corporation the Executive is entitled to purchase pursuant to the terms of all unexercised options to purchase any common stock of the Corporation owned by the Executive on the Determination Date; MINUS

(C) the Aggregate Exercise Price of the issued and outstanding unexercised options to purchase common stock of the Corporation owned by the Executive on the Determination Date.

(ii) IN SUCCESSOR. If Executive owns, on the later of the date of his Termination of Employment (the “Determination Date”), unexercised Conversion Options, the Conversion Options shall be cancelled, and the Executive shall receive a lump sum amount equal to:

(A) the Highest Sale Price, determined as of the Determination Date, of each unit of Successor Equity that could be acquired by the Executive on the exercise of all outstanding Conversion Options; MULTIPLIED BY

(B) the aggregate number of units of Successor Equity the Executive is entitled to purchase pursuant to the terms of all Conversion Options owned by the Executive and exercisable on the Determination Date; MINUS

(C) the Aggregate Exercise Price of the issued and outstanding unexercised Conversion Options.

(f) TIME OF PAYMENT. Payments under subsections (a)(ii), (b), (c) and (e) of this Section 3 shall be made on the day following the six month anniversary of the Executive’s Termination of Employment.

(g) ESTABLISHMENT OF RABBI TRUST. On or before the date of a Change in Control or, if later, on or before the date of the Executive’s Termination of Employment, the Corporation shall transfer cash and/or liquid assets having a value equal to the amounts that will become payable to the Executive under subsection (a) (other than the amount payable under subsection (a)(i)(A) if applicable), (b), (c) and (e) of this Section 3 to an irrevocable grantor trust established with a bank trustee that is reasonably acceptable to the Executive. The trust agreement shall be similar to the form of agreement provided in IRS Revenue Procedure 92-64 (concerning rabbi trusts) and shall provide that no amount held in the trust shall revert to the Corporation or its Successor or be used for any other purpose (other than the payment of the Corporation’s creditors in the event of its insolvency) until the amounts that will become payable to the Executive under subsections (a) (other than the amount payable under subsection (a)(i)(A) if applicable), (b), (c) and (e) of this Section 3 have been paid.

4. WITHHOLDING. The Corporation will deduct or withhold from all salary and bonus payments, and from all other payments made to the Executive pursuant to this Agreement, all amounts that may be required to be deducted or withheld under any applicable Social Security contribution, income tax withholding or other similar law now in effect or that may become effective during the term of this Agreement.

5. OTHER TERMINATION. Upon termination of the Executive's employment for Cause or because of death or Disability, or not within the time related to a Change in Control as described in Section 3, no benefits will be payable under this Agreement.

6. ADDITIONAL PAYMENTS.

(a) Entitlement to Gross-up Payment. Notwithstanding anything in this Agreement, the 2000 Equity Award Plan, or any other agreement or plan to the contrary, in the event it is determined that any payments or distributions by the Corporation or any affiliate (as defined under the Securities Act of 1933, as amended, and the regulations thereunder) thereof or any other person to or for the benefit of the Executive, whether paid or payable pursuant to the terms of this Agreement, or pursuant to any other agreement or arrangement with the Corporation or any such affiliate ("Payments"), would be subject to the excise tax imposed by Section 4999 of the Code, or any successor provision, or any interest or penalties with respect to the excise tax (the excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “Excise Tax"), then

(i) If liability for the Excise Tax can be avoided by reducing the total amount payable to the Executive under Sections 3(a) and (b) by an amount not exceeding 10% of the total thereof (the “Reduction

Amount”), the amount payable to the Executive pursuant to Section 3(a)(i)(B) or 3(a)(ii), as applicable, shall be reduced by the Reduction Amount.

(ii) If liability for the Excise Tax cannot be avoided by reducing the total amount payable to the Executive by the Reduction Amount, then payment of amounts due the Executive under Section 3 shall not be reduced by the Reduction Amount and the Executive shall be entitled to receive an additional payment from the Corporation (a "Gross-Up Payment") in an amount that after payment by the Executive of all taxes (including, without limitation, any interest or penalties imposed with respect to such taxes and any Excise Tax) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b) Calculation of Gross-up Payment. The amount of the Gross-Up Payment will be calculated by the Corporation's independent accounting firm, engaged immediately prior to the event that triggered the payment, in consultation with the Corporation's outside legal counsel. For purposes of making the calculations required by this Section, the accounting firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code, provided that the accounting firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code).

(c) Time and Form of Gross-up Payment. The Gross-Up Payment shall be made in a lump sum at the same time as the payment made pursuant to Section 3(a)(i)(B) or 3(a)(ii), as applicable. If the precise amount of the Gross-Up Payment cannot be determined on the date it is to be paid, an amount equal to the best estimate of the Gross-Up Payment will be made on that date and, within 10 days after the precise calculation is obtained, either the Corporation will pay any additional amount to the Executive or the Executive will pay any excess amount to the Corporation, as the case may be. In all events, the Gross-up Payment will be made by the end of the Executive’s taxable year next following the Executive's taxable year in which the Executive remits the related taxes.

(d) Claim of Additional Gross-up Payment. If subsequently the Internal Revenue Service (the "IRS") claims that any additional Excise Tax is owing, an additional Gross-Up Payment will be paid to the Executive within 30 days of the Executive providing substantiation of the claim made by the IRS.

(e) Cooperation of Executive In Contesting Excise Tax. After payment to the Executive of the Gross-Up Payment, the Executive will provide to the Corporation any information reasonably requested by the Corporation relating to the Excise Tax, the Executive will take those actions as the Corporation reasonable requests to contest the Excise Tax, cooperate in good faith with the Corporation to effectively contest the Excise Tax and permit the Corporation to participate in any proceedings contesting the Excise Tax. The Corporation will bear and pay directly all costs and expenses (including any interest or penalties on the Excise Tax), and indemnify and hold the Executive harmless, on an after-tax basis, from all such costs and expenses related to such contest.

(f) Refund of Excess Gross-up Payment. Should it ultimately be determined that any amount of an Excise Tax is not properly owed, the Executive will refund to the Corporation the related amount of the Gross-Up Payment immediately following receipt of such payment from the US Treasury..

7. NON-EXCLUSIVITY OF RIGHTS. Except as otherwise specifically provided, nothing in this Agreement prevents or limits the Executive's continued or future participation in any benefit, incentive, or other plan, practice, or program provided by the Corporation and for which the Executive may qualify. Any amount of vested benefit or any amount to which the Executive is otherwise entitled under any plan, practice, or program of the Corporation will be payable in accordance with the plan, practice, or program, except as specifically modified by this Agreement. However, if the Executive receives the payments under Section 3, the Executive will not be entitled to any severance payments (which excludes for this purpose all types of equity-based compensation not cashed out under Section 2(c) or 3(e)) otherwise payable under any other agreement, plan, or practice providing for severance compensation.

8. NO OBLIGATION TO SEEK OTHER EMPLOYMENT. The Executive will not be obligated to seek other employment or to take other action to mitigate any amount payable to him under this Agreement.

9. SUCCESSORS. This Agreement is personal to the Executive and may not be assigned by the Executive other than by will or the laws of descent and distribution. This Agreement will inure to the benefit of and be enforceable by the Executive's legal representatives or successors in interest. Notwithstanding any other provision of this Agreement, the Executive may designate a successor or successors in interest to receive any amounts due under this Agreement

after the Executive's death. A designation of a successor in interest must be made in writing, signed by the Executive, and delivered to the Corporation. Except as otherwise provided in this Agreement, if the Executive has not designated a successor in interest, payment of benefits under this Agreement will be made to the Executive's estate. This Section will not supersede any designation of beneficiary or successor in interest made by the Executive or provided for under any other plan, practice, or program of the Corporation. This Agreement will inure to the benefit of and be binding upon the Corporation and its successors and assigns. The Corporation will require any successor (whether direct or indirect, by acquisition of assets, merger, consolidation or otherwise) to all or substantially all of the operations or assets of the Corporation or any successor, and without regard to the form of transaction used to acquire the operations or assets of the Corporation, to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no succession had taken place. As used in this Agreement, "Corporation" means the Corporation and any successor to its operations or assets as set forth in this Section that is required by this clause to assume and agree to perform this Agreement or that otherwise assumes and agrees to perform this Agreement.

10. BENEFIT CLAIMS. In the event the Executive, or his beneficiaries, as the case may be, and the Corporation disagree as to their respective rights and obligations under this Agreement, and the Executive or his beneficiaries are successful in establishing, privately or otherwise, that his or their position is substantially correct, or that the Corporation's position is substantially wrong or unreasonable, or in the event that the disagreement is resolved by settlement, the Corporation will pay all costs and expenses, including counsel fees, that the Executive or his beneficiaries may incur in connection therewith directly to the provider of the services or as may otherwise be directed by the Executive or his beneficiaries. The Corporation will not delay or reduce the amount of any payment provided for hereunder or setoff or counterclaim against any such amount for any reason whatsoever; it is the intention of the Corporation and the Executive that the amounts payable to the Executive or his beneficiaries hereunder will continue to be paid in all events in the manner and at the times herein provided. All payments made by the Corporation hereunder will be final and the Corporation will not seek to recover all or any part of any portion of any payments hereunder for any reason.

11. FAILURE, DELAY OR WAIVER. No course of action or failure to act by the Corporation or the Executive will constitute a waiver by the party of any right or remedy under this Agreement, and no waiver by either party of any right or remedy under this Agreement will be effective unless made in writing.

12. SEVERABILITY. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be enforceable under applicable law. However, if any provision of this Agreement is deemed unenforceable under applicable law by a court having jurisdiction, the provision will be unenforceable only to the extent necessary to make it enforceable without invalidating the remainder thereof or any of the remaining provisions of this Agreement.

13. NOTICE. All written communications to parties required hereunder must be in writing and (a) delivered in person, (b) mailed by registered or certified mail, return receipt requested, (such mailed notice to be effective 4 days after the date it is mailed) or (c) sent by facsimile transmission, with confirmation sent by way of one of the above methods, to the party at the address given below for the party (or to any other address as the party designates in a writing complying with this Section, delivered to the other party):

If to the Corporation:

Computer Task Group, Incorporated

800 Delaware Avenue

Buffalo, New York 14209

Attention: General Counsel

Telephone: 716-882-8000

Telecopier: 716-887-7370

If to the Executive:

Brendan M. Harrington

46 Rankin Road

Amherst, New York 14226

14. MISCELLANEOUS. This Agreement (a) may not be amended, modified or terminated orally or by any course of conduct pursued by the Corporation or the Executive, but may be amended, modified or terminated only by a written agreement duly executed by the Corporation and the Executive, (b) is binding upon and inures to the benefit of the

Corporation and the Executive and each of their respective heirs, representatives, successors and assignees, except that the Executive may not assign any of his rights or obligations pursuant to this Agreement, (c) except as otherwise specifically provided in this Agreement, constitutes the entire agreement between the Corporation and the Executive with respect to the subject matter of this Agreement, and supersedes all oral and written proposals, representations, understandings and agreements previously made or existing with respect to such subject matter, including that certain Change in Control Agreement dated November 14, 2006 and any similar agreements, and (d) will be governed by, and interpreted and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of law.

15. TERM.

(a) Except as provided in (b), this Agreement will not be terminated earlier than 36 months after its Effective Date. The Agreement will be extended automatically for additional 12-month periods unless one party notifies the other prior to the beginning of the successive 36 month period that it is terminating the Agreement. The intention of the preceding sentence is that if a party does not give notice, at least 36 months remain in the Agreement.

(b) This Agreement will terminate when the Corporation has made the last payment provided for under it, including without limitation, any payments payable at any time under Sections 9 and 10. However, the obligations under Section 3(d) will survive any termination and will remain in full force and effect for the period specified.

(c) Notwithstanding the foregoing paragraphs (a) and (b) above, in the event a Change in Control has not occurred and the Executive’s position as Chief Executive Officer is terminated because the Board of Directors of the Corporation has appointed a different individual as Chief Executive Officer, then this Agreement shall terminate on the date of the appointment of such other individual to the position of Chief Executive Officer.

16. RULE GOVERNING PAYMENT DATES. In any case where this Agreement requires the payment of an amount during a period of two or more days that overlaps two calendar years, the payee shall have no right to determine the calendar year in which payment actually occurs.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day first written above.

Computer Task Group, Incorporated

By______________________________

Daniel J. Sullivan                        

Title_____________________________

Chairman of the Board of Directors

Executive

_________________________________

Brendan M. Harrington

EX-21

EXHIBIT 21

COMPUTER TASK GROUP, INCORPORATED

SUBSIDIARIES OF COMPUTER TASK GROUP, INCORPORATED

The following is a list of all of the subsidiaries of the Registrant as of December 31, 2014. All financial statements of such subsidiaries are included in the consolidated financial statements of the Registrant, and all of the voting securities of each subsidiary are wholly‑owned by the Registrant:

Subsidiary	State/Country  or Jurisdiction of Incorporation
Computer Task Group of Delaware, Inc.	Delaware
CTG of Buffalo, Inc.	New York
Computer Task Group (Holdings) Ltd.	United Kingdom
Computer Task Group of Kansas, Inc. (a subsidiary     of Computer Task Group (Holdings) Ltd.)	Missouri
Computer Task Group of Canada, Inc.	Canada
Computer Task Group International, Inc.	Delaware
Computer Task Group Europe B.V. (a subsidiary     of Computer Task Group International, Inc.)	The Netherlands
Computer Task Group (U.K.) Ltd. (a subsidiary     of Computer Task Group Europe B.V.)	United Kingdom
Computer Task Group Belgium N.V. (a subsidiary     of Computer Task Group Europe B.V.)	Belgium
CTG ITS S.A. (a subsidiary     of Computer Task Group IT Solutions, S.A.)	Belgium
Computer Task Group of Luxembourg PSF (a subsidiary     of Computer Task Group, Incorporated)	Luxembourg
Computer Task Group IT Solutions, S.A. (a subsidiary     of Computer Task Group Luxembourg PSF.)	Luxembourg
e-trinity N.V. (a subsidiary of Computer Task Group Belgium N.V.)	Belgium
Quality4Care B.V.B.A. (a subsidiary of e-trinity N.V.)	Belgium

EX-23

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Computer Task Group, Incorporated:

We consent to the incorporation by reference in the registration statement No. 333‑43263 on Form S-3 and No. 033-61493, 333-12237, 333-39936, 333-51162, 333-66766, 333-91148, 333-118314, 333-143080, 333-152827, 333-167461, 333-167462, 333-183206, and 333-197925 on Form S-8 of Computer Task Group, Incorporated of our reports dated February 25, 2015, with respect to the consolidated balance sheets of Computer Task Group, Incorporated and subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2014, and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of December 31, 2014, which reports appear in the December 31, 2014 annual report on Form 10‑K of Computer Task Group, Incorporated.

/s/ KPMG LLP

Buffalo, New York

February 25, 2015

EX-31.A

EXHIBIT 31 (a)

CERTIFICATION

I, Brendan M. Harrington, certify that:

1. I have reviewed this report on Form 10-K of Computer Task Group, Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2015	/s/ Brendan M. Harrington
	Brendan M. Harrington Interim Chief Executive Officer

EX-31.B

EXHIBIT 31 (b)

CERTIFICATION

I, John M. Laubacker, certify that:

1. I have reviewed this report on Form 10-K of Computer Task Group, Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2015	/s/ John M. Laubacker
	John M. Laubacker Interim Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Computer Task Group, Incorporated, a New York corporation (the “Company”), does hereby certify with respect to the Annual Report of the Company on Form 10-K for the year ended December 31, 2014 as filed with the Securities and Exchange Commission (the “Form 10-K”) that:

(1) the Form 10-K fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Computer Task Group, Incorporated and will be retained by Computer Task Group, Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.

