2014 ANNUAL REPORT
ABOUT ROBERT HALF
Founded in 1948, Robert Half is the world’s first and largest specialized
staffing firm and a recognized leader in professional consulting and
staffing services. Robert Half is traded on the New York Stock Exchange
(symbol: RHI) and is a member of the S&P 500 index and the FTSE4Good
Responsible Investment Index. We have appeared on Fortune magazine’s
“Most Admired Companies” list every year since 1998.
PROFESSIONAL STAFFING SERVICES
The company’s specialized staffing divisions include
Accountemps®, Robert Half® Finance & Accounting and
Robert Half® Management Resources, for temporary, full-
time and senior-level project professionals, respectively,
in the fields of accounting and finance; OfficeTeam®, for
highly skilled administrative support professionals; Robert
Half® Technology, for project and full-time technology
professionals; Robert Half® Legal, for project and full-time
staffing of lawyers, paralegals and legal support personnel;
and The Creative Group®, for interactive, design, marketing,
advertising and public relations professionals. We have 341
staffing locations in 19 countries.
Robert Half is an authoritative resource on hiring and careers
and publishes an array of hiring and management advice
regularly via social media and industry-specific blogs. Visit us
online at roberthalf.com.
RISK & BUSINESS CONSULTING.
INTERNAL AUDIT.
Robert Half also is the parent company of Protiviti®, a global
consulting firm that helps companies solve problems in
finance, technology, operations, governance, risk and internal
audit. Protiviti has served 60 percent of Fortune 1000® and
35 percent of Fortune Global 500® companies. Protiviti also
works with smaller, growing companies, including those
looking to go public, as well as with government agencies.
Protiviti and its independently owned Member Firms serve
clients through a network of 74 locations in 25 countries.
In March of this year, Protiviti was named one of the 2015
Fortune 100 Best Companies to Work For®. Connect with
Protiviti and its social media channels at protiviti.com.
2
2014 Annual Report • Robert Half SELECTED FINANCIAL DATA
(in millions, except per share amounts)
YEARS ENDED DEC 31,
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
INCOME
STATEMENT DATA:
Net service revenues $ 4,695.0 $ 4,245.9 $ 4,111.2 $ 3,777.0 $ 3,175.1 $ 3,036.5 $ 4,600.6 $ 4,645.7 $ 4,013.5 $ 3,338.4 $ 2,675.7
Net income
Net income available
to common stock-
holders — diluted
Diluted net income
per share
Diluted shares
Cash dividends
declared per share
CASH FLOW DATA:
Net cash flows
provided by
operating activities
$ 305.9 $ 252.2 $ 209.9 $ 149.9 $
66.1 $
37.3 $ 250.2 $ 296.2 $ 283.2 $ 237.9 $ 140.6
$ 305.9 $ 252.2 $ 208.9 $ 147.8 $
63.7 $
35.1 $ 242.7 $ 288.8 $ 276.8 $ 233.8 $ 138.5
$
2.26 $
1.83 $
1.50 $
1.04 $
.44 $
.24 $
1.59 $
1.78 $
1.62 $
1.35 $
.79
135.5
137.6
139.4
141.8
144.0
146.6
152.5
162.6
170.6
173.7
175.6
$
.72 $
.64 $
.60 $
.56 $
.52 $
.48 $
.44 $
.40 $
.32 $
.28 $
.18
$ 340.7 $ 309.2 $ 289.2 $ 256.3 $ 175.9 $ 240.2 $ 447.1 $ 411.2 $ 376.2 $ 327.5 $ 161.8
Capital expenditures $
62.8 $
53.7 $
50.1 $
56.5 $
35.1 $
41.2 $
73.4 $
83.8 $
80.4 $
61.8 $
32.9
BALANCE SHEET
DATA AT YEAR-END:
Total assets
$ 1,647.3 $ 1,490.3 $ 1,381.3 $ 1,311.8 $ 1,274.0 $ 1,283.5 $ 1,411.9 $ 1,450.3 $ 1,459.0 $ 1,318.7 $ 1,198.7
Debt financing
$
1.3 $
1.4 $
1.5 $
1.7 $
1.8 $
1.9 $
2.0 $
4.1 $
4.2 $
3.1 $
2.3
Stockholders’ equity
$ 979.9 $ 919.6 $ 842.0 $ 800.5 $ 834.4 $ 899.8 $ 983.9 $ 984.0 $ 1,042.7 $ 970.9 $ 911.9
REVENUES (in millions)
NET CASH FLOWS PROVIDED
BY OPERATING ACTIVITIES (in millions)
$5,000
$4,000
$3,000
$2,000
$1,000
$500
$400
$300
$200
$100
‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14
‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14
3
2014 Annual Report • Robert Half
TO OUR STOCKHOLDERS
Robert Half had an excellent year in 2014. We are pleased
to report that last year’s net service revenues, net income
and diluted earnings per share were all the highest we
have ever achieved. Annual net service revenues were
$4.7 billion, an 11 percent increase over the prior year. All
parts of the business contributed to the advance. Revenue
momentum improved as the year unfolded, with second-
half increases exceeding those in the first six months. Full-
year 2014 net income was $306 million compared to $252
million in 2013, a 21 percent gain. Diluted earnings per
share of $2.26 increased 23 percent from the prior year
on 1.5 percent fewer shares outstanding. The 2014 final
quarter was the 19th consecutive quarter of year-over-year,
double-digit percentage growth in net income and earnings
per share.
The 2014 economic backdrop was generally favorable for
our business. U.S. real gross domestic product (GDP) in
2014 grew at a 2.4 percent rate, a pace modestly ahead of
the prior year’s 2.2 percent. A weather-influenced decline in
first-quarter real GDP was followed by strong advances in
the spring and summer months and further improvement in
the fourth quarter.
Revenue momentum
improved as the year
unfolded, with second-half
increases exceeding those
in the first six months.
The expansion was accompanied by broad-based
strengthening in labor markets. Employers in the United
States added more than 3 million jobs during 2014, the
best year for employment growth since 1999. More jobs
and a reduced labor force participation rate enabled the
unemployment rate to fall below 6 percent for the first
time since 2008. By year-end, the rate had declined to 5.6
percent and has slipped further to 5.5 percent since then.
The demand for temporary workers rose last year as new
jobs were created. We are finding that, more than ever,
companies are using interim professionals as part of their
staffing mix. As 2014 came to a close, temporary workers
as a percentage of U.S. employment reached an all-time
high of 2.04 percent. Over the past several years, it has
become increasingly clear that flexible staffing has become
an important part of how employers manage their work
flows and control labor costs.
Outside the United States, economic progress since
the last recession has been generally slower than our
experience domestically. Robert Half’s non-U.S. revenues
last year represented 23 percent of the total and grew
4 percent compared to the 13 percent gain recorded in the
United States. The same trends that are affecting our U.S.
business favorably are present in international markets,
but the gains in many of those markets have been more
tentative. We see positive signs that the pace of recovery
is accelerating, but it is too soon to conclude that a full
recovery is under way.
FINANCIAL CONDITION
Our financial condition remains solid. We ended the year
with total assets of $1.6 billion, which included cash and
cash equivalents of $287 million, up slightly from the prior
year-end balance of $276 million. Our balance sheet
remains virtually debt-free. The great majority of our assets
are highly liquid; our business requires few fixed assets and
no inventory. Accounts receivable, our largest single asset,
totaled $658 million at year-end, or 40 percent of total
assets. Because of the importance of that asset, we monitor
outstanding balances closely and focus on timely collections
of amounts due. Average days’ sales outstanding (DSO) at
year-end was 49 days, a level consistent throughout the year
and in line with historical experience. Our customer base is
diverse without significant exposure to customer or industry
concentrations.
The strength of our balance sheet reflects the favorable
cash-generating characteristic of the business. In both good
and challenging times, Robert Half has shown that it can
consistently produce generous amounts of cash. Net cash
provided by operating activities in 2014 was $341 million.
4
2014 Annual Report • Robert Half That total was up 10 percent from the prior year, despite the
need to fund higher accounts receivable balances that came
with 2014’s increased revenue momentum. Over the past
decade, we generated $3.2 billion in cash from operations.
Our business is not capital-intensive. Capital expenditures
last year totaled $63 million, which was as budgeted
and represented 1.3 percent of full-year revenues, a
level consistent with a 1.5 percent average over the
past decade. Although we do not invest much in brick-
and-mortar fixed assets, over the past several years we
have made capital outlays to enhance our technological
infrastructure. Much of that spending has been aimed
at helping our field teams deliver more convenient and
flexible service to clients and job candidates, while at
the same time automating many day-to-day business
processes. Among other things, we have streamlined the
candidate registration process, introduced remote skills
assessments and enabled video interviewing in our global
office network. Improving these functions is a never-ending
process, and our efforts to leverage new technologies
are ongoing. A decades-long presence in the staffing
business provides us with a unique advantage. We have
accumulated a vast amount of proprietary data over our
history, which we are pairing with the latest technologies to
produce operational best practices.
Robert Half made no acquisitions last year. That is not
unusual. We believe that our industry continues to offer ample
opportunity to grow the business organically. And, importantly,
we believe organic growth carries fewer risks. Besides the
uncertainty that often accompanies growth via acquisition, we
believe making acquisitions in an intensely personal service
business such as ours involves special risks. Melding separate
workforces with distinct personalities and corporate cultures
carries challenges. Over the years, Robert Half has developed
a service mentality that is an important part of our culture and
philosophy. We are protective of our culture and will consider
acquiring others only when we can be comfortable that
acquisition candidates can measure up to our high standards.
After netting amounts used in investing activities, last year’s
free cash flow was $252 million, a 19 percent increase over
the prior year. In 2014, we continued our long-established
policy of returning cash to stockholders through open market
Chairman and Chief Executive Officer Harold M. Messmer, Jr. (right);
Vice Chairman, President and Chief Financial Of icer M. Keith
Waddell.
Flexible staffing has
become an important
part of how employers
manage their work flows
and control labor costs.
share repurchases and cash dividend payments. Last year,
we purchased 3.3 million shares for $162 million. We have
purchased shares of our stock each year since 1997. At
year-end, there were 4.8 million board-authorized shares
available for repurchase. We also distributed quarterly cash
dividends of $0.18 per share in 2014 for a total outlay of
$98 million. Subsequent to year-end, our board upped the
quarterly dividend to $0.20 per share. We have increased
our quarterly cash dividend every year since our initial
distribution was made in 2004, and the dividend has grown
at a compound annual growth rate (CAGR) of 11.8 percent
during this period.
5
2014 Annual Report • Robert Half Clients place a premium
on recruiting hard-to-find
candidates, which is our
strong suit.
STAFFING OPERATIONS
The majority of our staffing business both domestically
and internationally is produced by our three accounting
and finance staffing divisions: Accountemps, Robert Half
Management Resources and Robert Half Finance &
Accounting.
Accountemps provides accounting personnel on a
temporary basis. Our initial temporary staffing offering,
Accountemps has roots that go back to the early 1970s;
today, it is our largest business unit. Its 2014 revenues of
$1.6 billion represented 35 percent of the consolidated
total and were 7 percent ahead of those in the prior
year. This division’s growth was broad-based and
benefited, particularly late in the year, from an improving
macroeconomic environment for small and midsize
businesses, our core client group.
Over the years, Robert
Half has developed a
service mentality that is
an important part of our
culture and philosophy.
Robert Half Management Resources provides senior-level
accounting and finance professionals on a project basis,
often for longer-duration assignments. This business was
launched in 1997, and its revenues last year of $565
million, equivalent to 12 percent of the consolidated total,
were up 13 percent from the prior year. Working together,
Robert Half Management Resources and Protiviti allow us
to offer joint services anywhere on the demand continuum,
from supplemental staffing to deliverables-based consulting
projects. For example, Robert Half Management Resources
often partners with Protiviti to provide professional staffing
resources in support of Protiviti engagements. Last year’s
combined efforts included work in the areas of risk assessment
and regulatory compliance, as well as internal control and
operational-related engagements, among others.
Robert Half Finance & Accounting is our permanent
placement unit. It places specialized personnel in
accounting, finance, tax and accounting operations. This
was our original business dating back to 1948. Last year’s
revenues were $395 million, or 8 percent of the total, and
were 13 percent ahead of the prior year. The call for full-
time employees typically accelerates in an up economic
cycle; this is what we’ve seen play out, especially in 2014.
The best job candidates increasingly are getting multiple
offers, which are being met with counteroffers from
existing employers. As labor markets tighten, clients place
a premium on recruiting hard-to-find candidates, which is
6
2014 Annual Report • Robert Half our strong suit. We hired additional permanent placement
recruiters in 2014 to capture more of this business.
OfficeTeam, our specialty administrative staffing
unit, was introduced in 1991. It provides temporary
staffing assistance in roles ranging from executive and
administrative assistants to receptionists and customer
service representatives. Last year’s revenues of $917
million represented 20 percent of the consolidated total
and grew 10 percent from the prior year. Among other
things, OfficeTeam served companies needing assistance
with healthcare open enrollment processes, largely in
response to the Affordable Care Act. The complexities
of the Act required many companies to change benefit
plans, including offering employees access to healthcare
exchanges. OfficeTeam also provided administrative
assistance to state exchanges and insurance companies as
these entities prepared to handle an influx of new enrollees.
Robert Half Technology was launched in 1994 and
provides information technology support and development
professionals. Last year’s revenues of $577 million were
12 percent of the consolidated total and 10 percent ahead
of those reported in 2013. Technology is the most supply-
constrained area we serve. Because skilled IT candidates
are difficult to find, starting in the second quarter of 2014
we began to hire more recruiters. The additional personnel
helped accelerate the division’s growth rate later in the year.
Our business in this unit is evolving in an important way.
Demand in prior years was generated primarily from larger
companies, particularly in applications development. We
are now beginning to see demand drift down to our middle-
market sweet spot, where clients are often more reliant on
the services we offer and we are of proven value.
PROTIVITI
Protiviti, our global business consulting unit, was launched in
May 2002. In the first 12 full years of its existence, Protiviti’s
revenues have grown at a 15-percent CAGR, to $624 million
in 2014 from $133 million in 2003. Last year’s growth rate
was higher at 18 percent, with faster growth domestically.
Protiviti built momentum throughout the year. This business
now accounts for 13 percent of the consolidated total. Its
revenues were largely dominated by its three principal service
areas: internal audit and financial advisory services, risk and
compliance, and IT consulting.
Protiviti is highly respected in the marketplace and has
developed a loyal and expanding client base. A more
stringent regulatory environment is contributing to increased
demand for Protiviti’s risk and compliance solutions. Protiviti’s
internal audit and financial advisory services are benefiting
from factors such as Public Company Accounting Oversight
Board (PCAOB) inspections and the revised framework for
internal controls issued by the Committee of Sponsoring
Organizations (COSO), which have created internal audit
demand and opportunities to assist clients in updating their
systems of internal control. A stronger market for initial public
offerings also is leading to new business in internal audit and
financial advisory services. IT consulting demand is largely
driven by the increased focus on data security and privacy, as
well as expanded budgets for systems implementation and IT
governance activities.
We bring hard-to-match
assets to bear in executing
our business. It starts with
decades of experience.
Protiviti added experienced consultants in certain practice
areas last year to expand its service offerings. Investing
in senior talent reflects our ongoing effort to balance the
unit’s annual profitability, now near double-digit percentage
rates, and future growth. Protiviti serves clients through a
global network, which includes Member Firms in several
countries. Member Firms are regional consulting providers
that operate independently and have licensing agreements
with us giving them access to training and certain
intellectual property. Member Firms extend Protiviti’s global
service capabilities. In many countries, there also are tax
advantages and other business benefits to this structure.
LOOKING AHEAD
We are confident in the ability of our corporate and field
leadership to grow the business. Favorable domestic market
conditions and selective and gradual improvement in non-
U.S. economies are providing us with a near-term tailwind.
The percentage of new jobs represented by temporary
positions is triple what it was in the prior recovery. Industry
7
2014 Annual Report • Robert Half And it extends to more than a half-century of efforts to
create and strengthen our brand name, which we believe
is unmatched in the professional segment of the staffing
industry. It includes applying new technology tools to make
our internal employees more efficient and our customer
service seamless. Integral to the whole process are our
core values and a service approach that our clients and
candidates have told us they appreciate and admire. This
will not change.
We would like to thank our tenured management team,
which we believe is unsurpassed in the industry. Likewise,
we want to acknowledge the work of our talented and
dedicated employees who help us delight customers around
the globe every business day. None of our success would be
possible without the continued efforts of these professionals.
We also would like to express our appreciation to our board
of directors for their wisdom and insights during the year
and to you, our stockholders, for your continued support
and encouragement.
Respectfully submitted,
Harold M. Messmer, Jr.
M. Keith Waddell
Chairman and
Chief Executive Officer
Vice Chairman, President and
Chief Financial Officer
March 13, 2015
March 13, 2015
observers have projected that the expected real growth in
economies in 2015 should boost staffing revenues in all
major developed countries. We already are seeing firmer
recruiting demand in our offices around the world.
In the longer term, we believe that U.S. temporary worker
penetration rates for the industry, and for Robert Half
more specifically, have the potential to rise much higher.
Significantly deeper industry penetration exists in certain
non-U.S. markets and provides a precedent for what we
might expect in the future in the United States. We see this
as a critically important long-term opportunity.
We want to acknowledge
the work of our talented
and dedicated employees
who help us delight
customers around the
globe every business day.
We also are optimistic about the opportunity for Protiviti
with regard to both revenue and profitability upside. Protiviti
is well positioned in financial services, risk and regulatory
compliance, IT consulting, and internal audit and financial
advisory services. There also are emerging opportunities
in business process improvement and data analytics. We
expect these opportunities to extend far into the future.
Protiviti and the Robert Half staffing business are a powerful
combination. We offer clients a full spectrum of services
ranging from staff augmentation to full-service consulting
solutions in a way that no other consulting or staffing firm
can match.
On the surface, our business seems quite simple: We find
great talent for our clients and excellent jobs for our skilled
professionals. But we bring hard-to-match assets to bear in
executing our business. It starts with decades of experience.
8
2014 Annual Report • Robert Half
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
__________________________________________
Commission file number 1-10427
ROBERT HALF INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
2884 Sand Hill Road, Menlo Park, California
(Address of principal executive offices)
94-1648752
(I.R.S. Employer
Identification No.)
94025
(Zip code)
Registrant’s telephone number, including area code: (650) 234-6000
__________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, Par Value $.001 per Share
Name of each exchange
on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
__________________________________________
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes
No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes
No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes
No
Indicate by check mark whether the registrant has submitted electronically 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 during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post such files). Yes
No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Indicate by check mark whether the registrant is a shell company.
Yes
No
As of June 30, 2014, the aggregate market value of the Common Stock held by non-affiliates of the registrant was approximately
$6,269,772,207 based on the closing sale price on that date. This amount excludes the market value of 5,760,355 shares of Common
Stock directly or indirectly held by registrant’s directors and officers and their affiliates.
As of January 31, 2015, there were 135,140,537 outstanding shares of the registrant’s Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Proxy Statement to be mailed to stockholders in connection with the registrant’s annual meeting of
stockholders, scheduled to be held in May 2015, are incorporated by reference in Part III of this report. Except as expressly incorporated
by reference, the registrant’s Proxy Statement shall not be deemed to be part of this report.
2014 Annual Report • Robert Half
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2014 Annual Report • Robert Half Item 1. Business
PART I
Robert Half International Inc. (the “Company”) provides specialized staffing and risk consulting services through such
divisions as Accountemps®, Robert Half® Finance & Accounting, OfficeTeam®, Robert Half® Technology, Robert Half®
Management Resources, Robert Half® Legal, The Creative Group®, and Protiviti®. The Company, through its Accountemps,
Robert Half Finance & Accounting, and Robert Half Management Resources divisions, is the world’s largest specialized
provider of temporary, full-time, and project professionals in the fields of accounting and finance. OfficeTeam specializes in
highly skilled temporary administrative support personnel. Robert Half Technology provides information technology
professionals. Robert Half Legal provides temporary, project, and full-time staffing of attorneys and specialized support
personnel within law firms and corporate legal departments. The Creative Group provides project staffing in the interactive
media, design, and marketing fields. Protiviti, which began operations in 2002, is a global business consulting and internal audit
firm. Protiviti, which primarily employs professionals specializing in risk, advisory and transactional services, is a wholly
owned subsidiary of the Company.
The Company’s business was originally founded in 1948. Prior to 1986, the Company was primarily a franchisor, under
the names Accountemps and Robert Half (now called Robert Half Finance & Accounting), of offices providing temporary and
full-time professionals in the fields of accounting and finance. Beginning in 1986, the Company and its current management
embarked on a strategy of acquiring franchised locations. All of the franchises have been acquired. The Company believes that
direct ownership of offices allows it to better monitor and protect the image of its tradenames, promotes a more consistent and
higher level of quality and service throughout its network of offices and improves profitability by centralizing many of its
administrative functions. Since 1986, the Company has significantly expanded operations at many of the acquired locations,
opened many new locations and acquired other local or regional providers of specialized temporary service personnel. The
Company has also expanded the scope of its services by launching the new product lines OfficeTeam, Robert Half Technology,
Robert Half Management Resources, Robert Half Legal and The Creative Group.
In 2002, the Company hired more than 700 professionals who had been affiliated with the internal audit and business and
technology risk consulting practice of Arthur Andersen LLP, including more than 50 individuals who had been partners of that
firm. These professionals formed the base of the Company’s Protiviti Inc. subsidiary. Protiviti® has enabled the Company to
enter the market for business consulting and internal audit services, which market the Company believes offers synergies with
its traditional lines of business.
Accountemps
The Accountemps temporary services division offers customers a reliable and economical means of dealing with uneven
or peak workloads for accounting, finance, and bookkeeping personnel caused by such predictable events as vacations, taking
inventories, tax work, month-end activities and special projects, and such unpredictable events as illness and emergencies.
Businesses view the use of temporary employees as a means of controlling personnel costs and converting such costs from
fixed to variable. The cost and inconvenience to clients of hiring and firing regular employees are eliminated by the use of
Accountemps temporaries. The temporary workers are employees of Accountemps and are paid by Accountemps. The customer
pays a fixed rate only for hours worked.
Accountemps clients may fill their regular employment needs by using an Accountemps employee on a trial basis and, if
so desired, “converting” the temporary position to a regular position. The client typically pays a one-time fee for such
conversions.
OfficeTeam
The Company’s OfficeTeam division, which commenced operations in 1991, places temporary and full-time office and
administrative personnel, ranging from executive and administrative assistants to receptionists and customer service
representatives. OfficeTeam operates in much the same fashion as the Accountemps division.
Robert Half Finance & Accounting
Established in 1948, the Company’s first division and specialized recruitment pioneer Robert Half Finance & Accounting
specializes in the placement of full-time accounting, financial, tax and accounting operations personnel. Fees for successful
1
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robert_half_10k_FIN_1-54.indd 1
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2014 Annual Report • Robert Half placements are paid only by the employer and are generally a percentage of the new employee’s annual compensation. No fee
for placement services is charged to employment candidates.
corporate-maintained social media sites and other online properties. Local employees are encouraged to be active in civic
organizations and industry trade groups.
Robert Half Technology
The Company’s Robert Half Technology division, which commenced operations in 1994, specializes in providing
information technology contract consultants and placing full-time employees in areas ranging from multiple platform systems
integration to end-user support, including specialists in web development, networking, application development, systems
integration, database design, security and business continuity, and desktop support.
Robert Half Legal
Since 1992, the Company has been placing temporary and full-time employees in attorney, paralegal, legal administrative
and legal secretarial positions through its Robert Half Legal division. The legal profession’s requirements (the need for
confidentiality, accuracy and reliability, a strong drive toward cost-effectiveness, and frequent peak caseload periods) are
similar to the demands of the clients of the Accountemps division. Robert Half Legal offers a full suite of legal staffing and
consulting services to help organizations manage constantly changing workloads and access expertise across in-demand legal
practice areas.
Robert Half Management Resources
The Company’s Robert Half Management Resources division, which commenced operations in 1997, specializes in
providing senior level project professionals in the accounting and finance fields, including chief financial officers, controllers,
senior financial analysts, internal auditors, and business systems analysts for such tasks as financial systems conversions,
expansion into new markets, business process reengineering, business systems performance improvement, and post-merger
financial consolidation.
The Creative Group
The Creative Group division commenced operations in 1999 and specializes in identifying for its clients creative
professionals in the areas of interactive media, design, marketing, advertising and public relations. The division places freelance
and project consultants in a variety of positions such as creative directors, graphics designers, web content developers, web
designers, media buyers, brand managers, and public relations specialists.