Date: February 25, 2015	/s/ Brendan M. Harrington
	Brendan M. Harrington Interim Chief Executive Officer

Date: February 25, 2015	/s/ John M. Laubacker
	John M. Laubacker Interim Chief Financial Officer

XML

Summary of Significant Accounting Policies - Trade Accounts Receivable (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accounting Policies [Abstract]
Bad debt expense, net of recoveries	$ (31)	$ 167	$ (40)

XML

Income Taxes - Deferred Tax Assets and Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Assets
Deferred compensation	$ 8,358	$ 8,005
Loss carryforwards	1,240	1,208
Accruals deductible for tax purposes when paid	452	409
Depreciation	56	57
Allowance for doubtful accounts	300	324
State taxes	767	836
Gross deferred tax assets	11,173	10,839
Deferred tax asset valuation allowance	(3,135)	(2,170)	(2,269)	(1,404)
Gross deferred tax assets less valuation allowance	8,038	8,669	8,485
Liabilities
Depreciation	(470)	(965)
Other	(125)	(197)
Gross deferred tax liabilities	(595)	(1,162)
Net deferred tax assets	7,443	7,507
Net current assets	1,079	1,113
Net non-current assets	6,364	6,487
Net non-current liabilities	$ 0	$ 93

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Property, Equipment and Capitalized Software - (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, gross	$ 27,635	$ 28,387
Accumulated depreciation and amortization	(20,842)	(20,146)
Net	6,793	8,241	6,916
Capitalized software costs, additions	1,683	1,686
Land [Member]
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, gross	378	378
Buildings [Member]
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, gross	4,342	4,342
Equipment [Member]
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, gross	6,904	7,372
Furniture [Member]
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, gross	3,224	3,088
Software Development [Member]
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, gross	5,505	5,784
Other Software [Member]
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, gross	2,761	2,869
Leasehold Improvements [Member]
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, gross	$ 4,521	$ 4,554

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Equity-Based Compensation Options Exercisable (Details) (USD $)	12 Months Ended
	Dec. 31, 2014
2010 Plan [Member]
Share-based Compensation Details
Options exercisable (in shares)	477,722
Outstanding, weighted-average exercise price	$ 15.56
Weighted average remaining contractual life	10 years 1 month
Aggregate intrinsic value	$ 0
Equity Plan [Member]
Share-based Compensation Details
Options exercisable (in shares)	1,868,597
Outstanding, weighted-average exercise price	$ 4.82
Weighted average remaining contractual life	3 years 11 months
Aggregate intrinsic value	8,809,260
Range of Exercise Prices, $12.16 – $13.75 [Member] | 2010 Plan [Member]
Share-based Compensation Details
Options exercisable (in shares)	289,750
Outstanding, weighted-average exercise price	$ 13.16
Weighted average remaining contractual life	9 years 8 months
Aggregate intrinsic value	0
Exercise price range, lower limit	$ 12.16
Exercise price range, upper limit	$ 13.75
Range of Exercise Prices, $15.04 – $16.93 [Member] | 2010 Plan [Member]
Share-based Compensation Details
Options exercisable (in shares)	62,348
Outstanding, weighted-average exercise price	$ 15.22
Weighted average remaining contractual life	7 years 11 months
Aggregate intrinsic value	0
Range of Exercise Prices, $20.68 - $21.41 [Member] | 2010 Plan [Member]
Share-based Compensation Details
Options exercisable (in shares)	125,624
Outstanding, weighted-average exercise price	$ 21.26
Weighted average remaining contractual life	12 years 2 months
Aggregate intrinsic value	0
Exercise price range, lower limit	$ 20.68
Exercise price range, upper limit	$ 21.41
Range of Exercise Prices, $2.35 – $3.26 [Member] | Equity Plan [Member]
Share-based Compensation Details
Options exercisable (in shares)	292,500
Outstanding, weighted-average exercise price	$ 3.20
Weighted average remaining contractual life	4 years 0 months
Aggregate intrinsic value	1,852,825
Exercise price range, lower limit	$ 2.35
Exercise price range, upper limit	$ 3.26
Range of Exercise Prices, $3.48 – $4.90 [Member] | Equity Plan [Member]
Share-based Compensation Details
Options exercisable (in shares)	1,007,972
Outstanding, weighted-average exercise price	$ 4.54
Weighted average remaining contractual life	3 years 0 months
Aggregate intrinsic value	5,032,901
Exercise price range, lower limit	$ 3.48
Exercise price range, upper limit	$ 4.90
Range of Exercise Prices, $5.25 – $7.18 [Member] | Equity Plan [Member]
Share-based Compensation Details
Options exercisable (in shares)	568,125
Outstanding, weighted-average exercise price	$ 6.14
Weighted average remaining contractual life	5 years 3 months
Aggregate intrinsic value	$ 1,923,534
Exercise price range, lower limit	$ 5.25
Exercise price range, upper limit	$ 7.18

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Income Taxes - Reconcilliation of Unrecognized Tax Benefits (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Beginning of period, unrecognized tax benefits	$ 0	$ 173
Additions based on tax positions related to the current year	0	0
Additions for tax positions of prior years	0	0
Reductions for lapse of statute of limitations	0	(24)
Settlements	0	(149)
End of period, unrecognized Tax Benefits	$ 0	$ 0

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Summary of Significant Accounting Policies - Guarantees (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Accounting Policies [Abstract]
Current carrying value of guarantees	$ 1.6	$ 2.7

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Summary of Significant Accounting Policies - Basis of Presentation and Consolidation (Details)	12 Months Ended
	Dec. 31, 2014
Accounting Policies [Abstract]
Number of Operating Segments	1
Number of Vertical Market Focus Areas	4

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Enterprise-Wide Disclosures - (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Enterprise-Wide Disclosures
Revenue	$ 393,268		$ 419,036		$ 424,415
Long-lived assets	6,793		8,241		6,916
Deferred tax assets, net of valuation allowance	8,038		8,669		8,485
Threshold for Separate Geographic Disclosure	10.00%		10.00%		10.00%
United States [Member]
Enterprise-Wide Disclosures
Revenue	314,500		341,391		355,022
Long-lived assets	5,759		7,169		6,102
Deferred tax assets, net of valuation allowance	7,982		8,669		8,485
Europe [Member]
Enterprise-Wide Disclosures
Long-lived assets	1,034		1,072		814
Deferred tax assets, net of valuation allowance	56		0		0
Belgium [Member]
Enterprise-Wide Disclosures
Revenue	44,692	[1]	48,428	[1]	41,957	[1]
Other European Countries [Member]
Enterprise-Wide Disclosures
Revenue	33,652		28,684		26,653
Other Country [Member]
Enterprise-Wide Disclosures
Revenue	424		533		783
Foreign Countries [Member]
Enterprise-Wide Disclosures
Revenue	$ 78,768		$ 77,645		$ 69,393

[1] Revenue for our Belgium operations has been disclosed separately as it exceeds 10% of consolidated revenue for certain of the years presented

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Lease Commitments Future Minimum Obligations (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Operating Leased Assets [Line Items]
2015	$ 5,046
2016	3,740
2017	2,459
2018	1,091
2019	269
Later years	0
Minimum future obligations	$ 12,605

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Equity-Based Compensation - Text (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Details
Award vesting period	4 years
Weighted-average fair value on the date of grant of stock options granted	$ 5.91	$ 5.78	$ 5.47
Restricted Stock - annual vesting percentage	25.00%
Stock-based compensation expense for non-vested equity-based compensation	$ 2,700,000
End of period, share price	$ 9.53
Stock based compensation expense, recognition period	15 months
Minimum
Share-based Compensation Details
Award vesting period	1 year
2010 Plan [Member]
Share-based Compensation Details
Years of annual installments in which stock options become exercisable	4 years
Number of shares authorized	1,300,000
Number of shares available for grant	628,000
Options exercised (in shares)	(5,000)	(2,875)	(20,750)
Intrinsic value of shares exercised	18,000	17,000	55,000
Number of options outstanding and exercisable (in shares)	631,846	660,471	461,346	265,500
Aggregate intrinsic value	0
Weighted average remaining contractual life	9 years 6 months
Restricted stock grants (in shares)	11,700
Restricted stock shares released (weighted-average fair value)	0
Restricted stock cancelled or forfeited (weighted-average fair value)	0
Restricted stock grants (weighted-average fair value)	$ 16.93
2010 Plan [Member] | Minimum
Share-based Compensation Details
Award vesting period	1 year
2010 Plan [Member] | Maximum
Share-based Compensation Details
Award vesting period	15 years
Equity Plan [Member]
Share-based Compensation Details
Options exercised (in shares)	(601,800)	(107,775)	(574,353)
Intrinsic value of shares exercised	5,800,000	1,600,000	7,400,000
Number of options outstanding and exercisable (in shares)	1,868,597	2,472,147	2,584,547	3,175,075
Aggregate intrinsic value	8,809,260
Weighted average remaining contractual life	3 years 11 months
Equity Plan [Member] | Minimum
Share-based Compensation Details
Years of annual installments in which stock options become exercisable	3 years
Award vesting period	1 year
Equity Plan [Member] | Maximum
Share-based Compensation Details
Years of annual installments in which stock options become exercisable	4 years
Award vesting period	15 years
1991 Plan Options [Member]
Share-based Compensation Details
Options exercised (in shares)	0	0	0
Number of options outstanding and exercisable (in shares)	135,060
Aggregate intrinsic value	$ 500,000
Weighted average remaining contractual life	0 years 6 months
1991 Plan Options [Member] | Range of Exercise Prices, $2.88 – $6.00 [Member]
Share-based Compensation Details
Number of options outstanding and exercisable (in shares)	127,000
Exercise price range, lower limit	$ 2.88
Exercise price range, upper limit	$ 6.00
1991 Plan Options [Member] | Exercise Price, $16.19 [Member]
Share-based Compensation Details
Number of options outstanding and exercisable (in shares)	8,000
Exercise price range, lower limit	$ 16.19
Exercise price range, upper limit	$ 16.19
1991 Restricted Stock Plan [Member]
Share-based Compensation Details
Number of shares authorized	800,000
Number of shares available for grant	95,000
Restricted stock grants (in shares)	125,200	98,000	127,500
Restricted stock shares released (weighted-average fair value)	193,652	106,626	90,626
Restricted stock cancelled or forfeited (weighted-average fair value)	39,838	1,600	7,500
Restricted stock grants (weighted-average fair value)	$ 16.62	$ 20.68	$ 15.04

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Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Revenue by vertical market

CTG’s revenue by vertical market as a percentage of consolidated revenue for the years ended December 31, 2014, 2013 and 2012 is as follows:

	2014		2013		2012
Healthcare	28.6	%	31.4	%	33.0	%
Technology service providers	26.4	%	28.0	%	30.8	%
Financial services	7.9	%	6.8	%	6.1	%
Energy	6.1	%	6.2	%	6.0	%
General markets	31.0	%	27.6	%	24.1	%
Total	100.0	%	100.0	%	100.0	%

Revenue by contract type

The Company’s revenue from contracts accounted for under time-and-material, progress billing, and percentage-of-completion methods as a percentage of consolidated revenue for the years ended December 31, 2014, 2013 and 2012 is as follows:

	2014		2013		2012
Time-and-material	86.2	%	88.8	%	90.3	%
Progress billing	11.2	%	8.8	%	7.9	%
Percentage-of-completion	2.6	%	2.4	%	1.8	%
Total	100.0	%	100.0	%	100.0	%

Basic and diluted earnings per share (EPS)

Basic and diluted earnings per share (EPS) for the years ended December 31, 2014, 2013, and 2012 are as follows:

For the year ended	Net Income		Weighted Average Shares	Earnings per Share
(amounts in thousands, except per-share data)
December 31, 2014
Basic EPS	$	10,350	15,120	$	0.68
Dilutive effect of outstanding equity instruments	—		1,140	(0.04		)
Diluted EPS	$	10,350	16,260	$	0.64
December 31, 2013
Basic EPS	$	15,679	15,365	$	1.02
Dilutive effect of outstanding equity instruments	—		1,589	(0.10		)
Diluted EPS	$	15,679	16,954	$	0.92
December 31, 2012
Basic EPS	$	16,165	15,172	$	1.07
Dilutive effect of outstanding equity instruments	—		1,669	(0.11		)
Diluted EPS	$	16,165	16,841	$	0.96

Schedule of accumulated other comprehensive Income (Loss)

The components that comprised accumulated other comprehensive loss on the consolidated balance sheets at December 31, 2014, 2013, and 2012 are as follows:

	2014			2013			2012
(amounts in thousands)
Foreign currency adjustment	$	(5,811	)	$	(3,537	)	$	(4,254	)
Pension loss adjustment, net of tax of $1,233 in 2014, $805 in 2013, and $1,040 in 2012	(9,782		)	(5,168		)	(6,426		)
	$	(15,593	)	$	(8,705	)	$	(10,680	)

Schedule of net benefit costs

During 2014 and 2013, actuarial losses were amortized to expense as follows:

(amounts in thousands)	2014			2013
Amortization of actuarial losses	$	201		$	277
Income tax	(51		)	(72		)
Net of tax	$	150		$	205

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Property, Equipment and Capitalized Software - Text (Details) (USD $)	3 Months Ended	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, gross	$ 27,635,000	$ 27,635,000	$ 28,387,000
Capitalized software costs, additions		1,683,000	1,686,000
Capitalized software costs, accumulated amortization	4,200,000	4,200,000	3,400,000
Depreciation and amortization expense		2,974,000	2,796,000	2,919,000
Asset impairment charges	1,544,000
Capitalized Software [Member]
Property, Equipment and Capitalized Software [Line Items]
Depreciation and amortization expense		$ 1,200,000	$ 1,200,000	$ 1,700,000

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Summary of Significant Accounting Policies - Other Intangibles (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 29, 2013	Dec. 31, 2014	Dec. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
Acquired intangible assets	$ 0.4
Amortization of intangible assets		$ 0.1	$ 0.1

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Schedule II-Valuation and Qualifying Accounts - (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Valuation and Qualifying Accounts [Abstract]
Allowance for doubtful accounts, Balance at January 1	$ 1,040		$ 862		$ 965
Allowance for doubtful accounts additions	55	[1]	178	[1]	326	[1]
Allowance for doubtful accounts, Deductions	(204)	[1]	0	[1]	(429)	[1]
Allowance for doubtful accounts, Balance at December 31	891		1,040		862
Deferred tax asset valuation allowance, Balance at January 1	2,170		2,269		1,404
Valuation Allowance Additions	1,233	[2]	233	[2]	1,000	[2]
Deferred tax asset valuation allowance, Deductions	(268)	[2]	(332)	[2]	(135)	[2]
Deferred tax asset valuation allowance, Balance at December 31	$ 3,135		$ 2,170		$ 2,269

[1] These balances primarily reflect additions to the allowance charged to expense resulting from the normal course of business, less deductions for recovery of accounts that were previously reserved, and additions and deductions for foreign currency translation

[2] These balances primarily reflect additions for an increase in the valuation reserve associated with certain deferred tax assets related to the Netherlands defined-benefit plan

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Summary of Significant Accounting Policies - Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Accounting Policies [Abstract]
Cash and cash equivalents	$ 40,862	$ 46,227	$ 40,614	$ 22,414

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Debt - (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Debt [Abstract]
Maximum borrowing capacity	$ 40,000,000	$ 35,000,000
Commitment fee	0	100,000	100,000
Amount outstanding	0	0
Maximum borrowed during year	0	0
Average borrowed during year	0	0
Interest expense	0	0
Letters of credit outstanding	$ 0	$ 600,000

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Equity-Based Compensation Stock Option Activity (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
2010 Plan [Member]
Stock Option Activity
Beginning of period, outstanding (in shares)	660,471	461,346	265,500
Beginning of period (weighted-average price)	$ 15.93	$ 13.59	$ 12.89
Options granted (in shares)	107,000	207,000	225,596
Options granted (weighted-average price)	$ 16.93	$ 21.03	$ 14.41
Options exercised (in shares)	(5,000)	(2,875)	(20,750)
Options exercised (weighted-average price)	$ 13.18	$ 13.50	$ 13.53
Options canceled or forfeited (in shares)	(130,625)	(5,000)	(9,000)
Options canceled or forfeited (weighted-average price)	$ 17.02	$ 13.18	$ 13.55
Options expired (in shares)	0	0	0
Options expired (weighted-average price)	$ 0.00	$ 0.00	$ 0.00
End of period, outstanding (in shares)	631,846	660,471	461,346
End of period (weighted-average price)	$ 15.89	$ 15.93	$ 13.59
Options exercisable (in shares)	477,722
Options exercisable (weighted-average price)	$ 15.56
Equity Plan [Member]
Stock Option Activity
Beginning of period, outstanding (in shares)	2,472,147	2,584,547	3,175,075
Beginning of period (weighted-average price)	$ 4.67	$ 4.68	$ 4.49
Options granted (in shares)	0	0	0
Options granted (weighted-average price)	$ 0	$ 0.00	$ 0.00
Options exercised (in shares)	(601,800)	(107,775)	(574,353)
Options exercised (weighted-average price)	$ 4.23	$ 4.93	$ 3.58
Options canceled or forfeited (in shares)	0	(2,000)	(13,175)
Options canceled or forfeited (weighted-average price)	$ 0.00	$ 5.92	$ 5.42
Options expired (in shares)	(1,750)	(2,625)	(3,000)
Options expired (weighted-average price)	$ 4.34	$ 3.45	$ 3.56
End of period, outstanding (in shares)	1,868,597	2,472,147	2,584,547
End of period (weighted-average price)	$ 4.82	$ 4.67	$ 4.68
Options exercisable (in shares)	1,868,597
Options exercisable (weighted-average price)	$ 4.82

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Deferred Compensation Benefits Anticipated Benefit Payments (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
ESBP
Anticipated Benefit Payments
2015	$ 725
2016	670
2017	654
2018	655
2019	657
2020 - 2024	2,942
Total	6,303
NDBP
Anticipated Benefit Payments
2015	150
2016	165
2017	186
2018	227
2019	258
2020 - 2024	1,528
Total	$ 2,514

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Summary of Significant Accounting Policies - Acquisition (Details) (USD $)	1 Months Ended	12 Months Ended
	Jan. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Business Acquisition [Line Items]
Revenue		$ 393,268,000	$ 419,036,000	$ 424,415,000
Etrinity [Member]
Business Acquisition [Line Items]
Purchase price of acquired entity	2,800,000
Revenue		$ 2,100,000	$ 2,800,000	$ 3,000,000

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of Computer Task Group, Incorporated, and its subsidiaries (the Company or CTG), located primarily in North America and Europe. There are no unconsolidated entities, or off-balance sheet arrangements other than certain guarantees supporting office leases or the performance under government contracts in the Company's European operations. All inter-company accounts and transactions have been eliminated. Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with U.S. generally accepted accounting principles. Such estimates primarily relate to the valuation of goodwill, valuation allowances for deferred tax assets, actuarial assumptions including discount rates and expected rates of return, as applicable, for the Company’s defined benefit plans, the allowance for doubtful accounts receivable, assumptions underlying stock option valuation, investment valuation, estimates of progress toward completion and direct profit or loss on contracts, legal matters, and other contingencies. The current economic environments in the United States, Canada, and Western Europe where the Company has operations have increased the degree of uncertainty inherent in these estimates and assumptions. Actual results could differ from those estimates.

The Company operates in one industry segment, providing IT services to its clients. These services include IT Solutions and IT and other Staffing. CTG provides these primary services to all of the markets that it serves. The services provided typically encompass the IT business solution life cycle, including phases for planning, developing, implementing, managing, and ultimately maintaining the IT solution. A typical customer is an organization with large, complex information and data processing requirements. In certain limited instances for a small number of clients, the Company provides administrative or warehouse employees to clients to supplement the IT resources we place at those clients. The Company promotes a significant portion of its services through four vertical market focus areas: Healthcare (which includes services provided to healthcare providers, health insurers, and life sciences companies), Technology Service Providers, Financial Services, and Energy. The Company focuses on these four vertical areas as it believes that these areas are either higher growth markets than the general IT services market and the general economy, or are areas that provide greater potential for the Company’s growth due to the size of the vertical market. The remainder of CTG’s revenue is derived from general markets.

CTG’s revenue by vertical market as a percentage of consolidated revenue for the years ended December 31, 2014, 2013 and 2012 is as follows:

	2014		2013		2012
Healthcare	28.6	%	31.4	%	33.0	%
Technology service providers	26.4	%	28.0	%	30.8	%
Financial services	7.9	%	6.8	%	6.1	%
Energy	6.1	%	6.2	%	6.0	%
General markets	31.0	%	27.6	%	24.1	%
Total	100.0	%	100.0	%	100.0	%

Revenue and Cost Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, when the services have been rendered, when the price is determinable, and when collectibility of the amounts due is reasonably assured. For time-and-material contracts, revenue is recognized as hours are incurred and costs are expended. For contracts with periodic billing schedules, primarily monthly, revenue is recognized as services are rendered to the customer. Revenue for fixed-price contracts is recognized per the proportional method of accounting using an input-based approach. On a given project, actual salary and indirect labor costs incurred are measured and compared against the total estimated costs of such items at the completion of the project. Revenue is recognized based upon the percentage-of-completion calculation of total incurred costs to total estimated costs. The Company infrequently works on fixed-price projects that include significant amounts of material or other non-labor related costs which could distort the percent complete within a percentage-of-completion calculation. The Company’s estimate of the total labor costs it expects to incur over the term of the contract is based on the nature of the project and our past experience on similar projects, and includes management judgments and estimates which affect the amount of revenue recognized on fixed-price contracts in any accounting period.