Competition
Protiviti
Protiviti is a global consulting firm that helps companies solve problems in finance, technology, operations, governance,
risk and internal audit. Through its risk management and internal audit heritage, Protiviti has gained unique perspectives on the
challenges faced by its clients. Protiviti uses these perspectives not only to solve regulatory, risk and compliance problems, but
also to help clients become more effective and productive. Protiviti provides solutions to its clients in areas such as business
performance improvement, internal audit and financial advisory, IT consulting, restructuring and litigation, risk and
compliance, and transaction services.
Marketing and Recruiting
The Company markets its staffing services to clients as well as employment candidates. Local marketing and recruiting
are generally conducted by each office or related group of offices. Local advertising directed to clients and employment
candidates consists of radio, digital and social media, websites, job boards, and trade shows. Direct marketing through e-mail,
regular mail and telephone solicitation also constitutes a significant portion of the Company’s total advertising. National
advertising conducted by the Company consists primarily of radio, outdoor/billboard, digital and print advertisements in
national newspapers, magazines, websites, social media sites and trade journals. Additionally, the Company has expanded its
use of job boards in all aspects of sales and recruitment. Joint marketing arrangements have been entered into with major
software manufacturers and typically provide for development of proprietary skills tests, cooperative advertising, joint mailings
and similar promotional activities. The Company also actively seeks endorsements and affiliations with professional
organizations in the business management, office administration and professional secretarial fields. In addition, the Company
conducts public relations activities designed to enhance public recognition of the Company and its services. This includes
outreach to journalists, bloggers and social media influencers, and the distribution of thought leadership via print, video,
2
2
2
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Protiviti markets its business consulting and internal audit services to a variety of clients in a range of industries. Industry
and competency teams conduct targeted marketing efforts, both locally and nationally, including print advertising and branded
speaking events, with support from Protiviti management. National advertising conducted by Protiviti consists primarily of
print advertisements in national newspapers, magazines and selected trade journals. Protiviti has programs to share its insights
with clients on current corporate governance and risk management issues. It conducts public relations activities, such as
distributing press releases, white papers, case studies and newsletters, designed to enhance recognition for the Protiviti brand,
establish its expertise in key issues surrounding its business and promote its services. Protiviti plans to expand both the services
and value added content on the Protiviti.com website and increase traffic through targeted Internet advertising. Local employees
are encouraged to be active in relevant social media communities, civic organizations and industry trade groups.
The Company and its subsidiaries own many trademarks, service marks and tradenames, including the Robert Half®
Finance & Accounting, Accountemps®, OfficeTeam®, Robert Half® Technology, Robert Half® Management Resources, Robert
Half® Legal, The Creative Group® and Protiviti® marks, which are registered in the United States and in a number of foreign
countries.
Organization
Management of the Company’s staffing operations is coordinated from its headquarters facilities in Menlo Park and San
Ramon, California. The Company’s headquarters provides support and centralized services to its offices in the administrative,
marketing, public relations, accounting, training and legal areas, particularly as it relates to the standardization of the operating
procedures of its offices. As of December 31, 2014, the Company conducted its staffing services operations through 341 offices
in 42 states, the District of Columbia and 18 foreign countries. Office managers are responsible for most activities of their
offices, including sales, local advertising and marketing and recruitment.
The day-to-day operations of Protiviti are managed by a chief executive officer and a senior management team with
operational and administrative support provided by individuals located in San Ramon and Menlo Park, California. As of
December 31, 2014, Protiviti had 57 offices in 23 states and 11 foreign countries.
The Company’s staffing services face competition in attracting clients as well as skilled specialized employment
candidates. The staffing business is highly competitive, with a number of firms offering services similar to those provided by
the Company on a national, regional or local basis. In many areas the local companies are the strongest competitors. The most
significant competitive factors in the staffing business are price and the reliability of service, both of which are often a function
of the availability and quality of personnel. The Company believes it derives a competitive advantage from its long experience
with and commitment to the specialized employment market, its national presence, and its various marketing activities.
Protiviti faces competition in its efforts to attract clients and win proposal presentations. The risk consulting and internal
audit businesses are highly competitive. In addition, the changing regulatory environment is increasing opportunities for non-
attestation audit and risk consulting services. The principal competitors of Protiviti remain the “big four” accounting firms.
Significant competitive factors include reputation, technology, tools, project methodologies, price of services and depth of skills
of personnel. Protiviti believes its competitive strengths lie in its unique ability to couple the deep skills and proven
methodologies of its “big four” heritage with the customer focus and attention of a smaller organization.
Employees
The Company has approximately 14,000 full-time employees, including approximately 2,800 engaged directly in Protiviti
operations. In addition, the Company placed approximately 211,000 temporary employees on assignments with clients during
2014. Employees placed by the Company on assignment with clients are the Company’s employees for all purposes while they
are working on assignments. The Company pays the related costs of employment, such as workers’ compensation insurance,
state and federal unemployment taxes, social security and certain fringe benefits. The Company provides access to voluntary
health insurance coverage to interested temporary employees.
3
2014 Annual Report • Robert Half placements are paid only by the employer and are generally a percentage of the new employee’s annual compensation. No fee
for placement services is charged to employment candidates.
corporate-maintained social media sites and other online properties. Local employees are encouraged to be active in civic
organizations and industry trade groups.
The Company’s Robert Half Technology division, which commenced operations in 1994, specializes in providing
information technology contract consultants and placing full-time employees in areas ranging from multiple platform systems
integration to end-user support, including specialists in web development, networking, application development, systems
integration, database design, security and business continuity, and desktop support.
Robert Half Technology
Robert Half Legal
Since 1992, the Company has been placing temporary and full-time employees in attorney, paralegal, legal administrative
and legal secretarial positions through its Robert Half Legal division. The legal profession’s requirements (the need for
confidentiality, accuracy and reliability, a strong drive toward cost-effectiveness, and frequent peak caseload periods) are
similar to the demands of the clients of the Accountemps division. Robert Half Legal offers a full suite of legal staffing and
consulting services to help organizations manage constantly changing workloads and access expertise across in-demand legal
The Company’s Robert Half Management Resources division, which commenced operations in 1997, specializes in
providing senior level project professionals in the accounting and finance fields, including chief financial officers, controllers,
senior financial analysts, internal auditors, and business systems analysts for such tasks as financial systems conversions,
expansion into new markets, business process reengineering, business systems performance improvement, and post-merger
practice areas.
Robert Half Management Resources
financial consolidation.
The Creative Group
Protiviti
compliance, and transaction services.
Marketing and Recruiting
The Creative Group division commenced operations in 1999 and specializes in identifying for its clients creative
professionals in the areas of interactive media, design, marketing, advertising and public relations. The division places freelance
and project consultants in a variety of positions such as creative directors, graphics designers, web content developers, web
designers, media buyers, brand managers, and public relations specialists.
Protiviti is a global consulting firm that helps companies solve problems in finance, technology, operations, governance,
risk and internal audit. Through its risk management and internal audit heritage, Protiviti has gained unique perspectives on the
challenges faced by its clients. Protiviti uses these perspectives not only to solve regulatory, risk and compliance problems, but
also to help clients become more effective and productive. Protiviti provides solutions to its clients in areas such as business
performance improvement, internal audit and financial advisory, IT consulting, restructuring and litigation, risk and
The Company markets its staffing services to clients as well as employment candidates. Local marketing and recruiting
are generally conducted by each office or related group of offices. Local advertising directed to clients and employment
candidates consists of radio, digital and social media, websites, job boards, and trade shows. Direct marketing through e-mail,
regular mail and telephone solicitation also constitutes a significant portion of the Company’s total advertising. National
advertising conducted by the Company consists primarily of radio, outdoor/billboard, digital and print advertisements in
national newspapers, magazines, websites, social media sites and trade journals. Additionally, the Company has expanded its
use of job boards in all aspects of sales and recruitment. Joint marketing arrangements have been entered into with major
software manufacturers and typically provide for development of proprietary skills tests, cooperative advertising, joint mailings
and similar promotional activities. The Company also actively seeks endorsements and affiliations with professional
organizations in the business management, office administration and professional secretarial fields. In addition, the Company
conducts public relations activities designed to enhance public recognition of the Company and its services. This includes
outreach to journalists, bloggers and social media influencers, and the distribution of thought leadership via print, video,
2
Protiviti markets its business consulting and internal audit services to a variety of clients in a range of industries. Industry
and competency teams conduct targeted marketing efforts, both locally and nationally, including print advertising and branded
speaking events, with support from Protiviti management. National advertising conducted by Protiviti consists primarily of
print advertisements in national newspapers, magazines and selected trade journals. Protiviti has programs to share its insights
with clients on current corporate governance and risk management issues. It conducts public relations activities, such as
distributing press releases, white papers, case studies and newsletters, designed to enhance recognition for the Protiviti brand,
establish its expertise in key issues surrounding its business and promote its services. Protiviti plans to expand both the services
and value added content on the Protiviti.com website and increase traffic through targeted Internet advertising. Local employees
are encouraged to be active in relevant social media communities, civic organizations and industry trade groups.
The Company and its subsidiaries own many trademarks, service marks and tradenames, including the Robert Half®
Finance & Accounting, Accountemps®, OfficeTeam®, Robert Half® Technology, Robert Half® Management Resources, Robert
Half® Legal, The Creative Group® and Protiviti® marks, which are registered in the United States and in a number of foreign
countries.
Organization
Management of the Company’s staffing operations is coordinated from its headquarters facilities in Menlo Park and San
Ramon, California. The Company’s headquarters provides support and centralized services to its offices in the administrative,
marketing, public relations, accounting, training and legal areas, particularly as it relates to the standardization of the operating
procedures of its offices. As of December 31, 2014, the Company conducted its staffing services operations through 341 offices
in 42 states, the District of Columbia and 18 foreign countries. Office managers are responsible for most activities of their
offices, including sales, local advertising and marketing and recruitment.
The day-to-day operations of Protiviti are managed by a chief executive officer and a senior management team with
operational and administrative support provided by individuals located in San Ramon and Menlo Park, California. As of
December 31, 2014, Protiviti had 57 offices in 23 states and 11 foreign countries.
Competition
The Company’s staffing services face competition in attracting clients as well as skilled specialized employment
candidates. The staffing business is highly competitive, with a number of firms offering services similar to those provided by
the Company on a national, regional or local basis. In many areas the local companies are the strongest competitors. The most
significant competitive factors in the staffing business are price and the reliability of service, both of which are often a function
of the availability and quality of personnel. The Company believes it derives a competitive advantage from its long experience
with and commitment to the specialized employment market, its national presence, and its various marketing activities.
Protiviti faces competition in its efforts to attract clients and win proposal presentations. The risk consulting and internal
audit businesses are highly competitive. In addition, the changing regulatory environment is increasing opportunities for non-
attestation audit and risk consulting services. The principal competitors of Protiviti remain the “big four” accounting firms.
Significant competitive factors include reputation, technology, tools, project methodologies, price of services and depth of skills
of personnel. Protiviti believes its competitive strengths lie in its unique ability to couple the deep skills and proven
methodologies of its “big four” heritage with the customer focus and attention of a smaller organization.
Employees
The Company has approximately 14,000 full-time employees, including approximately 2,800 engaged directly in Protiviti
operations. In addition, the Company placed approximately 211,000 temporary employees on assignments with clients during
2014. Employees placed by the Company on assignment with clients are the Company’s employees for all purposes while they
are working on assignments. The Company pays the related costs of employment, such as workers’ compensation insurance,
state and federal unemployment taxes, social security and certain fringe benefits. The Company provides access to voluntary
health insurance coverage to interested temporary employees.
3
3
3
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2014 Annual Report • Robert Half Other Information
The Company’s current business constitutes three business segments. (See Note M of Notes to Consolidated Financial
Statement in Item 8. Financial Statements and Supplementary Data for financial information about the Company’s segments.)
The Company is not dependent upon a single customer or a limited number of customers. The Company’s staffing
services operations are generally more active in the first and fourth quarters of a calendar year. Protiviti is generally more active
in the third and fourth quarters of a calendar year. Order backlog is not a material aspect of the Company’s staffing services
business. While backlog is of greater importance to Protiviti, the Company does not believe, based upon the length of time of
the average Protiviti engagement, that backlog is a material aspect of the Protiviti business. No material portion of the
Company’s business is subject to government contracts.
Information about foreign operations is contained in Note M of Notes to Consolidated Financial Statements in Item 8.
The Company does not have export sales.
Available Information
The Company’s Internet address is www.roberthalf.com. The Company makes available, free of charge, through its
website, its Annual Reports on Form 10-K, proxy statements for its annual meetings of stockholders, its Quarterly Reports on
Form 10-Q, and Current Reports on Form 8-K, and any amendments to those reports, as soon as is reasonably practicable after
such reports are filed with or furnished to the Securities and Exchange Commission. Also available on the Company’s website
are its Corporate Governance Guidelines, its Code of Business Conduct and Ethics, and the charters for its Audit Committee,
Compensation Committee and Nominating and Governance Committee, each of which is available in print to any stockholder
who makes a request to Robert Half International Inc., 2884 Sand Hill Road, Menlo Park, CA 94025, Attn: Corporate Secretary.
The Company’s Code of Business Conduct and Ethics is the Code of Ethics required by Item 406 of Securities and Exchange
Commission Regulation S-K. The Company intends to satisfy any disclosure obligations under Item 5.05 of Form 8-K
regarding any amendment or waiver relating to its Code of Business Conduct and Ethics by posting such information on its
website.
Item 1A. Risk Factors
The Company’s business prospects are subject to various risks and uncertainties that impact its business. The most
important of these risks and uncertainties are as follows:
The global economic downturn may continue to harm the Company’s business and financial condition. Many of the
Company’s markets, particularly in Europe, are currently experiencing a prolonged economic downturn characterized by high
unemployment, limited availability of credit and decreased consumer and business spending. Given the nature of the
Company’s business, financial results could be significantly harmed should this downturn continue for an extended period of
time or intensify. In the past, the Company’s business has suffered during periods of high unemployment as demand for staffing
services tends to significantly decrease during such periods. The impact of this downturn on the Company’s business could be
further dramatized given the severe impact it has had and may continue to have on the global labor markets.
Any reduction in global economic activity may harm the Company’s business. The demand for the Company’s services,
in particular its staffing services, is highly dependent upon the state of the economy and upon the staffing needs of the
Company’s clients. Any variation in the economic condition or unemployment levels of the U.S. or of any of the foreign
countries in which the Company does business, or in the economic condition of any region of any of the foregoing, or in any
specific industry may severely reduce the demand for the Company’s services and thereby significantly decrease the
Company’s revenues and profits.
The Company’s business depends on a strong reputation and anything that harms its reputation will likely harm its
results. As a provider of temporary and permanent staffing solutions as well as consultant services, the Company’s reputation
is dependent upon the performance of the employees it places with its clients and the services rendered by its consultants. If the
Company’s clients become dissatisfied with the performance of those employees or consultants or if any of those employees or
consultants engage in conduct that is harmful to the Company’s clients, the Company’s ability to maintain or expand its client
base may be harmed.
The Company and certain subsidiaries are defendants in several lawsuits that could cause the Company to incur
substantial liabilities. The Company and certain subsidiaries are defendants in several actual or asserted class and
4
4
4
representative action lawsuits brought by or on behalf of the Company’s current and former employees alleging violations of
federal and state law with respect to certain wage and hour related matters, as well as claims challenging the Company’s
compliance with the Fair Credit Reporting Act. The various claims made in one or more of such lawsuits include, among other
things, the misclassification of certain employees as exempt employees under applicable law, failure to comply with wage
statement requirements and other related wage and hour violations. Such suits seek, as applicable, unspecified amounts for
unpaid overtime compensation, penalties, and other damages, as well as attorneys’ fees. It is not possible to predict the outcome
of these lawsuits. However, these lawsuits may consume substantial amounts of the Company’s financial and managerial
resources and might result in adverse publicity, regardless of the ultimate outcome of the lawsuits. In addition, the Company
and its subsidiaries may become subject to similar lawsuits in the same or other jurisdictions. An unfavorable outcome with
respect to these lawsuits and any future lawsuits could, individually or in the aggregate, cause the Company to incur substantial
liabilities that may have a material adverse effect upon the Company’s business, financial condition or results of operations. In
addition, an unfavorable outcome in one or more of these cases could cause the Company to change its compensation plans for
its employees, which could have a material adverse effect upon the Company’s business.
The Company faces risks in operating internationally. The Company depends on operations in international markets,
including Europe, for a significant portion of its business. The European market has been experiencing on-going economic
uncertainty which has adversely affected, and may continue to adversely affect, the Company’s operations in Europe. To the
extent that these adverse economic conditions in Europe continue or worsen, demand for the Company’s services may decline,
which could significantly harm its business and results of operations. In addition, these international operations are subject to a
number of risks, including general political and economic conditions in those foreign countries, the burden of complying with
various foreign laws and technical standards and unpredictable changes in foreign regulations, U.S. legal requirements
governing U.S. companies operating in foreign countries, legal and cultural differences in the conduct of business, potential
adverse tax consequences and difficulty in staffing and managing international operations. In addition, the Company’s business
may be affected by foreign currency exchange fluctuations. In particular, the Company is subject to risk in translating its results
in foreign currencies into the U.S. dollar. If the value of the U.S. dollar strengthens relative to other currencies, the Company’s
reported income from these operations could decrease. The value of the U.S. dollar has recently strengthened considerably
against a number of major foreign currencies, and a continuation or extension of this strength relative to these other currencies
could adversely impact the Company’s reported income from its international markets and cause its revenue in such markets,
when translated into U.S. dollars, to decline.
Government regulations may result in prohibition or restriction of certain types of employment services or the imposition
of additional licensing or tax requirements that may reduce the Company’s future earnings. In many jurisdictions in which the
Company operates, the employment services industry is heavily regulated. For example, governmental regulations in some
countries restrict the length of contracts and the industries in which the Company’s employees may be used. In other countries,
special taxes, fees or costs are imposed in connection with the use of its employees. Additionally, trade unions in some
countries have used the political process to target the industry, in an effort to increase the regulatory burden and expense
associated with offering or utilizing temporary staffing solutions.
The countries in which we operate may, among other things:
•
•
•
•
create additional regulations that prohibit or restrict the types of employment services that the Company
currently provides;
require new or additional benefits be paid to the Company’s employees;
require the Company to obtain additional licensing to provide employment services; or
increase taxes, such as sales or value-added taxes, payable by the providers of temporary workers.
Any future regulations may have a material adverse effect on the Company’s business and financial results because they
may make it more difficult or expensive for the Company to continue to provide employment services.
The Company may be unable to find sufficient candidates for its staffing business. The Company’s staffing services
business consists of the placement of individuals seeking employment. There can be no assurance that candidates for
employment will continue to seek employment through the Company. Candidates generally seek temporary or regular positions
through multiple sources, including the Company and its competitors. Any shortage of candidates could materially adversely
affect the Company.
The Company operates in a highly competitive business and may be unable to retain clients or market share. The
staffing services business is highly competitive and, because it is a service business, the barriers to entry are quite low. There
are many competitors, some of which have greater resources than the Company, and new competitors are entering the market
all the time. In addition, long-term contracts form a negligible portion of the Company’s revenue. Therefore, there can be no
assurance that the Company will be able to retain clients or market share in the future. Nor can there be any assurance that the
5
robert_half_10k_FIN_1-54.indd 4
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2014 Annual Report • Robert Half Other Information
The Company’s current business constitutes three business segments. (See Note M of Notes to Consolidated Financial
Statement in Item 8. Financial Statements and Supplementary Data for financial information about the Company’s segments.)
The Company is not dependent upon a single customer or a limited number of customers. The Company’s staffing
services operations are generally more active in the first and fourth quarters of a calendar year. Protiviti is generally more active
in the third and fourth quarters of a calendar year. Order backlog is not a material aspect of the Company’s staffing services
business. While backlog is of greater importance to Protiviti, the Company does not believe, based upon the length of time of
the average Protiviti engagement, that backlog is a material aspect of the Protiviti business. No material portion of the
Company’s business is subject to government contracts.
Information about foreign operations is contained in Note M of Notes to Consolidated Financial Statements in Item 8.
The Company does not have export sales.
Available Information
The Company’s Internet address is www.roberthalf.com. The Company makes available, free of charge, through its
website, its Annual Reports on Form 10-K, proxy statements for its annual meetings of stockholders, its Quarterly Reports on
Form 10-Q, and Current Reports on Form 8-K, and any amendments to those reports, as soon as is reasonably practicable after
such reports are filed with or furnished to the Securities and Exchange Commission. Also available on the Company’s website
are its Corporate Governance Guidelines, its Code of Business Conduct and Ethics, and the charters for its Audit Committee,
Compensation Committee and Nominating and Governance Committee, each of which is available in print to any stockholder
who makes a request to Robert Half International Inc., 2884 Sand Hill Road, Menlo Park, CA 94025, Attn: Corporate Secretary.
The Company’s Code of Business Conduct and Ethics is the Code of Ethics required by Item 406 of Securities and Exchange
Commission Regulation S-K. The Company intends to satisfy any disclosure obligations under Item 5.05 of Form 8-K
regarding any amendment or waiver relating to its Code of Business Conduct and Ethics by posting such information on its
website.
Item 1A. Risk Factors
The Company’s business prospects are subject to various risks and uncertainties that impact its business. The most
important of these risks and uncertainties are as follows:
The global economic downturn may continue to harm the Company’s business and financial condition. Many of the
Company’s markets, particularly in Europe, are currently experiencing a prolonged economic downturn characterized by high
unemployment, limited availability of credit and decreased consumer and business spending. Given the nature of the
Company’s business, financial results could be significantly harmed should this downturn continue for an extended period of
time or intensify. In the past, the Company’s business has suffered during periods of high unemployment as demand for staffing
services tends to significantly decrease during such periods. The impact of this downturn on the Company’s business could be
further dramatized given the severe impact it has had and may continue to have on the global labor markets.
Any reduction in global economic activity may harm the Company’s business. The demand for the Company’s services,
in particular its staffing services, is highly dependent upon the state of the economy and upon the staffing needs of the
Company’s clients. Any variation in the economic condition or unemployment levels of the U.S. or of any of the foreign
countries in which the Company does business, or in the economic condition of any region of any of the foregoing, or in any
specific industry may severely reduce the demand for the Company’s services and thereby significantly decrease the
Company’s revenues and profits.
The Company’s business depends on a strong reputation and anything that harms its reputation will likely harm its
results. As a provider of temporary and permanent staffing solutions as well as consultant services, the Company’s reputation
is dependent upon the performance of the employees it places with its clients and the services rendered by its consultants. If the
Company’s clients become dissatisfied with the performance of those employees or consultants or if any of those employees or
consultants engage in conduct that is harmful to the Company’s clients, the Company’s ability to maintain or expand its client
base may be harmed.
The Company and certain subsidiaries are defendants in several lawsuits that could cause the Company to incur
substantial liabilities. The Company and certain subsidiaries are defendants in several actual or asserted class and
4
representative action lawsuits brought by or on behalf of the Company’s current and former employees alleging violations of
federal and state law with respect to certain wage and hour related matters, as well as claims challenging the Company’s
compliance with the Fair Credit Reporting Act. The various claims made in one or more of such lawsuits include, among other
things, the misclassification of certain employees as exempt employees under applicable law, failure to comply with wage
statement requirements and other related wage and hour violations. Such suits seek, as applicable, unspecified amounts for
unpaid overtime compensation, penalties, and other damages, as well as attorneys’ fees. It is not possible to predict the outcome
of these lawsuits. However, these lawsuits may consume substantial amounts of the Company’s financial and managerial
resources and might result in adverse publicity, regardless of the ultimate outcome of the lawsuits. In addition, the Company
and its subsidiaries may become subject to similar lawsuits in the same or other jurisdictions. An unfavorable outcome with
respect to these lawsuits and any future lawsuits could, individually or in the aggregate, cause the Company to incur substantial
liabilities that may have a material adverse effect upon the Company’s business, financial condition or results of operations. In
addition, an unfavorable outcome in one or more of these cases could cause the Company to change its compensation plans for
its employees, which could have a material adverse effect upon the Company’s business.
The Company faces risks in operating internationally. The Company depends on operations in international markets,
including Europe, for a significant portion of its business. The European market has been experiencing on-going economic
uncertainty which has adversely affected, and may continue to adversely affect, the Company’s operations in Europe. To the
extent that these adverse economic conditions in Europe continue or worsen, demand for the Company’s services may decline,
which could significantly harm its business and results of operations. In addition, these international operations are subject to a
number of risks, including general political and economic conditions in those foreign countries, the burden of complying with
various foreign laws and technical standards and unpredictable changes in foreign regulations, U.S. legal requirements
governing U.S. companies operating in foreign countries, legal and cultural differences in the conduct of business, potential
adverse tax consequences and difficulty in staffing and managing international operations. In addition, the Company’s business
may be affected by foreign currency exchange fluctuations. In particular, the Company is subject to risk in translating its results
in foreign currencies into the U.S. dollar. If the value of the U.S. dollar strengthens relative to other currencies, the Company’s
reported income from these operations could decrease. The value of the U.S. dollar has recently strengthened considerably
against a number of major foreign currencies, and a continuation or extension of this strength relative to these other currencies
could adversely impact the Company’s reported income from its international markets and cause its revenue in such markets,
when translated into U.S. dollars, to decline.
Government regulations may result in prohibition or restriction of certain types of employment services or the imposition
of additional licensing or tax requirements that may reduce the Company’s future earnings. In many jurisdictions in which the
Company operates, the employment services industry is heavily regulated. For example, governmental regulations in some
countries restrict the length of contracts and the industries in which the Company’s employees may be used. In other countries,
special taxes, fees or costs are imposed in connection with the use of its employees. Additionally, trade unions in some
countries have used the political process to target the industry, in an effort to increase the regulatory burden and expense
associated with offering or utilizing temporary staffing solutions.
The countries in which we operate may, among other things:
•
•
•
•
create additional regulations that prohibit or restrict the types of employment services that the Company
currently provides;
require new or additional benefits be paid to the Company’s employees;
require the Company to obtain additional licensing to provide employment services; or
increase taxes, such as sales or value-added taxes, payable by the providers of temporary workers.
Any future regulations may have a material adverse effect on the Company’s business and financial results because they
may make it more difficult or expensive for the Company to continue to provide employment services.
The Company may be unable to find sufficient candidates for its staffing business. The Company’s staffing services
business consists of the placement of individuals seeking employment. There can be no assurance that candidates for
employment will continue to seek employment through the Company. Candidates generally seek temporary or regular positions
through multiple sources, including the Company and its competitors. Any shortage of candidates could materially adversely
affect the Company.
The Company operates in a highly competitive business and may be unable to retain clients or market share. The
staffing services business is highly competitive and, because it is a service business, the barriers to entry are quite low. There
are many competitors, some of which have greater resources than the Company, and new competitors are entering the market
all the time. In addition, long-term contracts form a negligible portion of the Company’s revenue. Therefore, there can be no
assurance that the Company will be able to retain clients or market share in the future. Nor can there be any assurance that the
5
5
5
robert_half_10k_FIN_1-54.indd 5
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2014 Annual Report • Robert Half Company will, in light of competitive pressures, be able to remain profitable or, if profitable, maintain its current profit
margins.
The Company may incur potential liability to employees and clients. The Company’s temporary services business
entails employing individuals on a temporary basis and placing such individuals in clients’ workplaces. The Company’s ability
to control the workplace environment is limited. As the employer of record of its temporary employees, the Company incurs a
risk of liability to its temporary employees for various workplace events, including claims of physical injury, discrimination,
harassment or failure to protect confidential personal information. While such claims have not historically had a material
adverse effect upon the Company, there can be no assurance that such claims in the future will not result in adverse publicity or
have a material adverse effect upon the Company. The Company also incurs a risk of liability to its clients resulting from
allegations of errors, omissions or theft by its temporary employees, or allegations of misuse of client confidential information.
The Company maintains insurance with respect to many of such claims. While such claims have not historically had a material
adverse effect upon the Company, there can be no assurance that the Company will continue to be able to obtain insurance at a
cost that does not have a material adverse effect upon the Company or that such claims (whether by reason of the Company not
having insurance or by reason of such claims being outside the scope of the Company’s insurance) will not have a material
adverse effect upon the Company.
The Company is dependent on its management personnel and employees and a failure to attract and retain such
of revenue.
personnel could harm its business. The Company is engaged in the services business. As such, its success or failure is highly
dependent upon the performance of its management personnel and employees, rather than upon technology or upon tangible
assets (of which the Company has few). There can be no assurance that the Company will be able to attract and retain the
personnel that are essential to its success.
The Company’s business is subject to extensive government regulation and a failure to comply with regulations could
financial reporting, or if material weaknesses in the Company’s internal controls are identified, the Company could be subject
harm its business. The Company’s business is subject to regulation or licensing in many states and in certain foreign
countries. While the Company has had no material difficulty complying with regulations in the past, there can be no assurance
that the Company will be able to continue to obtain all necessary licenses or approvals or that the cost of compliance will not
prove to be material. Any inability of the Company to comply with government regulation or licensing requirements could
materially adversely affect the Company. In addition, the Company’s temporary services business entails employing individuals
on a temporary basis and placing such individuals in clients’ workplaces. Increased government regulation of the workplace or
of the employer-employee relationship, or judicial or administrative proceedings related to such regulation, could materially
adversely affect the Company. In addition, to the extent that government regulation imposes increased costs upon the Company,
such as unemployment insurance taxes, there can be no assurance that such costs will not adversely impact the Company’s
profit margins. Further, lawsuits or other proceedings related to the Company’s compliance with government regulations or
licensing requirements could materially adversely affect the Company. For example, the Company is currently named as a
defendant in litigation challenging its compliance with the Fair Credit Reporting Act. It is not possible to predict the outcome
of such litigation; however, such litigation or any future lawsuits or proceedings related to the Company’s compliance with
government regulation or licensing requirements could consume substantial amounts of the Company’s financial and
managerial resources and might result in adverse publicity, regardless of the ultimate outcome of any such lawsuits or other
proceedings. An unfavorable outcome with respect to such litigation or any future lawsuits or proceedings could, individually
or in the aggregate, cause the Company to incur substantial liabilities that may have a material adverse effect upon the
Company’s business, financial condition or results of operations.
Health care reform could increase the costs of the Company’s temporary staffing operations. In March 2010, the Patient
Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (the “PPACA”) was signed
into law in the United States. The PPACA imposed new mandates on individuals and employers, requiring most individuals to
have health insurance and, beginning in 2015, assessing penalties on large employers that do not offer health insurance that
meets certain coverage, value, or affordability standards. Beginning 2015, the Company has redesigned its employee benefits to
offer health insurance coverage to its temporary candidates in a way that it believes will meet the requirements of the PPACA’s
employer mandate. Providing such additional health insurance benefits and an increase in the number of employees who elect
to participate in the Company’s health plans may significantly increase the Company’s health care-related costs. While the
Company will attempt to recover these costs from its customers, there can be no assurance that it will be successfully able to do
so and, if it cannot recover such costs, its financial results will suffer.
In addition, because the regulations governing the PPACA’s employer mandate are new and subject to interpretation, it is
possible that despite the Company’s efforts, the Company may incur liability in the form of penalties, fines, or damages if:
•
•
the health plans offered to temporary candidates are subsequently found not to meet minimum essential
coverage, affordability or minimum value standards;
the Company’s method for determining eligibility for coverage is found inadequate; or
6
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7
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•
the Company’s clients seek indemnification for health care claims by candidates working on client assignments.
The cost of any such penalties, fines, or damages could have a material adverse effect on the Company’s financial and
operating results.
The Company’s computer and communications hardware and software systems are vulnerable to damage and
interruption. The Company’s ability to manage its operations successfully is critical to its success and largely depends upon
the efficient and uninterrupted operation of its computer and communications hardware and software systems. The Company’s
primary computer systems and operations are vulnerable to damage or interruption from power outages, computer and
telecommunications failures, computer viruses, security breaches, catastrophic events and errors in usage by the Company’s
employees. In particular, the Company’s employees may have access or exposure to personally identifiable or otherwise
confidential information and customer data and systems, the misuse of which could result in legal liability. Cyber-attacks,
including attacks motivated by grievances against the business services industry in general or against the Company in
particular, may disable or damage its systems. It is possible that the Company’s security controls over personal and other data
and other practices it follows may not prevent the improper access to or disclosure of personally identifiable or otherwise
confidential information. Such disclosure or damage to the Company’s systems could harm its reputation and subject it to
liability under its contracts and laws that protect personal data and confidential information, resulting in increased costs or loss
Failure to maintain adequate financial and management processes and controls could lead to errors in the Company’s
financial reporting. Failure to maintain adequate financial and management processes and controls could lead to errors in the
Company’s financial reporting. If the Company’s management is unable to certify the effectiveness of its internal controls or if
its independent registered public accounting firm cannot render an opinion on the effectiveness of its internal control over
to regulatory scrutiny and a loss of public confidence. In addition, if the Company does not maintain adequate financial and
management personnel, processes and controls, it may not be able to accurately report its financial performance on a timely
basis, which could cause its stock price to fall.
The Company’s results of operations and ability to grow could be materially negatively affected if it cannot successfully
keep pace with technological changes in the development and implementation of its services. The Company’s success
depends on its ability to keep pace with rapid technological changes in the development and implementation of its services. The
Company’s business is reliant on a variety of technologies, including those which support hiring and tracking, order
management, billing, and client data analytics. If the Company does not sufficiently invest in new technology and industry
developments, appropriately implement new technologies, or evolve its business at sufficient speed and scale in response to
such developments, or if it does not make the right strategic investments to respond to these developments, the Company’s
services, results of operations, and ability to develop and maintain its business could be negatively affected.
The demand for the Company’s services related to Sarbanes-Oxley or other regulatory compliance may decline. The
operations of both the staffing services business and Protiviti include services related to Sarbanes-Oxley and other regulatory
compliance. There can be no assurance that there will be ongoing demand for these services. For example, the Jumpstart Our
Business Startup (“JOBS”) Act signed into law in April of 2012 allows most companies going public in the U.S. to defer
implementation of some of the provisions of Sarbanes-Oxley for up to five years after their initial public offering. Similarly
there are a number of proposals currently being considered by the U.S. Congress to further delay or, in some cases, remove the
requirements of Sarbanes-Oxley for a number of public companies. These or other similar delays or modifications of the
Sarbanes Oxley requirements could decrease demand for Protiviti’s services.
Long-term contracts do not comprise a significant portion of the Company’s revenue. Because long-term contracts are
not a significant part of the Company’s staffing services business, future results cannot be reliably predicted by considering past
trends or extrapolating past results.
Protiviti may be unable to attract and retain key personnel. Protiviti is a services business, and is dependent upon its
ability to attract and retain personnel. While Protiviti has retained its key personnel to date, there can be no assurance that it
will continue to be able to do so.
Protiviti operates in a highly competitive business and faces competitors who are significantly larger and have more
established reputations. Protiviti operates in a highly competitive business. As with the Company’s staffing services business,
the barriers to entry are quite low. There are many competitors, some of which have greater resources than Protiviti and many
of which have been in operation far longer than Protiviti. In particular, Protiviti faces competition from the “big four”
accounting firms, which have been in operation for a considerable period of time and have established reputations and client
bases. Because the principal factors upon which competition is based are reputation, technology, tools, project methodologies,
2014 Annual Report • Robert Half Company will, in light of competitive pressures, be able to remain profitable or, if profitable, maintain its current profit
•
the Company’s clients seek indemnification for health care claims by candidates working on client assignments.
margins.
The Company may incur potential liability to employees and clients. The Company’s temporary services business
operating results.
The cost of any such penalties, fines, or damages could have a material adverse effect on the Company’s financial and
entails employing individuals on a temporary basis and placing such individuals in clients’ workplaces. The Company’s ability
to control the workplace environment is limited. As the employer of record of its temporary employees, the Company incurs a
risk of liability to its temporary employees for various workplace events, including claims of physical injury, discrimination,
harassment or failure to protect confidential personal information. While such claims have not historically had a material
adverse effect upon the Company, there can be no assurance that such claims in the future will not result in adverse publicity or
have a material adverse effect upon the Company. The Company also incurs a risk of liability to its clients resulting from
allegations of errors, omissions or theft by its temporary employees, or allegations of misuse of client confidential information.
The Company maintains insurance with respect to many of such claims. While such claims have not historically had a material
adverse effect upon the Company, there can be no assurance that the Company will continue to be able to obtain insurance at a
cost that does not have a material adverse effect upon the Company or that such claims (whether by reason of the Company not
having insurance or by reason of such claims being outside the scope of the Company’s insurance) will not have a material
adverse effect upon the Company.
The Company is dependent on its management personnel and employees and a failure to attract and retain such
personnel could harm its business. The Company is engaged in the services business. As such, its success or failure is highly
dependent upon the performance of its management personnel and employees, rather than upon technology or upon tangible
assets (of which the Company has few). There can be no assurance that the Company will be able to attract and retain the
personnel that are essential to its success.
The Company’s business is subject to extensive government regulation and a failure to comply with regulations could
harm its business. The Company’s business is subject to regulation or licensing in many states and in certain foreign
countries. While the Company has had no material difficulty complying with regulations in the past, there can be no assurance
that the Company will be able to continue to obtain all necessary licenses or approvals or that the cost of compliance will not
prove to be material. Any inability of the Company to comply with government regulation or licensing requirements could
materially adversely affect the Company. In addition, the Company’s temporary services business entails employing individuals
on a temporary basis and placing such individuals in clients’ workplaces. Increased government regulation of the workplace or
of the employer-employee relationship, or judicial or administrative proceedings related to such regulation, could materially
adversely affect the Company. In addition, to the extent that government regulation imposes increased costs upon the Company,
such as unemployment insurance taxes, there can be no assurance that such costs will not adversely impact the Company’s
profit margins. Further, lawsuits or other proceedings related to the Company’s compliance with government regulations or
licensing requirements could materially adversely affect the Company. For example, the Company is currently named as a
defendant in litigation challenging its compliance with the Fair Credit Reporting Act. It is not possible to predict the outcome
of such litigation; however, such litigation or any future lawsuits or proceedings related to the Company’s compliance with
government regulation or licensing requirements could consume substantial amounts of the Company’s financial and
managerial resources and might result in adverse publicity, regardless of the ultimate outcome of any such lawsuits or other
proceedings. An unfavorable outcome with respect to such litigation or any future lawsuits or proceedings could, individually
or in the aggregate, cause the Company to incur substantial liabilities that may have a material adverse effect upon the
Company’s business, financial condition or results of operations.
Health care reform could increase the costs of the Company’s temporary staffing operations. In March 2010, the Patient
Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (the “PPACA”) was signed
into law in the United States. The PPACA imposed new mandates on individuals and employers, requiring most individuals to
have health insurance and, beginning in 2015, assessing penalties on large employers that do not offer health insurance that
meets certain coverage, value, or affordability standards. Beginning 2015, the Company has redesigned its employee benefits to
offer health insurance coverage to its temporary candidates in a way that it believes will meet the requirements of the PPACA’s
employer mandate. Providing such additional health insurance benefits and an increase in the number of employees who elect
to participate in the Company’s health plans may significantly increase the Company’s health care-related costs. While the
Company will attempt to recover these costs from its customers, there can be no assurance that it will be successfully able to do
so and, if it cannot recover such costs, its financial results will suffer.
In addition, because the regulations governing the PPACA’s employer mandate are new and subject to interpretation, it is
possible that despite the Company’s efforts, the Company may incur liability in the form of penalties, fines, or damages if:
•
•
the health plans offered to temporary candidates are subsequently found not to meet minimum essential
coverage, affordability or minimum value standards;
the Company’s method for determining eligibility for coverage is found inadequate; or
The Company’s computer and communications hardware and software systems are vulnerable to damage and
interruption. The Company’s ability to manage its operations successfully is critical to its success and largely depends upon
the efficient and uninterrupted operation of its computer and communications hardware and software systems. The Company’s
primary computer systems and operations are vulnerable to damage or interruption from power outages, computer and
telecommunications failures, computer viruses, security breaches, catastrophic events and errors in usage by the Company’s
employees. In particular, the Company’s employees may have access or exposure to personally identifiable or otherwise
confidential information and customer data and systems, the misuse of which could result in legal liability. Cyber-attacks,
including attacks motivated by grievances against the business services industry in general or against the Company in
particular, may disable or damage its systems. It is possible that the Company’s security controls over personal and other data
and other practices it follows may not prevent the improper access to or disclosure of personally identifiable or otherwise
confidential information. Such disclosure or damage to the Company’s systems could harm its reputation and subject it to
liability under its contracts and laws that protect personal data and confidential information, resulting in increased costs or loss
of revenue.
Failure to maintain adequate financial and management processes and controls could lead to errors in the Company’s
financial reporting. Failure to maintain adequate financial and management processes and controls could lead to errors in the
Company’s financial reporting. If the Company’s management is unable to certify the effectiveness of its internal controls or if
its independent registered public accounting firm cannot render an opinion on the effectiveness of its internal control over
financial reporting, or if material weaknesses in the Company’s internal controls are identified, the Company could be subject
to regulatory scrutiny and a loss of public confidence. In addition, if the Company does not maintain adequate financial and
management personnel, processes and controls, it may not be able to accurately report its financial performance on a timely
basis, which could cause its stock price to fall.
The Company’s results of operations and ability to grow could be materially negatively affected if it cannot successfully
keep pace with technological changes in the development and implementation of its services. The Company’s success
depends on its ability to keep pace with rapid technological changes in the development and implementation of its services. The
Company’s business is reliant on a variety of technologies, including those which support hiring and tracking, order
management, billing, and client data analytics. If the Company does not sufficiently invest in new technology and industry
developments, appropriately implement new technologies, or evolve its business at sufficient speed and scale in response to
such developments, or if it does not make the right strategic investments to respond to these developments, the Company’s
services, results of operations, and ability to develop and maintain its business could be negatively affected.
The demand for the Company’s services related to Sarbanes-Oxley or other regulatory compliance may decline. The
operations of both the staffing services business and Protiviti include services related to Sarbanes-Oxley and other regulatory
compliance. There can be no assurance that there will be ongoing demand for these services. For example, the Jumpstart Our
Business Startup (“JOBS”) Act signed into law in April of 2012 allows most companies going public in the U.S. to defer
implementation of some of the provisions of Sarbanes-Oxley for up to five years after their initial public offering. Similarly
there are a number of proposals currently being considered by the U.S. Congress to further delay or, in some cases, remove the
requirements of Sarbanes-Oxley for a number of public companies. These or other similar delays or modifications of the
Sarbanes Oxley requirements could decrease demand for Protiviti’s services.
Long-term contracts do not comprise a significant portion of the Company’s revenue. Because long-term contracts are
not a significant part of the Company’s staffing services business, future results cannot be reliably predicted by considering past
trends or extrapolating past results.
Protiviti may be unable to attract and retain key personnel. Protiviti is a services business, and is dependent upon its
ability to attract and retain personnel. While Protiviti has retained its key personnel to date, there can be no assurance that it
will continue to be able to do so.
Protiviti operates in a highly competitive business and faces competitors who are significantly larger and have more
established reputations. Protiviti operates in a highly competitive business. As with the Company’s staffing services business,
the barriers to entry are quite low. There are many competitors, some of which have greater resources than Protiviti and many
of which have been in operation far longer than Protiviti. In particular, Protiviti faces competition from the “big four”
accounting firms, which have been in operation for a considerable period of time and have established reputations and client
bases. Because the principal factors upon which competition is based are reputation, technology, tools, project methodologies,
6
7
7
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2014 Annual Report • Robert Half price of services and depth of skills of personnel, there can be no assurance that Protiviti will be successful in attracting and
retaining clients.
Company intends to continue to vigorously defend against the litigation.
The Company is involved in a number of other lawsuits arising in the ordinary course of business. While management
Protiviti’s operations could subject it to liability. The business of Protiviti consists of providing business consulting and
does not expect any of these other matters to have a material adverse effect on the Company’s results of operations, financial
internal audit services. Liability could be incurred or litigation could be instituted against the Company or Protiviti for claims
related to these activities or to prior transactions or activities. There can be no assurance that such liability or litigation will not
have a material adverse impact on Protiviti or the Company.
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 2. Properties
The Company’s headquarters operations are located in Menlo Park and San Ramon, California. As of December 31, 2014,
placement activities were conducted through 341 offices located in the United States, Canada, the United Kingdom, Belgium,
Brazil, France, the Netherlands, Germany, Italy, Luxembourg, Switzerland, Japan, China, Singapore, Australia, New Zealand,
Austria, the United Arab Emirates, and Chile. As of December 31, 2014, Protiviti had 57 offices in the United States, Canada,
Australia, China, France, Germany, Italy, the Netherlands, Japan, Singapore, India and the United Kingdom. All of the offices
are leased.
Item 3. Legal Proceedings
On April 23, 2010, Plaintiffs David Opalinski and James McCabe, on behalf of themselves and a putative class of
similarly situated Staffing Managers, filed a Complaint in the United States District Court for the District of New Jersey
naming the Company and one of its subsidiaries as Defendants. The Complaint alleges that salaried Staffing Managers located
throughout the U.S. have been misclassified as exempt from the Fair Labor Standards Act’s overtime pay requirements.
Plaintiffs seek an unspecified amount for unpaid overtime on behalf of themselves and the class they purport to represent.
Plaintiffs also seek an unspecified amount for statutory penalties, attorneys’ fees and other damages. On October 6, 2011, the
Court granted the Company’s motion to compel arbitration of the Plaintiffs’ allegations. At this stage, it is not feasible to predict
the outcome of or a range of loss, should a loss occur, from these allegations and, accordingly, no amounts have been provided
in the Company’s Financial Statements. The Company believes it has meritorious defenses to the allegations, and the Company
intends to continue to vigorously defend against the allegations.
On March 13, 2014, Plaintiff Leonor Rodriguez, on her own behalf and on behalf of a putative class of allegedly
similarly situated individuals, filed a complaint against the Company in the Superior Court of California, San Diego County.
The complaint alleges that a putative class of current and former employees of the Company working in California since March
13, 2011 were denied compensation for the time they spent interviewing with clients of the Company as well as performing
activities related to the interview process. Rodriguez seeks recovery on her own behalf and on behalf of the putative class in an
unspecified amount for this allegedly unpaid compensation. Rodriguez also seeks recovery of an unspecified amount for the
alleged failure of the Company to provide her and the putative class with accurate wage statements. Rodriguez also seeks an
unspecified amount of other damages, attorneys’ fees, and statutory penalties, including but not limited to statutory penalties on
behalf of herself and other allegedly “aggrieved employees” as defined by California’s Labor Code Private Attorney General
Act (“PAGA”). On October 10, 2014, the Court granted a motion by the Company to compel all of Rodriguez’s claims, except
the PAGA claim, to individual arbitration. At this stage of the litigation, it is not feasible to predict the outcome of or a range of
loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the Company’s Financial
Statements. The Company believes it has meritorious defenses to the allegations and the Company intends to continue to
vigorously defend against the litigation.
On September 5, 2014, Plaintiff Theresa Daniels, on behalf of herself and a putative class of salaried Recruiting
Managers, filed a complaint in California Superior Court naming the Company as Defendant. The complaint alleges that
salaried Recruiting Managers based in California have been misclassified under California law as exempt employees, and seeks
an unspecified amount for unpaid overtime pay alleged to be due to them had they been paid as non-exempt hourly employees,
as well as statutory penalties for alleged violations of the California Labor Code arising from such alleged misclassification.
The complaint also alleges a claim under California Business and Professions Code section 17200 for unfair competition. The
Plaintiff also seeks an unspecified amount for other damages, attorneys’ fees, and statutory penalties. On or about September
17, 2014, the Plaintiff provided written notice to the California Labor and Workforce Development Agency of her alleged
claims. On October 27, 2014, the Plaintiff filed a First Amended Complaint adding a representative claim and request for
penalties under the California Private Attorney General Act. At this stage of the litigation, it is not feasible to predict the
outcome of or a range of loss, should a loss occur, from this proceeding, and accordingly, no amounts have been provided in the
Company’s financial statements. The Company believes it has meritorious defenses to the allegations in this case, and the
8
8
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position or cash flows, litigation is subject to certain inherent uncertainties.
Item 4. Mine Safety Disclosure
Not applicable.
9
2014 Annual Report • Robert Half price of services and depth of skills of personnel, there can be no assurance that Protiviti will be successful in attracting and
Company intends to continue to vigorously defend against the litigation.
retaining clients.
Protiviti’s operations could subject it to liability. The business of Protiviti consists of providing business consulting and
internal audit services. Liability could be incurred or litigation could be instituted against the Company or Protiviti for claims
related to these activities or to prior transactions or activities. There can be no assurance that such liability or litigation will not
have a material adverse impact on Protiviti or the Company.
The Company is involved in a number of other lawsuits arising in the ordinary course of business. While management
does not expect any of these other matters to have a material adverse effect on the Company’s results of operations, financial
position or cash flows, litigation is subject to certain inherent uncertainties.
Item 4. Mine Safety Disclosure
Not applicable.
9
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Item 1B. Unresolved Staff Comments.
Not applicable.
Item 2. Properties
are leased.