The Company’s revenue from contracts accounted for under time-and-material, progress billing, and percentage-of-completion methods as a percentage of consolidated revenue for the years ended December 31, 2014, 2013 and 2012 is as follows:

	2014		2013		2012
Time-and-material	86.2	%	88.8	%	90.3	%
Progress billing	11.2	%	8.8	%	7.9	%
Percentage-of-completion	2.6	%	2.4	%	1.8	%
Total	100.0	%	100.0	%	100.0	%

The Company includes billable expenses in its accounts as both revenue and direct costs. These billable expenses totaled $8.6 million, $11.8 million, and $13.4 million in 2014, 2013 and 2012, respectively.

Software Revenue Recognition

In 2012 and 2013, the Company performed services for a customer under a series of contracts that provided for application customization and integration services, specifically utilizing one of the software tools the Company had developed for internal use. These services were provided under a software-as-a-service model. As the contracts were closely interrelated and dependent on each other, for accounting purposes the contracts were considered to be one arrangement. As the project included significant modification and customization services to transform the previously developed software tool into an expanded tool intended to meet the customer’s requirements, the percentage-of-completion method of contract accounting was utilized for the project.

Fair Value

Fair value is defined as the exchange price that would be received for an asset or paid for a liability in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants. The Company utilizes a fair value hierarchy for its assets and liabilities, as applicable, based upon three levels of input, which are:

Level 1—quoted prices in active markets for identical assets or liabilities (observable)

Level 2—inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in inactive markets, or other inputs that are observable or can be supported by observable market data for essentially the full term of the asset or liability (observable)

Level 3—unobservable inputs that are supported by little or no market activity, but are significant to determining the fair value of the asset or liability (unobservable)

At December 31, 2014 and 2013, the carrying amounts of the Company’s cash of $40.9 million and $46.2 million, respectively, approximated fair value.

The Company is also allowed to elect an irrevocable option to measure, on a contract by contract basis, specific financial instruments and certain other items that are currently not being measured at fair value. The Company did not elect to apply the fair value provisions of this standard for any specific contracts during the years ended December 31, 2014 or 2013.

Life Insurance Policies

The Company has purchased life insurance on the lives of certain plan participants, all who were former employees, in the non-qualified defined benefit Executive Supplemental Benefit Plan. Those policies have generated cash surrender value, and the Company has taken loans against the policies. At December 31, 2014 and December 31, 2013, these insurance policies had a gross cash surrender value of $27.6 million and $26.2 million, respectively, loans had been taken totaling $23.1 million in both periods, and the net cash surrender value balance of $4.5 million and $3.1 million, respectively, was included on the consolidated balance sheet in “Other Assets” under non-current assets.

At December 31, 2014, the total death benefit for the remaining policies was approximately $38.8 million. Currently, upon the death of all of the remaining plan participants, the Company would expect to receive approximately $15.1 million after the payment of outstanding loans and other commitments, and record a gain of approximately $11.2 million.

Taxes Collected from Customers

In instances where the Company collects taxes from its customers for remittance to governmental authorities, primarily in its European operations, revenue and expenses are not presented on a gross basis in the consolidated financial statements as such taxes are recorded in the Company's accounts on a net basis.

Cash and Cash Equivalents, and Cash Overdrafts

For purposes of the statement of cash flows, cash and cash equivalents are defined as cash on hand, demand deposits, and short-term, highly liquid investments with a maturity of three months or less. As the Company does not fund its bank accounts for the checks it has written until the checks are presented to the bank for payment, the change in cash overdraft, net, on the consolidated statements of cash flows represents the increase or decrease in outstanding checks year-over-year.

Trade Accounts Receivable

Trade accounts receivable balances are expected to be received on average approximately 65 days from the date of invoice. Generally, the Company does not work on any projects where amounts due are expected to be received greater than one year from the date of the invoice. Accordingly, the recorded book value for the Company’s accounts receivable equals fair value. Outstanding trade accounts receivable are generally considered past due when they remain unpaid after the contractual due date has passed. An allowance for doubtful accounts receivable (allowance) is established using management’s judgment. Specific identification of balances that are significantly past due and where customer payments have not been recently received are generally added to the allowance unless the Company has direct knowledge that the customer intends to make payment. Additionally, any balances which relate to a customer that has declared bankruptcy or ceased its business operations are added to the allowance at the amount not expected to be received.

Bad debt expense, net of recoveries, was approximately $(31,000), $0.2 million, and $(40,000) in 2014, 2013, and 2012, respectively.

Property, Equipment and Capitalized Software Costs

Property and equipment are generally stated at historical cost less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives of one year to 30 years, and begins after an asset has been put into service. Leasehold improvements are generally depreciated over the shorter of the term of the lease or the useful life of the improvement. The cost of property or equipment sold or otherwise disposed of, along with related accumulated depreciation, is eliminated from the accounts, and the resulting gain or loss, if any, is reflected in current earnings. Maintenance and repairs are charged to expense when incurred, while significant improvements to existing assets are capitalized.

As of December 31, 2014 and December 31, 2013, the Company had capitalized costs relating to software projects developed for internal use. Amortization periods for these projects range from two to five years, and begin when the software, or enhancements thereto, is available for its intended use. Amortization periods are evaluated annually for propriety.

Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When such circumstances exist, the recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value less costs to sell. The Company does not have any long-lived assets that are impaired or that it intends to dispose of at December 31, 2014.

Leases

The Company is obligated under a number of short and long-term operating leases, primarily for the rental of office space, office equipment, and for automobiles in our European operations. In instances where the Company has negotiated leases that contain rent holidays or escalation clauses, the expense for those leases is recognized monthly on a straight-line basis over the term of the lease.

Goodwill

The Company had a goodwill balance of $37.4 million at December 31, 2014. This balance increased by approximately $2.0 million during 2013 due to the acquisition of etrinity. The balance is evaluated annually as of the Company’s October fiscal month-end (the measurement date), or more frequently if facts and circumstances indicate impairment may exist. This evaluation, as applicable, is based on estimates and assumptions that may be used to analyze the appraised value of similar transactions from which the goodwill arose, the appraised value of similar companies, or estimates of future discounted cash flows. The estimates and assumptions on which the Company’s evaluations are based involve judgments and are based on currently available information, any of which could prove wrong or inaccurate when made, or become wrong or inaccurate as a result of subsequent events.

At the respective measurement dates for 2014, 2013, and 2012, the Company completed its annual valuation of the business to which the Company’s goodwill relates. In 2014, the Company utilized the services of an external valuation consultant, while in 2013 and 2012, the Company utilized the provisions under Accounting Standards Update No. 2011-08, “Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment,” which allow public entities to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under this process, an entity is no longer required to calculate the fair value of a reporting unit unless the qualitative assessment shows that it is more likely than not that its fair value is less than its carrying amount. From its reviews, the Company believes the fair value of the business continues to be substantially in excess of the carrying value of the business. Additionally, there are no other facts or circumstances which arose during 2014, 2013 or 2012 that led management to believe the goodwill balance was impaired.

Other Intangible Assets

The Company recorded approximately $0.4 million of other intangible assets in 2013 resulting from the acquisition of etrinity. Previously, the Company did not have any other intangible assets recorded on its accounts. These intangible assets include customer relationships, trademarks, and non-compete agreements, and are being amortized over periods ranging from two to seven years. Total amortization expense recognized in both 2014 and 2013 was approximately $0.1 million.

Income Taxes

The Company provides for deferred income taxes for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. In assessing the realizability of deferred tax assets, management considers within each tax jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax-planning strategies in making this assessment. The Company recognizes, as applicable, accrued interest and penalties related to unrecognized tax benefits (if any) in tax expense.

Equity-Based Compensation

The Company records the fair value of equity-based compensation expense for all equity-based compensation awards granted subsequent to January 1, 2006. The calculated fair value cost of its equity-based compensation awards is recognized in the Company’s income statement over the period in which an employee or director is required to provide the services for the award. Compensation cost is not recognized for employees or directors that do not render the requisite services. The Company recognized the expense for equity-based compensation in its 2014, 2013, and 2012 statements of income on a straight-line basis based upon awards that are ultimately expected to vest. See note 10, “Equity-Based Compensation.”

Net Income Per Share

Basic and diluted earnings per share (EPS) for the years ended December 31, 2014, 2013, and 2012 are as follows:

For the year ended	Net Income		Weighted Average Shares	Earnings per Share
(amounts in thousands, except per-share data)
December 31, 2014
Basic EPS	$	10,350	15,120	$	0.68
Dilutive effect of outstanding equity instruments	—		1,140	(0.04		)
Diluted EPS	$	10,350	16,260	$	0.64
December 31, 2013
Basic EPS	$	15,679	15,365	$	1.02
Dilutive effect of outstanding equity instruments	—		1,589	(0.10		)
Diluted EPS	$	15,679	16,954	$	0.92
December 31, 2012
Basic EPS	$	16,165	15,172	$	1.07
Dilutive effect of outstanding equity instruments	—		1,669	(0.11		)
Diluted EPS	$	16,165	16,841	$	0.96

Weighted-average shares represent the average number of issued shares less treasury shares and shares held in the Stock Trusts, and for the basic EPS calculations, unvested restricted stock.

Certain options representing 0.6 million, 0.1 million, and 0.1 million shares of common stock were outstanding at December 31, 2014, 2013, and 2012, respectively, but were not included in the computation of diluted earnings per share as their effect on the computation would have been anti-dilutive.

Accumulated Other Comprehensive Loss

The components that comprised accumulated other comprehensive loss on the consolidated balance sheets at December 31, 2014, 2013, and 2012 are as follows:

	2014			2013			2012
(amounts in thousands)
Foreign currency adjustment	$	(5,811	)	$	(3,537	)	$	(4,254	)
Pension loss adjustment, net of tax of $1,233 in 2014, $805 in 2013, and $1,040 in 2012	(9,782		)	(5,168		)	(6,426		)
	$	(15,593	)	$	(8,705	)	$	(10,680	)

During 2014 and 2013, actuarial losses were amortized to expense as follows:

(amounts in thousands)	2014			2013
Amortization of actuarial losses	$	201		$	277
Income tax	(51		)	(72		)
Net of tax	$	150		$	205

The amortization of actuarial losses is included in determining net periodic pension cost. See note 7, "Deferred Compensation Benefits" for additional information.

Foreign Currency

The functional currency of the Company’s foreign subsidiaries is the applicable local currency. The translation of the applicable foreign currencies into U.S. dollars is performed for assets and liabilities using current exchange rates in effect at the balance sheet date, for equity accounts using historical exchange rates, and for revenue and expense activity using the applicable month’s average exchange rates. The Company recorded nominal losses in 2014, 2013, and 2012 from foreign currency transactions for balances settled during the year or intended to be settled as of each respective year-end.

Guarantees

The Company has a number of guarantees in place in our European operations which support office leases and performance under government projects. These guarantees totaled approximately $1.6 million and $2.7 million at December 31, 2014 and 2013, respectively, and generally have expiration dates ranging from January 2015 through June 2019. The dollar value of the guarantees decreased at December 31, 2014 as compared with December 31, 2013 due to a renegotiation of the office lease agreement for the Company's Belgium office as well as a decrease in the value of the Euro as compared with the US dollar during 2014.

Acquisition

In January 2013, the Company acquired etrinity, a provider of IT services to the healthcare market in Belgium and the Netherlands for approximately $2.8 million. Founded in 2000, etrinity's 2014, 2013 and 2012 revenue approximated U.S. $2.1 million, $2.8 million, and $3.0 million, respectively. The firm's IT services are targeted to the healthcare provider market and include clinical systems integration and implementation, application management, technology support for medical imaging, training, and technical resources.

Recently Issued Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," ("ASU 2014-09"). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and footnote disclosures.

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Deferred Compensation Benefits - Text (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Deferred Compensation Text Details [Line Items]
Amounts not recognized as net periodic benefit, net of tax	$ (9,782,000)	$ (5,168,000)	$ (6,426,000)
Pension loss (benefit) adjustment, net of tax	4,614,000	(1,258,000)	2,820,000
ESBP
Deferred Compensation Text Details [Line Items]
Net periodic pension cost	414,000	434,000	617,000
Benefit obligation	8,274,000	7,499,000	8,405,000
Comprehensive pension gain (loss), net of tax	(700,000)	400,000
Discount rate	3.30%	3.87%
Change in discount rate	(0.57%)
Increase (decrease) in plan liabilities	400,000
Estimated future employer contributions, next year	700,000
Employer contributions	737,000	720,000
Amounts not recognized as net periodic benefit, net of tax	2,000,000	1,300,000
Non Employee Director Deferred Compensation Plan [Member]
Deferred Compensation Text Details [Line Items]
Employer contributions	400,000	100,000	100,000
NDBP
Deferred Compensation Text Details [Line Items]
Net periodic pension cost	90,000	49,000	118,000
Benefit obligation	14,932,000	11,635,000	11,913,000
Discount rate	1.50%	3.20%
Change in discount rate	(1.70%)
Increase (decrease) in plan liabilities	4,400,000
Employer contributions	0	0
Targeted minimum return	4.00%	4.00%
Guaranteed rate of return	4.00%	4.00%
Amounts not recognized as net periodic benefit, net of tax	7,800,000	3,900,000
Key Employee Non Qualified Deferred Compensation Plan
Deferred Compensation Text Details [Line Items]
Estimated future employer contributions, next year	100,000
Employer contributions	200,000	300,000	400,000
ESBP and NDBP [Member]
Deferred Compensation Text Details [Line Items]
Pension loss (benefit) adjustment, net of tax	(5,100,000)	800,000	2,100,000
Amount to be recognized as components of net periodic benefit in next year	$ 400,000

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Summary of Significant Accounting Policies - Net Income Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 26, 2014	Jun. 27, 2014	Mar. 28, 2014	Dec. 31, 2013	Sep. 27, 2013	Jun. 28, 2013	Mar. 29, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accounting Policies [Abstract]
Current Fiscal Year End Date									--12-31
Net Income	$ 1,225	$ 2,726	$ 3,233	$ 3,166	$ 3,704	$ 3,863	$ 4,055	$ 4,057	$ 10,350	$ 15,679	$ 16,165
Weighted average number of shares outstanding, basic (in shares)									15,120,000	15,365,000	15,172,000
Basic (in dollars per share)	$ 0.08	$ 0.18	$ 0.22	$ 0.21	$ 0.24	$ 0.25	$ 0.26	$ 0.26	$ 0.68	$ 1.02	$ 1.07
Number of shares, attribuatable to equity based compensation plans (in shares)									1,140,000	1,589,000	1,669,000
Dilutive effect on basic earnings per share (in dollars per share)									$ (0.04)	$ (0.10)	$ (0.11)
Weighted average number of shares outstanding, diluted (in shares)									16,260,000	16,954,000	16,841,000
Diluted (in dollars per share)	$ 0.08	$ 0.17	$ 0.20	$ 0.19	$ 0.22	$ 0.23	$ 0.24	$ 0.24	$ 0.64	$ 0.92	$ 0.96
Antidilutive securities not included in the computation of earnings per share	600,000				100,000				600,000	100,000	100,000

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Deferred Compensation Benefits - (Tables)

12 Months Ended

Dec. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Schedule of Net Periodic Pension Cost

Net periodic pension cost for the years ended December 31, 2014, 2013, and 2012 for the ESBP is as follows:

Net Periodic Pension Cost—ESBP	2014		2013		2012
(amounts in thousands)
Interest cost	$	276	$	243	$	338
Amortization of actuarial loss	138		191		279
Net periodic pension cost	$	414	$	434	$	617

Schedule of Changes in Benefit Obligation

The change in benefit obligation and reconciliation of fair value of plan assets for the years ended December 31, 2014 and 2013 for the ESBP and NDBP are as follows:

	ESBP						NDBP
Changes in Benefit Obligation	2014			2013			2014			2013
(amounts in thousands)
Benefit obligation at beginning of period	$	7,499		$	8,405		$	11,635		$	11,913
Interest cost	276			243			358			333
Benefits paid	(737		)	(720		)	(159		)	(141		)
Actuarial loss (gain)	1,236			(429		)	4,896			(939		)
Effect of exchange rate changes	—			—			(1,798		)	469
Benefit obligation at end of period	8,274			7,499			14,932			11,635
Reconciliation of Fair Value of Plan Assets
Fair value of plan assets at beginning of period	—			—			8,752			8,143
Actual return on plan assets	—			—			359			351
Employer contributions	737			720			—			—
Benefits paid	(737		)	(720		)	(159		)	(141		)
Administrative costs	—			—			—			52
Effect of exchange rate changes	—			—			(1,042		)	347
Fair value of plan assets at end of period	—			—			7,910			8,752
Accrued benefit cost	$	8,274		$	7,499		$	7,022		$	2,883
Accrued benefit cost is included in the consolidated balance sheet as follows:
Current liabilities	$	714		$	704		$	—		$	—
Non-current liabilities	$	7,560		$	6,795		$	7,022		$	2,883
Discount rates:
Benefit obligation	3.30		%	3.87		%	1.50		%	3.20		%
Net periodic pension cost	3.87		%	3.02		%	3.20		%	2.80		%
Salary increase rate	—		%	—		%	—		%	—		%
Expected return on plan assets	—		%	—		%	4.00		%	4.00		%

Schedule of Expected Benefit Payments

Anticipated benefit payments for the ESBP and the NDBP expected to be paid in future years are as follows:

	ESBP		NDBP
(amounts in thousands)
2015	$	725	$	150
2016	670		165
2017	654		186
2018	655		227
2019	657		258
2020 - 2024	2,942		1,528
Total	$	6,303	$	2,514

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Lease Commitments - (Tables)

12 Months Ended

Dec. 31, 2014

Leases [Abstract]