Item 3. Legal Proceedings
The Company’s headquarters operations are located in Menlo Park and San Ramon, California. As of December 31, 2014,
placement activities were conducted through 341 offices located in the United States, Canada, the United Kingdom, Belgium,
Brazil, France, the Netherlands, Germany, Italy, Luxembourg, Switzerland, Japan, China, Singapore, Australia, New Zealand,
Austria, the United Arab Emirates, and Chile. As of December 31, 2014, Protiviti had 57 offices in the United States, Canada,
Australia, China, France, Germany, Italy, the Netherlands, Japan, Singapore, India and the United Kingdom. All of the offices
On April 23, 2010, Plaintiffs David Opalinski and James McCabe, on behalf of themselves and a putative class of
similarly situated Staffing Managers, filed a Complaint in the United States District Court for the District of New Jersey
naming the Company and one of its subsidiaries as Defendants. The Complaint alleges that salaried Staffing Managers located
throughout the U.S. have been misclassified as exempt from the Fair Labor Standards Act’s overtime pay requirements.
Plaintiffs seek an unspecified amount for unpaid overtime on behalf of themselves and the class they purport to represent.
Plaintiffs also seek an unspecified amount for statutory penalties, attorneys’ fees and other damages. On October 6, 2011, the
Court granted the Company’s motion to compel arbitration of the Plaintiffs’ allegations. At this stage, it is not feasible to predict
the outcome of or a range of loss, should a loss occur, from these allegations and, accordingly, no amounts have been provided
in the Company’s Financial Statements. The Company believes it has meritorious defenses to the allegations, and the Company
intends to continue to vigorously defend against the allegations.
On March 13, 2014, Plaintiff Leonor Rodriguez, on her own behalf and on behalf of a putative class of allegedly
similarly situated individuals, filed a complaint against the Company in the Superior Court of California, San Diego County.
The complaint alleges that a putative class of current and former employees of the Company working in California since March
13, 2011 were denied compensation for the time they spent interviewing with clients of the Company as well as performing
activities related to the interview process. Rodriguez seeks recovery on her own behalf and on behalf of the putative class in an
unspecified amount for this allegedly unpaid compensation. Rodriguez also seeks recovery of an unspecified amount for the
alleged failure of the Company to provide her and the putative class with accurate wage statements. Rodriguez also seeks an
unspecified amount of other damages, attorneys’ fees, and statutory penalties, including but not limited to statutory penalties on
behalf of herself and other allegedly “aggrieved employees” as defined by California’s Labor Code Private Attorney General
Act (“PAGA”). On October 10, 2014, the Court granted a motion by the Company to compel all of Rodriguez’s claims, except
the PAGA claim, to individual arbitration. At this stage of the litigation, it is not feasible to predict the outcome of or a range of
loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the Company’s Financial
Statements. The Company believes it has meritorious defenses to the allegations and the Company intends to continue to
vigorously defend against the litigation.
On September 5, 2014, Plaintiff Theresa Daniels, on behalf of herself and a putative class of salaried Recruiting
Managers, filed a complaint in California Superior Court naming the Company as Defendant. The complaint alleges that
salaried Recruiting Managers based in California have been misclassified under California law as exempt employees, and seeks
an unspecified amount for unpaid overtime pay alleged to be due to them had they been paid as non-exempt hourly employees,
as well as statutory penalties for alleged violations of the California Labor Code arising from such alleged misclassification.
The complaint also alleges a claim under California Business and Professions Code section 17200 for unfair competition. The
Plaintiff also seeks an unspecified amount for other damages, attorneys’ fees, and statutory penalties. On or about September
17, 2014, the Plaintiff provided written notice to the California Labor and Workforce Development Agency of her alleged
claims. On October 27, 2014, the Plaintiff filed a First Amended Complaint adding a representative claim and request for
penalties under the California Private Attorney General Act. At this stage of the litigation, it is not feasible to predict the
outcome of or a range of loss, should a loss occur, from this proceeding, and accordingly, no amounts have been provided in the
Company’s financial statements. The Company believes it has meritorious defenses to the allegations in this case, and the
8
2014 Annual Report • Robert Half PART II
Stock Performance Graph
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Market Price, Dividends and Related Matters
The following graph compares, through December 31, 2014, the cumulative total return of the Company’s Common
Stock, an index of certain publicly traded employment services companies, and the S&P 500. The graph assumes the investment
of $100 at the beginning of the period depicted in the chart and reinvestment of all dividends. The information presented in the
graph was obtained by the Company from outside sources it considers to be reliable but has not been independently verified by
The Company’s Common Stock is listed for trading on the New York Stock Exchange under the symbol “RHI”. On
the Company.
January 31, 2015, there were 1,406 holders of record of the Common Stock.
Following is a list by fiscal quarters of the sales prices of the stock:
2014
4th Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3rd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1st Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013
4th Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3rd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1st Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales Prices
High
$ 59.45
$ 53.08
$ 48.13
$ 43.06
Low
$ 45.30
$ 46.98
$ 39.57
$ 38.62
Sales Prices
High
$ 42.33
$ 39.23
$ 37.75
$ 37.59
Low
$ 37.16
$ 30.64
$ 31.08
$ 32.22
Cash dividends of $.18 per share were declared and paid in each quarter of 2014. Cash dividends of $.16 per share were
declared and paid in each quarter of 2013.
Issuer Purchases of Equity Securities
October 1, 2014 to October 31, 2014 . . . . . . . . . . . . . . . . . . .
November 1, 2014 to November 30, 2014 . . . . . . . . . . . . . . .
December 1, 2014 to December 31, 2014 . . . . . . . . . . . . . . . .
Total October 1, 2014 to December 31, 2014 . . . . . . . . . . . . .
Total
Number of
Shares
Purchased
4,995
(a)
—
Average
Price Paid
per Share
$50.84
—
984,635
989,630
(b)
$57.78
Total
Number of
Shares
Purchased
as Part of
Publicly
Announced
Plans
—
—
792,491
792,491
Maximum
Number of
Shares that May
Yet Be
Purchased
Under Publicly
Announced
Plans (c)
5,548,243
5,548,243
4,755,752
(a)
(b)
(c)
Represents shares repurchased in connection with employee stock plans, whereby Company shares were tendered by
employees for the payment of applicable withholding taxes and/or exercise price.
Includes 192,144 shares repurchased in connection with employee stock plans, whereby Company shares were tendered
by employees for the payment of applicable withholding taxes and/or exercise price.
Commencing in October 1997, the Company’s Board of Directors has, at various times, authorized the repurchase, from
time to time, of the Company’s common stock on the open market or in privately negotiated transactions depending on
market conditions. Since plan inception, a total of 98,000,000 shares have been authorized for repurchase of which
93,244,248 shares have been repurchased as of December 31, 2014.
The remainder of the information required by this item is incorporated by reference to Part III, Item 12 of this Form 10-K.
10
10
10
11
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(a)
This index represents the cumulative total return of the Company and the following corporations providing temporary or
permanent employment services: CDI Corp.; Kelly Services, Inc.; Kforce Inc.; ManpowerGroup; and Resources Connection
Inc.
2014 Annual Report • Robert Half
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Market Price, Dividends and Related Matters
The Company’s Common Stock is listed for trading on the New York Stock Exchange under the symbol “RHI”. On
January 31, 2015, there were 1,406 holders of record of the Common Stock.
Following is a list by fiscal quarters of the sales prices of the stock:
Sales Prices
High
Low
$ 59.45
$ 53.08
$ 48.13
$ 43.06
$ 45.30
$ 46.98
$ 39.57
$ 38.62
Sales Prices
High
Low
$ 42.33
$ 39.23
$ 37.75
$ 37.59
$ 37.16
$ 30.64
$ 31.08
$ 32.22
4th Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3rd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1st Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014
2013
4th Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3rd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1st Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends of $.18 per share were declared and paid in each quarter of 2014. Cash dividends of $.16 per share were
declared and paid in each quarter of 2013.
Issuer Purchases of Equity Securities
Total
Number of
Shares
Purchased
Average
Price Paid
per Share
October 1, 2014 to October 31, 2014 . . . . . . . . . . . . . . . . . . .
4,995
(a)
$50.84
November 1, 2014 to November 30, 2014 . . . . . . . . . . . . . . .
—
—
December 1, 2014 to December 31, 2014 . . . . . . . . . . . . . . . .
984,635
(b)
$57.78
Total October 1, 2014 to December 31, 2014 . . . . . . . . . . . . .
989,630
Total
Number of
Shares
Purchased
as Part of
Publicly
Announced
Plans
—
—
792,491
792,491
Maximum
Number of
Shares that May
Yet Be
Purchased
Under Publicly
Announced
Plans (c)
5,548,243
5,548,243
4,755,752
(a)
Represents shares repurchased in connection with employee stock plans, whereby Company shares were tendered by
employees for the payment of applicable withholding taxes and/or exercise price.
(b)
Includes 192,144 shares repurchased in connection with employee stock plans, whereby Company shares were tendered
by employees for the payment of applicable withholding taxes and/or exercise price.
(c)
Commencing in October 1997, the Company’s Board of Directors has, at various times, authorized the repurchase, from
time to time, of the Company’s common stock on the open market or in privately negotiated transactions depending on
market conditions. Since plan inception, a total of 98,000,000 shares have been authorized for repurchase of which
93,244,248 shares have been repurchased as of December 31, 2014.
The remainder of the information required by this item is incorporated by reference to Part III, Item 12 of this Form 10-K.
PART II
Stock Performance Graph
The following graph compares, through December 31, 2014, the cumulative total return of the Company’s Common
Stock, an index of certain publicly traded employment services companies, and the S&P 500. The graph assumes the investment
of $100 at the beginning of the period depicted in the chart and reinvestment of all dividends. The information presented in the
graph was obtained by the Company from outside sources it considers to be reliable but has not been independently verified by
the Company.
(a)
This index represents the cumulative total return of the Company and the following corporations providing temporary or
permanent employment services: CDI Corp.; Kelly Services, Inc.; Kforce Inc.; ManpowerGroup; and Resources Connection
Inc.
10
11
11
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2014 Annual Report • Robert Half
Item 6. Selected Financial Data
The selected five-year financial data presented below should be read in conjunction with the information contained in
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Company’s
Consolidated Financial Statements and the Notes thereto contained in Item 8. Financial Statements and Supplementary Data.
Income Statement Data:
Net service revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct costs of services, consisting of
payroll, payroll taxes, benefit costs and
reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2014
2013
2012
2011
2010
(in thousands)
$4,695,014
$ 4,245,895
$4,111,213
$3,776,976
$3,175,093
2,772,098
2,522,803
2,462,153
2,287,374
1,981,060
1,922,916
1,723,092
1,649,060
1,489,602
1,194,033
Selling, general and administrative expenses. . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes. . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,425,734
557
(724)
497,349
191,421
$ 305,928
1,324,815
1,700
(1,002)
397,579
145,384
$ 252,195
1,305,614
398
(1,197)
344,245
134,303
$ 209,942
1,240,184
153
(951)
250,216
100,294
$ 149,922
Net income available to common stockholders . . . . . . . .
$ 305,928
$ 252,192
$ 208,867
$ 147,772
1,079,033
411
(579)
115,168
49,099
66,069
63,729
$
$
Years Ended December 31,
2014
2013
2012
2011
2010
(in thousands, except per share amounts)
Net Income Per Share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash Dividends Declared Per Share. . . . . . . . . . . . . . . . .
$
$
$
2.28
2.26
134,358
135,541
.72
$
$
$
1.85
1.83
136,153
137,589
.64
$
$
$
1.51
1.50
138,201
139,409
.60
$
$
$
1.05
1.04
140,479
141,790
.56
$
$
$
.45
.44
142,833
144,028
.52
December 31,
2014
2013
2012
2011
2010
(in thousands)
Balance Sheet Data:
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes payable and other indebtedness, less
current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,647,267
$ 1,490,271
$1,381,271
$1,311,836
$1,273,984
$
1,159
$
1,300
$
1,428
$
1,545
$
1,656
$ 979,858
$ 919,643
$ 842,011
$ 800,505
$ 834,371
12
12
12
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Certain information contained in Management’s Discussion and Analysis and in other parts of this report may be deemed
forward-looking statements regarding events and financial trends that may affect the Company’s future operating results or
financial positions. These statements may be identified by words such as “estimate”, “forecast”, “project”, “plan”, “intend”,
“believe”, “expect”, “anticipate”, or variations or negatives thereof or by similar or comparable words or phrases. Forward-
looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed
in the statements. These risks and uncertainties include, but are not limited to, the following: the global financial and economic
situation; changes in levels of unemployment and other economic conditions in the United States or foreign countries where the
Company does business, or in particular regions or industries; reduction in the supply of candidates for temporary employment
or the Company’s ability to attract candidates; the entry of new competitors into the marketplace or expansion by existing
competitors; the ability of the Company to maintain existing client relationships and attract new clients in the context of
changing economic or competitive conditions; the impact of competitive pressures, including any change in the demand for the
Company’s services, on the Company’s ability to maintain its margins; the possibility of the Company incurring liability for its
activities, including the activities of its temporary employees, or for events impacting its temporary employees on clients’
premises; the possibility that adverse publicity could impact the Company’s ability to attract and retain clients and candidates;
the success of the Company in attracting, training, and retaining qualified management personnel and other staff employees; the
Company’s ability to comply with governmental regulations affecting personnel services businesses in particular or employer/
employee relationships in general; whether there will be ongoing demand for Sarbanes-Oxley or other regulatory compliance
services; the Company’s reliance on short-term contracts for a significant percentage of its business; litigation relating to prior
or current transactions or activities, including litigation that may be disclosed from time to time in the Company’s SEC filings;
the ability of the Company to manage its international operations and comply with foreign laws and regulations; the impact of
fluctuations in foreign currency exchange rates; the possibility that the additional costs the Company will incur as a result of
health care reform legislation may adversely affect the Company’s profit margins or the demand for the Company’s services;
the possibility that the Company’s computer and communications hardware and software systems could be damaged or their
service interrupted; and the possibility that the Company may fail to maintain adequate financial and management controls and
as a result suffer errors in its financial reporting. Additionally, with respect to Protiviti, other risks and uncertainties include the
fact that future success will depend on its ability to retain employees and attract clients; there can be no assurance that there will
be ongoing demand for Sarbanes-Oxley or other regulatory compliance services; failure to produce projected revenues could
adversely affect financial results; and there is the possibility of involvement in litigation relating to prior or current transactions
or activities. Because long-term contracts are not a significant part of the Company’s business, future results cannot be reliably
predicted by considering past trends or extrapolating past results. Further information regarding these and other risks and
uncertainties is contained in Item 1A. “Risk Factors.”
Critical Accounting Policies and Estimates
As described below, the Company’s most critical accounting policies and estimates are those that involve subjective
decisions or assessments.
Accounts Receivable Allowances. The Company maintains allowances for estimated losses resulting from (i) the
inability of its customers to make required payments, (ii) temporary placement sales adjustments, and (iii) permanent placement
candidates not remaining with the client through the 90-day guarantee period, commonly referred to as “fall offs”. The
Company establishes these allowances based on its review of customers’ credit profiles, historical loss statistics and current
trends. The adequacy of these allowances is reviewed each reporting period. Historically, the Company’s actual losses and
credits have been consistent with these allowances. As a percentage of gross accounts receivable, the Company’s accounts
receivable allowances totaled 4.4% and 4.7% as of December 31, 2014 and 2013, respectively. As of December 31, 2014, a
five-percentage point deviation in the Company’s accounts receivable allowances balance would have resulted in an increase or
decrease in the allowance of $1.5 million. Although future results cannot always be predicted by extrapolating past results,
management believes that it is reasonably likely that future results will be consistent with historical trends and experience.
However, if the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability
to make payments, or if unexpected events or significant future changes in trends were to occur, additional allowances may be
required.
Income Tax Assets and Liabilities. In establishing its deferred income tax assets and liabilities, the Company makes
judgments and interpretations based on the enacted tax laws and published tax guidance that are applicable to its operations.
13
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2014 Annual Report • Robert Half
Item 6. Selected Financial Data
The selected five-year financial data presented below should be read in conjunction with the information contained in
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Company’s
Consolidated Financial Statements and the Notes thereto contained in Item 8. Financial Statements and Supplementary Data.
2014
2013
2012
2011
2010
Years Ended December 31,
(in thousands)
Net service revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,695,014
$ 4,245,895
$4,111,213
$3,776,976
$3,175,093
Income Statement Data:
Direct costs of services, consisting of
payroll, payroll taxes, benefit costs and
reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . .
2,772,098
2,522,803
2,462,153
2,287,374
1,981,060
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,922,916
1,723,092
1,649,060
1,489,602
1,194,033
Selling, general and administrative expenses. . . . . . . . . .
1,425,734
1,324,815
1,305,614
1,240,184
1,079,033
Amortization of intangible assets . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes. . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . .
557
(724)
497,349
191,421
1,700
(1,002)
397,579
145,384
398
(1,197)
344,245
134,303
153
(951)
250,216
100,294
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 305,928
$ 252,195
$ 209,942
$ 149,922
Net income available to common stockholders . . . . . . . .
$ 305,928
$ 252,192
$ 208,867
$ 147,772
63,729
411
(579)
115,168
49,099
66,069
$
$
Years Ended December 31,
2014
2013
2012
2011
2010
(in thousands, except per share amounts)
Net Income Per Share:
Shares:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
2.28
2.26
$
$
1.85
1.83
$
$
1.51
1.50
$
$
1.05
1.04
$
$
.45
.44
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
134,358
135,541
136,153
137,589
138,201
139,409
140,479
141,790
142,833
144,028
Cash Dividends Declared Per Share. . . . . . . . . . . . . . . . .
$
.72
$
.64
$
.60
$
.56
$
.52
2014
2013
2012
2011
2010
December 31,
(in thousands)
Balance Sheet Data:
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,647,267
$ 1,490,271
$1,381,271
$1,311,836
$1,273,984
Notes payable and other indebtedness, less
current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
1,159
$
1,300
$
1,428
$
1,545
$
1,656
Stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 979,858
$ 919,643
$ 842,011
$ 800,505
$ 834,371
12
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Certain information contained in Management’s Discussion and Analysis and in other parts of this report may be deemed
forward-looking statements regarding events and financial trends that may affect the Company’s future operating results or
financial positions. These statements may be identified by words such as “estimate”, “forecast”, “project”, “plan”, “intend”,
“believe”, “expect”, “anticipate”, or variations or negatives thereof or by similar or comparable words or phrases. Forward-
looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed
in the statements. These risks and uncertainties include, but are not limited to, the following: the global financial and economic
situation; changes in levels of unemployment and other economic conditions in the United States or foreign countries where the
Company does business, or in particular regions or industries; reduction in the supply of candidates for temporary employment
or the Company’s ability to attract candidates; the entry of new competitors into the marketplace or expansion by existing
competitors; the ability of the Company to maintain existing client relationships and attract new clients in the context of
changing economic or competitive conditions; the impact of competitive pressures, including any change in the demand for the
Company’s services, on the Company’s ability to maintain its margins; the possibility of the Company incurring liability for its
activities, including the activities of its temporary employees, or for events impacting its temporary employees on clients’
premises; the possibility that adverse publicity could impact the Company’s ability to attract and retain clients and candidates;
the success of the Company in attracting, training, and retaining qualified management personnel and other staff employees; the
Company’s ability to comply with governmental regulations affecting personnel services businesses in particular or employer/
employee relationships in general; whether there will be ongoing demand for Sarbanes-Oxley or other regulatory compliance
services; the Company’s reliance on short-term contracts for a significant percentage of its business; litigation relating to prior
or current transactions or activities, including litigation that may be disclosed from time to time in the Company’s SEC filings;
the ability of the Company to manage its international operations and comply with foreign laws and regulations; the impact of
fluctuations in foreign currency exchange rates; the possibility that the additional costs the Company will incur as a result of
health care reform legislation may adversely affect the Company’s profit margins or the demand for the Company’s services;
the possibility that the Company’s computer and communications hardware and software systems could be damaged or their
service interrupted; and the possibility that the Company may fail to maintain adequate financial and management controls and
as a result suffer errors in its financial reporting. Additionally, with respect to Protiviti, other risks and uncertainties include the
fact that future success will depend on its ability to retain employees and attract clients; there can be no assurance that there will
be ongoing demand for Sarbanes-Oxley or other regulatory compliance services; failure to produce projected revenues could
adversely affect financial results; and there is the possibility of involvement in litigation relating to prior or current transactions
or activities. Because long-term contracts are not a significant part of the Company’s business, future results cannot be reliably
predicted by considering past trends or extrapolating past results. Further information regarding these and other risks and
uncertainties is contained in Item 1A. “Risk Factors.”
Critical Accounting Policies and Estimates
As described below, the Company’s most critical accounting policies and estimates are those that involve subjective
decisions or assessments.
Accounts Receivable Allowances. The Company maintains allowances for estimated losses resulting from (i) the
inability of its customers to make required payments, (ii) temporary placement sales adjustments, and (iii) permanent placement
candidates not remaining with the client through the 90-day guarantee period, commonly referred to as “fall offs”. The
Company establishes these allowances based on its review of customers’ credit profiles, historical loss statistics and current
trends. The adequacy of these allowances is reviewed each reporting period. Historically, the Company’s actual losses and
credits have been consistent with these allowances. As a percentage of gross accounts receivable, the Company’s accounts
receivable allowances totaled 4.4% and 4.7% as of December 31, 2014 and 2013, respectively. As of December 31, 2014, a
five-percentage point deviation in the Company’s accounts receivable allowances balance would have resulted in an increase or
decrease in the allowance of $1.5 million. Although future results cannot always be predicted by extrapolating past results,
management believes that it is reasonably likely that future results will be consistent with historical trends and experience.
However, if the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability
to make payments, or if unexpected events or significant future changes in trends were to occur, additional allowances may be
required.
Income Tax Assets and Liabilities. In establishing its deferred income tax assets and liabilities, the Company makes
judgments and interpretations based on the enacted tax laws and published tax guidance that are applicable to its operations.
13
13
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2014 Annual Report • Robert Half
Deferred tax assets and liabilities are measured and recorded using current enacted tax rates, which the Company expects will
apply to taxable income in the years in which those temporary differences are recovered or settled. The likelihood of a material
change in the Company’s expected realization of these assets is dependent on future taxable income, its ability to use foreign
tax credit carryforwards and carrybacks, final U.S. and foreign tax settlements, and the effectiveness of its tax planning in the
various relevant jurisdictions.
The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts.
Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including
operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be
realized. When appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may
not be realized. Valuation allowances of $29.6 million and $37.0 million were recorded as of December 31, 2014 and 2013,
respectively. The valuation allowances recorded related primarily to net operating losses in certain foreign operations. If such
losses are ultimately utilized to offset future operating income, the Company will recognize a tax benefit up to the full amount
of the related valuation reserve.
While management believes that its judgments and interpretations regarding income taxes are appropriate, significant
differences in actual experience may materially affect the future financial results of the Company.
Goodwill Impairment. The Company assesses the impairment of goodwill annually in the second quarter, or more often
claims in excess of $0.5 million, claims administration fees charged by the Company’s workers’ compensation administrator,
if events or changes in circumstances indicate that the carrying value may not be recoverable in accordance with Financial
Accounting Standards Board (“FASB”) authoritative guidance. The Company completed its annual goodwill impairment
analysis as of June 30, 2014, and determined that no adjustment to the carrying value of goodwill was required. There were no
events or changes in circumstances during the six months ended December 31, 2014 that caused the Company to perform an
interim impairment assessment.
The Company follows FASB authoritative guidance utilizing a two-step approach for determining goodwill impairment.
In the first step the Company determines the fair value of each reporting unit utilizing a present value technique derived from a
discounted cash flow methodology. For purposes of this assessment the Company’s reporting units are its lines of business. The
fair value of the reporting unit is then compared to its carrying value. If the fair value of the reporting unit exceeds the carrying
value of the net assets assigned to that unit, goodwill is not impaired and no further testing is performed. The second step under
the FASB guidance is contingent upon the results of the first step. To the extent a reporting unit’s carrying value exceeds its fair
value, an indication exists that the reporting unit’s goodwill may be impaired and the Company must perform a second more
detailed impairment assessment. The second step involves allocating the reporting unit’s fair value to its net assets in order to
determine the implied fair value of the reporting unit’s goodwill as of the assessment date. The implied fair value of the
reporting unit’s goodwill is then compared to the carrying amount of goodwill to quantify an impairment charge as of the
assessment date.
The Company’s reporting units are Accountemps, Robert Half Finance & Accounting, OfficeTeam, Robert Half
Technology, Robert Half Management Resources and Protiviti, which had goodwill balances at December 31, 2014, of
$127.0 million, $26.4 million, $0.0 million, $7.0 million, $0.0 million and $39.1 million, respectively, totaling $199.5 million.
There were no changes to the Company’s reporting units or to the allocations of goodwill by reporting unit for the year ended
December 31, 2014.