Future obligations for Operating Leases

Minimum future obligations under such leases as of December 31, 2014 are summarized as follows:

(amounts in thousands)
2015	$	5,046
2016	3,740
2017	2,459
2018	1,091
2019	269
Later years	—
Minimum future obligations	$	12,605

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Income Taxes - Text (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Taxes Disclosure [Line Items]
Effective income tax rate	38.90%	35.60%	36.50%
Income tax reconciliation, research tax credits		$ 700,000
Income tax reconciliation, other tax credits		400,000
Change in deferred tax asset valuation allowance	(1,000,000)
Income tax reconciliation, tax exempt income	520,000	563,000	993,000
Income tax reconciliation, state and local adjustments			200,000
Deferred tax asset valuation allowance	3,135,000	2,170,000	2,269,000	1,404,000
Undistributed earnings of foreign subsidiaries	18,400,000
Deferred tax assets from operating loss carryforwards	1,240,000	1,208,000
Operating loss carryforwards, net of valuation allowance	100,000
Net income taxes paid	5,800,000	7,100,000	6,500,000
Minimum
Income Taxes Disclosure [Line Items]
Effective income tax rate	38.00%
Maximum
Income Taxes Disclosure [Line Items]
Effective income tax rate	40.00%
Life Insurance [Member]
Income Taxes Disclosure [Line Items]
Income tax reconciliation, tax exempt income			500,000
Valuation Allowance, Operating Loss Carryforwards [Member]
Income Taxes Disclosure [Line Items]
Change in deferred tax asset valuation allowance		(100,000)
Valuation Allowance, Operating Loss Carryforwards [Member]
Income Taxes Disclosure [Line Items]
Deferred tax asset valuation allowance	1,100,000
United States [Member]
Income Taxes Disclosure [Line Items]
Options exercised (in shares)	543,000	87,000	461,000
Tax benefits of options exercised	2,000,000	500,000	2,200,000
United Kingdom
Income Taxes Disclosure [Line Items]
Operating loss carryforwards	3,600,000
Deferred tax assets from operating loss carryforwards	800,000
Belgium [Member]
Income Taxes Disclosure [Line Items]
Operating loss carryforwards	200,000
Deferred tax assets from operating loss carryforwards	100,000
Netherlands
Income Taxes Disclosure [Line Items]
Operating loss carryforwards	1,400,000
Deferred tax assets from operating loss carryforwards	400,000
State and Local Jurisdiction [Member]
Income Taxes Disclosure [Line Items]
Operating loss carryforwards	100,000
Deferred tax assets from operating loss carryforwards	$ 100,000
State and Local Jurisdiction [Member] | Minimum
Income Taxes Disclosure [Line Items]
Operating loss carryforward period	5 years
State and Local Jurisdiction [Member] | Maximum
Income Taxes Disclosure [Line Items]
Operating loss carryforward period	20 years

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Summary of Significant Accounting Policies - Schedule of Accumulated Other Comprehensive Loss (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accounting Policies [Abstract]
Foreign currency adjustment	$ (5,811)	$ (3,537)	$ (4,254)
Pension loss adjustment, net of tax	(9,782)	(5,168)	(6,426)
Accumulated other comprehensive loss	(15,593)	(8,705)	(10,680)
Tax on pension loss adjustment	$ 1,233	$ 805	$ 1,040

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Equity-Based Compensation - (Tables)

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity based compensation expense

Equity-based compensation expense, the corresponding tax benefit and net equity-based compensation expense for 2014, 2013 and 2012 are as follows:

	2014		2013		2012
(amounts in thousands)
Equity-based compensation expense	$	3,088	$	2,647	$	2,236
Tax benefit	1,098		935		788
Net equity-based compensation expense	$	1,990	$	1,712	$	1,448

Fair Value Weighted-Average Assumptions

The fair value of the options at the date of grant was estimated using the following weighted-average assumptions for the years ended December 31, 2014, 2013 and 2012:

	2014		2013		2012
Expected life (years)	4.1		2.7		2.7
Dividend yield	1.4	%	1.0	%	0.0	%
Risk-free interest rate	1.2	%	0.4	%	0.4	%
Expected volatility	48.0	%	44.4	%	61.3	%

Summary of stock option activity under the 2010 Plan and Equity Plan

A summary of stock option activity under the 2010 Plan and Equity Plan is as follows:

	2010 Plan Options		Weighted- Average Exercise Price		Equity Plan Options		Weighted- Average Exercise Price
Outstanding at December 31, 2011	265,500		$	12.89	3,175,075		$	4.49
Granted	225,596		$	14.41	—		$	—
Exercised	(20,750	)	$	13.53	(574,353	)	$	3.58
Canceled or forfeited	(9,000	)	$	13.55	(13,175	)	$	5.42
Expired	—		$	—	(3,000	)	$	3.56
Outstanding at December 31, 2012	461,346		$	13.59	2,584,547		$	4.68
Granted	207,000		$	21.03	—		$	—
Exercised	(2,875	)	$	13.50	(107,775	)	$	4.93
Canceled or forfeited	(5,000	)	$	13.18	(2,000	)	$	5.92
Expired	—		$	—	(2,625	)	$	3.45
Outstanding at December 31, 2013	660,471		$	15.93	2,472,147		$	4.67
Granted	107,000		$	16.93	—		$	—
Exercised	(5,000	)	$	13.18	(601,800	)	$	4.23
Canceled or forfeited	(130,625	)	$	17.02	—		$	—
Expired	—		$	—	(1,750	)	$	4.34
Outstanding at December 31, 2014	631,846		$	15.89	1,868,597		$	4.82
Options Exercisable at December 31, 2014	477,722		$	15.56	1,868,597		$	4.82

Summary of restricted stock activity under the Equity Plan and the 1991 Restricted Stock Plan

A summary of restricted stock activity under the Equity Plan and the 1991 Restricted Stock Plan is as follows:

	Equity Plan Restricted Stock		Weighted- Average Fair Value		1991 Restricted Stock Plan		Weighted- Average Fair Value
Outstanding at December 31, 2011	221,500		$	5.01	262,375		$	9.57
Granted	—		$	—	127,500		$	15.04
Released	(40,000	)	$	4.97	(90,626	)	$	8.38
Canceled or forfeited	—		$	—	(7,500	)	$	11.14
Outstanding at December 31, 2012	181,500		$	5.02	291,749		$	12.29
Granted	—		$	—	98,000		$	20.68
Released	(40,000	)	$	4.97	(106,626	)	$	10.77
Canceled or forfeited	—		$	—	(1,600	)	$	18.04
Outstanding at December 31, 2013	141,500		$	5.04	281,523		$	15.75
Granted	—		$	—	125,200		$	16.62
Released	—		$	—	(193,652	)	$	15.26
Canceled or forfeited	—		$	—	(39,838	)	$	16.71
Outstanding at December 31, 2014	141,500		$	5.04	173,233		$	16.70

Summary of stock options outstanding for the 2010 Plan and Equity Plan

A summary of stock options that were outstanding at December 31, 2014 for the 2010 Plan and the Equity Plan is as follows:

Range of Exercise Prices:	Number of Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
2010 Plan
$12.16 - $13.75	314,250	$	13.10	9.3	$	—
$15.04 - $16.93	148,096	$	15.84	8.2	—
$20.68 - $21.41	169,500	$	21.11	11.1	—
	631,846	$	15.89	9.5	$	—
Equity Plan
$2.35 - $3.26	292,500	$	3.20	4.0	$	1,852,825
$3.48 - $4.90	1,007,972	$	4.54	3.0	5,032,901
$5.25 - $7.18	568,125	$	6.14	5.3	1,923,534
	1,868,597	$	4.82	3.9	$	8,809,260

Summary of stock options that are exercisable for the 2010 Plan and the Equity Plan

A summary of stock options that are exercisable at December 31, 2014 for the 2010 Plan and the Equity Plan is as follows:

Range of Exercise Prices:	Number of Options Exercisable	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
2010 Plan
$12.16 - $13.75	289,750	$	13.16	9.7	$	—
$15.04 - $16.93	62,348	$	15.22	7.9	—
$20.68 - $21.41	125,624	$	21.26	12.2	—
	477,722	$	15.56	10.1	$	—
Equity Plan
$2.35 - $3.26	292,500	$	3.20	4.0	$	1,852,825
$3.48 - $4.90	1,007,972	$	4.54	3.0	5,032,901
$5.25 - $7.18	568,125	$	6.14	5.3	1,923,534
	1,868,597	$	4.82	3.9	$	8,809,260

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Enterprise-Wide Disclosures - (Tables)

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas

Financial Information About Geographic Areas	2014		2013		2012
(amounts in thousands)
Revenue from External Customers:
United States	$	314,500	$	341,391	$	355,022
Belgium(1)	44,692		48,428		41,957
Other European countries	33,652		28,684		26,653
Other country	424		533		783
Total foreign revenue	78,768		77,645		69,393
Total revenue	$	393,268	$	419,036	$	424,415
Long-lived Assets:
United States	$	5,759	$	7,169	$	6,102
Europe	1,034		1,072		814
Total long-lived assets	$	6,793	$	8,241	$	6,916
Deferred Tax Assets, Net of Valuation Allowance:
United States	$	7,982	$	8,669	$	8,485
Europe	56		—		—
Total deferred tax assets, net	$	8,038	$	8,669	$	8,485

(1) Revenue for our Belgium operations has been disclosed separately as it exceeds 10% of consolidated revenue for certain of the years presented

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Consolidated Statements of Changes in Shareholders' Equity (USD $) In Thousands, except Share data	Total	Common Stock	Capital in Excess of Par Value	Retained Earnings	Treasury Stock	Stock Trusts	Accumulated Other Comprehensive Income (loss)	Other
Balance at Dec. 31, 2011	$ 88,805	$ 270	$ 115,895	$ 83,479	$ (47,320)	$ (55,083)	$ (8,230)	$ (206)
Balance, shares at Dec. 31, 2011		27,018,000			8,541,000	3,363,000
Employee Stock Purchase Plan share issuance	294		181		113
Employee Stock Purchase Plan share issuance, shares					(19,000)
Stock Option Plan share issuance, net	223		(1,310)		1,533
Stock Option Plan share issuance, shares					(476,000)
Excess tax benefits from equity-based compensation	2,615		2,615
Restricted stock plan share issuance/forfeiture	(824)		(660)		(164)
Restricted stock plan share issuance/forfeiture, shares					(70,000)
Deferred compensation plan share issuance	308		226		127			45
Deferred compensation plan share issuance, shares					(26,000)
Purchase of stock	(4,591)				(4,591)
Purchase of stock, shares					326,000
Equity-based compensation	2,236		2,236
Net Income	16,165			16,165
Foreign currency adjustment	370						370
Pension loss adjustment, net of tax	(2,820)						(2,820)
Balance at Dec. 31, 2012	102,781	270	119,183	99,644	(50,302)	(55,083)	(10,680)	(251)
Balance, shares at Dec. 31, 2012		27,018,000			8,276,000	3,363,000
Employee Stock Purchase Plan share issuance	368		248		120
Employee Stock Purchase Plan share issuance, shares					(19,000)
Stock Option Plan share issuance, net	504		(183)		687
Stock Option Plan share issuance, shares					(110,000)
Excess tax benefits from equity-based compensation	1,119		1,119
Restricted stock plan share issuance/forfeiture	(931)		(567)		(364)
Restricted stock plan share issuance/forfeiture, shares					(52,000)
Deferred compensation plan share issuance	89		84		39			(34)
Deferred compensation plan share issuance, shares					(6,000)
Purchase of stock	(7,343)				(7,343)
Purchase of stock, shares					399,000
Equity-based compensation	2,647		2,647
Net Income	15,679			15,679
Dividends declared	(3,046)			(3,046)
Foreign currency adjustment	717						717
Pension loss adjustment, net of tax	1,258						1,258
Balance at Dec. 31, 2013	113,842	270	122,531	112,277	(57,163)	(55,083)	(8,705)	(285)
Balance, shares at Dec. 31, 2013	27,017,824	27,018,000			8,488,000	3,363,000
Employee Stock Purchase Plan share issuance	323		145		178
Employee Stock Purchase Plan share issuance, shares					(24,000)
Stock Option Plan share issuance, net	974		(2,082)		3,056
Stock Option Plan share issuance, shares					(513,000)
Excess tax benefits from equity-based compensation	1,964		1,964
Restricted stock plan share issuance/forfeiture	(2,745)		(247)		(2,498)
Restricted stock plan share issuance/forfeiture, shares					84,000
Deferred compensation plan share issuance	1,118		485		348			285
Deferred compensation plan share issuance, shares					(48,000)
Purchase of stock	(7,432)				(7,432)
Purchase of stock, shares					499,000
Equity-based compensation	3,088		3,088
Net Income	10,350			10,350
Dividends declared	(3,628)			(3,628)
Foreign currency adjustment	(2,274)						(2,274)
Pension loss adjustment, net of tax	(4,614)						(4,614)
Balance at Dec. 31, 2014	$ 110,966	$ 270	$ 125,884	$ 118,999	$ (63,511)	$ (55,083)	$ (15,593)
Balance, shares at Dec. 31, 2014	27,017,824	27,018,000			8,486,000	3,363,000

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Quarterly Financial Data (Unaudited) - (Tables)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Data [Abstract]

Schedule of Quarterly Financial Information

	Quarters
	First			Second			Third			Fourth (1)(2)			Total
(amounts in thousands, except per-share data)
2014
Revenue	$	97,911		$	100,331		$	96,760		$	98,266		$	393,268
Direct costs	76,979			79,133			77,723			80,095			313,930
Gross profit	20,932			21,198			19,037			18,171			79,338
Selling, general, and administrative expenses	15,457			15,728			14,466			16,535			62,186
Operating income	5,475			5,470			4,571			1,636			17,152
Interest and other expense, net	(97		)	(55		)	(33		)	(29		)	(214		)
Income before income taxes	5,378			5,415			4,538			1,607			16,938
Provision for income taxes	2,212			2,182			1,812			382			6,588
Net income	$	3,166		$	3,233		$	2,726		$	1,225		$	10,350
Basic net income per share	$	0.21		$	0.22		$	0.18		$	0.08		$	0.68
Diluted net income per share	$	0.19		$	0.20		$	0.17		$	0.08		$	0.64
Cash dividend declared per share	$	0.06		$	0.06		$	0.06		$	0.06		$	0.24

(1) Included in fourth quarter direct costs is approximately $1.5 million, or $0.9 million, net of tax, or $0.06 basic and diluted net income per share, relating to the disposal of one of the Company's capitalized software projects.

(2) Included in fourth quarter selling, general, and administrative expenses is approximately $2.0 million, or $1.2 million, net of tax, or $0.08 basic and $0.07 diluted net income per share, of costs relating to the death of the Company's Chairman and Chief Executive Officer under his employment agreement.

	Quarters
	First			Second			Third			Fourth			Total
(amounts in thousands, except per-share data)
2013
Revenue	$	108,495		$	107,117		$	100,689		$	102,735		$	419,036
Direct costs	85,896			84,470			79,506			80,455			330,327
Gross profit	22,599			22,647			21,183			22,280			88,709
Selling, general, and administrative expenses	16,417			16,248			15,129			16,188			63,982
Operating income	6,182			6,399			6,054			6,092			24,727
Interest and other income (expense), net	(109		)	(106		)	(91		)	(82		)	(388		)
Income before income taxes	6,073			6,293			5,963			6,010			24,339
Provision for income taxes	2,016			2,238			2,100			2,306			8,660
Net income	$	4,057		$	4,055		$	3,863		$	3,704		$	15,679
Basic net income per share	$	0.26		$	0.26		$	0.25		$	0.24		$	1.02
Diluted net income per share	$	0.24		$	0.24		$	0.23		$	0.22		$	0.92
Cash dividend declared per share	$	0.05		$	0.05		$	0.05		$	0.05		$	0.20

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Summary of Significant Accounting Policies - Property, Equipment and Capitalized Software Costs (Details)	12 Months Ended
	Dec. 31, 2014
Minimum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	1 year
Maximum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	30 years
Software Development [Member] | Minimum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	2 years
Software Development [Member] | Maximum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	5 years

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Income Taxes - Provision for Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 26, 2014	Jun. 27, 2014	Mar. 28, 2014	Dec. 31, 2013	Sep. 27, 2013	Jun. 28, 2013	Mar. 29, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Domestic and foreign components of income before income taxes are as follows:
Domestic									$ 14,885	$ 22,313	$ 23,028
Foreign									2,053	2,026	2,417
Income before income taxes	1,607	4,538	5,415	5,378	6,010	5,963	6,293	6,073	16,938	24,339	25,445
Current Income Tax Expense (Benefit), Continuing Operations [Abstract]
Current U.S. federal									4,023	6,133	6,778
Current Foreign									1,505	1,469	1,393
Current U.S. state and local									831	1,409	993
Current Total current tax									6,359	9,011	9,164
Deferred tax:
Deferred U.S. federal									273	(245)	55
Deferred Foreign									(97)	(34)	0
Deferred U.S. state and local									53	(72)	61
Deferred income taxes									229	(351)	116
Total tax	382	1,812	2,182	2,212	2,306	2,100	2,238	2,016	6,588	8,660	9,280
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract]
Tax at statutory rate of 35% / 34%									5,928	8,519	8,906
State tax, net of federal benefit									578	877	685
Non-taxable income									(520)	(563)	(993)
Non-deductible expenses									803	963	796
Change in estimate primarily related to foreign taxes									134	128	41
Change in estimate primarily related to state taxes and tax reserves									0	(172)	50
Change in estimate primarily related to U.S. federal taxes									0	0	(157)
Tax credits									(421)	(1,117)	0
Other, net									$ 86	$ 25	$ (48)
Effective income tax rate									38.90%	35.60%	36.50%

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Significant Customer - (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Segment Reporting Information [Line Items]
Revenue	$ 393,268,000	$ 419,036,000	$ 424,415,000
Revenue percent	100.00%	100.00%	100.00%
Concentration percentage for significant customer	10.00%	10.00%	10.00%
Accounts receivable, net	67,843,000	67,422,000
IBM [Member]
Segment Reporting Information [Line Items]
Revenue	90,500,000	101,700,000	113,800,000
Revenue percent	23.00%	24.30%	26.80%
Revenue related to IBM's retail business			3,200,000
Accounts receivable, net	$ 7,800,000	$ 11,500,000