The goodwill impairment assessment is based upon a discounted cash flow analysis. The estimate of future cash flows is
based upon, among other things, a discount rate and certain assumptions about expected future operating performance. The
discount rate for all reporting units was determined by management based on estimates of risk free interest rates, beta and
market risk premiums. The discount rate used was compared to the rate published in various third party research reports, which
indicated that the rate was within a range of reasonableness. The primary assumptions related to future operating performance
include revenue growth rates and profitability levels. In addition, the impairment assessment requires that management make
certain judgments in allocating shared assets and liabilities to the balance sheets of the reporting units. Solely for purposes of
establishing inputs for the fair value calculations described above related to its annual goodwill impairment testing, the
Company made the following assumptions. The Company assumed that year-to-date trends through the date of the last
assessment would continue for all reporting units through 2014, using unique assumptions for each reporting unit. In addition,
the Company applied profitability assumptions consistent with each reporting unit’s historical trends at various revenue levels
and, for years 2016 and beyond, used a 5% growth factor. This rate is comparable to the Company’s most recent ten-year
annual compound revenue growth rate. The future cash flows used to calculate fair value go out a total of 10 years with a
terminal value calculation at the end of the 10 year period. In its most recent calculation, the Company used a 10.2% discount
14
14
14
robert_half_10k_FIN_1-54.indd 14
3/26/15 1:59 PM
rate, which is slightly lower than the 10.5% discount rate used for the Company’s test during the second quarter of 2013. This
decrease in discount rate is attributable to decreases in the risk free rate, beta and equity market risk premium.
In order to evaluate the sensitivity of the fair value calculations on the goodwill impairment test, the Company applied
hypothetical decreases to the fair values of each reporting unit. The Company determined that hypothetical decreases in fair
value of at least 70% would be required before any reporting unit would have a carrying value in excess of its fair value.
Given the current economic environment and the uncertainties regarding the impact on the Company’s business, there can
be no assurance that the Company’s estimates and assumptions made for purposes of the Company’s goodwill impairment
testing will prove to be accurate predictions of the future. If the Company’s assumptions regarding forecasted revenue or
profitability growth rates of certain reporting units are not achieved, the Company may be required to recognize goodwill
impairment charges in future periods. It is not possible at this time to determine if any such future impairment charge would
result or, if it does, whether such charge would be material.
Workers’ Compensation. Except for states which require participation in state-operated insurance funds, the Company
retains the economic burden for the first $0.5 million per occurrence in workers’ compensation claims. Workers’ compensation
includes ongoing healthcare and indemnity coverage for claims and may be paid over numerous years following the date of
injury. Claims in excess of $0.5 million are insured. Workers’ compensation expense includes the insurance premiums for
premiums paid to state-operated insurance funds, and an estimate for the Company’s liability for Incurred But Not Reported
(“IBNR”) claims and for the ongoing development of existing claims. Total workers’ compensation expense was $5.7 million,
$7.0 million and $10.9 million, representing 0.16%, 0.22% and 0.36% of applicable U.S. revenue for the years ended
December 31, 2014, 2013 and 2012, respectively.
The reserves for IBNR claims and for the ongoing development of existing claims in each reporting period include
estimates. The Company has established reserves for workers’ compensation claims using loss development rates which are
estimated using periodic third party actuarial valuations based upon historical loss statistics which include the Company’s
historical frequency and severity of workers’ compensation claims, and an estimate of future cost trends. While management
believes that its assumptions and estimates are appropriate, significant differences in actual experience or significant changes in
assumptions may materially affect the Company’s future results. Based on the Company’s results for the year ended
December 31, 2014, a five-percentage point deviation in the Company’s estimated loss development rates would have resulted
in an increase or decrease in the reserve of $0.2 million.
Stock-based Compensation. Under various stock plans, officers, employees and outside directors have received or may
receive grants of restricted stock, stock units, stock appreciation rights or options to purchase common stock.
The Company recognizes compensation expense equal to the grant-date fair value for all stock-based payment awards
that are expected to vest. This expense is recorded on a straight-line basis over the requisite service period of the entire award,
unless the awards are subject to performance conditions, in which case the Company recognizes compensation expense over the
requisite service period of each separate vesting tranche. The Company determines the grant-date fair value of its restricted
stock and stock unit awards using the fair market value of its stock on the grant date, unless the awards are subject to market
conditions, in which case the Company utilizes a binomial-lattice model (i.e., Monte Carlo simulation model). The Monte Carlo
simulation model utilizes multiple input variables to determine the stock-based compensation expense. For grants with market
conditions made in the year ended December 31, 2014, the Company utilized an historical volatility of 31.55%, a 0% dividend
yield and a risk-free interest rate of 0.79%. The historical volatility was based on the most recent 2.75-year period for the
Company and the components of the peer group. The stock price projection for the Company and the components of the peer
group assumes a 0% dividend yield. This is mathematically equivalent to reinvesting dividends in the issuing entity over the
performance period. The risk-free interest rate is equal to the yield, as of the measurement date, of the zero-coupon U.S.
Treasury bill that is commensurate with the remaining performance measurement period.
No stock appreciation rights have been granted under the Company’s existing stock plans. The Company has not granted
any options to purchase common stock since 2006.
For the years ended December 31, 2014, 2013 and 2012, compensation expense related to restricted stock and stock units
was $40.8 million, $38.9 million and $41.5 million, respectively, of which $11.7 million, $9.9 million and $11.4 million was
related to grants made in 2014, 2013 and 2012, respectively. Based on the Company’s results for the year ended December 31,
15
2014 Annual Report • Robert Half Deferred tax assets and liabilities are measured and recorded using current enacted tax rates, which the Company expects will
apply to taxable income in the years in which those temporary differences are recovered or settled. The likelihood of a material
change in the Company’s expected realization of these assets is dependent on future taxable income, its ability to use foreign
tax credit carryforwards and carrybacks, final U.S. and foreign tax settlements, and the effectiveness of its tax planning in the
various relevant jurisdictions.
The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts.
Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including
operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be
realized. When appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may
not be realized. Valuation allowances of $29.6 million and $37.0 million were recorded as of December 31, 2014 and 2013,
respectively. The valuation allowances recorded related primarily to net operating losses in certain foreign operations. If such
losses are ultimately utilized to offset future operating income, the Company will recognize a tax benefit up to the full amount
of the related valuation reserve.
While management believes that its judgments and interpretations regarding income taxes are appropriate, significant
differences in actual experience may materially affect the future financial results of the Company.
Goodwill Impairment. The Company assesses the impairment of goodwill annually in the second quarter, or more often
if events or changes in circumstances indicate that the carrying value may not be recoverable in accordance with Financial
Accounting Standards Board (“FASB”) authoritative guidance. The Company completed its annual goodwill impairment
analysis as of June 30, 2014, and determined that no adjustment to the carrying value of goodwill was required. There were no
events or changes in circumstances during the six months ended December 31, 2014 that caused the Company to perform an
interim impairment assessment.
The Company follows FASB authoritative guidance utilizing a two-step approach for determining goodwill impairment.
In the first step the Company determines the fair value of each reporting unit utilizing a present value technique derived from a
discounted cash flow methodology. For purposes of this assessment the Company’s reporting units are its lines of business. The
fair value of the reporting unit is then compared to its carrying value. If the fair value of the reporting unit exceeds the carrying
value of the net assets assigned to that unit, goodwill is not impaired and no further testing is performed. The second step under
the FASB guidance is contingent upon the results of the first step. To the extent a reporting unit’s carrying value exceeds its fair
value, an indication exists that the reporting unit’s goodwill may be impaired and the Company must perform a second more
detailed impairment assessment. The second step involves allocating the reporting unit’s fair value to its net assets in order to
determine the implied fair value of the reporting unit’s goodwill as of the assessment date. The implied fair value of the
reporting unit’s goodwill is then compared to the carrying amount of goodwill to quantify an impairment charge as of the
assessment date.
December 31, 2014.
The Company’s reporting units are Accountemps, Robert Half Finance & Accounting, OfficeTeam, Robert Half
Technology, Robert Half Management Resources and Protiviti, which had goodwill balances at December 31, 2014, of
$127.0 million, $26.4 million, $0.0 million, $7.0 million, $0.0 million and $39.1 million, respectively, totaling $199.5 million.
There were no changes to the Company’s reporting units or to the allocations of goodwill by reporting unit for the year ended
The goodwill impairment assessment is based upon a discounted cash flow analysis. The estimate of future cash flows is
based upon, among other things, a discount rate and certain assumptions about expected future operating performance. The
discount rate for all reporting units was determined by management based on estimates of risk free interest rates, beta and
market risk premiums. The discount rate used was compared to the rate published in various third party research reports, which
indicated that the rate was within a range of reasonableness. The primary assumptions related to future operating performance
include revenue growth rates and profitability levels. In addition, the impairment assessment requires that management make
certain judgments in allocating shared assets and liabilities to the balance sheets of the reporting units. Solely for purposes of
establishing inputs for the fair value calculations described above related to its annual goodwill impairment testing, the
Company made the following assumptions. The Company assumed that year-to-date trends through the date of the last
assessment would continue for all reporting units through 2014, using unique assumptions for each reporting unit. In addition,
the Company applied profitability assumptions consistent with each reporting unit’s historical trends at various revenue levels
and, for years 2016 and beyond, used a 5% growth factor. This rate is comparable to the Company’s most recent ten-year
annual compound revenue growth rate. The future cash flows used to calculate fair value go out a total of 10 years with a
terminal value calculation at the end of the 10 year period. In its most recent calculation, the Company used a 10.2% discount
14
rate, which is slightly lower than the 10.5% discount rate used for the Company’s test during the second quarter of 2013. This
decrease in discount rate is attributable to decreases in the risk free rate, beta and equity market risk premium.
In order to evaluate the sensitivity of the fair value calculations on the goodwill impairment test, the Company applied
hypothetical decreases to the fair values of each reporting unit. The Company determined that hypothetical decreases in fair
value of at least 70% would be required before any reporting unit would have a carrying value in excess of its fair value.
Given the current economic environment and the uncertainties regarding the impact on the Company’s business, there can
be no assurance that the Company’s estimates and assumptions made for purposes of the Company’s goodwill impairment
testing will prove to be accurate predictions of the future. If the Company’s assumptions regarding forecasted revenue or
profitability growth rates of certain reporting units are not achieved, the Company may be required to recognize goodwill
impairment charges in future periods. It is not possible at this time to determine if any such future impairment charge would
result or, if it does, whether such charge would be material.
Workers’ Compensation. Except for states which require participation in state-operated insurance funds, the Company
retains the economic burden for the first $0.5 million per occurrence in workers’ compensation claims. Workers’ compensation
includes ongoing healthcare and indemnity coverage for claims and may be paid over numerous years following the date of
injury. Claims in excess of $0.5 million are insured. Workers’ compensation expense includes the insurance premiums for
claims in excess of $0.5 million, claims administration fees charged by the Company’s workers’ compensation administrator,
premiums paid to state-operated insurance funds, and an estimate for the Company’s liability for Incurred But Not Reported
(“IBNR”) claims and for the ongoing development of existing claims. Total workers’ compensation expense was $5.7 million,
$7.0 million and $10.9 million, representing 0.16%, 0.22% and 0.36% of applicable U.S. revenue for the years ended
December 31, 2014, 2013 and 2012, respectively.
The reserves for IBNR claims and for the ongoing development of existing claims in each reporting period include
estimates. The Company has established reserves for workers’ compensation claims using loss development rates which are
estimated using periodic third party actuarial valuations based upon historical loss statistics which include the Company’s
historical frequency and severity of workers’ compensation claims, and an estimate of future cost trends. While management
believes that its assumptions and estimates are appropriate, significant differences in actual experience or significant changes in
assumptions may materially affect the Company’s future results. Based on the Company’s results for the year ended
December 31, 2014, a five-percentage point deviation in the Company’s estimated loss development rates would have resulted
in an increase or decrease in the reserve of $0.2 million.
Stock-based Compensation. Under various stock plans, officers, employees and outside directors have received or may
receive grants of restricted stock, stock units, stock appreciation rights or options to purchase common stock.
The Company recognizes compensation expense equal to the grant-date fair value for all stock-based payment awards
that are expected to vest. This expense is recorded on a straight-line basis over the requisite service period of the entire award,
unless the awards are subject to performance conditions, in which case the Company recognizes compensation expense over the
requisite service period of each separate vesting tranche. The Company determines the grant-date fair value of its restricted
stock and stock unit awards using the fair market value of its stock on the grant date, unless the awards are subject to market
conditions, in which case the Company utilizes a binomial-lattice model (i.e., Monte Carlo simulation model). The Monte Carlo
simulation model utilizes multiple input variables to determine the stock-based compensation expense. For grants with market
conditions made in the year ended December 31, 2014, the Company utilized an historical volatility of 31.55%, a 0% dividend
yield and a risk-free interest rate of 0.79%. The historical volatility was based on the most recent 2.75-year period for the
Company and the components of the peer group. The stock price projection for the Company and the components of the peer
group assumes a 0% dividend yield. This is mathematically equivalent to reinvesting dividends in the issuing entity over the
performance period. The risk-free interest rate is equal to the yield, as of the measurement date, of the zero-coupon U.S.
Treasury bill that is commensurate with the remaining performance measurement period.
No stock appreciation rights have been granted under the Company’s existing stock plans. The Company has not granted
any options to purchase common stock since 2006.
For the years ended December 31, 2014, 2013 and 2012, compensation expense related to restricted stock and stock units
was $40.8 million, $38.9 million and $41.5 million, respectively, of which $11.7 million, $9.9 million and $11.4 million was
related to grants made in 2014, 2013 and 2012, respectively. Based on the Company’s results for the year ended December 31,
15
15
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robert_half_10k_FIN_1-54.indd 15
3/26/15 1:59 PM
2014 Annual Report • Robert Half 2014, a one-percentage point deviation in the estimated forfeiture rates would have resulted in a $0.4 million increase or
decrease in compensation expense related to restricted stock and stock units.
Years ended December 31, 2014 and 2013
Recent Accounting Pronouncements
See Note B—“New Accounting Pronouncements” to the Company’s Consolidated Financial Statements included under
Part II—Item 8 of this report.
Results of Operations
Demand for the Company’s temporary and permanent staffing services and risk consulting and internal audit services is
largely dependent upon general economic and labor market conditions both domestically and abroad. Correspondingly, results
of operations were positively impacted by improving global economic conditions during 2014. Because of the inherent
difficulty in predicting economic trends and the absence of material long-term contracts in any of our business units, future
demand for the Company’s services cannot be forecast with certainty. The Company believes it is well positioned to benefit in
the current United States macro environment. The Company is making investments in people and infrastructure to support
business expansion, and is confident in the ability of its field and corporate leadership teams to grow the business.
The Company’s temporary and permanent staffing services business has 341 offices in 42 states, the District of Columbia
permanent placement revenues increased 14.3% for 2014 compared to 2013. In the U.S., 2014 revenues increased 17.8% on
and 18 foreign countries, while Protiviti has 57 offices in 23 states and 11 foreign countries.
Because fluctuations in foreign currency exchange rates have an impact on the Company’s results, the Company provides
selected growth percentages below on a constant-currency basis. Constant-currency percentages are calculated using as-
reported amounts which have been retranslated using foreign currency exchange rates from the prior year’s comparable period.
Non-GAAP Financial Measures
The financial results of the Company are prepared in conformity with accounting principles generally accepted in the
United States of America ("GAAP") and the rules of the SEC. To help readers understand the Company’s financial
performance, the Company supplements its GAAP financial results with revenue growth rates derived from non-GAAP revenue
amounts. Variations in the Company’s financial results include the impact of changes in foreign currency exchange rates and
billing days. The Company provides “same billing days and constant currency” revenue growth calculations to remove the
impact of these items. These calculations show the year-over-year revenue growth rates for the Company’s reportable segments
on both a reported basis and also on a same day, constant-currency basis for global, U.S. and international operations. The
Company has provided this data because management believes it better reflects the Company’s actual revenue growth rates and
aids in evaluating revenue trends over time. The Company expresses year-over-year revenue changes as calculated percentages
using the same number of billing days and constant currency exchange rates.
In order to calculate constant currency revenue growth rates, as reported amounts are retranslated using foreign currency
exchange rates from the prior year’s comparable period. Management then calculates a global, weighted-average number of
billing days for each reporting period based upon input from all countries and all lines of business. In order to remove the
fluctuations caused by comparable periods having different billing days, the Company calculates same billing day revenue
growth rates by dividing each comparative period’s reported revenues by the calculated number of billing days for that period,
to arrive at a per billing day amount. Same billing day growth rates are then calculated based upon the per billing day amounts.
The term “same billing days and constant currency” means that the impact of different billing days has been removed from the
constant currency calculation.
The non-GAAP financial measures provided herein may not provide information that is directly comparable to that
provided by other companies in the Company’s industry, as other companies may calculate such financial results differently.
The Company’s non-GAAP financial measures are not measurements of financial performance under GAAP, and should not be
considered as alternatives to actual revenue growth derived from revenue amounts presented in accordance with GAAP. The
Company does not consider these non-GAAP financial measures to be a substitute for, or superior to, the information provided
by GAAP financial results. A reconciliation of the same-day, constant-currency revenue growth rates to the reported revenue
growth rates is provided herein.
16
16
16
robert_half_10k_FIN_1-54.indd 16
3/26/15 1:59 PM
Revenues. The Company’s revenues were $4.70 billion for the year ended December 31, 2014, increasing by 10.6%
compared to $4.25 billion for the year ended December 31, 2013. Revenues from foreign operations represented 23% and 24%
of total revenues for the years ended December 31, 2014 and 2013, respectively. The Company analyzes its revenues for three
reportable segments: temporary and consultant staffing, permanent placement staffing and risk consulting and internal audit
services. In 2014, revenues for all three of the Company’s reportable segments were up compared to 2013. Results were
strongest domestically with broad-based revenue expansion across the Company’s staffing and consulting operations.
Contributing factors for each reportable segment are discussed below in further detail.
Temporary and consultant staffing services revenues were $3.68 billion for the year ended December 31, 2014, increasing
by 9.1% compared to revenues of $3.37 billion for the year ended December 31, 2013. On a same-day, constant-currency basis,
temporary and consultant staffing services revenues increased 9.5% for 2014, compared to 2013. In the U.S., 2014 revenues
increased 10.6% on both an as reported and a same-day basis, compared to 2013. For the Company’s international operations,
2014 revenues increased 4.2% and on a same-day, constant-currency basis increased 5.9%, compared to 2013.
Permanent placement staffing revenues were $395 million for the year ended December 31, 2014, increasing by 13.5%
compared to revenues of $348 million for the year ended December 31, 2013. On a same-day, constant-currency basis,
both an as reported and same-day basis, compared to 2013. For the Company’s international operations, 2014 revenues
increased 6.3%, and on a same-day, constant-currency basis increased 8.5%, compared to 2013. Historically, demand for
permanent placement services is even more sensitive to economic and labor market conditions than demand for temporary and
consulting staffing services and this is expected to continue.
Risk consulting and internal audit services revenues were $624 million for the year ended December 31, 2014, increasing
by 18.1% compared to revenues of $528 million for the year ended December 31, 2013. On a same-day, constant-currency
basis, risk consulting and internal audit services revenues increased 17.5% for 2014 compared to 2013. In the U.S., 2014
revenues increased 21.9%, or 21.0% on a same-day basis, compared to 2013. For the Company’s international operations, 2014
revenues increased 3.8% and on a same-day, constant-currency basis increased 4.1%, compared to 2013.
A reconciliation of the non-GAAP year-over-year revenue growth rates to the as reported year-over-year revenue
growth rates for the year ended December 31, 2014, is presented in the following table:
Global
United States
International
Temporary and consultant staffing
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Same Billing Days and Constant Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1%
0.0%
0.4%
9.5%
Permanent placement staffing
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.5%
Billing Days Impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.0%
0.8%
Same Billing Days and Constant Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14.3%
Risk consulting and internal audit services
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Same Billing Days and Constant Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18.1%
-0.8%
0.2%
17.5%
10.6%
0.0%
—
10.6%
17.8%
0.0%
—
17.8%
21.9%
-0.9%
—
21.0%
4.2%
0.0%
1.7%
5.9%
6.3%
0.0%
2.2%
8.5%
3.8%
-0.8%
1.1%
4.1%
Gross Margin. The Company’s gross margin dollars were $1.92 billion for the year ended December 31, 2014, up
11.6% from $1.72 billion for the year ended December 31, 2013. For 2014 compared to 2013, gross margin dollars for all three
of the Company’s reportable segments increased. Gross margin dollars as a percentage of revenues increased for both the
17
2014 Annual Report • Robert Half
2014, a one-percentage point deviation in the estimated forfeiture rates would have resulted in a $0.4 million increase or
Years ended December 31, 2014 and 2013
decrease in compensation expense related to restricted stock and stock units.
Recent Accounting Pronouncements
Part II—Item 8 of this report.
Results of Operations
See Note B—“New Accounting Pronouncements” to the Company’s Consolidated Financial Statements included under
Demand for the Company’s temporary and permanent staffing services and risk consulting and internal audit services is
largely dependent upon general economic and labor market conditions both domestically and abroad. Correspondingly, results
of operations were positively impacted by improving global economic conditions during 2014. Because of the inherent
difficulty in predicting economic trends and the absence of material long-term contracts in any of our business units, future
demand for the Company’s services cannot be forecast with certainty. The Company believes it is well positioned to benefit in
the current United States macro environment. The Company is making investments in people and infrastructure to support
business expansion, and is confident in the ability of its field and corporate leadership teams to grow the business.
The Company’s temporary and permanent staffing services business has 341 offices in 42 states, the District of Columbia
and 18 foreign countries, while Protiviti has 57 offices in 23 states and 11 foreign countries.
Because fluctuations in foreign currency exchange rates have an impact on the Company’s results, the Company provides
selected growth percentages below on a constant-currency basis. Constant-currency percentages are calculated using as-
reported amounts which have been retranslated using foreign currency exchange rates from the prior year’s comparable period.
Non-GAAP Financial Measures
The financial results of the Company are prepared in conformity with accounting principles generally accepted in the
United States of America ("GAAP") and the rules of the SEC. To help readers understand the Company’s financial
performance, the Company supplements its GAAP financial results with revenue growth rates derived from non-GAAP revenue
amounts. Variations in the Company’s financial results include the impact of changes in foreign currency exchange rates and
billing days. The Company provides “same billing days and constant currency” revenue growth calculations to remove the
impact of these items. These calculations show the year-over-year revenue growth rates for the Company’s reportable segments
on both a reported basis and also on a same day, constant-currency basis for global, U.S. and international operations. The
Company has provided this data because management believes it better reflects the Company’s actual revenue growth rates and
aids in evaluating revenue trends over time. The Company expresses year-over-year revenue changes as calculated percentages
using the same number of billing days and constant currency exchange rates.
In order to calculate constant currency revenue growth rates, as reported amounts are retranslated using foreign currency
exchange rates from the prior year’s comparable period. Management then calculates a global, weighted-average number of
billing days for each reporting period based upon input from all countries and all lines of business. In order to remove the
fluctuations caused by comparable periods having different billing days, the Company calculates same billing day revenue
growth rates by dividing each comparative period’s reported revenues by the calculated number of billing days for that period,
to arrive at a per billing day amount. Same billing day growth rates are then calculated based upon the per billing day amounts.
The term “same billing days and constant currency” means that the impact of different billing days has been removed from the
constant currency calculation.
The non-GAAP financial measures provided herein may not provide information that is directly comparable to that
provided by other companies in the Company’s industry, as other companies may calculate such financial results differently.
The Company’s non-GAAP financial measures are not measurements of financial performance under GAAP, and should not be
considered as alternatives to actual revenue growth derived from revenue amounts presented in accordance with GAAP. The
Company does not consider these non-GAAP financial measures to be a substitute for, or superior to, the information provided
by GAAP financial results. A reconciliation of the same-day, constant-currency revenue growth rates to the reported revenue
growth rates is provided herein.
16
Revenues. The Company’s revenues were $4.70 billion for the year ended December 31, 2014, increasing by 10.6%
compared to $4.25 billion for the year ended December 31, 2013. Revenues from foreign operations represented 23% and 24%
of total revenues for the years ended December 31, 2014 and 2013, respectively. The Company analyzes its revenues for three
reportable segments: temporary and consultant staffing, permanent placement staffing and risk consulting and internal audit
services. In 2014, revenues for all three of the Company’s reportable segments were up compared to 2013. Results were
strongest domestically with broad-based revenue expansion across the Company’s staffing and consulting operations.
Contributing factors for each reportable segment are discussed below in further detail.