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Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Statement [Abstract]
Revenue	$ 393,268	$ 419,036	$ 424,415
Direct costs	313,930	330,327	333,086
Selling, general, and administrative expenses	62,186	63,982	66,867
Operating income	17,152	24,727	24,462
Interest and other income	111	58	156
Non-taxable life insurance proceeds	0	0	1,268
Interest and other expense	325	446	441
Income before income taxes	16,938	24,339	25,445
Provision for income taxes	6,588	8,660	9,280
Net Income	$ 10,350	$ 15,679	$ 16,165
Net income per share
Basic (in dollars per share)	$ 0.68	$ 1.02	$ 1.07
Diluted (in dollars per share)	$ 0.64	$ 0.92	$ 0.96
Weighted average shares outstanding
Basic (in shares)	15,120	15,365	15,172
Diluted (in shares)	16,260	16,954	16,841
Cash dividend declared per share	$ 0.24	$ 0.20	$ 0.00

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Summary of Significant Accounting Policies - Schedule of Net Benefit Cost (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Postemployment Benefits [Abstract]
Amortization of actuarial losses - Gross	$ 201	$ 277
Amortization of actuarial losses - Tax	(51)	(72)
Amortization of actuarial losses - Net	$ 150	$ 205

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 891	$ 1,040
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	27,017,824	27,017,824
Treasury stock, shares	8,486,172	8,488,404
Stock trusts, shares	3,363,351	3,363,351

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Deferred Compensation Benefits Net Periodic Pension Cost - (Details) (ESBP, USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
ESBP
Net periodic pension cost for the Executive Supplemental Benefit Plan
Interest cost	$ 276,000	$ 243,000	$ 338,000
Amortization of actuarial loss	138,000	191,000	279,000
Net periodic pension cost	$ 414,000	$ 434,000	$ 617,000

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Summary of Significant Accounting Policies - Revenue by Contract Type (Details)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Schedule of Revenue by External Customer [Line Items]
Revenue percent	100.00%	100.00%	100.00%
Time-and-material [Member]
Schedule of Revenue by External Customer [Line Items]
Revenue percent	86.20%	88.80%	90.30%
Progress Billing [Member]
Schedule of Revenue by External Customer [Line Items]
Revenue percent	11.20%	8.80%	7.90%
Percentage-of-completion [Member]
Schedule of Revenue by External Customer [Line Items]
Revenue percent	2.60%	2.40%	1.80%

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Equity-Based Compensation Net Equity-based Compensation Expense (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Equity-based compensation expense	$ 3,088	$ 2,647	$ 2,236
Tax benefit	1,098	935	788
Net equity-based compensation expense	$ 1,990	$ 1,712	$ 1,448

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Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited)

Quarterly Financial Data (Unaudited)

	Quarters
	First			Second			Third			Fourth (1)(2)			Total
(amounts in thousands, except per-share data)
2014
Revenue	$	97,911		$	100,331		$	96,760		$	98,266		$	393,268
Direct costs	76,979			79,133			77,723			80,095			313,930
Gross profit	20,932			21,198			19,037			18,171			79,338
Selling, general, and administrative expenses	15,457			15,728			14,466			16,535			62,186
Operating income	5,475			5,470			4,571			1,636			17,152
Interest and other expense, net	(97		)	(55		)	(33		)	(29		)	(214		)
Income before income taxes	5,378			5,415			4,538			1,607			16,938
Provision for income taxes	2,212			2,182			1,812			382			6,588
Net income	$	3,166		$	3,233		$	2,726		$	1,225		$	10,350
Basic net income per share	$	0.21		$	0.22		$	0.18		$	0.08		$	0.68
Diluted net income per share	$	0.19		$	0.20		$	0.17		$	0.08		$	0.64
Cash dividend declared per share	$	0.06		$	0.06		$	0.06		$	0.06		$	0.24

(1) Included in fourth quarter direct costs is approximately $1.5 million, or $0.9 million, net of tax, or $0.06 basic and diluted net income per share, relating to the disposal of one of the Company's capitalized software projects.

(2) Included in fourth quarter selling, general, and administrative expenses is approximately $2.0 million, or $1.2 million, net of tax, or $0.08 basic and $0.07 diluted net income per share, of costs relating to the death of the Company's Chairman and Chief Executive Officer under his employment agreement.

	Quarters
	First			Second			Third			Fourth			Total
(amounts in thousands, except per-share data)
2013
Revenue	$	108,495		$	107,117		$	100,689		$	102,735		$	419,036
Direct costs	85,896			84,470			79,506			80,455			330,327
Gross profit	22,599			22,647			21,183			22,280			88,709
Selling, general, and administrative expenses	16,417			16,248			15,129			16,188			63,982
Operating income	6,182			6,399			6,054			6,092			24,727
Interest and other income (expense), net	(109		)	(106		)	(91		)	(82		)	(388		)
Income before income taxes	6,073			6,293			5,963			6,010			24,339
Provision for income taxes	2,016			2,238			2,100			2,306			8,660
Net income	$	4,057		$	4,055		$	3,863		$	3,704		$	15,679
Basic net income per share	$	0.26		$	0.26		$	0.25		$	0.24		$	1.02
Diluted net income per share	$	0.24		$	0.24		$	0.23		$	0.22		$	0.92
Cash dividend declared per share	$	0.05		$	0.05		$	0.05		$	0.05		$	0.20

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Summary of Significant Accounting Policies - Billable Expenses (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accounting Policies [Abstract]
Billable Expenses	$ 8.6	$ 11.8	$ 13.4

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of Computer Task Group, Incorporated, and its subsidiaries (the Company or CTG), located primarily in North America and Europe. There are no unconsolidated entities, or off-balance sheet arrangements other than certain guarantees supporting office leases or the performance under government contracts in the Company's European operations. All inter-company accounts and transactions have been eliminated. Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with U.S. generally accepted accounting principles. Such estimates primarily relate to the valuation of goodwill, valuation allowances for deferred tax assets, actuarial assumptions including discount rates and expected rates of return, as applicable, for the Company’s defined benefit plans, the allowance for doubtful accounts receivable, assumptions underlying stock option valuation, investment valuation, estimates of progress toward completion and direct profit or loss on contracts, legal matters, and other contingencies. The current economic environments in the United States, Canada, and Western Europe where the Company has operations have increased the degree of uncertainty inherent in these estimates and assumptions. Actual results could differ from those estimates.

The Company operates in one industry segment, providing IT services to its clients. These services include IT Solutions and IT and other Staffing. CTG provides these primary services to all of the markets that it serves. The services provided typically encompass the IT business solution life cycle, including phases for planning, developing, implementing, managing, and ultimately maintaining the IT solution. A typical customer is an organization with large, complex information and data processing requirements. In certain limited instances for a small number of clients, the Company provides administrative or warehouse employees to clients to supplement the IT resources we place at those clients. The Company promotes a significant portion of its services through four vertical market focus areas: Healthcare (which includes services provided to healthcare providers, health insurers, and life sciences companies), Technology Service Providers, Financial Services, and Energy. The Company focuses on these four vertical areas as it believes that these areas are either higher growth markets than the general IT services market and the general economy, or are areas that provide greater potential for the Company’s growth due to the size of the vertical market. The remainder of CTG’s revenue is derived from general markets.

Revenue and Cost Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, when the services have been rendered, when the price is determinable, and when collectibility of the amounts due is reasonably assured. For time-and-material contracts, revenue is recognized as hours are incurred and costs are expended. For contracts with periodic billing schedules, primarily monthly, revenue is recognized as services are rendered to the customer. Revenue for fixed-price contracts is recognized per the proportional method of accounting using an input-based approach. On a given project, actual salary and indirect labor costs incurred are measured and compared against the total estimated costs of such items at the completion of the project. Revenue is recognized based upon the percentage-of-completion calculation of total incurred costs to total estimated costs. The Company infrequently works on fixed-price projects that include significant amounts of material or other non-labor related costs which could distort the percent complete within a percentage-of-completion calculation. The Company’s estimate of the total labor costs it expects to incur over the term of the contract is based on the nature of the project and our past experience on similar projects, and includes management judgments and estimates which affect the amount of revenue recognized on fixed-price contracts in any accounting period.

Software Revenue Recognition

In 2012 and 2013, the Company performed services for a customer under a series of contracts that provided for application customization and integration services, specifically utilizing one of the software tools the Company had developed for internal use. These services were provided under a software-as-a-service model. As the contracts were closely interrelated and dependent on each other, for accounting purposes the contracts were considered to be one arrangement. As the project included significant modification and customization services to transform the previously developed software tool into an expanded tool intended to meet the customer’s requirements, the percentage-of-completion method of contract accounting was utilized for the project.

Fair Value

Fair value is defined as the exchange price that would be received for an asset or paid for a liability in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants. The Company utilizes a fair value hierarchy for its assets and liabilities, as applicable, based upon three levels of input, which are:

Level 1—quoted prices in active markets for identical assets or liabilities (observable)

Level 2—inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in inactive markets, or other inputs that are observable or can be supported by observable market data for essentially the full term of the asset or liability (observable)

Level 3—unobservable inputs that are supported by little or no market activity, but are significant to determining the fair value of the asset or liability (unobservable)

Taxes Collected from Customers

In instances where the Company collects taxes from its customers for remittance to governmental authorities, primarily in its European operations, revenue and expenses are not presented on a gross basis in the consolidated financial statements as such taxes are recorded in the Company's accounts on a net basis.

Cash and Cash Equivalents, and Cash Overdrafts

For purposes of the statement of cash flows, cash and cash equivalents are defined as cash on hand, demand deposits, and short-term, highly liquid investments with a maturity of three months or less. As the Company does not fund its bank accounts for the checks it has written until the checks are presented to the bank for payment, the change in cash overdraft, net, on the consolidated statements of cash flows represents the increase or decrease in outstanding checks year-over-year.

Trade Accounts Receivable

Trade accounts receivable balances are expected to be received on average approximately 65 days from the date of invoice. Generally, the Company does not work on any projects where amounts due are expected to be received greater than one year from the date of the invoice. Accordingly, the recorded book value for the Company’s accounts receivable equals fair value. Outstanding trade accounts receivable are generally considered past due when they remain unpaid after the contractual due date has passed. An allowance for doubtful accounts receivable (allowance) is established using management’s judgment. Specific identification of balances that are significantly past due and where customer payments have not been recently received are generally added to the allowance unless the Company has direct knowledge that the customer intends to make payment. Additionally, any balances which relate to a customer that has declared bankruptcy or ceased its business operations are added to the allowance at the amount not expected to be received.

Property and Equipment and Capitalized Software Costs

Property and equipment are generally stated at historical cost less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives of one year to 30 years, and begins after an asset has been put into service. Leasehold improvements are generally depreciated over the shorter of the term of the lease or the useful life of the improvement. The cost of property or equipment sold or otherwise disposed of, along with related accumulated depreciation, is eliminated from the accounts, and the resulting gain or loss, if any, is reflected in current earnings. Maintenance and repairs are charged to expense when incurred, while significant improvements to existing assets are capitalized.

Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When such circumstances exist, the recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value less costs to sell.

Leases

The Company is obligated under a number of short and long-term operating leases, primarily for the rental of office space, office equipment, and for automobiles in our European operations. In instances where the Company has negotiated leases that contain rent holidays or escalation clauses, the expense for those leases is recognized monthly on a straight-line basis over the term of the lease.

Goodwill

The Company had a goodwill balance of $37.4 million at December 31, 2014. This balance increased by approximately $2.0 million during 2013 due to the acquisition of etrinity. The balance is evaluated annually as of the Company’s October fiscal month-end (the measurement date), or more frequently if facts and circumstances indicate impairment may exist. This evaluation, as applicable, is based on estimates and assumptions that may be used to analyze the appraised value of similar transactions from which the goodwill arose, the appraised value of similar companies, or estimates of future discounted cash flows. The estimates and assumptions on which the Company’s evaluations are based involve judgments and are based on currently available information, any of which could prove wrong or inaccurate when made, or become wrong or inaccurate as a result of subsequent events.

Income Taxes

The Company provides for deferred income taxes for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. In assessing the realizability of deferred tax assets, management considers within each tax jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax-planning strategies in making this assessment. The Company recognizes, as applicable, accrued interest and penalties related to unrecognized tax benefits (if any) in tax expense.

Equity-Based Compensation

The Company records the fair value of equity-based compensation expense for all equity-based compensation awards granted subsequent to January 1, 2006. The calculated fair value cost of its equity-based compensation awards is recognized in the Company’s income statement over the period in which an employee or director is required to provide the services for the award. Compensation cost is not recognized for employees or directors that do not render the requisite services. The Company recognized the expense for equity-based compensation in its 2014, 2013, and 2012 statements of income on a straight-line basis based upon awards that are ultimately expected to vest.

Net Income Per Share

Weighted-average shares represent the average number of issued shares less treasury shares and shares held in the Stock Trusts, and for the basic EPS calculations, unvested restricted stock.

Foreign Currency

The functional currency of the Company’s foreign subsidiaries is the applicable local currency. The translation of the applicable foreign currencies into U.S. dollars is performed for assets and liabilities using current exchange rates in effect at the balance sheet date, for equity accounts using historical exchange rates, and for revenue and expense activity using the applicable month’s average exchange rates

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," ("ASU 2014-09"). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and footnote disclosures.

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Equity-Based Compensation Restricted Stock Activity (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Equity Plan Restricted Stock [Member]
Restricted Stock Activity
Beginning of period, outstanding (in shares)	141,500	181,500	221,500
Beginning of period (weighted-average fair value)	$ 5.04	$ 5.02	$ 5.01
Restricted stock grants (in shares)	0	0	0
Restricted stock grants (weighted-average fair value)	$ 0.00	$ 0.00	$ 0.00
Released (in shares)	0	(40,000)	(40,000)
Released (weighted-average fair value)	$ 0.00	$ 4.97	$ 4.97
Canceled or forfeited (in shares)	0	0	0
Canceled or forfeited (weighted-average fair value)	$ 0.00	$ 0.00	$ 0.00
End of period, outstanding (in shares)	141,500	141,500	181,500
End of period (weighted-average fair value)	$ 5.04	$ 5.04	$ 5.02
1991 Restricted Stock Plan [Member]
Restricted Stock Activity
Beginning of period, outstanding (in shares)	281,523	291,749	262,375
Beginning of period (weighted-average fair value)	$ 15.75	$ 12.29	$ 9.57
Restricted stock grants (in shares)	125,200	98,000	127,500
Restricted stock grants (weighted-average fair value)	$ 16.62	$ 20.68	$ 15.04
Released (in shares)	(193,652)	(106,626)	(90,626)
Released (weighted-average fair value)	$ 15.26	$ 10.77	$ 8.38
Canceled or forfeited (in shares)	(39,838)	(1,600)	(7,500)
Canceled or forfeited (weighted-average fair value)	$ 16.71	$ 18.04	$ 11.14
End of period, outstanding (in shares)	173,233	281,523	291,749
End of period (weighted-average fair value)	$ 16.70	$ 15.75	$ 12.29

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash flow from operating activities
Net Income	$ 10,350	$ 15,679	$ 16,165
Adjustments:
Depreciation and amortization expense	2,974	2,796	2,919
Equity-based compensation expense	3,088	2,647	2,236
Deferred income taxes	204	(350)	116
Deferred compensation	(103)	128	600
Loss on disposals of property, equipment and capitalized software	1,546	0	20
Changes in assets and liabilities:
(Increase) decrease in accounts receivable	(2,594)	5,213	(2,239)
(Increase) decrease in prepaid and other current assets	(189)	(154)	403
(Increase) decrease in other assets	(1,537)	(1,610)	50
Decrease in accounts payable	(2,372)	(2,607)	(293)
Increase (decrease) in accrued compensation	(3,230)	(1,107)	1,002
Decrease in income taxes payable	(2,261)	(232)	(1,067)
Increase (decrease) in advance billings on contracts	(431)	(361)	707
Increase (decrease) in other current liabilities	1,050	(869)	732
Increase (decrease) in other long-term liabilities	213	(182)	(195)
Net cash provided by operating activities	6,708	18,991	21,156
Cash flow from investing activities:
Acquisition of business, net of cash received	0	(2,488)	0
Additions to property and equipment	(1,410)	(2,266)	(1,872)
Additions to capitalized software	(1,683)	(1,686)	0
Deferred compensation plan investments, net	(109)	269	113
Proceeds from sales of property and equipment	0	0	5
Net cash used in investing activities	(2,984)	(6,709)	(1,980)
Cash flow from financing activities:
Proceeds from stock option plan exercises	1,241	561	1,144
Excess tax benefits from equity-based compensation	1,964	1,119	2,615
Proceeds from Employee Stock Purchase Plan	323	368	294
Change in cash overdraft, net	(424)	506	(777)
Dividends paid	(3,422)	(2,274)	0
Purchase of stock for treasury	(7,432)	(7,343)	(4,591)
Net cash used in financing activities	(7,750)	(7,063)	(1,315)
Effect of exchange rates on cash and cash equivalents	(1,339)	394	339
Net increase (decrease) in cash and cash equivalents	(5,365)	5,613	18,200
Cash and cash equivalents at beginning of year	46,227	40,614	22,414
Cash and cash equivalents at end of year	$ 40,862	$ 46,227	$ 40,614

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
Net Income	$ 10,350	$ 15,679	$ 16,165
Foreign currency adjustment	(2,274)	717	370
Pension loss adjustment, net of tax	(4,614)	1,258	(2,820)
Other comprehensive income (loss)	(6,888)	1,975	(2,450)
Comprehensive income	$ 3,462	$ 17,654	$ 13,715

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Shareholders' Equity

12 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

Employee Stock Purchase Plan

Under the Company’s First Employee Stock Purchase Plan (ESPP), employees may apply up to 10% of their compensation to purchase the Company’s common stock. Shares are purchased at the closing market price on the business day preceding the date of purchase. At the Company's annual meeting in May 2012, the Company's shareholders approved the addition of 250,000 shares for this plan. As of December 31, 2014, approximately 218,000 shares remain unissued under the ESPP. During 2014, 2013, and 2012, approximately 24,000, 19,000, and 19,000 shares, respectively, were purchased under the ESPP at an average price of $13.35, $19.72, and $15.29 per share, respectively.

Stock Trusts

The Company maintains a Stock Employee Compensation Trust (SECT) to provide funding for existing employee stock plans and benefit programs. Shares of the Company’s common stock are purchased by and released from the SECT by the trustee of the SECT at the request of the compensation committee of the Board of Directors. As of December 31, 2014, all shares remaining in the SECT were unallocated and, therefore, are not considered outstanding for purposes of calculating earnings per share. There were no shares purchased or released by the SECT during 2014, 2013, or 2012, and there were 3.3 million shares in the SECT at each of December 31, 2014, 2013 and 2012.

The Company created an Omnibus Stock Trust (OST) to provide funding for various employee benefit programs. Shares of the Company’s common stock are released from the OST by the trustee at the request of the compensation committee of the Board of Directors. There were no shares purchased or released by the OST during 2014, 2013, or 2012, and there were 59,000 shares in the OST at each of December 31, 2014, 2013 and 2012.

Preferred Stock

At December 31, 2014 and 2013, the Company had 2.5 million shares of par value $0.01 preferred stock authorized for issuance, but none outstanding.

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Document and Entity Information Document (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Feb. 20, 2015	Jun. 27, 2014
Document and Entity Information [Abstract]
Current Fiscal Year End Date	--12-31
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Entity Registrant Name	COMPUTER TASK GROUP INC
Entity Central Index Key	0000023111
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		18,748,625
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Public Float			$ 227.1
Entity Well-known Seasoned Issuer	No

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Equity-Based Compensation

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity-Based Compensation

Equity-Based Compensation

The Company issues stock options and restricted stock in exchange for employee and director services. In accordance with current accounting standards, the calculated cost of its equity-based compensation awards is recognized in the Company’s consolidated statements of income over the period in which an employee or director is required to provide the services for the award. Compensation cost will not be recognized for employees or directors that do not render the requisite services. The Company recognizes the expense for equity-based compensation in its consolidated income statements on a straight-line basis based upon the number of awards that are ultimately expected to vest.

Equity-based compensation expense, the corresponding tax benefit and net equity-based compensation expense for 2014, 2013 and 2012 are as follows:

	2014		2013		2012
(amounts in thousands)
Equity-based compensation expense	$	3,088	$	2,647	$	2,236
Tax benefit	1,098		935		788
Net equity-based compensation expense	$	1,990	$	1,712	$	1,448

On May 12, 2010, the shareholders approved the Company’s 2010 Equity Award Plan (2010 Plan). Under the provisions of the 2010 Plan, stock options, restricted stock, stock appreciation rights, and other awards may be granted or awarded to employees and directors of the Company, as well as non-employees. The compensation committee of the Board of Directors determines the nature, amount, pricing and vesting of the grants or awards. All options and awards remain in effect until the earliest of the expiration, exercise, or surrender date. Options generally become exercisable in four equal installments, typically beginning one year from the date of grant, and expire no more than 15 years from the date of grant. A total of 1,300,000 shares may be granted or awarded under the 2010 plan, 628,000 of which are available for grant as of December 31, 2014.

On April 26, 2000, the shareholders approved the Company’s 2000 Equity Award Plan (Equity Plan). Under the provisions of the Equity Plan, stock options, restricted stock, stock appreciation rights, and other awards could previously be granted or awarded to employees and directors of the Company. The compensation committee of the Board of Directors determined the nature, amount, pricing, and vesting of the grants or awards. All options and awards remain in effect until the earlier of the expiration, exercise, or surrender date. Options generally become exercisable in three or four equal annual installments, typically beginning one year from the date of grant, and expire no more than 15 years from the date of grant. In certain limited instances, options granted at fair market value were expected to vest nine and one-half years from the date of grant. There are no shares or options available for grant under this plan as of December 31, 2014.

On April 24, 1991, the shareholders approved the Company’s 1991 Employee Stock Option Plan (1991 Plan). Under the provisions of the 1991 Plan, options could previously be granted to employees and directors of the Company. The exercise price for options granted under this plan was equal to or greater than the fair market value of the Company’s common stock on the date the option was granted. All options remain in effect until the earlier of the expiration, exercise, or surrender date. There are no shares or options available for grant under this plan as of December 31, 2014.

Under the Company’s 1991 Restricted Stock Plan, a total of 800,000 shares of restricted stock may be granted to certain key employees, 95,000 of which are available for grant as of December 31, 2014.

The Company utilizes the Black-Scholes option-pricing model to estimate the fair value of stock options granted on the date of grant. The per-option weighted-average fair value on the date of grant of stock options granted in 2014, 2013, and 2012 was $5.91, $5.78, and $5.47, respectively.

The fair value of the options at the date of grant was estimated using the following weighted-average assumptions for the years ended December 31, 2014, 2013 and 2012:

	2014		2013		2012
Expected life (years)	4.1		2.7		2.7
Dividend yield	1.4	%	1.0	%	0.0	%
Risk-free interest rate	1.2	%	0.4	%	0.4	%
Expected volatility	48.0	%	44.4	%	61.3	%

The Company used historical volatility calculated using daily closing prices for its common stock over periods that match the expected term of the options granted to estimate the expected volatility for the grants made in 2012, 2013 and 2014. The risk-free interest rate assumption was based upon U.S. Treasury yields appropriate for the expected term of the Company’s stock options based upon the date of grant. The expected term of the stock options granted was based upon the options expected vesting schedule and historical exercise patterns. The expected dividend yield was based upon the Company’s recent history of beginning to pay dividends in 2013, and the expectation of paying dividends in the foreseeable future.

During 2012, 2013 and 2014, the Company issued restricted stock to certain employees. The stock vests over a period of four years, with 25% of the stock issued vesting one year from the date of grant, and another 25% vesting each year thereafter until the stock is fully vested. The Company is recognizing compensation expense for these shares ratably over the expected term of the restricted stock, or four years. In the event the Company issued stock to its independent directors, the stock vests at retirement. As the directors are eligible for retirement from the Company’s Board of Directors at any point in time, the Company will recognize the expense associated with these shares on the date of grant. The shares of restricted stock issued are considered outstanding, can be voted, and are eligible to receive dividends, if any are paid. However, the restricted shares do not include a non-forfeitable right for the holder to receive dividends and none will be paid in the event the awards do not vest. Accordingly, only vested shares of outstanding restricted stock are included in the calculation of basic earnings per share.

As of December 31, 2014, total remaining stock-based compensation expense for non-vested equity-based compensation was approximately $2.7 million, which is expected to be recognized on a weighted-average basis over the next 15 months. Historically, the Company has issued shares out of treasury stock or the SECT to fulfill the share requirements from stock option exercises and restricted stock grants.

A summary of stock option activity under the 2010 Plan and Equity Plan is as follows:

	2010 Plan Options		Weighted- Average Exercise Price		Equity Plan Options		Weighted- Average Exercise Price
Outstanding at December 31, 2011	265,500		$	12.89	3,175,075		$	4.49
Granted	225,596		$	14.41	—		$	—
Exercised	(20,750	)	$	13.53	(574,353	)	$	3.58
Canceled or forfeited	(9,000	)	$	13.55	(13,175	)	$	5.42
Expired	—		$	—	(3,000	)	$	3.56
Outstanding at December 31, 2012	461,346		$	13.59	2,584,547		$	4.68
Granted	207,000		$	21.03	—		$	—
Exercised	(2,875	)	$	13.50	(107,775	)	$	4.93
Canceled or forfeited	(5,000	)	$	13.18	(2,000	)	$	5.92
Expired	—		$	—	(2,625	)	$	3.45
Outstanding at December 31, 2013	660,471		$	15.93	2,472,147		$	4.67
Granted	107,000		$	16.93	—		$	—
Exercised	(5,000	)	$	13.18	(601,800	)	$	4.23
Canceled or forfeited	(130,625	)	$	17.02	—		$	—
Expired	—		$	—	(1,750	)	$	4.34
Outstanding at December 31, 2014	631,846		$	15.89	1,868,597		$	4.82
Options Exercisable at December 31, 2014	477,722		$	15.56	1,868,597		$	4.82

For 2014, there were 5,000 shares exercised under the 2010 plan, and the intrinsic value of those exercised shares was $18,000. There were 2,875 and 20,750 shares exercised under the 2010 plan in 2013 and 2012, respectively. The intrinsic value of those shares was $17,000 and $55,000, respectively. For 2014, 2013, and 2012, the intrinsic value of the options exercised under the Equity Plan was $5.8 million, $1.6 million, and $7.4 million, respectively. At December 31, 2014, there were 135,060 options remaining outstanding under the 1991 Plan. There were no shares exercised under the 1991 Plan during 2014, 2013, or 2012.

A summary of restricted stock activity under the Equity Plan and the 1991 Restricted Stock Plan is as follows:

	Equity Plan Restricted Stock		Weighted- Average Fair Value		1991 Restricted Stock Plan		Weighted- Average Fair Value
Outstanding at December 31, 2011	221,500		$	5.01	262,375		$	9.57
Granted	—		$	—	127,500		$	15.04
Released	(40,000	)	$	4.97	(90,626	)	$	8.38
Canceled or forfeited	—		$	—	(7,500	)	$	11.14
Outstanding at December 31, 2012	181,500		$	5.02	291,749		$	12.29
Granted	—		$	—	98,000		$	20.68
Released	(40,000	)	$	4.97	(106,626	)	$	10.77
Canceled or forfeited	—		$	—	(1,600	)	$	18.04
Outstanding at December 31, 2013	141,500		$	5.04	281,523		$	15.75
Granted	—		$	—	125,200		$	16.62
Released	—		$	—	(193,652	)	$	15.26
Canceled or forfeited	—		$	—	(39,838	)	$	16.71
Outstanding at December 31, 2014	141,500		$	5.04	173,233		$	16.70

During 2014, there were 11,700 shares of restricted stock granted under the 2010 Plan, with a weighted-average fair value of $16.93. There were no releases or cancellations of these shares during 2014.

Options Outstanding at December 31, 2014

A summary of stock options that were outstanding at December 31, 2014 for the 2010 Plan and the Equity Plan is as follows:

Range of Exercise Prices:	Number of Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
2010 Plan
$12.16 - $13.75	314,250	$	13.10	9.3	$	—
$15.04 - $16.93	148,096	$	15.84	8.2	—
$20.68 - $21.41	169,500	$	21.11	11.1	—
	631,846	$	15.89	9.5	$	—
Equity Plan
$2.35 - $3.26	292,500	$	3.20	4.0	$	1,852,825
$3.48 - $4.90	1,007,972	$	4.54	3.0	5,032,901
$5.25 - $7.18	568,125	$	6.14	5.3	1,923,534
	1,868,597	$	4.82	3.9	$	8,809,260

At December 31, 2014, there were also 135,060 options remaining outstanding under the 1991 stock option plan, with 127,000 options ranging in prices from $2.88 to $6.00, and 8,000 options with a price of $16.19, all with a remaining average contractual life of 0.5 years, and having an intrinsic value of $0.5 million.

Options Exercisable at December 31, 2014

A summary of stock options that are exercisable at December 31, 2014 for the 2010 Plan and the Equity Plan is as follows:

Range of Exercise Prices:	Number of Options Exercisable	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
2010 Plan
$12.16 - $13.75	289,750	$	13.16	9.7	$	—
$15.04 - $16.93	62,348	$	15.22	7.9	—
$20.68 - $21.41	125,624	$	21.26	12.2	—
	477,722	$	15.56	10.1	$	—
Equity Plan
$2.35 - $3.26	292,500	$	3.20	4.0	$	1,852,825
$3.48 - $4.90	1,007,972	$	4.54	3.0	5,032,901
$5.25 - $7.18	568,125	$	6.14	5.3	1,923,534
	1,868,597	$	4.82	3.9	$	8,809,260

At December 31, 2014, there were also 135,060 options exercisable under the 1991 stock option plan, with 127,000 options ranging in prices from $2.88 to $6.00, and 8,000 options with a price of $16.19, all with a remaining average contractual life of 0.5 years, and having an intrinsic value of $0.5 million.

The aggregate intrinsic values as calculated in the above charts detailing options that are outstanding and those that are exercisable, respectively, are based upon the Company’s closing stock price on December 31, 2014 of $9.53 per share.

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Consolidated Statements of Comprehensive Income - (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
Taxes on change in pension loss adjustment	$ (428)	$ 235	$ (396)

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Debt

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Debt

Debt

The Company's revolving credit agreement expired in April 2014 and previously allowed the Company to borrow up to $35.0 million. During April 2014, the Company entered into a new, demand line of credit with its banks totaling $40.0 million. At both December 31, 2014 and 2013, there were no amounts outstanding under either of these credit agreements. Although there were no borrowings outstanding, at December 31, 2013 there was a $0.6 million letter of credit issued under the revolving credit agreement. The Company borrows or repays its debt as needed based upon its working capital obligations, including the timing of the U.S. bi-weekly payroll. The Company did not borrow any funds under its credit agreements during 2014, 2013 or 2012.

The Company was previously required to meet certain financial covenants in order to maintain borrowings under its revolving credit line, pay dividends, and make acquisitions. There are no measured financial covenants under the new demand line of credit. The Company was in compliance with its previously required covenants at December 31, 2013. The Company incurred commitment fees totaling approximately $0.1 million in both 2013 and 2012 relating to the revolving credit agreement.

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Investments

12 Months Ended

Dec. 31, 2014

Investments [Abstract]

Investments

Investments

The Company’s investments consist of mutual funds which are part of the Computer Task Group, Incorporated Non-qualified Key Employee Deferred Compensation Plan. At December 31, 2014 and 2013, the Company’s investment balances, which are classified as trading securities, totaled approximately $0.8 million and $0.9 million, respectively, and were measured at fair value. As there is an active trading market for these funds, fair value was determined using Level 1 inputs (see note 1 “Summary of Significant Accounting Policies—Fair Value”). Unrealized gains and losses on these securities are recorded in earnings and were nominal in 2014, 2013, and 2012.

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Schedule II-Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2014

Valuation and Qualifying Accounts [Abstract]

Schedule II-Valuation and Qualifying Accounts

COMPUTER TASK GROUP, INCORPORATED

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

(amounts in thousands)

	Balance at January 1		Additions		Deductions			Balance at December 31
2014
Accounts deducted from accounts receivable -
Allowance for doubtful accounts	$	1,040	55	A	(204	)	A	$	891
Accounts deducted from deferred tax assets -
Deferred tax asset valuation allowance	$	2,170	1,233	B	(268	)	B	$	3,135
2013
Accounts deducted from accounts receivable -
Allowance for doubtful accounts	$	862	178	A	—		A	$	1,040
Accounts deducted from deferred tax assets -
Deferred tax asset valuation allowance	$	2,269	233	B	(332	)	B	$	2,170
2012
Accounts deducted from accounts receivable -
Allowance for doubtful accounts	$	965	326	A	(429	)	A	$	862
Accounts deducted from deferred tax assets -
Deferred tax asset valuation allowance	$	1,404	1,000	B	(135	)	B	$	2,269

A These balances primarily reflect additions to the allowance charged to expense resulting from the normal course of business, less deductions for recovery of accounts that were previously reserved, and additions and deductions for foreign currency translation

B These balances primarily reflect additions for an increase in the valuation reserve associated with certain deferred tax assets related to the Netherlands defined-benefit plan

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Significant Customer

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Significant Customer

Significant Customer

International Business Machines Corporation (IBM) is the Company’s largest customer. During the 2014 fourth quarter, our contract with IBM was renewed for three years until December 31, 2017. In 2014, 2013, and 2012, IBM accounted for $90.5 million or 23.0%, $101.7 million or 24.3%, and $113.8 million or 26.8% of the Company’s consolidated revenue, respectively. In 2012, IBM sold its retail business to another large company. While CTG retained the work, this reduced our revenue from IBM in 2012 by $3.2 million. The Company’s accounts receivable from IBM at December 31, 2014 and 2013 amounted to $7.8 million and $11.5 million, respectively. No other customer accounted for more than 10% of revenue in 2014, 2013, or 2012.

In January 2014, IBM announced its intention to sell its x86 server division to Lenovo, and the initial closing of that sale occurred on September 29, 2014. A portion of the Company's 2014 and 2013 revenue from IBM was related to the x86 server division. The Company expects to continue to retain a significant share of the revenue derived from the x86 server division despite the transition of the division from IBM to Lenovo.

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Deferred Compensation Benefits

12 Months Ended

Dec. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Deferred Compensation Benefits

Deferred Compensation Benefits

The Company maintains a non-qualified defined-benefit Executive Supplemental Benefit Plan (ESBP) that provides certain former key executives with deferred compensation benefits, based on years of service and base compensation, payable during retirement. The plan was amended as of November 30, 1994, to freeze benefits for the participants in the plan at that time.

Net periodic pension cost for the years ended December 31, 2014, 2013, and 2012 for the ESBP is as follows:

Net Periodic Pension Cost—ESBP	2014		2013		2012
(amounts in thousands)
Interest cost	$	276	$	243	$	338
Amortization of actuarial loss	138		191		279
Net periodic pension cost	$	414	$	434	$	617

The Company also retained a contributory defined-benefit plan for its previous employees located in the Netherlands (NDBP) when the Company disposed of its subsidiary, CTG Nederland, B.V. Benefits paid are a function of a percentage of career average pay. This plan was curtailed for additional contributions in January 2003. Net periodic pension cost was approximately $90,000, $49,000, and $118,000 for the years ending December 31, 2014, 2013 and 2012, respectively.