Temporary and consultant staffing services revenues were $3.68 billion for the year ended December 31, 2014, increasing
by 9.1% compared to revenues of $3.37 billion for the year ended December 31, 2013. On a same-day, constant-currency basis,
temporary and consultant staffing services revenues increased 9.5% for 2014, compared to 2013. In the U.S., 2014 revenues
increased 10.6% on both an as reported and a same-day basis, compared to 2013. For the Company’s international operations,
2014 revenues increased 4.2% and on a same-day, constant-currency basis increased 5.9%, compared to 2013.
Permanent placement staffing revenues were $395 million for the year ended December 31, 2014, increasing by 13.5%
compared to revenues of $348 million for the year ended December 31, 2013. On a same-day, constant-currency basis,
permanent placement revenues increased 14.3% for 2014 compared to 2013. In the U.S., 2014 revenues increased 17.8% on
both an as reported and same-day basis, compared to 2013. For the Company’s international operations, 2014 revenues
increased 6.3%, and on a same-day, constant-currency basis increased 8.5%, compared to 2013. Historically, demand for
permanent placement services is even more sensitive to economic and labor market conditions than demand for temporary and
consulting staffing services and this is expected to continue.
Risk consulting and internal audit services revenues were $624 million for the year ended December 31, 2014, increasing
by 18.1% compared to revenues of $528 million for the year ended December 31, 2013. On a same-day, constant-currency
basis, risk consulting and internal audit services revenues increased 17.5% for 2014 compared to 2013. In the U.S., 2014
revenues increased 21.9%, or 21.0% on a same-day basis, compared to 2013. For the Company’s international operations, 2014
revenues increased 3.8% and on a same-day, constant-currency basis increased 4.1%, compared to 2013.
A reconciliation of the non-GAAP year-over-year revenue growth rates to the as reported year-over-year revenue
growth rates for the year ended December 31, 2014, is presented in the following table:
Global
United States
International
Temporary and consultant staffing
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Same Billing Days and Constant Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Same Billing Days and Constant Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Same Billing Days and Constant Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1%
0.0%
0.4%
9.5%
13.5%
0.0%
0.8%
14.3%
18.1%
-0.8%
0.2%
17.5%
10.6%
0.0%
—
10.6%
17.8%
0.0%
—
17.8%
21.9%
-0.9%
—
21.0%
4.2%
0.0%
1.7%
5.9%
6.3%
0.0%
2.2%
8.5%
3.8%
-0.8%
1.1%
4.1%
Gross Margin. The Company’s gross margin dollars were $1.92 billion for the year ended December 31, 2014, up
11.6% from $1.72 billion for the year ended December 31, 2013. For 2014 compared to 2013, gross margin dollars for all three
of the Company’s reportable segments increased. Gross margin dollars as a percentage of revenues increased for both the
17
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2014 Annual Report • Robert Half
staffing division, operating income was $78 million, or 19.9% of applicable revenues, up 44.0% from operating income of $54
million, or 15.6% of applicable revenues, in 2013. For the Company’s risk consulting and internal audit services division,
operating income was $60 million, or 9.7% of applicable revenues, up 41.2% from operating income of $43 million, or 8.1% of
applicable revenues, in 2013.
Provision for income taxes. The provision for income taxes was 38.5% and 36.6% for the years ended December 31,
2014 and 2013, respectively. The 2014 increase is primarily due to fewer available foreign tax benefits and a decrease in federal
tax credits.
Years ended December 31, 2013 and 2012
Revenues. The Company’s revenues were $4.25 billion for the year ended December 31, 2013, increasing by 3.3%
compared to $4.11 billion for the year ended December 31, 2012. Revenues from foreign operations represented 24% and 26%
of total revenues for the years ended December 31, 2013 and 2012, respectively. The Company analyzes its revenues for three
reportable segments: temporary and consultant staffing, permanent placement staffing and risk consulting and internal audit
services. In 2013, revenues for all three of the Company’s reportable segments were up compared to 2012. Results were
strongest domestically, with growth rates outside the United States impacted by weaker economies in several countries, most
notably within Europe. Contributing factors for each reportable segment are discussed below in further detail.
Temporary and consultant staffing services revenues were $3.37 billion for the year ended December 31, 2013, increasing
by 1.4% compared to revenues of $3.32 billion for the year ended December 31, 2012. On a same-day, constant-currency basis,
temporary and consultant staffing services revenues increased 1.6% for 2013 compared to 2012. In the U.S., 2013 revenues
increased 4.1%, or 4.3% on a same-day basis, compared to 2012. For the Company’s international operations, 2013 revenues
decreased 6.7% and on a same-day, constant-currency basis decreased 6.5%, compared to 2012.
Permanent placement staffing revenues were $348 million for the year ended December 31, 2013, increasing by 4.0%
compared to revenues of $334 million for the year ended December 31, 2012. On a same-day, constant-currency basis,
permanent placement revenues increased 5.1% for 2013 compared to 2012. In the U.S., 2013 revenues increased 12.5%, or
12.7% on a same-day basis, compared to 2012. For the Company’s international operations, 2013 revenues decreased 7.5%, and
on a same-day, constant-currency basis decreased 5.3%, compared to 2012. Historically, demand for permanent placement
services is even more sensitive to economic and labor market conditions than demand for temporary and consulting staffing
services and this is expected to continue.
Risk consulting and internal audit services revenues were $528 million for the year ended December 31, 2013 increasing
by 16.7% compared to revenues of $453 million for the year ended December 31, 2012. On a same-day, constant-currency
basis, risk consulting and internal audit services revenues increased 18.0% for 2013 compared to 2012. Contributing to the
increase was higher demand in the U.S. In the U.S., 2013 revenues increased 20.5%, or 21.1% on a same-day basis, compared
to 2012. For the Company’s international operations, 2013 revenues increased 4.2% and on a same-day, constant-currency
basis increased 8.1%, compared to 2012.
Company’s temporary and consultant staffing services segment and the risk consulting and internal audit services segment on a
year-over-year basis. Contributing factors for each reportable segment are discussed below in further detail.
Gross margin dollars from the Company’s temporary and consultant staffing services represent revenues less direct costs
of services, which consist of payroll, payroll taxes and benefit costs for temporary employees, and reimbursable expenses.
Gross margin dollars for the Company’s temporary and consultant staffing services division were $1.35 billion for the year
ended December 31, 2014 , up 10.2% from $1.22 billion for the year ended December 31, 2013. As a percentage of revenues,
gross margin dollars for temporary and consultant staffing services were 36.6% in 2014, up from 36.2% in 2013. This year-
over-year improvement in gross margin percentage was primarily attributable to higher conversion revenues and lower fringe
costs in 2014 compared to 2013. Conversion revenues are earned when a temporary position converts to a permanent position.
As there are no direct costs related to conversion revenues, the gross margin percentage is favorably impacted as the mix of
conversion revenues increases. Fringe costs are primarily composed of payroll taxes and benefit costs for temporary
employees.
Gross margin dollars from permanent placement staffing services represent revenues less reimbursable expenses. Gross
margin dollars for the Company’s permanent placement staffing division were $394 million for the year ended December 31,
2014, up 13.5% from $348 million for the year ended December 31, 2013. Because reimbursable expenses for permanent
placement staffing services are de minimis, the increase in gross margin dollars is substantially explained by the increase in
revenues previously discussed.
Gross margin dollars for risk consulting and internal audit services represent revenues less direct costs of services, which
consist primarily of professional staff payroll, payroll taxes, benefit costs and reimbursable expenses. Gross margin dollars for
the Company’s risk consulting and internal audit division were $183 million for the year ended December 31, 2014, up 18.5%
from $155 million for the year ended December 31, 2013. As a percentage of revenues, gross margin dollars for risk consulting
and internal audit services were 29.4% in 2014, up from 29.3% in 2013.
Selling, General and Administrative Expenses. The Company’s selling, general and administrative expenses consist
primarily of staff compensation, advertising, depreciation and occupancy costs. The Company’s selling, general and
administrative expenses were $1.43 billion for the year ended December 31, 2014, up 7.6% from $1.32 billion for the year
ended December 31, 2013. As a percentage of revenues, the Company’s selling, general and administrative expenses were
30.4% for 2014, down from 31.2% for 2013. In 2014, selling, general and administrative expenses increased for all three of the
Company’s reportable segments compared to 2013. As percentage of revenue, selling, general and administrative expenses for
all three of the Company’s reportable segments decreased in 2014 compared to 2013. Contributing factors for each reportable
segment are discussed below in further detail.
Selling, general and administrative expenses for the Company’s temporary and consultant staffing services division were
$987 million for the year ended December 31, 2014, up 7.3% from $920 million for the year ended December 31, 2013. As a
percentage of revenues, selling, general and administrative expenses for temporary and consultant staffing services were 26.8%
in 2014, down from 27.3% in 2013. For 2014 compared to 2013, the decrease in selling, general and administrative expenses as
a percentage of revenue is primarily due to an improvement in leverage resulting from higher revenue in 2014.
Selling, general and administrative expenses for the Company’s permanent placement staffing division were $316 million
for the year ended December 31, 2014, up 7.8% from $293 million for the year ended December 31, 2013. As a percentage of
revenues, selling, general and administrative expenses for permanent placement staffing services were 80.1% in 2014, down
from 84.3% in 2013. For 2014 compared to 2013, decreases in field compensation, administrative compensation and fixed
overhead drove the overall decrease as a percentage of revenues.
Selling, general and administrative expenses for the Company’s risk consulting and internal audit services division were
$123 million for the year ended December 31, 2014, up 9.8% from $112 million for the year ended December 31, 2013. As a
percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services were 19.7%
in 2014, down from 21.2% in 2013. For 2014 compared to 2013, improved leverage in general and administrative expenses, as
a result of higher revenue, drove the overall decrease as a percentage of revenues.
Operating Income. The Company’s total operating income was $497 million, or 10.6% of revenues, for the year ended
December 31, 2014, up 24.8% from $398 million, or 9.4% of revenues, for the year ended December 31, 2013. For the
Company’s temporary and consultant staffing services division, operating income was $359 million, or 9.8% of applicable
revenues, up 19.0% from $301 million, or 8.9% of applicable revenues, in 2013. For the Company’s permanent placement
18
18
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2014 Annual Report • Robert Half Company’s temporary and consultant staffing services segment and the risk consulting and internal audit services segment on a
year-over-year basis. Contributing factors for each reportable segment are discussed below in further detail.
Gross margin dollars from the Company’s temporary and consultant staffing services represent revenues less direct costs
of services, which consist of payroll, payroll taxes and benefit costs for temporary employees, and reimbursable expenses.
Gross margin dollars for the Company’s temporary and consultant staffing services division were $1.35 billion for the year
ended December 31, 2014 , up 10.2% from $1.22 billion for the year ended December 31, 2013. As a percentage of revenues,
gross margin dollars for temporary and consultant staffing services were 36.6% in 2014, up from 36.2% in 2013. This year-
over-year improvement in gross margin percentage was primarily attributable to higher conversion revenues and lower fringe
costs in 2014 compared to 2013. Conversion revenues are earned when a temporary position converts to a permanent position.
As there are no direct costs related to conversion revenues, the gross margin percentage is favorably impacted as the mix of
conversion revenues increases. Fringe costs are primarily composed of payroll taxes and benefit costs for temporary
employees.
Gross margin dollars from permanent placement staffing services represent revenues less reimbursable expenses. Gross
margin dollars for the Company’s permanent placement staffing division were $394 million for the year ended December 31,
2014, up 13.5% from $348 million for the year ended December 31, 2013. Because reimbursable expenses for permanent
placement staffing services are de minimis, the increase in gross margin dollars is substantially explained by the increase in
revenues previously discussed.
Gross margin dollars for risk consulting and internal audit services represent revenues less direct costs of services, which
consist primarily of professional staff payroll, payroll taxes, benefit costs and reimbursable expenses. Gross margin dollars for
the Company’s risk consulting and internal audit division were $183 million for the year ended December 31, 2014, up 18.5%
from $155 million for the year ended December 31, 2013. As a percentage of revenues, gross margin dollars for risk consulting
and internal audit services were 29.4% in 2014, up from 29.3% in 2013.
Selling, General and Administrative Expenses. The Company’s selling, general and administrative expenses consist
primarily of staff compensation, advertising, depreciation and occupancy costs. The Company’s selling, general and
administrative expenses were $1.43 billion for the year ended December 31, 2014, up 7.6% from $1.32 billion for the year
ended December 31, 2013. As a percentage of revenues, the Company’s selling, general and administrative expenses were
30.4% for 2014, down from 31.2% for 2013. In 2014, selling, general and administrative expenses increased for all three of the
Company’s reportable segments compared to 2013. As percentage of revenue, selling, general and administrative expenses for
all three of the Company’s reportable segments decreased in 2014 compared to 2013. Contributing factors for each reportable
segment are discussed below in further detail.
Selling, general and administrative expenses for the Company’s temporary and consultant staffing services division were
$987 million for the year ended December 31, 2014, up 7.3% from $920 million for the year ended December 31, 2013. As a
percentage of revenues, selling, general and administrative expenses for temporary and consultant staffing services were 26.8%
in 2014, down from 27.3% in 2013. For 2014 compared to 2013, the decrease in selling, general and administrative expenses as
a percentage of revenue is primarily due to an improvement in leverage resulting from higher revenue in 2014 .
Selling, general and administrative expenses for the Company’s permanent placement staffing division were $316 million
for the year ended December 31, 2014, up 7.8% from $293 million for the year ended December 31, 2013. As a percentage of
revenues, selling, general and administrative expenses for permanent placement staffing services were 80.1% in 2014, down
from 84.3% in 2013. For 2014 compared to 2013, decreases in field compensation, administrative compensation and fixed
overhead drove the overall decrease as a percentage of revenues.
Selling, general and administrative expenses for the Company’s risk consulting and internal audit services division were
$123 million for the year ended December 31, 2014, up 9.8% from $112 million for the year ended December 31, 2013. As a
percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services were 19.7%
in 2014, down from 21.2% in 2013. For 2014 compared to 2013, improved leverage in general and administrative expenses, as
a result of higher revenue, drove the overall decrease as a percentage of revenues.
Operating Income. The Company’s total operating income was $497 million, or 10.6% of revenues, for the year ended
December 31, 2014, up 24.8% from $398 million, or 9.4% of revenues, for the year ended December 31, 2013. For the
Company’s temporary and consultant staffing services division, operating income was $359 million, or 9.8% of applicable
revenues, up 19.0% from $301 million, or 8.9% of applicable revenues, in 2013. For the Company’s permanent placement
18
staffing division, operating income was $78 million, or 19.9% of applicable revenues, up 44.0% from operating income of $54
million, or 15.6% of applicable revenues, in 2013. For the Company’s risk consulting and internal audit services division,
operating income was $60 million, or 9.7% of applicable revenues, up 41.2% from operating income of $43 million, or 8.1% of
applicable revenues, in 2013.
Provision for income taxes. The provision for income taxes was 38.5% and 36.6% for the years ended December 31,
2014 and 2013, respectively. The 2014 increase is primarily due to fewer available foreign tax benefits and a decrease in federal
tax credits.
Years ended December 31, 2013 and 2012
Revenues. The Company’s revenues were $4.25 billion for the year ended December 31, 2013, increasing by 3.3%
compared to $4.11 billion for the year ended December 31, 2012. Revenues from foreign operations represented 24% and 26%
of total revenues for the years ended December 31, 2013 and 2012, respectively. The Company analyzes its revenues for three
reportable segments: temporary and consultant staffing, permanent placement staffing and risk consulting and internal audit
services. In 2013, revenues for all three of the Company’s reportable segments were up compared to 2012. Results were
strongest domestically, with growth rates outside the United States impacted by weaker economies in several countries, most
notably within Europe. Contributing factors for each reportable segment are discussed below in further detail.
Temporary and consultant staffing services revenues were $3.37 billion for the year ended December 31, 2013, increasing
by 1.4% compared to revenues of $3.32 billion for the year ended December 31, 2012. On a same-day, constant-currency basis,
temporary and consultant staffing services revenues increased 1.6% for 2013 compared to 2012. In the U.S., 2013 revenues
increased 4.1%, or 4.3% on a same-day basis, compared to 2012. For the Company’s international operations, 2013 revenues
decreased 6.7% and on a same-day, constant-currency basis decreased 6.5%, compared to 2012.
Permanent placement staffing revenues were $348 million for the year ended December 31, 2013, increasing by 4.0%
compared to revenues of $334 million for the year ended December 31, 2012. On a same-day, constant-currency basis,
permanent placement revenues increased 5.1% for 2013 compared to 2012. In the U.S., 2013 revenues increased 12.5%, or
12.7% on a same-day basis, compared to 2012. For the Company’s international operations, 2013 revenues decreased 7.5%, and
on a same-day, constant-currency basis decreased 5.3%, compared to 2012. Historically, demand for permanent placement
services is even more sensitive to economic and labor market conditions than demand for temporary and consulting staffing
services and this is expected to continue.
Risk consulting and internal audit services revenues were $528 million for the year ended December 31, 2013 increasing
by 16.7% compared to revenues of $453 million for the year ended December 31, 2012. On a same-day, constant-currency
basis, risk consulting and internal audit services revenues increased 18.0% for 2013 compared to 2012. Contributing to the
increase was higher demand in the U.S. In the U.S., 2013 revenues increased 20.5%, or 21.1% on a same-day basis, compared
to 2012. For the Company’s international operations, 2013 revenues increased 4.2% and on a same-day, constant-currency
basis increased 8.1%, compared to 2012.
19
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2014 Annual Report • Robert Half A reconciliation of the non-GAAP year-over-year revenue growth rates to the as reported year-over-year revenue growth
of revenues decreased for the Company’s temporary and consultant and risk consulting and internal audit services segments and
rates for the year ended December 31, 2013, is presented in the following table:
increased for the Company’s permanent placement staffing services segment in 2013 compared to 2012. Contributing factors
Global
United States
International
Temporary and consultant staffing
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Same Billing Days and Constant Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Same Billing Days and Constant Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.4%
0.2%
0.0%
1.6%
4.0%
0.2%
0.9%
5.1%
Risk consulting and internal audit services
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Same Billing Days and Constant Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.7%
0.5%
0.8%
18.0%
4.1%
0.2%
—
4.3%
12.5%
0.2%
—
12.7%
20.5%
0.6%
—
21.1%
-6.7%
0.2%
0.0%
-6.5%
-7.5%
0.2%
2.0%
-5.3%
4.2%
0.5%
3.4%
8.1%
Gross Margin. The Company’s gross margin dollars were $1.72 billion for the year ended December 31, 2013, up 4.5%
from $1.65 billion for the year ended December 31, 2012. For 2013 compared to 2012, gross margin dollars for all three of the
Company’s reportable segments increased. Gross margin dollars as a percentage of revenues increased for both the Company’s
temporary and consultant staffing services segment and the risk consulting and internal audit services segment on a year-over-
year basis. Contributing factors for each reportable segment are discussed below in further detail.
Gross margin dollars from the Company’s temporary and consultant staffing services represent revenues less direct costs
of services, which consist of payroll, payroll taxes and benefit costs for temporary employees, and reimbursable expenses.
Gross margin dollars for the Company’s temporary and consultant staffing services division were $1.22 billion for the year
ended December 31, 2013, up 1.9% from $1.20 billion for the year ended December 31, 2012. As a percentage of revenues,
gross margin dollars for temporary and consultant staffing services were 36.2% in 2013, up from 36.0% in 2012.
Gross margin dollars from permanent placement staffing services represent revenues less reimbursable expenses. Gross
margin dollars for the Company’s permanent placement staffing division were $348 million for the year ended December 31,
2013, up 4.1% from $334 million for the year ended December 31, 2012. Because reimbursable expenses for permanent
placement staffing services are de minimis, the increase in gross margin dollars is substantially explained by the increase in
revenues previously discussed.
Gross margin dollars for risk consulting and internal audit services represent revenues less direct costs of services, which
consist primarily of professional staff payroll, payroll taxes, benefit costs and reimbursable expenses. Gross margin dollars for
the Company’s risk consulting and internal audit division were $155 million for the year ended December 31, 2013, up 32.0%
from $117 million for the year ended December 31, 2012. As a percentage of revenues, gross margin dollars for risk consulting
and internal audit services were 29.3% in 2013, up from 25.9% in 2012. The increase in 2013 gross margin percentage was
primarily the result of higher staff utilization rates. Utilization is the relationship of the time spent on client engagements to the
total time available for the Company's risk consulting and internal audit services staff.
Selling, General and Administrative Expenses. The Company’s selling, general and administrative expenses consist
primarily of staff compensation, advertising, depreciation and occupancy costs. The Company’s selling, general and
administrative expenses were $1.32 billion for the year ended December 31, 2013, up 1.5% from $1.31 billion for the year
ended December 31, 2012. As a percentage of revenues, the Company’s selling, general and administrative expenses were
31.2% for 2013, down from 31.8% for 2012. For 2013 compared to 2012, selling, general and administrative expenses
decreased for the Company’s temporary and consultant segment and increased for the Company's permanent placement staffing
services and risk consulting and internal audit services segments. Selling, general and administrative expenses as a percentage
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for each reportable segment are discussed below in further detail.
Selling, general and administrative expenses for the Company’s temporary and consultant staffing services division were
$920 million for the year ended December 31, 2013, down 0.2% from $921 million for the year ended December 31, 2012. As a
percentage of revenues, selling, general and administrative expenses for temporary and consultant staffing services were 27.3%
in 2013, down from 27.7% in 2012. For 2013 compared to 2012, the decrease in selling, general and administrative expenses as
a percentage of revenue is primarily due to a $19 million, or 0.6% of revenues, charge in 2012 related to a litigation settlement
disclosed in the Company’s July 5, 2012, Form 8-K.
Selling, general and administrative expenses for the Company’s permanent placement staffing division were $293 million
for the year ended December 31, 2013, up 5.4% from $278 million for the year ended December 31, 2012. As a percentage of
revenues, selling, general and administrative expenses for permanent placement staffing services were 84.3% in 2013, up from
83.3% in 2012. For 2013 compared to 2012, increases in field compensation and variable overhead, partially offset by decreases
in advertising expenses and fixed overhead, drove the overall increase as a percentage of revenues.
Selling, general and administrative expenses for the Company’s risk consulting and internal audit services division were
$112 million for the year ended December 31, 2013, up 5.3% from $106 million for the year ended December 31, 2012. As a
percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services were 21.2%
in 2013, down from 23.5% in 2012. For 2013 compared to 2012, improved leverage in general and administrative expenses, as
a result of higher revenue, drove the overall decrease as a percentage of revenues.
Operating Income. The Company’s total operating income was $398 million, or 9.4% of revenues, for the year ended
December 31, 2013, up 16.0% from $343 million, or 8.4% of revenues, for the year ended December 31, 2012. For the
Company’s temporary and consultant staffing services division, operating income was $301 million, or 8.9% of applicable
revenues, up 8.8% from $277 million, or 8.3% of applicable revenues, in 2012. For the Company’s permanent placement
staffing division, operating income was $54 million, or 15.6% of applicable revenues, down 2.4% from operating income of
$55 million, or 16.7% of applicable revenues, in 2012. For the Company’s risk consulting and internal audit services division,
operating income was $43 million, or 8.1% of applicable revenues, up 292.7% from operating income of $11 million, or 2.4%
Provision for income taxes. The provision for income taxes was 36.6% and 39.0% for the years ended December 31,
2013 and 2012, respectively. The 2013 decrease is primarily due to foreign restructuring, improving foreign results, and
The change in the Company’s liquidity during the years ended December 31, 2014, 2013 and 2012, is primarily the net
effect of funds generated by operations and the funds used for capital expenditures, repurchases of common stock and payment
Cash and cash equivalents were $287 million, $276 million and $288 million at December 31, 2014, 2013 and 2012,
respectively. Operating activities provided $341 million during the year ended December 31, 2014, offset by $89 million and
$230 million of net cash used in investing activities and financing activities, respectively. Operating activities provided $309
million during the year ended December 31, 2013, partially offset by $98 million and $220 million of net cash used in investing
activities and financing activities, respectively. Operating activities provided $289 million during the year ended December 31,
2012, offset by $73 million and $210 million of net cash used in investing activities and financing activities, respectively.
Operating activities—Net cash provided by operating activities for the year ended December 31, 2014, was composed of
net income of $306 million adjusted for non-cash items of $90 million, offset by net cash used in changes in working capital of
$55 million. Net cash provided by operating activities for the year ended December 31, 2013, was composed of net income of
$252 million adjusted for non-cash items of $74 million, offset by net cash used in changes in working capital of $17 million.
Net cash provided by operating activities for the year ended December 31, 2012, was composed of net income of $210 million
adjusted for non-cash items of $74 million, and net cash provided by changes in working capital of $5 million.
Investing activities—Cash used in investing activities for the year ended December 31, 2014, was $89 million. This was
primarily composed of capital expenditures of $63 million and deposits to trusts for employee deferred compensation plans of
21
of applicable revenues, in 2012.
increased federal tax credits.
Liquidity and Capital Resources
of dividends.
2014 Annual Report • Robert Half A reconciliation of the non-GAAP year-over-year revenue growth rates to the as reported year-over-year revenue growth
rates for the year ended December 31, 2013, is presented in the following table:
Global
United States
International
Temporary and consultant staffing
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Same Billing Days and Constant Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Same Billing Days and Constant Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.4%
0.2%
0.0%
1.6%
4.0%
0.2%
0.9%
5.1%
Risk consulting and internal audit services
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.7%
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.5%
0.8%
Same Billing Days and Constant Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18.0%
4.1%
0.2%
—
4.3%
12.5%
0.2%
—
12.7%
20.5%
0.6%
—
21.1%
-6.7%
0.2%
0.0%
-6.5%
-7.5%
0.2%
2.0%
-5.3%
4.2%
0.5%
3.4%
8.1%
Gross Margin. The Company’s gross margin dollars were $1.72 billion for the year ended December 31, 2013, up 4.5%
from $1.65 billion for the year ended December 31, 2012. For 2013 compared to 2012, gross margin dollars for all three of the
Company’s reportable segments increased. Gross margin dollars as a percentage of revenues increased for both the Company’s
temporary and consultant staffing services segment and the risk consulting and internal audit services segment on a year-over-
year basis. Contributing factors for each reportable segment are discussed below in further detail.
Gross margin dollars from the Company’s temporary and consultant staffing services represent revenues less direct costs
of services, which consist of payroll, payroll taxes and benefit costs for temporary employees, and reimbursable expenses.
Gross margin dollars for the Company’s temporary and consultant staffing services division were $1.22 billion for the year
ended December 31, 2013, up 1.9% from $1.20 billion for the year ended December 31, 2012. As a percentage of revenues,
gross margin dollars for temporary and consultant staffing services were 36.2% in 2013, up from 36.0% in 2012.
Gross margin dollars from permanent placement staffing services represent revenues less reimbursable expenses. Gross
margin dollars for the Company’s permanent placement staffing division were $348 million for the year ended December 31,
2013, up 4.1% from $334 million for the year ended December 31, 2012. Because reimbursable expenses for permanent
placement staffing services are de minimis, the increase in gross margin dollars is substantially explained by the increase in
revenues previously discussed.
Gross margin dollars for risk consulting and internal audit services represent revenues less direct costs of services, which
consist primarily of professional staff payroll, payroll taxes, benefit costs and reimbursable expenses. Gross margin dollars for
the Company’s risk consulting and internal audit division were $155 million for the year ended December 31, 2013, up 32.0%
from $117 million for the year ended December 31, 2012. As a percentage of revenues, gross margin dollars for risk consulting
and internal audit services were 29.3% in 2013, up from 25.9% in 2012. The increase in 2013 gross margin percentage was
primarily the result of higher staff utilization rates. Utilization is the relationship of the time spent on client engagements to the
total time available for the Company's risk consulting and internal audit services staff.
Selling, General and Administrative Expenses. The Company’s selling, general and administrative expenses consist
primarily of staff compensation, advertising, depreciation and occupancy costs. The Company’s selling, general and
administrative expenses were $1.32 billion for the year ended December 31, 2013, up 1.5% from $1.31 billion for the year
ended December 31, 2012. As a percentage of revenues, the Company’s selling, general and administrative expenses were
31.2% for 2013, down from 31.8% for 2012. For 2013 compared to 2012, selling, general and administrative expenses
decreased for the Company’s temporary and consultant segment and increased for the Company's permanent placement staffing
services and risk consulting and internal audit services segments. Selling, general and administrative expenses as a percentage
20
of revenues decreased for the Company’s temporary and consultant and risk consulting and internal audit services segments and
increased for the Company’s permanent placement staffing services segment in 2013 compared to 2012. Contributing factors
for each reportable segment are discussed below in further detail.
Selling, general and administrative expenses for the Company’s temporary and consultant staffing services division were
$920 million for the year ended December 31, 2013, down 0.2% from $921 million for the year ended December 31, 2012. As a
percentage of revenues, selling, general and administrative expenses for temporary and consultant staffing services were 27.3%
in 2013, down from 27.7% in 2012. For 2013 compared to 2012, the decrease in selling, general and administrative expenses as
a percentage of revenue is primarily due to a $19 million, or 0.6% of revenues, charge in 2012 related to a litigation settlement
disclosed in the Company’s July 5, 2012, Form 8-K.
Selling, general and administrative expenses for the Company’s permanent placement staffing division were $293 million
for the year ended December 31, 2013, up 5.4% from $278 million for the year ended December 31, 2012. As a percentage of
revenues, selling, general and administrative expenses for permanent placement staffing services were 84.3% in 2013, up from
83.3% in 2012. For 2013 compared to 2012, increases in field compensation and variable overhead, partially offset by decreases
in advertising expenses and fixed overhead, drove the overall increase as a percentage of revenues.
Selling, general and administrative expenses for the Company’s risk consulting and internal audit services division were
$112 million for the year ended December 31, 2013, up 5.3% from $106 million for the year ended December 31, 2012. As a
percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services were 21.2%
in 2013, down from 23.5% in 2012. For 2013 compared to 2012, improved leverage in general and administrative expenses, as
a result of higher revenue, drove the overall decrease as a percentage of revenues.
Operating Income. The Company’s total operating income was $398 million, or 9.4% of revenues, for the year ended
December 31, 2013, up 16.0% from $343 million, or 8.4% of revenues, for the year ended December 31, 2012. For the
Company’s temporary and consultant staffing services division, operating income was $301 million, or 8.9% of applicable
revenues, up 8.8% from $277 million, or 8.3% of applicable revenues, in 2012. For the Company’s permanent placement
staffing division, operating income was $54 million, or 15.6% of applicable revenues, down 2.4% from operating income of
$55 million, or 16.7% of applicable revenues, in 2012. For the Company’s risk consulting and internal audit services division,
operating income was $43 million, or 8.1% of applicable revenues, up 292.7% from operating income of $11 million, or 2.4%
of applicable revenues, in 2012.
Provision for income taxes. The provision for income taxes was 36.6% and 39.0% for the years ended December 31,
2013 and 2012, respectively. The 2013 decrease is primarily due to foreign restructuring, improving foreign results, and
increased federal tax credits.
Liquidity and Capital Resources
The change in the Company’s liquidity during the years ended December 31, 2014, 2013 and 2012, is primarily the net
effect of funds generated by operations and the funds used for capital expenditures, repurchases of common stock and payment
of dividends.
Cash and cash equivalents were $287 million, $276 million and $288 million at December 31, 2014, 2013 and 2012,
respectively. Operating activities provided $341 million during the year ended December 31, 2014, offset by $89 million and
$230 million of net cash used in investing activities and financing activities, respectively. Operating activities provided $309
million during the year ended December 31, 2013, partially offset by $98 million and $220 million of net cash used in investing
activities and financing activities, respectively. Operating activities provided $289 million during the year ended December 31,
2012, offset by $73 million and $210 million of net cash used in investing activities and financing activities, respectively.
Operating activities—Net cash provided by operating activities for the year ended December 31, 2014, was composed of
net income of $306 million adjusted for non-cash items of $90 million, offset by net cash used in changes in working capital of
$55 million. Net cash provided by operating activities for the year ended December 31, 2013, was composed of net income of
$252 million adjusted for non-cash items of $74 million, offset by net cash used in changes in working capital of $17 million.
Net cash provided by operating activities for the year ended December 31, 2012, was composed of net income of $210 million
adjusted for non-cash items of $74 million, and net cash provided by changes in working capital of $5 million.
Investing activities—Cash used in investing activities for the year ended December 31, 2014, was $89 million. This was
primarily composed of capital expenditures of $63 million and deposits to trusts for employee deferred compensation plans of
21
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2014 Annual Report • Robert Half twelve months. The remaining $2.4 million of unrecognized tax benefits have been classified as a non-current liability, as a
reasonably reliable estimate of the period of future payments, if any, could not be determined.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to the impact of foreign currency fluctuations. The Company’s exposure to foreign currency
exchange rates relates primarily to the Company’s foreign subsidiaries. Exchange rates impact the U.S. dollar value of the
Company’s reported earnings, investments in its foreign subsidiaries, and the intercompany transactions with its foreign
subsidiaries.
For the year ended December 31, 2014, approximately 23% of the Company’s revenues were generated outside of the
United States. These operations transact business in their functional currency. As a result, fluctuations in the value of foreign
currencies against the U.S. dollar, particularly the Canadian dollar, British pound, Euro, and Australian dollar have an impact
on the Company’s reported results. Revenues and expenses denominated in foreign currencies are translated into U.S. dollars at
the monthly average exchange rates prevailing during the period. Consequently, as the value of the U.S. dollar changes relative
to the currencies of the Company’s non-U.S. markets, the Company’s reported results vary.
Fluctuations in currency exchange rates impact the U.S. dollar amount of the Company’s stockholders’ equity. The assets
and liabilities of the Company’s non-U.S. subsidiaries are translated into U.S. dollars at the exchange rates in effect at period
end. The resulting translation adjustments are recorded in stockholders’ equity as a component of accumulated other
comprehensive income.
$26 million. Cash used in investing activities for the year ended December 31, 2013, was $98 million. This was primarily
composed of capital expenditures of $54 million and deposits to trusts for employee deferred compensation plans of $44
million. Cash used in investing activities for the year ended December 31, 2012, was $73 million. This was primarily composed
of capital expenditures of $50 million, deposits to trusts for employee deferred compensation plans of $9 million and payments
for acquisitions, net of cash acquired of $14 million.
Financing activities—Cash used in financing activities for the year ended December 31, 2014, was $230 million. This
included repurchases of $154 million in common stock and $97 million in cash dividends to stockholders, offset by the
proceeds of $14 million from exercises of stock options and the excess tax benefits from stock-based compensation of $7
million. Cash used in financing activities for the year ended December 31, 2013, was $220 million. This included repurchases
of $168 million in common stock, $89 million in cash dividends to stockholders and $4 million of payments of notes payable
and other indebtedness, offset by proceeds of $33 million from exercises of stock options and the excess tax benefits from
stock-based compensation of $8 million. Cash used in financing activities for the year ended December 31, 2012, was $210
million. This included repurchases of $177 million in common stock and $84 million in cash dividends to stockholders, offset
by proceeds of $43 million from exercises of stock options and the excess tax benefits from stock-based compensation of $8
million.
As of December 31, 2014, the Company is authorized to repurchase, from time to time, up to 4.8 million additional shares
of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions.
During the years ended December 31, 2014, 2013 and 2012, the Company repurchased approximately 3.3 million shares,
3.3 million shares and 4.7 million shares of common stock on the open market for a total cost of $162 million, $118 million and
$133 million, respectively. Additional stock repurchases were made in connection with employee stock plans, whereby
Company shares were tendered by employees for the payment of exercise price and applicable statutory withholding taxes.
During the years ended December 31, 2014, 2013 and 2012, such repurchases totaled approximately 0.5 million shares,
1.2 million shares and 1.7 million shares at a cost of $22 million, $44 million and $50 million, respectively. Repurchases of
shares have been funded with cash generated from operations.
The Company’s working capital at December 31, 2014, included $287 million in cash and cash equivalents. The
Company expects that internally generated cash will be sufficient to support the working capital needs of the Company, the
Company’s fixed payments, dividends, and other obligations on both a short-term and long-term basis.
On February 11, 2015, the Company announced a quarterly dividend of $0.20 per share to be paid to all shareholders of
record on February 25, 2015. The dividend will be paid on March 13, 2015.
The Company’s cash flows generated from operations are also the primary source for funding various contractual
obligations. The table below summarizes the Company’s major commitments as of December 31, 2014 (in thousands):
Contractual Obligations
Long-term debt obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015
$
252
84,458
42,632
1,288
$128,630
Payments due by period
2016
and 2017
505
$
118,587
33,758
2,143
$154,993
2018
and 2019
505
$
63,193
412
1,262
$ 65,372
Thereafter
505
$
77,567
13
9,524
$ 87,609
$
Total
1,767
343,805
76,815
14,217
$436,604
Long-term debt obligations consist of promissory notes and related interest as well as other forms of indebtedness issued
in connection with certain acquisitions and other payment obligations. Operating lease obligations consist of minimum rental
commitments for 2015 and thereafter under non-cancelable leases in effect at December 31, 2014. Purchase obligations consist
of purchase commitments primarily related to telecom service agreements, software licenses and subscriptions, and computer
hardware and software maintenance agreements. Other liabilities consist of asset retirement and deferred compensation
obligations.
The above table does not reflect $4.6 million of gross unrecognized tax benefits which the Company has accrued for
uncertain tax positions in accordance with FASB authoritative guidance. As of December 31, 2014, the Company classified
$2.2 million of its unrecognized tax benefits as a current liability, as these amounts are expected to be resolved in the next
22
22
22
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2014 Annual Report • Robert Half
$26 million. Cash used in investing activities for the year ended December 31, 2013, was $98 million. This was primarily
composed of capital expenditures of $54 million and deposits to trusts for employee deferred compensation plans of $44
million. Cash used in investing activities for the year ended December 31, 2012, was $73 million. This was primarily composed
of capital expenditures of $50 million, deposits to trusts for employee deferred compensation plans of $9 million and payments
for acquisitions, net of cash acquired of $14 million.
Financing activities—Cash used in financing activities for the year ended December 31, 2014, was $230 million. This
included repurchases of $154 million in common stock and $97 million in cash dividends to stockholders, offset by the
proceeds of $14 million from exercises of stock options and the excess tax benefits from stock-based compensation of $7
million. Cash used in financing activities for the year ended December 31, 2013, was $220 million. This included repurchases
of $168 million in common stock, $89 million in cash dividends to stockholders and $4 million of payments of notes payable
and other indebtedness, offset by proceeds of $33 million from exercises of stock options and the excess tax benefits from
stock-based compensation of $8 million. Cash used in financing activities for the year ended December 31, 2012, was $210
million. This included repurchases of $177 million in common stock and $84 million in cash dividends to stockholders, offset
by proceeds of $43 million from exercises of stock options and the excess tax benefits from stock-based compensation of $8
million.
As of December 31, 2014, the Company is authorized to repurchase, from time to time, up to 4.8 million additional shares
of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions.
During the years ended December 31, 2014, 2013 and 2012, the Company repurchased approximately 3.3 million shares,
3.3 million shares and 4.7 million shares of common stock on the open market for a total cost of $162 million, $118 million and
$133 million, respectively. Additional stock repurchases were made in connection with employee stock plans, whereby
Company shares were tendered by employees for the payment of exercise price and applicable statutory withholding taxes.
During the years ended December 31, 2014, 2013 and 2012, such repurchases totaled approximately 0.5 million shares,
1.2 million shares and 1.7 million shares at a cost of $22 million, $44 million and $50 million, respectively. Repurchases of
shares have been funded with cash generated from operations.
The Company’s working capital at December 31, 2014, included $287 million in cash and cash equivalents. The
Company expects that internally generated cash will be sufficient to support the working capital needs of the Company, the
Company’s fixed payments, dividends, and other obligations on both a short-term and long-term basis.
On February 11, 2015, the Company announced a quarterly dividend of $0.20 per share to be paid to all shareholders of
record on February 25, 2015. The dividend will be paid on March 13, 2015.
The Company’s cash flows generated from operations are also the primary source for funding various contractual
obligations. The table below summarizes the Company’s major commitments as of December 31, 2014 (in thousands):
Contractual Obligations
Long-term debt obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
252
$
505
$
505
$
505
$
1,767
Operating lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84,458
42,632
1,288
118,587
33,758
2,143
63,193
412
1,262
77,567
343,805
13
9,524
76,815
14,217
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$128,630
$154,993
$ 65,372
$ 87,609
$436,604
Payments due by period
2015
2016
and 2017
2018
and 2019
Thereafter
Total
Long-term debt obligations consist of promissory notes and related interest as well as other forms of indebtedness issued
in connection with certain acquisitions and other payment obligations. Operating lease obligations consist of minimum rental
commitments for 2015 and thereafter under non-cancelable leases in effect at December 31, 2014. Purchase obligations consist
of purchase commitments primarily related to telecom service agreements, software licenses and subscriptions, and computer
hardware and software maintenance agreements. Other liabilities consist of asset retirement and deferred compensation
obligations.
The above table does not reflect $4.6 million of gross unrecognized tax benefits which the Company has accrued for
uncertain tax positions in accordance with FASB authoritative guidance. As of December 31, 2014, the Company classified
$2.2 million of its unrecognized tax benefits as a current liability, as these amounts are expected to be resolved in the next
22
twelve months. The remaining $2.4 million of unrecognized tax benefits have been classified as a non-current liability, as a
reasonably reliable estimate of the period of future payments, if any, could not be determined.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to the impact of foreign currency fluctuations. The Company’s exposure to foreign currency
exchange rates relates primarily to the Company’s foreign subsidiaries. Exchange rates impact the U.S. dollar value of the
Company’s reported earnings, investments in its foreign subsidiaries, and the intercompany transactions with its foreign
subsidiaries.
For the year ended December 31, 2014, approximately 23% of the Company’s revenues were generated outside of the
United States. These operations transact business in their functional currency. As a result, fluctuations in the value of foreign
currencies against the U.S. dollar, particularly the Canadian dollar, British pound, Euro, and Australian dollar have an impact
on the Company’s reported results. Revenues and expenses denominated in foreign currencies are translated into U.S. dollars at
the monthly average exchange rates prevailing during the period. Consequently, as the value of the U.S. dollar changes relative
to the currencies of the Company’s non-U.S. markets, the Company’s reported results vary.
Fluctuations in currency exchange rates impact the U.S. dollar amount of the Company’s stockholders’ equity. The assets
and liabilities of the Company’s non-U.S. subsidiaries are translated into U.S. dollars at the exchange rates in effect at period
end. The resulting translation adjustments are recorded in stockholders’ equity as a component of accumulated other
comprehensive income.
23
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2014 Annual Report • Robert Half
Item 8. Financial Statements and Supplementary Data
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands, except share amounts)
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, less allowances of $30,544 and $27,261 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIABILITIES
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of notes payable and other indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes payable and other indebtedness, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and Contingencies (Note I)
STOCKHOLDERS’ EQUITY
December 31,
2014
2013
$ 287,119
657,676
133,151
245,337
1,323,283
199,488
—
121,754
2,742
$1,647,267
$ 275,764
551,905
112,881
231,978
1,172,528
200,833
556
112,644
3,710
$1,490,271
$ 175,107
448,115
140
623,362
1,159
42,888
667,409
$ 139,683
396,042
128
535,853
1,300
33,475
570,628
Preferred stock, $.001 par value authorized 5,000,000 shares; issued and outstanding
zero shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock, $.001 par value authorized 260,000,000 shares; issued and
outstanding 135,134,064 and 137,466,421 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
135
928,157
14,730
36,836
979,858
137
868,120
38,071
13,315
919,643
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,647,267
$1,490,271
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Years Ended December 31,
2014
2013
2012
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,695,014
$4,245,895
$4,111,213
Direct costs of services, consisting of payroll, payroll taxes, benefit
costs and reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,772,098
2,522,803
2,462,153
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,922,916
1,723,092
1,649,060
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,425,734
1,324,815
1,305,614
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
557
(724)
497,349
191,421
1,700
(1,002)
397,579
145,384
398
(1,197)
344,245
134,303
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 305,928
$ 252,195
$ 209,942
Net income available to common stockholders—diluted . . . . . . . . . . . . . . . . . . . . . . . $ 305,928
$ 252,192
$ 208,867
Net income per share (Note L):
Shares:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2.28
2.26
$
$
1.85
1.83
$
$
1.51
1.50
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
134,358
135,541
136,153
137,589
138,201
139,409
Cash dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.72
$
.64
$
.60
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
24
24
24
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
25
robert_half_10k_FIN_1-54.indd 24
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2014 Annual Report • Robert Half
Item 8. Financial Statements and Supplementary Data
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands, except share amounts)
December 31,
2014
2013
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 287,119
$ 275,764
Accounts receivable, less allowances of $30,544 and $27,261 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
657,676
133,151
245,337
551,905
112,881
231,978
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,323,283
1,172,528
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
199,488
200,833
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
121,754
2,742
556
112,644
3,710
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,647,267
$1,490,271
LIABILITIES
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 175,107
$ 139,683
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
448,115
396,042
Current portion of notes payable and other indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
140
128
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
623,362
535,853
Notes payable and other indebtedness, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,159
42,888
1,300
33,475
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
667,409
570,628
Commitments and Contingencies (Note I)
STOCKHOLDERS’ EQUITY
Preferred stock, $.001 par value authorized 5,000,000 shares; issued and outstanding
zero shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock, $.001 par value authorized 260,000,000 shares; issued and
outstanding 135,134,064 and 137,466,421 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
135
928,157
14,730
36,836
979,858
—
137
868,120
38,071
13,315
919,643
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,647,267
$1,490,271
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Years Ended December 31,
2014
2013
2012
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct costs of services, consisting of payroll, payroll taxes, benefit
costs and reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,695,014
$4,245,895
$4,111,213
2,772,098
2,522,803
2,462,153
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,922,916
1,425,734
557
(724)
1,723,092
1,324,815
1,700
(1,002)
1,649,060
1,305,614
398
(1,197)
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
497,349
191,421
397,579
145,384
344,245
134,303
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 305,928
$ 252,195
$ 209,942
Net income available to common stockholders—diluted . . . . . . . . . . . . . . . . . . . . . . .
$ 305,928
$ 252,192
$ 208,867
Net income per share (Note L):
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
2.28
2.26
$
$
1.85
1.83
$
$
1.51
1.50
Shares:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
134,358
135,541
136,153
137,589
138,201
139,409
Cash dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
.72
$
.64
$
.60
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
24
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
25
25
25
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2014 Annual Report • Robert Half
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except per share amounts)
Years Ended December 31,
2014
2013
2012
Years Ended December 31,
2014
2013
2012
COMPREHENSIVE INCOME:
COMMON STOCK—SHARES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$305,928
(23,341)
$282,587
$252,195
(5,708)
$246,487
$209,942
2,892
$212,834
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
137,466
139,439
142,086
Net issuances of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
938
(3,798)
528
1,091
(4,461)
1,397
1,443
(6,350)
2,260
Balance at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
135,134
137,466
139,439
COMMON STOCK—PAR VALUE:
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
137
$
139
$
142
Net issuances of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)
1
1
(1)
—
(4)
1
1
(1)
—
(6)
1
2
(1)
(7,715)
(49,971)
41,464
42,936
11,904
Balance at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
135
$
137
$
139
CAPITAL SURPLUS:
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 868,120
$ 798,093
$ 759,476
Net issuances of restricted stock at par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock—excess over par value . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends ($.64 per share and $.60 per share) . . . . . . . . . . . . . . . . . . . . . . . . . . .
— (12,256)
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options—excess over par value. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact of equity incentive plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40,821
14,323
4,894
38,867
33,285
10,132
Balance at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 928,157
$ 868,120
$ 798,093
ACCUMULATED OTHER COMPREHENSIVE INCOME:
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 38,071
$ 43,779
$ 40,887
Foreign currency translation adjustments, net of tax. . . . . . . . . . . . . . . . . . . . . . . . . . .
(23,341)
(5,708)
2,892
Balance at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,730
$ 38,071
$ 43,779
RETAINED EARNINGS:
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,315
$
— $
—
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
305,928
252,195
209,942
Repurchases of common stock—excess over par value . . . . . . . . . . . . . . . . . . . . . . . .
(183,969)
(162,029)
(175,015)
Cash dividends ($.72 per share, $.64 per share and $.60 per share) . . . . . . . . . . . . . . .
(98,438)
(76,851)
(34,927)
Balance at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36,836
$ 13,315
$
—
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
26
26
26
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
27
robert_half_10k_FIN_1-54.indd 26
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2014 Annual Report • Robert Half
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except per share amounts)
COMPREHENSIVE INCOME:
COMMON STOCK—SHARES:
Years Ended December 31,
2014
2013
2012
Years Ended December 31,
2014
2013
2012
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$305,928
$252,195
$209,942
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(23,341)
(5,708)
2,892
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$282,587
$246,487
$212,834
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
137,466
938
(3,798)
528
139,439
1,091
(4,461)
1,397
142,086
1,443
(6,350)
2,260
Balance at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
135,134
137,466
139,439
COMMON STOCK—PAR VALUE:
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
137
1
(4)
1
$
139
1
(4)
1
Balance at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
135
$
137
$
142
1
(6)
2
139
CAPITAL SURPLUS:
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock at par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock—excess over par value . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends ($.64 per share and $.60 per share) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options—excess over par value. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact of equity incentive plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 798,093
$ 868,120
(1)
(1)
—
—
— (12,256)
38,867
33,285
10,132
40,821
14,323
4,894
$ 759,476
(1)
(7,715)
(49,971)
41,464
42,936
11,904
Balance at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 928,157
$ 868,120
$ 798,093
ACCUMULATED OTHER COMPREHENSIVE INCOME:
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of tax. . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 38,071
(23,341)
$ 14,730
$ 43,779
(5,708)
$ 38,071
$ 40,887
2,892
$ 43,779
RETAINED EARNINGS:
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock—excess over par value . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends ($.72 per share, $.64 per share and $.60 per share) . . . . . . . . . . . . . . .