The change in benefit obligation and reconciliation of fair value of plan assets for the years ended December 31, 2014 and 2013 for the ESBP and NDBP are as follows:

	ESBP						NDBP
Changes in Benefit Obligation	2014			2013			2014			2013
(amounts in thousands)
Benefit obligation at beginning of period	$	7,499		$	8,405		$	11,635		$	11,913
Interest cost	276			243			358			333
Benefits paid	(737		)	(720		)	(159		)	(141		)
Actuarial loss (gain)	1,236			(429		)	4,896			(939		)
Effect of exchange rate changes	—			—			(1,798		)	469
Benefit obligation at end of period	8,274			7,499			14,932			11,635
Reconciliation of Fair Value of Plan Assets
Fair value of plan assets at beginning of period	—			—			8,752			8,143
Actual return on plan assets	—			—			359			351
Employer contributions	737			720			—			—
Benefits paid	(737		)	(720		)	(159		)	(141		)
Administrative costs	—			—			—			52
Effect of exchange rate changes	—			—			(1,042		)	347
Fair value of plan assets at end of period	—			—			7,910			8,752
Accrued benefit cost	$	8,274		$	7,499		$	7,022		$	2,883
Accrued benefit cost is included in the consolidated balance sheet as follows:
Current liabilities	$	714		$	704		$	—		$	—
Non-current liabilities	$	7,560		$	6,795		$	7,022		$	2,883
Discount rates:
Benefit obligation	3.30		%	3.87		%	1.50		%	3.20		%
Net periodic pension cost	3.87		%	3.02		%	3.20		%	2.80		%
Salary increase rate	—		%	—		%	—		%	—		%
Expected return on plan assets	—		%	—		%	4.00		%	4.00		%

For the ESBP, the accumulated benefit obligation at December 31, 2014 and 2013 was $8.3 million and $7.5 million, respectively. The amounts included in other comprehensive loss relating to the pension loss adjustment in 2014 and 2013, net of tax, were approximately $0.7 million and $(0.4) million, respectively. The discount rate used in 2014 was 3.30%, which is reflective of a series of bonds that are included in the Moody’s Aa long-term corporate bond yield whose cash flow approximates the payments to participants under the ESBP for the remainder of the plan. This rate was a decrease of 57 basis points from the rate used in the prior year and resulted in an increase in the plan’s liabilities of approximately $0.4 million. Benefits paid to participants are funded by the Company as needed, and are expected to total approximately $0.7 million in 2015. The plan is deemed unfunded as the Company has not specifically identified Company assets to be used to discharge the deferred compensation benefit liabilities. The Company has purchased insurance on the lives of certain plan participants in amounts considered sufficient to reimburse the Company for the costs associated with the plan for those participants. The Company does not anticipate making contributions to the plan other than for current year benefit payments as required in 2015 or future years.

For the NDBP, the accumulated benefit obligation at December 31, 2014 and 2013 was $14.9 million and $11.6 million, respectively. The discount rate used in 2014 was 1.50%, which is reflective of a series of corporate bonds whose cash flow approximates the payments to participants under the NDBP for the remainder of the plan. This rate was a decrease of 170 basis points from the rate used in the prior year due to the declining economic environment in Europe, and resulted in an increase in the plan’s liabilities of $4.4 million in 2014.

The assets for the NDBP are held by Aegon, a financial services firm located in the Netherlands. The assets for the plan are included in a general portfolio of government bonds, a portion of which is allocated to the NDBP based upon the estimated pension liability associated with the plan. The fair market value of the plan’s assets equals the amount allocated to the NDBP in any given year. The fair value of the assets is determined using a Level 3 methodology (see note 1 “Summary of Significant Accounting Policies—Fair Value”). The calculation of fair value includes determining the present value of the future expected payments under the plan, including using assumptions such as expected market rates of return and discount rates. In 2014 and 2013, the plan investments had a targeted minimum return to the Company of 4.0%, which is consistent with historical returns and the 4.0% return guaranteed to the participants of the plan. The Company, in conjunction with Aegon, intends to maintain the current investment strategy of investing plan assets solely in government bonds in 2015.

Anticipated benefit payments for the ESBP and the NDBP expected to be paid in future years are as follows:

	ESBP		NDBP
(amounts in thousands)
2015	$	725	$	150
2016	670		165
2017	654		186
2018	655		227
2019	657		258
2020 - 2024	2,942		1,528
Total	$	6,303	$	2,514

For the ESBP and the NDBP, the amounts included in accumulated other comprehensive loss, net of tax, that have not yet been recognized as components of net periodic benefit cost as of December 31, 2014 are $2.0 million and $7.8 million, respectively, for unrecognized actuarial losses. The amounts included in accumulated other comprehensive loss, net of tax, that had not yet been recognized as components of net periodic benefit cost as of December 31, 2013 were $1.3 million and $3.9 million, respectively, also for unrecognized actuarial losses.

The amounts recognized in other comprehensive income (loss), net of tax, for 2014, 2013, and 2012, which primarily consist of an actuarial gain (loss), totaled $(4.6) million (primarily due to the decrease in the discount rate for the NDBP), $1.3 million, and $(2.8) million, respectively. Net periodic pension benefit (cost), and the amounts recognized in other comprehensive loss, net of tax, for the ESBP and the NDBP for 2014, 2013, and 2012 totaled $(5.1) million, $0.8 million, and $2.1 million, respectively.

The amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost during 2015 for the ESBP and the NDBP for unrecognized actuarial losses total $0.4 million.

The Company also maintains the Key Employee Non-Qualified Deferred Compensation Plan for certain key executives. Company contributions to this plan, if any, are based on annually defined financial performance objectives. There were $0.2 million in contributions to the plan in 2014 for amounts earned in 2013, $0.3 million in contributions to the plan in 2013 for amounts earned in 2012, and $0.4 million in contributions to the plan in 2012 for amounts earned in 2011. The Company anticipates making contributions in 2015 totaling approximately $0.1 million to this plan for amounts earned in 2014. The investments in the plan are included in the total assets of the Company, and are discussed in note 3, “Investments.” During 2014, 2013 and 2012, some participants in the plan exchanged a portion of their investments for stock units which represent shares of the Company’s common stock. In exchange for the funds received, the Company issued shares out of treasury stock equivalent to the number of share units received by the participants. These shares of common stock are not entitled to any voting rights, but will receive dividends if any are paid. The shares are being held by the Company, and will be released to the participants as prescribed by their payment election under the plan.

The Company maintains the Non-Employee Director Deferred Compensation Plan for its non-employee directors. Cash contributions were made to the plan for certain of these directors totaling approximately $0.4 million in 2014, and less than $0.1 million for both 2013 and 2012.  At the time the contributions were made, one of the non-employee directors elected to exchange his cash contributions to the plan for the purchase of stock units which represent shares of the Company’s common stock. Consistent with the Key Employee Non-Qualified Deferred Compensation Plan, in exchange for funds received, the Company issued stock out of treasury stock equivalent to the number of share units received by the participant.  These shares of common stock are not entitled to any voting rights, but will receive dividends if any are paid.  The shares are being held by the Company, and will be released to the non-employee director as prescribed by their payment election under the plan.

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Deferred Compensation Benefits Change in Benefit Obligation and Reconciliation of Fair Value (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
ESBP
Changes in Benefit Obligation
Benefit obligation at beginning of period	$ 7,499	$ 8,405
Interest cost	276	243	338
Benefits paid	(737)	(720)
Actuarial loss (gain)	1,236	(429)
Effect of exchange rate changes	0	0
Benefit obligation at end of period	8,274	7,499	8,405
Reconciliation of Fair Value of Plan Assets
Fair value of plan assets at beginning of period	0	0
Actual return on plan assets	0	0
Employer contributions	737	720
Benefits paid	(737)	(720)
Fair value of plan assets at end of period	0	0	0
Accrued benefit cost	8,274	7,499
Current liabilities	714	704
Non-current liabilities	7,560	6,795
Benefit obligation	3.30%	3.87%
Net periodic pension cost	3.87%	3.02%
Salary increase rate	0.00%	0.00%
Expected return on plan assets	0.00%	0.00%
NDBP
Changes in Benefit Obligation
Benefit obligation at beginning of period	11,635	11,913
Interest cost	358	333
Benefits paid	(159)	(141)
Actuarial loss (gain)	4,896	(939)
Effect of exchange rate changes	(1,798)	469
Benefit obligation at end of period	14,932	11,635
Reconciliation of Fair Value of Plan Assets
Fair value of plan assets at beginning of period	8,752	8,143
Actual return on plan assets	359	351
Employer contributions	0	0
Benefits paid	(159)	(141)
Administrative costs		52
Effect of exchange rate changes	(1,042)	347
Fair value of plan assets at end of period	7,910	8,752
Accrued benefit cost	7,022	2,883
Current liabilities	0	0
Non-current liabilities	$ 7,022	$ 2,883
Benefit obligation	1.50%	3.20%
Net periodic pension cost	3.20%	2.80%
Salary increase rate	0.00%	0.00%
Expected return on plan assets	4.00%	4.00%

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Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes for 2014, 2013, and 2012 consists of the following:

	2014			2013			2012
(amounts in thousands)
Domestic and foreign components of income before income taxes are as follows:
Domestic	$	14,885		$	22,313		$	23,028
Foreign	2,053			2,026			2,417
Total income before income taxes	$	16,938		$	24,339		$	25,445
The provision (benefit) for income taxes consists of:
Current tax:
U.S. federal	$	4,023		$	6,133		$	6,778
Foreign	1,505			1,469			1,393
U.S. state and local	831			1,409			993
Total current tax	6,359			9,011			9,164
Deferred tax:
U.S. federal	273			(245		)	55
Foreign	(97		)	(34		)	—
U.S. state and local	53			(72		)	61
Total deferred tax	229			(351		)	116
Total tax	$	6,588		$	8,660		$	9,280
The effective and statutory income tax rate can be reconciled as follows:
Tax at statutory rate of 35% / 34%	$	5,928		$	8,519		$	8,906
State tax, net of federal benefit	578			877			685
Non-taxable income	(520		)	(563		)	(993		)
Non-deductible expenses	803			963			796
Change in estimate primarily related to foreign taxes	134			128			41
Change in estimate primarily related to state taxes and tax reserves	—			(172		)	50
Change in estimate primarily related to U.S. federal taxes	—			—			(157		)
Tax credits	(421		)	(1,117		)	—
Other, net	86			25			(48		)
Total tax	$	6,588		$	8,660		$	9,280
Effective income tax rate	38.9		%	35.6		%	36.5		%

The Company’s effective tax rate (ETR) is calculated based upon the full year's operating results, and various tax related items. The Company’s normal ETR ranges from 38% to 40%. The 2013 ETR was lower than the normal range primarily due to the recording of approximately $0.7 million of tax credits related to research and development activities, and approximately $0.4 million of tax credits related to the Company’s participation in the Work Opportunity Tax Credit (WOTC) program offered by the U.S. federal government to companies who have hired individuals who have traditionally faced barriers to employment. The tax benefit for these two items for both 2013 and 2012 was recorded in 2013 as required under current accounting guidelines, as the legislation extending these tax credits, the American Taxpayer Relief Act of 2012, was not passed by the U.S. federal government until January 2013. The benefit of these tax credits was partially offset by an increase of approximately $0.1 million in the valuation allowance associated with net operating losses incurred by certain foreign subsidiaries. The 2012 ETR was lower than the normal range due to approximately $0.5 million in tax expense related to non-taxable life insurance proceeds received during the year. In addition, in 2012 the Company recorded an additional $0.2 million reduction of state tax expense as a result of the recording of certain favorable provision-to-return adjustments associated with the Company’s 2011 income tax returns.

The expected relationship between foreign income before taxes and the foreign provision for income taxes differs from the actual relationship above as a result of certain foreign losses incurred for which no tax benefit has been recognized.  Management has determined that it is unclear whether operations in those jurisdictions will produce taxable income in future years sufficient to realize the benefit of the losses in those jurisdictions.  In addition, certain costs deducted for financial statement purposes are not deductible for tax purposes in some foreign jurisdictions, such as various employee benefit costs, resulting in a substantial increase to foreign taxable income.

The Company’s deferred tax assets and liabilities at December 31, 2014 and 2013 consist of the following:

December 31,	2014			2013
(amounts in thousands)
Assets
Deferred compensation	$	8,358		$	8,005
Loss carryforwards	1,240			1,208
Accruals deductible for tax purposes when paid	452			409
Depreciation	56			57
Allowance for doubtful accounts	300			324
State taxes	767			836
Gross deferred tax assets	11,173			10,839
Deferred tax asset valuation allowance	(3,135		)	(2,170		)
Gross deferred tax assets less valuation allowance	8,038			8,669
Liabilities
Depreciation	(470		)	(965		)
Other	(125		)	(197		)
Gross deferred tax liabilities	(595		)	(1,162		)
Net deferred tax assets	$	7,443		$	7,507
Net deferred tax assets and liabilities are recorded as follows:
Net current assets	$	1,079		$	1,113
Net non-current assets	6,364			6,487
Net non-current liabilities	—			(93		)
Net deferred tax assets	$	7,443		$	7,507

In assessing the realizability of deferred tax assets, management considers, within each taxing jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Factors that may affect the Company’s ability to achieve sufficient forecasted taxable income in future periods may include, but are not limited to, the following: increased competition, a decline in sales or margins, a loss of market share, the availability of qualified professional staff, and a decrease in demand for IT services. Based upon the levels of historical taxable income and projections for future taxable income over the years in which the deferred tax assets are deductible, at December 31, 2014, management believes that it is more likely than not that the Company will realize the benefits, net of the established valuation allowance, of these deferred tax assets in the future.

For tax purposes, the Company has various U.S. state net operating loss carryforwards which began to expire in 2011, and have approximately $0.1 million remaining. These net operating losses have a carryforward period of 5 to 20 years. The Netherlands net operating loss carryforward is approximately $1.4 million, and began to expire in 2014, while in the United Kingdom and Belgium, the net operating loss carryforwards are approximately $3.6 million and $0.2 million, respectively, and have no expiration date.

At December 31, 2014, the Company has a deferred tax asset before the valuation allowance in the United States resulting from net operating losses in various states of approximately $0.1 million, in the United Kingdom of approximately $0.8 million, in Belgium of approximately $0.1 million, and in the Netherlands of approximately $0.4 million. Management has analyzed each jurisdiction’s tax position, including forecasting potential taxable income in future years, and the expiration of the net operating loss carryforwards as applicable, and determined that it is unclear whether all of the deferred tax asset totaling $1.2 million will be realized at any point in the future. Accordingly, at December 31, 2014, the Company has offset most of the asset with a valuation allowance totaling $1.1 million, resulting in a net deferred tax asset from net operating loss carryforwards of approximately $0.1 million. During 2014, the net increase in the valuation allowance was approximately $1.0 million.

The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to 2010.

A reconciliation of unrecognized tax benefits for 2014 and 2013 is as follows:

(amounts in thousands)
Balance at January 1, 2013	$	173
Additions based on tax positions related to the current year	—
Additions for tax positions of prior years	—
Reductions for lapse of statute of limitations	(24		)
Settlements	(149		)
Balance at December 31, 2013	—
Additions based on tax positions related to the current year	—
Additions for tax positions of prior years	—
Reductions for lapse of statute of limitations	—
Settlements	—
Balance at December 31, 2014	$	—

No significant increase in the total amount of unrecognized tax benefits is expected within the next twelve months. The Company recognizes accrued interest and penalties related to unrecognized tax benefits (if any) in tax expense, as applicable. At December 31, 2014, the Company had no accrual for the payment of interest and penalties.

The Company will establish an unrecognized tax benefit based upon the anticipated outcome of tax positions taken for financial statement purposes compared with positions taken on the Company’s tax returns. The Company records the benefit for unrecognized tax benefits only when it is more likely than not that the position will be sustained upon examination by the taxing authorities. The Company reviews its unrecognized tax benefits on a quarterly basis. Such reviews include consideration of factors such as the cause of the action, the degree of probability of an unfavorable outcome, the Company’s ability to estimate the liability, and the timing of the liability and how it will impact the Company’s other tax attributes. At December 31, 2014, the Company believes it has adequately provided for its tax-related liabilities, and that no reserve for unrecognized tax benefits is necessary.

At December 31, 2014, the undistributed earnings of foreign subsidiaries amounted to approximately $18.4 million. A deferred tax liability for the taxes related to these unremitted accumulated foreign earnings has not been provided for as the determination of the estimated liability is not practicable and because undistributed earnings of the Company’s foreign subsidiaries are considered to be indefinitely reinvested. Upon distribution of these earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries.

In 2014, 2013, and 2012, a total of 543,000, 87,000, and 461,000 shares of common stock, respectively, were issued through the exercise of non-qualified stock options or through the disqualifying disposition of incentive stock options. The tax benefit to the Company from these transactions, which was credited to capital in excess of par value rather than recognized as a reduction of income tax expense, was $2.0 million, $0.5 million, and $2.2 million in 2014, 2013, and 2012, respectively. These tax benefits have also been recognized in the consolidated balance sheets as a reduction of income taxes payable.

Net income tax payments during 2014, 2013, and 2012 totaled $5.8 million, $7.1 million, and $6.5 million, respectively.

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Lease Commitments

12 Months Ended

Dec. 31, 2014

Leases [Abstract]

Lease Commitments

Lease Commitments

At December 31, 2014, the Company was obligated under a number of long-term operating leases, some of which contain renewal options with escalation clauses commensurate with local market fluctuations, however, generally limiting the increase to no more than 5.0% of the existing lease payment.

Minimum future obligations under such leases as of December 31, 2014 are summarized as follows:

(amounts in thousands)
2015	$	5,046
2016	3,740
2017	2,459
2018	1,091
2019	269
Later years	—
Minimum future obligations	$	12,605

The operating lease obligations relate to the rental of office space, office equipment, and automobiles leased in Europe. Total rental expense under such operating leases for 2014, 2013, and 2012 was approximately $7.0 million, $7.0 million, and $6.3 million, respectively.

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Employee Benefits

12 Months Ended

Dec. 31, 2014

Postemployment Benefits [Abstract]

Employee Benefits

Employee Benefits

401(k) Profit-Sharing Retirement Plan

The Company maintains a contributory 401(k) profit-sharing retirement plan covering substantially all U.S. employees. At its discretion, the Company may match up to 50% of the first 6% of eligible wages contributed by the participants. Company contributions, net of forfeitures, which currently consist of cash and may include the Company’s stock, were funded and charged to operations in the amounts of $2.3 million, $2.4 million, and $2.8 million for 2014, 2013, and 2012, respectively.

Other Retirement Plans

The Company maintains various other defined contribution retirement plans covering substantially all of the remaining European employees. Company contributions charged to operations were $0.2 million in 2014, and $0.1 million in both 2013, and 2012.

Employee Health Insurance

The Company provides various health insurance plans for its employees, including a self-insured plan for its salaried employees in the U.S. In 2014 and previous years, the Company offered limited healthcare coverage to its hourly employees, which includes nearly half of its total employees. Under the PPACA, the Company will be required to offer expanded healthcare coverage to those employees, or potentially pay financial penalties. Beginning in 2015, the Company is in the process of offering compliant healthcare coverage as required.

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Shareholders' Equity - (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Shareholders' Equity
Employee Stock Purchase Plan (ESPP): Maximum annual contribution per employee	10.00%
Employee Stock Purchase Plan (ESPP), Shares authorized			250,000
Employee Stock Purchase Plan (ESPP), Shares in ESPP	218,000
Employee Stock Purchase Plan (ESPP), Shares purchased	24,000	19,000	19,000
Employee Stock Purchase Plan (ESPP), Weighted average purchase price	$ 13.35	$ 19.72	$ 15.29
Preferred stock, shares authorized	2,500,000	2,500,000
Preferred stock, par or stated value per share	$ 0.01	$ 0.01
Stock Employee Compensation Trust (SECT) [Member]
Shareholders' Equity
Stock Trusts, Shares held	3,304,000	3,304,000	3,304,000
Omnibus Stock Trust (OST) [Member]
Shareholders' Equity
Stock Trusts, Shares held	59,000	59,000	59,000

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Equity-Based Compensation Fair Value Assumptions (Details)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Expected life (years)	4 years 1 month	2 years 8 months	2 years 8 months
Dividend yield	1.40%	1.00%	0.00%
Risk-free interest rate	1.20%	0.40%	0.40%
Expected volatility	48.00%	44.40%	61.30%

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Employee Benefits - (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Postemployment Benefits [Abstract]
Employee 401(K) profit sharing plan, maximum annual matching per employee	6.00%
Employee 401(K) profit sharing plan, employer matching contribution	50.00%
Defined Benefit Plan Disclosure [Line Items]
Defined Contribution Plan, Cost Recognized	$ 2.3	$ 2.4	$ 2.8
Europe [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Contribution Plan, Cost Recognized	$ 0.2	$ 0.1	$ 0.1

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Summary of Significant Accounting Policies - Revenue by Vertical Market (Details)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenue by vertical market as a percentage of total revenue
Total revenue	100.00%	100.00%	100.00%
Healthcare [Member]
Revenue by vertical market as a percentage of total revenue
Total revenue	28.60%	31.40%	33.00%
Technology Service Providers [Member]
Revenue by vertical market as a percentage of total revenue
Total revenue	26.40%	28.00%	30.80%
Financial Services [Member]
Revenue by vertical market as a percentage of total revenue
Total revenue	7.90%	6.80%	6.10%
Energy [Member]
Revenue by vertical market as a percentage of total revenue
Total revenue	6.10%	6.20%	6.00%
General Markets [Member]
Revenue by vertical market as a percentage of total revenue
Total revenue	31.00%	27.60%	24.10%

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Investments - (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Investments [Abstract]
Trading securities	$ 788	$ 896

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Enterprise-Wide Disclosures

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Enterprise-Wide Disclosures

Financial Information About Geographic Areas	2014		2013		2012
(amounts in thousands)
Revenue from External Customers:
United States	$	314,500	$	341,391	$	355,022
Belgium(1)	44,692		48,428		41,957
Other European countries	33,652		28,684		26,653
Other country	424		533		783
Total foreign revenue	78,768		77,645		69,393
Total revenue	$	393,268	$	419,036	$	424,415
Long-lived Assets:
United States	$	5,759	$	7,169	$	6,102
Europe	1,034		1,072		814
Total long-lived assets	$	6,793	$	8,241	$	6,916
Deferred Tax Assets, Net of Valuation Allowance:
United States	$	7,982	$	8,669	$	8,485
Europe	56		—		—
Total deferred tax assets, net	$	8,038	$	8,669	$	8,485

(1) Revenue for our Belgium operations has been disclosed separately as it exceeds 10% of consolidated revenue for certain of the years presented

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Property, Equipment and Capitalized Software - (Tables)

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, equipment and capitalized software at December 31, 2014 and 2013 are summarized as follows:

December 31,	Useful Life	2014			2013
(amounts in thousands)	(years)
Land	-	$	378		$	378
Buildings	30	4,342			4,342
Equipment	2 - 5	6,904			7,372
Furniture	5 - 10	3,224			3,088
Capitalized software	2 - 5	5,505			5,784
Other software	1 - 5	2,761			2,869
Leasehold improvements	3 - 10	4,521			4,554
		27,635			28,387
Accumulated depreciation and amortization		(20,842		)	(20,146		)
		$	6,793		$	8,241

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Property, Equipment and Capitalized Software - Useful Life (Details)	12 Months Ended
	Dec. 31, 2014
Minimum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	1 year
Maximum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	30 years
Buildings [Member]
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	30 years
Equipment [Member] | Minimum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	2 years
Equipment [Member] | Maximum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	5 years
Furniture [Member] | Minimum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	5 years
Furniture [Member] | Maximum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	10 years
Capitalized Software [Member] | Minimum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	2 years
Capitalized Software [Member] | Maximum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	5 years
Other Software [Member] | Minimum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	1 year
Other Software [Member] | Maximum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	5 years
Leasehold Improvements [Member] | Minimum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	3 years
Leasehold Improvements [Member] | Maximum
Property, Equipment and Capitalized Software [Line Items]
Property, equipment and capitalized software, useful life	10 years

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Summary of Significant Accounting Policies - Goodwill (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Goodwill [Line Items]
Goodwill	$ 37,638,000	$ 37,409,000
Goodwill from acquisition	$ 2,000,000

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Assets
Cash and cash equivalents	$ 40,862	$ 46,227
Accounts receivable, net	67,843	67,422
Prepaid and other current assets	1,817	1,657
Income taxes receivable	1,684	0
Deferred income taxes	1,079	1,113
Total current assets	113,285	116,419
Property, equipment and capitalized software, net	6,793	8,241
Goodwill	37,409	37,638
Deferred income taxes	6,364	6,487
Other assets	6,157	4,750
Investments	788	896
Total assets	170,796	174,431
Liabilities
Accounts payable	8,865	9,536
Accrued compensation	27,371	31,460
Advance billings on contracts	1,973	2,467
Dividend payable	896	748
Other current liabilities	4,955	4,086
Income taxes payable	0	632
Total current liabilities	44,060	48,929
Deferred compensation benefits	15,480	11,224
Other long-term liabilities	290	436
Total liabilities	59,830	60,589
Shareholders' Equity
Common stock	270	270
Capital in excess of par value	125,884	122,531
Retained earnings	118,999	112,277
Less: Treasury stock	(63,511)	(57,163)
Stock Trusts	(55,083)	(55,083)
Other	0	(285)
Accumulated other comprehensive loss	(15,593)	(8,705)
Total shareholders’ equity	110,966	113,842
Total liabilities and shareholders’ equity	$ 170,796	$ 174,431

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Property, Equipment and Capitalized Software

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Property, Equipment and Capitalized Software

Property, Equipment and Capitalized Software

Property, equipment and capitalized software at December 31, 2014 and 2013 are summarized as follows:

December 31,	Useful Life	2014			2013
(amounts in thousands)	(years)
Land	-	$	378		$	378
Buildings	30	4,342			4,342
Equipment	2 - 5	6,904			7,372
Furniture	5 - 10	3,224			3,088
Capitalized software	2 - 5	5,505			5,784
Other software	1 - 5	2,761			2,869
Leasehold improvements	3 - 10	4,521			4,554
		27,635			28,387
Accumulated depreciation and amortization		(20,842		)	(20,146		)
		$	6,793		$	8,241

The Company recorded additions to capitalized software of $1.7 million in both of the years ended December 31, 2014 and December 31, 2013. As of these dates the Company had capitalized a total of $5.5 million and $5.8 million, respectively, solely for software projects developed for internal use. Accumulated amortization for these projects totaled $4.2 million and $3.4 million as of December 31, 2014 and 2013, respectively.

Amortization expense for these projects totaled $1.2 million, $1.2 million, and $1.7 million in 2014, 2013, and 2012, respectively.

During the 2014 fourth quarter, the Company recorded the expense for the impairment of one of its capitalized software projects (fraud, waste and abuse software solution) after determining that it had no net realizable value. The impairment was a result of nominal sales results for this software solution in recent years, and the uncertainty of sales in the foreseeable future. The remaining net asset value, totaling approximately $1.5 million, was expensed to direct costs in the fourth quarter operating results. The Company recorded the charge in the 2014 fourth quarter as several sales opportunities that had been considered viable throughout 2014 ended late in the year without any sales.

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Lease Commitments Text (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Leases [Abstract]
Maximum potential payment increase	5.00%
Operating leases, rent expense	$ 7.0	$ 7.0	$ 6.3

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Equity-Based Compensation Options Outstanding (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
2010 Plan [Member]
Share-based Compensation Details
Number of options outstanding (in shares)	631,846	660,471	461,346	265,500
Weighted-average price	$ 15.89	$ 15.93	$ 13.59	$ 12.89
Weighted average remaining contractual life	9 years 6 months
Aggregate intrinsic value	$ 0
Equity Plan [Member]
Share-based Compensation Details
Number of options outstanding (in shares)	1,868,597	2,472,147	2,584,547	3,175,075
Weighted-average price	$ 4.82	$ 4.67	$ 4.68	$ 4.49
Weighted average remaining contractual life	3 years 11 months
Aggregate intrinsic value	8,809,260
Range of Exercise Prices, $12.16 – $13.75 [Member] | 2010 Plan [Member]
Share-based Compensation Details
Number of options outstanding (in shares)	314,250
Weighted-average price	$ 13.10
Weighted average remaining contractual life	9 years 4 months
Aggregate intrinsic value	0
Exercise price range, lower limit	$ 12.16
Exercise price range, upper limit	$ 13.75
Range of Exercise Prices, $15.04 – $16.93 [Member] | 2010 Plan [Member]
Share-based Compensation Details
Number of options outstanding (in shares)	148,096
Weighted-average price	$ 15.84
Weighted average remaining contractual life	8 years 2 months
Aggregate intrinsic value	0
Exercise price range, lower limit	$ 15.04
Exercise price range, upper limit	$ 16.93
Range of Exercise Prices, $20.68 - $21.41 [Member] | 2010 Plan [Member]
Share-based Compensation Details
Number of options outstanding (in shares)	169,500
Weighted-average price	$ 21.11
Weighted average remaining contractual life	11 years 1 month
Aggregate intrinsic value	0
Exercise price range, lower limit	$ 20.68
Exercise price range, upper limit	$ 21.41
Range of Exercise Prices, $2.35 – $3.26 [Member] | Equity Plan [Member]
Share-based Compensation Details
Number of options outstanding (in shares)	292,500
Weighted-average price	$ 3.20
Weighted average remaining contractual life	4 years 0 months
Aggregate intrinsic value	1,852,825
Exercise price range, lower limit	$ 2.35
Exercise price range, upper limit	$ 3.26
Range of Exercise Prices, $3.48 – $4.90 [Member] | Equity Plan [Member]
Share-based Compensation Details
Number of options outstanding (in shares)	1,007,972
Weighted-average price	$ 4.54
Weighted average remaining contractual life	3 years 0 months
Aggregate intrinsic value	5,032,901
Exercise price range, lower limit	$ 3.48
Exercise price range, upper limit	$ 4.90
Range of Exercise Prices, $5.25 – $7.18 [Member] | Equity Plan [Member]
Share-based Compensation Details
Number of options outstanding (in shares)	568,125
Weighted-average price	$ 6.14
Weighted average remaining contractual life	5 years 3 months
Aggregate intrinsic value	$ 1,923,534
Exercise price range, lower limit	$ 5.25
Exercise price range, upper limit	$ 7.18

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Income Taxes - (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The provision for income taxes for 2014, 2013, and 2012 consists of the following:

	2014			2013			2012
(amounts in thousands)
Domestic and foreign components of income before income taxes are as follows:
Domestic	$	14,885		$	22,313		$	23,028
Foreign	2,053			2,026			2,417
Total income before income taxes	$	16,938		$	24,339		$	25,445
The provision (benefit) for income taxes consists of:
Current tax:
U.S. federal	$	4,023		$	6,133		$	6,778
Foreign	1,505			1,469			1,393
U.S. state and local	831			1,409			993
Total current tax	6,359			9,011			9,164
Deferred tax:
U.S. federal	273			(245		)	55
Foreign	(97		)	(34		)	—
U.S. state and local	53			(72		)	61
Total deferred tax	229			(351		)	116
Total tax	$	6,588		$	8,660		$	9,280
The effective and statutory income tax rate can be reconciled as follows:
Tax at statutory rate of 35% / 34%	$	5,928		$	8,519		$	8,906
State tax, net of federal benefit	578			877			685
Non-taxable income	(520		)	(563		)	(993		)
Non-deductible expenses	803			963			796
Change in estimate primarily related to foreign taxes	134			128			41
Change in estimate primarily related to state taxes and tax reserves	—			(172		)	50
Change in estimate primarily related to U.S. federal taxes	—			—			(157		)
Tax credits	(421		)	(1,117		)	—
Other, net	86			25			(48		)
Total tax	$	6,588		$	8,660		$	9,280
Effective income tax rate	38.9		%	35.6		%	36.5		%

Schedule of Deferred Tax Assets and Liabilities

The Company’s deferred tax assets and liabilities at December 31, 2014 and 2013 consist of the following:

December 31,	2014			2013
(amounts in thousands)
Assets
Deferred compensation	$	8,358		$	8,005
Loss carryforwards	1,240			1,208
Accruals deductible for tax purposes when paid	452			409
Depreciation	56			57
Allowance for doubtful accounts	300			324
State taxes	767			836
Gross deferred tax assets	11,173			10,839
Deferred tax asset valuation allowance	(3,135		)	(2,170		)
Gross deferred tax assets less valuation allowance	8,038			8,669
Liabilities
Depreciation	(470		)	(965		)
Other	(125		)	(197		)
Gross deferred tax liabilities	(595		)	(1,162		)
Net deferred tax assets	$	7,443		$	7,507
Net deferred tax assets and liabilities are recorded as follows:
Net current assets	$	1,079		$	1,113
Net non-current assets	6,364			6,487
Net non-current liabilities	—			(93		)
Net deferred tax assets	$	7,443		$	7,507

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of unrecognized tax benefits for 2014 and 2013 is as follows:

(amounts in thousands)
Balance at January 1, 2013	$	173
Additions based on tax positions related to the current year	—
Additions for tax positions of prior years	—
Reductions for lapse of statute of limitations	(24		)
Settlements	(149		)
Balance at December 31, 2013	—
Additions based on tax positions related to the current year	—
Additions for tax positions of prior years	—
Reductions for lapse of statute of limitations	—
Settlements	—
Balance at December 31, 2014	$	—

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Quarterly Financial Data (Unaudited) - (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended									12 Months Ended
	Dec. 31, 2014		Sep. 26, 2014	Jun. 27, 2014	Mar. 28, 2014	Dec. 31, 2013	Sep. 27, 2013	Jun. 28, 2013	Mar. 29, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenue	$ 98,266		$ 96,760	$ 100,331	$ 97,911	$ 102,735	$ 100,689	$ 107,117	$ 108,495	$ 393,268	$ 419,036
Direct costs	80,095	[1]	77,723	79,133	76,979	80,455	79,506	84,470	85,896	313,930	330,327	333,086
Gross profit	18,171		19,037	21,198	20,932	22,280	21,183	22,647	22,599	79,338	88,709
Selling, general, and administrative expenses	16,535	[2]	14,466	15,728	15,457	16,188	15,129	16,248	16,417	62,186	63,982	66,867
Operating income	1,636		4,571	5,470	5,475	6,092	6,054	6,399	6,182	17,152	24,727	24,462
Interest and other expense, net	(29)		(33)	(55)	(97)	(82)	(91)	(106)	(109)	(214)	(388)
Income before income taxes	1,607		4,538	5,415	5,378	6,010	5,963	6,293	6,073	16,938	24,339	25,445
Provision for income taxes	382		1,812	2,182	2,212	2,306	2,100	2,238	2,016	6,588	8,660	9,280
Net Income	1,225		2,726	3,233	3,166	3,704	3,863	4,055	4,057	10,350	15,679	16,165
Basic (in dollars per share)	$ 0.08		$ 0.18	$ 0.22	$ 0.21	$ 0.24	$ 0.25	$ 0.26	$ 0.26	$ 0.68	$ 1.02	$ 1.07
Diluted (in dollars per share)	$ 0.08		$ 0.17	$ 0.20	$ 0.19	$ 0.22	$ 0.23	$ 0.24	$ 0.24	$ 0.64	$ 0.92	$ 0.96
Cash dividend declared per share	$ 0.06		$ 0.06	$ 0.06	$ 0.06	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.24	$ 0.20	$ 0.00
Asset impairment charges	1,544
Asset Impairment Charges Net	944
Asset Impairment Charges Per Share Basic	$ 0.06
Asset Impairment Charges Per Share Diluted	$ 0.06
Unusual or Infrequent Item, Loss, Gross	1,980
Unusual or Infrequent Item, Net (Gain) Loss	$ 1,210
Unusual or Infrequent Item Per Basic Share	$ 0.08
Unusual or Infrequent Item Per Diluted Share	$ 0.07

[1] Included in fourth quarter direct costs is approximately $1.5 million, or $0.9 million, net of tax, or $0.06 basic and diluted net income per share, relating to the disposal of one of the Company's capitalized software projects.

[2] Included in fourth quarter selling, general, and administrative expenses is approximately $2.0 million, or $1.2 million, net of tax, or $0.08 basic and $0.07 diluted net income per share, of costs relating to the death of the Company's Chairman and Chief Executive Officer under his employment agreement.

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Summary of Significant Accounting Policies - Life Insurance Policies (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Accounting Policies [Abstract]
Gross cash surrender value of life insurance	$ 27.6	$ 26.2
Loan on cash surrender value of life insurance	23.1	23.1
Net cash surrender value of life insurance	4.5	3.1
Gross death benefit of life insurance contracts	38.8
Life insurance proceeds to be received upon the death of participants	15.1
Life insurance gain to be recognized upon death of participants	$ 11.2

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Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

The Company and its subsidiaries are involved from time to time in various legal proceedings and tax audits arising in the ordinary course of business. At December 31, 2014 and 2013, the Company was in discussion with various governmental agencies relative to tax matters, including income, sales and use, and property and franchise taxes. The outcome of these audits and legal proceedings, as applicable, involving the Company and its subsidiaries cannot be predicted with certainty, and the amount of any liability that could arise with respect to such audits cannot be accurately predicted. However, as none of these matters are individually or in the aggregate significant, and as management has recorded an estimate of its potential liability for these audits at December 31, 2014 and 2013, and the Company does not have any open legal proceedings, the Company does not expect the conclusion of these matters to have a material adverse effect on the financial position, results of operations, or cash flows of the Company.