Balance at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 13,315
305,928
(183,969)
(98,438)
$ 36,836
$
— $
252,195
(162,029)
(76,851)
$ 13,315
—
209,942
(175,015)
(34,927)
—
$
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
26
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
27
27
27
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2014 Annual Report • Robert Half
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
2014
2013
2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 305,928
$ 252,195
$ 209,942
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense—restricted stock and stock
units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from stock-based compensation . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
557
49,124
40,821
(7,174)
(3,643)
9,825
1,700
47,072
398
48,326
38,867
(8,103)
(13,259)
7,467
41,464
(8,475)
(14,993)
7,133
Changes in assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in accounts payable, accrued expenses, accrued payroll and benefit
costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in other assets, net of change in other liabilities . . . . . . . . . . . . . . . . . . . .
(134,917)
(47,699)
(21,354)
71,740
16,359
(7,922)
38,356
(11,927)
4,548
16,672
15,160
(5,096)
Net cash flows provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
340,698
309,217
289,177
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments to trusts for employee deferred compensation plans . . . . . . . . . . . . . . .
—
(62,830)
(25,811)
— (14,393)
(50,056)
(8,577)
(53,725)
(44,052)
Net cash flows used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(88,641)
(97,777)
(73,026)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in notes payable and other indebtedness . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from stock-based compensation . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash flows used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(153,821)
(97,604)
(128)
7,174
14,324
(230,055)
(167,975)
(89,187)
(4,496)
8,103
33,285
(220,270)
(176,794)
(84,129)
(107)
8,475
42,939
(209,616)
Effect of exchange rate changes on cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . .
(10,647)
(3,041)
1,764
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,355
275,764
$ 287,119
(11,871)
287,635
$ 275,764
8,299
279,336
$ 287,635
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
330
$ 178,375
$
315
$ 168,407
$
405
$ 136,023
Non-cash items:
Stock repurchases awaiting settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 30,152
$
— $
5,942
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
28
28
28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A—Summary of Significant Accounting Policies
Nature of Operations. Robert Half International Inc. (the “Company”) provides specialized staffing and risk consulting
services through such divisions as Accountemps®, Robert Half® Finance & Accounting, OfficeTeam®, Robert Half® Technology,
Robert Half® Management Resources, Robert Half® Legal, The Creative Group®, and Protiviti®. The Company, through its
Accountemps, Robert Half Finance & Accounting, and Robert Half Management Resources divisions, is a specialized provider
of temporary, full-time, and senior-level project professionals in the fields of accounting and finance. OfficeTeam specializes in
highly skilled temporary administrative support professionals. Robert Half Technology provides project and full-time
technology professionals. Robert Half Legal provides temporary, project, and full-time staffing of lawyers, paralegals and legal
support personnel. The Creative Group provides interactive, design, marketing, advertising and public relations professionals.
Protiviti is a global consulting firm that helps companies solve problems in finance, technology, operations, governance, risk
and internal audit, and is a wholly-owned subsidiary of the Company. Revenues are predominantly derived from specialized
staffing services. The Company operates in North America, South America, Europe, Asia and Australia. The Company is a
Delaware corporation.
Basis of Presentation. The Consolidated Financial Statements (“Financial Statements”) of the Company are prepared in
conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the
Securities and Exchange Commission (“SEC”).
Principles of Consolidation. The Financial Statements include the accounts of the Company and its subsidiaries, all of
which are wholly-owned. All intercompany balances have been eliminated.
Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
As of December 31, 2014, such estimates included allowances for uncollectible accounts receivable, workers’ compensation
losses and income and other taxes. Management estimates are also utilized in the Company’s goodwill impairment assessment
and in the valuation of stock grants subject to market conditions.
Revenue Recognition. The Company derives its revenues from three segments: temporary and consultant staffing,
permanent placement staffing, and risk consulting and internal audit services. Net service revenues as presented on the
Consolidated Statements of Operations represent services rendered to customers less sales adjustments and allowances.
Reimbursements, including those related to travel and out-of-pocket expenses, are also included in net service revenues, and
equivalent amounts of reimbursable expenses are included in direct costs of services. The Company records revenue on a gross
basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses. The Company has concluded
that gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified employees, (ii) has
the discretion to select the employees and establish their price and duties and (iii) bears the risk for services that are not fully
paid for by customers.
Temporary and consultant staffing revenues—Temporary and consultant staffing revenues are recognized when the
services are rendered by the Company’s temporary employees. Employees placed on temporary assignment by the Company
are the Company’s legal employees while they are working on assignments. The Company pays all related costs of
employment, including workers’ compensation insurance, state and federal unemployment taxes, social security and certain
fringe benefits. The Company assumes the risk of acceptability of its employees to its customers.
Permanent placement staffing revenues—Permanent placement staffing revenues are recognized when employment
candidates accept offers of permanent employment. The Company has a substantial history of estimating the effect of
permanent placement candidates who do not remain with its clients through the 90-day guarantee period. Allowances are
established to estimate these losses. Fees to clients are generally calculated as a percentage of the new employee’s annual
compensation. No fees for permanent placement services are charged to employment candidates.
Risk consulting and internal audit revenues—Risk consulting and internal audit services are generally provided on a time-
and-material basis or fixed-fee basis. Revenues earned under time-and-material arrangements are recognized as services are
provided. Revenues on fixed-fee arrangements are recognized using a proportional performance method as hours are incurred
relative to total estimated hours for the engagement. The Company periodically evaluates the need to provide for any losses on
these projects, and losses are recognized when it is probable that a loss will be incurred.
Costs of Services. Direct costs of temporary and consultant staffing services consist of payroll, payroll taxes and benefit
costs for the Company’s temporary employees, as well as reimbursable expenses. Direct costs of permanent placement staffing
29
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2014 Annual Report • Robert Half
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
2014
2013
2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 305,928
$ 252,195
$ 209,942
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense—restricted stock and stock
units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from stock-based compensation . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
557
49,124
40,821
(7,174)
(3,643)
9,825
1,700
47,072
398
48,326
38,867
(8,103)
(13,259)
7,467
41,464
(8,475)
(14,993)
7,133
Changes in assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(134,917)
(47,699)
(21,354)
Increase in accounts payable, accrued expenses, accrued payroll and benefit
costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in other assets, net of change in other liabilities . . . . . . . . . . . . . . . . . . . .
71,740
16,359
(7,922)
38,356
(11,927)
4,548
16,672
15,160
(5,096)
Net cash flows provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
340,698
309,217
289,177
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments to trusts for employee deferred compensation plans . . . . . . . . . . . . . . .
—
(62,830)
(25,811)
— (14,393)
(53,725)
(44,052)
(50,056)
(8,577)
Net cash flows used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(88,641)
(97,777)
(73,026)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(153,821)
(167,975)
(176,794)
Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(97,604)
Decrease in notes payable and other indebtedness . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from stock-based compensation . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(128)
7,174
14,324
(89,187)
(4,496)
8,103
33,285
(84,129)
(107)
8,475
42,939
Net cash flows used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(230,055)
(220,270)
(209,616)
Effect of exchange rate changes on cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . .
(10,647)
(3,041)
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,355
(11,871)
Cash and cash equivalents at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
275,764
287,635
279,336
Cash and cash equivalents at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 287,119
$ 275,764
$ 287,635
1,764
8,299
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
330
$
315
$
405
Income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 178,375
$ 168,407
$ 136,023
Non-cash items:
Stock repurchases awaiting settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 30,152
$
— $
5,942
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A—Summary of Significant Accounting Policies
Nature of Operations. Robert Half International Inc. (the “Company”) provides specialized staffing and risk consulting
services through such divisions as Accountemps®, Robert Half® Finance & Accounting, OfficeTeam®, Robert Half® Technology,
Robert Half® Management Resources, Robert Half® Legal, The Creative Group®, and Protiviti®. The Company, through its
Accountemps, Robert Half Finance & Accounting, and Robert Half Management Resources divisions, is a specialized provider
of temporary, full-time, and senior-level project professionals in the fields of accounting and finance. OfficeTeam specializes in
highly skilled temporary administrative support professionals. Robert Half Technology provides project and full-time
technology professionals. Robert Half Legal provides temporary, project, and full-time staffing of lawyers, paralegals and legal
support personnel. The Creative Group provides interactive, design, marketing, advertising and public relations professionals.
Protiviti is a global consulting firm that helps companies solve problems in finance, technology, operations, governance, risk
and internal audit, and is a wholly-owned subsidiary of the Company. Revenues are predominantly derived from specialized
staffing services. The Company operates in North America, South America, Europe, Asia and Australia. The Company is a
Delaware corporation.
Basis of Presentation. The Consolidated Financial Statements (“Financial Statements”) of the Company are prepared in
conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the
Securities and Exchange Commission (“SEC”).
Principles of Consolidation. The Financial Statements include the accounts of the Company and its subsidiaries, all of
which are wholly-owned. All intercompany balances have been eliminated.
Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
As of December 31, 2014, such estimates included allowances for uncollectible accounts receivable, workers’ compensation
losses and income and other taxes. Management estimates are also utilized in the Company’s goodwill impairment assessment
and in the valuation of stock grants subject to market conditions.
Revenue Recognition. The Company derives its revenues from three segments: temporary and consultant staffing,
permanent placement staffing, and risk consulting and internal audit services. Net service revenues as presented on the
Consolidated Statements of Operations represent services rendered to customers less sales adjustments and allowances.
Reimbursements, including those related to travel and out-of-pocket expenses, are also included in net service revenues, and
equivalent amounts of reimbursable expenses are included in direct costs of services. The Company records revenue on a gross
basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses. The Company has concluded
that gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified employees, (ii) has
the discretion to select the employees and establish their price and duties and (iii) bears the risk for services that are not fully
paid for by customers.
Temporary and consultant staffing revenues—Temporary and consultant staffing revenues are recognized when the
services are rendered by the Company’s temporary employees. Employees placed on temporary assignment by the Company
are the Company’s legal employees while they are working on assignments. The Company pays all related costs of
employment, including workers’ compensation insurance, state and federal unemployment taxes, social security and certain
fringe benefits. The Company assumes the risk of acceptability of its employees to its customers.
Permanent placement staffing revenues—Permanent placement staffing revenues are recognized when employment
candidates accept offers of permanent employment. The Company has a substantial history of estimating the effect of
permanent placement candidates who do not remain with its clients through the 90-day guarantee period. Allowances are
established to estimate these losses. Fees to clients are generally calculated as a percentage of the new employee’s annual
compensation. No fees for permanent placement services are charged to employment candidates.
Risk consulting and internal audit revenues—Risk consulting and internal audit services are generally provided on a time-
and-material basis or fixed-fee basis. Revenues earned under time-and-material arrangements are recognized as services are
provided. Revenues on fixed-fee arrangements are recognized using a proportional performance method as hours are incurred
relative to total estimated hours for the engagement. The Company periodically evaluates the need to provide for any losses on
these projects, and losses are recognized when it is probable that a loss will be incurred.
Costs of Services. Direct costs of temporary and consultant staffing services consist of payroll, payroll taxes and benefit
costs for the Company’s temporary employees, as well as reimbursable expenses. Direct costs of permanent placement staffing
29
29
29
robert_half_10k_FIN_1-54.indd 29
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2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note A—Summary of Significant Accounting Policies (continued)
Note A—Summary of Significant Accounting Policies (continued)
services consist of reimbursable expenses. Risk consulting and internal audit costs of services include professional staff payroll,
payroll taxes and benefit costs, as well as reimbursable expenses.
Advertising Costs. The Company expenses all advertising costs as incurred. Advertising costs for the years ended
December 31, 2014, 2013 and 2012, are reflected in the following table (in thousands):
Advertising Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2014
$ 42,335
2013
$ 38,845
2012
$ 42,256
Comprehensive Income. Comprehensive income includes net income and certain other items that are recorded directly
to Stockholders’ Equity. The Company’s only source of other comprehensive income is foreign currency translation
adjustments.
Fair Value of Financial Instruments. The Company does not have any financial instruments which require re-
measurement to fair value. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued
expenses represent fair value based upon their short-term nature.
Cash and Cash Equivalents. The Company considers all highly liquid investments with a maturity at the date of
purchase of three months or less as cash equivalents.
Goodwill and Intangible Assets. Goodwill and intangible assets primarily consist of the cost of acquired companies in
excess of the fair market value of their net tangible assets at the date of acquisition. Identifiable intangible assets are amortized
over their lives, typically ranging from two to five years. Goodwill is not amortized, but is tested at least annually for
impairment. The Company completed its annual goodwill impairment analysis as of June 30 in each of the three years ended
December 31, 2014, and determined that no adjustment to the carrying value of goodwill was required. There were no events or
changes in circumstances during the six months ended December 31, 2014 that caused the Company to perform an interim
impairment assessment.
Income Tax Assets and Liabilities. In establishing its deferred income tax assets and liabilities, the Company makes
judgments and interpretations based on the enacted tax laws and published tax guidance that are applicable to its operations.
Deferred tax assets and liabilities are measured and recorded using current enacted tax rates, which the Company expects will
apply to taxable income in the years in which those temporary differences are recovered or settled. The likelihood of a material
change in the Company’s expected realization of these assets is dependent on future taxable income, its ability to use foreign
tax credit carryforwards and carrybacks, final U.S. and foreign tax settlements, and the effectiveness of its tax planning
strategies in the various relevant jurisdictions.
The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts.
Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including
operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be
realized. When appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may
not be realized. Valuation allowances of $29.6 million and $37.0 million were recorded as of December 31, 2014 and 2013,
respectively. The valuation allowances recorded related primarily to net operating losses in certain foreign operations. If such
losses are ultimately utilized to offset future operating income, the Company will recognize a tax benefit up to the full amount
of the valuation reserve.
Workers’ Compensation. Except for states which require participation in state-operated insurance funds, the Company
retains the economic burden for the first $0.5 million per occurrence in workers’ compensation claims. Workers’ compensation
includes ongoing healthcare and indemnity coverage for claims and may be paid over numerous years following the date of
injury. Claims in excess of $0.5 million are insured. Workers’ compensation expense includes the insurance premiums for
claims in excess of $0.5 million, claims administration fees charged by the Company’s workers’ compensation administrator,
premiums paid to state-operated insurance funds, and an estimate for the Company’s liability for Incurred But Not Reported
(“IBNR”) claims and for the ongoing development of existing claims.
The reserves for IBNR claims and for the ongoing development of existing claims in each reporting period includes
estimates. The Company has established reserves for workers’ compensation claims using loss development rates which are
estimated using periodic third party actuarial valuations based upon historical loss statistics which include the Company’s
historical frequency and severity of workers’ compensation claims, and an estimate of future cost trends. While management
believes that its assumptions and estimates are appropriate, significant differences in actual experience or significant changes in
assumptions may materially affect the Company’s future results.
Foreign Currency Translation. The results of operations of the Company’s foreign subsidiaries are translated at the
monthly average exchange rates prevailing during the period. The financial position of the Company’s foreign subsidiaries is
translated at the current exchange rates at the end of the period, and the related translation adjustments are recorded as a
component of accumulated other comprehensive income within Stockholders’ Equity. Gains and losses resulting from foreign
currency transactions are included as a component of selling, general and administrative expenses in the Consolidated
Statements of Operations, and have not been material for all periods presented.
Stock-based Compensation. Under various stock plans, officers, employees and outside directors have received or may
receive grants of restricted stock, stock units, stock appreciation rights or options to purchase common stock.
The Company recognizes compensation expense equal to the grant-date fair value for all stock-based payment awards
that are expected to vest. This expense is recorded on a straight-line basis over the requisite service period of the entire award,
unless the awards are subject to performance conditions, in which case the Company recognizes compensation expense over the
requisite service period of each separate vesting tranche. The Company determines the grant-date fair value of its restricted
stock and stock unit awards using the fair market value of its stock on the grant date, unless the awards are subject to market
conditions, in which case the Company utilizes a binomial-lattice model (i.e., Monte Carlo simulation model). The Monte Carlo
simulation model utilizes multiple input variables to determine the stock-based compensation expense.
No stock appreciation rights have been granted under the Company’s existing stock plans. The Company has not granted
any options to purchase common stock since 2006.
Property and Equipment. Property and equipment are recorded at cost. Depreciation expense is computed using the
straight-line method over the following useful lives:
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 5 years
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Term of lease,
5 years maximum
Internal-use Software. The Company capitalizes direct costs incurred in the development of internal-use software.
Amounts capitalized are reported as a component of computer software within property and equipment. Internal-use software
development costs capitalized for the years ended December 31, 2014, 2013 and 2012, are reflected in the following table (in
thousands):
Internal-use software development costs. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,367
$ 13,027
$ 19,083
Years Ended December 31,
2014
2013
2012
30
30
30
31
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2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note A—Summary of Significant Accounting Policies (continued)
Note A—Summary of Significant Accounting Policies (continued)
services consist of reimbursable expenses. Risk consulting and internal audit costs of services include professional staff payroll,
The reserves for IBNR claims and for the ongoing development of existing claims in each reporting period includes
payroll taxes and benefit costs, as well as reimbursable expenses.
Advertising Costs. The Company expenses all advertising costs as incurred. Advertising costs for the years ended
December 31, 2014, 2013 and 2012, are reflected in the following table (in thousands):
Years Ended December 31,
2014
2013
2012
Advertising Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 42,335
$ 38,845
$ 42,256
Comprehensive Income. Comprehensive income includes net income and certain other items that are recorded directly
to Stockholders’ Equity. The Company’s only source of other comprehensive income is foreign currency translation
adjustments.
Fair Value of Financial Instruments. The Company does not have any financial instruments which require re-
measurement to fair value. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued
expenses represent fair value based upon their short-term nature.
Cash and Cash Equivalents. The Company considers all highly liquid investments with a maturity at the date of
purchase of three months or less as cash equivalents.
Goodwill and Intangible Assets. Goodwill and intangible assets primarily consist of the cost of acquired companies in
excess of the fair market value of their net tangible assets at the date of acquisition. Identifiable intangible assets are amortized
over their lives, typically ranging from two to five years. Goodwill is not amortized, but is tested at least annually for
impairment. The Company completed its annual goodwill impairment analysis as of June 30 in each of the three years ended
December 31, 2014, and determined that no adjustment to the carrying value of goodwill was required. There were no events or
changes in circumstances during the six months ended December 31, 2014 that caused the Company to perform an interim
impairment assessment.
Income Tax Assets and Liabilities. In establishing its deferred income tax assets and liabilities, the Company makes
judgments and interpretations based on the enacted tax laws and published tax guidance that are applicable to its operations.
Deferred tax assets and liabilities are measured and recorded using current enacted tax rates, which the Company expects will
apply to taxable income in the years in which those temporary differences are recovered or settled. The likelihood of a material
change in the Company’s expected realization of these assets is dependent on future taxable income, its ability to use foreign
tax credit carryforwards and carrybacks, final U.S. and foreign tax settlements, and the effectiveness of its tax planning
strategies in the various relevant jurisdictions.
The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts.
Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including
operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be
realized. When appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may
not be realized. Valuation allowances of $29.6 million and $37.0 million were recorded as of December 31, 2014 and 2013,
respectively. The valuation allowances recorded related primarily to net operating losses in certain foreign operations. If such
losses are ultimately utilized to offset future operating income, the Company will recognize a tax benefit up to the full amount
of the valuation reserve.
Workers’ Compensation. Except for states which require participation in state-operated insurance funds, the Company
retains the economic burden for the first $0.5 million per occurrence in workers’ compensation claims. Workers’ compensation
includes ongoing healthcare and indemnity coverage for claims and may be paid over numerous years following the date of
injury. Claims in excess of $0.5 million are insured. Workers’ compensation expense includes the insurance premiums for
claims in excess of $0.5 million, claims administration fees charged by the Company’s workers’ compensation administrator,
premiums paid to state-operated insurance funds, and an estimate for the Company’s liability for Incurred But Not Reported
(“IBNR”) claims and for the ongoing development of existing claims.
estimates. The Company has established reserves for workers’ compensation claims using loss development rates which are
estimated using periodic third party actuarial valuations based upon historical loss statistics which include the Company’s
historical frequency and severity of workers’ compensation claims, and an estimate of future cost trends. While management
believes that its assumptions and estimates are appropriate, significant differences in actual experience or significant changes in
assumptions may materially affect the Company’s future results.
Foreign Currency Translation. The results of operations of the Company’s foreign subsidiaries are translated at the
monthly average exchange rates prevailing during the period. The financial position of the Company’s foreign subsidiaries is
translated at the current exchange rates at the end of the period, and the related translation adjustments are recorded as a
component of accumulated other comprehensive income within Stockholders’ Equity. Gains and losses resulting from foreign
currency transactions are included as a component of selling, general and administrative expenses in the Consolidated
Statements of Operations, and have not been material for all periods presented.
Stock-based Compensation. Under various stock plans, officers, employees and outside directors have received or may
receive grants of restricted stock, stock units, stock appreciation rights or options to purchase common stock.
The Company recognizes compensation expense equal to the grant-date fair value for all stock-based payment awards
that are expected to vest. This expense is recorded on a straight-line basis over the requisite service period of the entire award,
unless the awards are subject to performance conditions, in which case the Company recognizes compensation expense over the
requisite service period of each separate vesting tranche. The Company determines the grant-date fair value of its restricted
stock and stock unit awards using the fair market value of its stock on the grant date, unless the awards are subject to market
conditions, in which case the Company utilizes a binomial-lattice model (i.e., Monte Carlo simulation model). The Monte Carlo
simulation model utilizes multiple input variables to determine the stock-based compensation expense.
No stock appreciation rights have been granted under the Company’s existing stock plans. The Company has not granted
any options to purchase common stock since 2006.
Property and Equipment. Property and equipment are recorded at cost. Depreciation expense is computed using the
straight-line method over the following useful lives:
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 5 years
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Term of lease,
5 years maximum
Internal-use Software. The Company capitalizes direct costs incurred in the development of internal-use software.
Amounts capitalized are reported as a component of computer software within property and equipment. Internal-use software
development costs capitalized for the years ended December 31, 2014, 2013 and 2012, are reflected in the following table (in
thousands):
Internal-use software development costs. . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2014
$ 24,367
2013
$ 13,027
2012
$ 19,083
30
31
31
31
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2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note B—New Accounting Pronouncements
Income Taxes. In September 2013, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance
in regards to the presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax
credit carryforward exists. The amendment states that an unrecognized tax benefit or a portion of the unrecognized tax benefit
should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a
similar tax loss, or a tax credit carryforward. This authoritative guidance is to be applied for fiscal years, and interim periods
within those years, beginning after December 15, 2013. The adoption of this guidance in 2014 did not have an impact on the
Company’s Financial Statements.
Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. In April 2014, the FASB
issued authoritative guidance in regards to the criteria for reporting discontinued operations while enhancing disclosures in this
area. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued
operations. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide
financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations.
The amendments in the authoritative guidance are effective in the first quarter of 2015 for public organizations with calendar
year-ends. The Company does not expect the adoption of this guidance to have a material impact on its Financial Statements.
Revenue from Contracts with Customers. In May 2014, the FASB issued authoritative guidance that provides companies
with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue
recognition guidance, including industry-specific revenue guidance. The new guidance requires a company to recognize
revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive
in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing and uncertainty
of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and
assets recognized from costs incurred to obtain or fulfill a contract. The new guidance is effective for annual reporting periods
beginning after December 15, 2016. Early adoption is not permitted. The guidance permits companies to either apply the
requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a
cumulative adjustment. The Company is in the process of evaluating the impact of adoption of this guidance on its Financial
Statements.
Note C—Other Current Assets
Other current assets consisted of the following (in thousands):
Deposits in trusts for employee deferred compensation plans. . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2014
$172,237
73,100
$245,337
2013
$149,391
82,587
$231,978
Note D—Goodwill
thousands):
The following table sets forth the activity in goodwill from December 31, 2012, through December 31, 2014 (in
Balance as of December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $201,339
Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
(519)
Balance as of December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,833
Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,345)
Balance as of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $199,488
Goodwill
Note E—Property and Equipment, Net
Property and equipment consisted of the following (in thousands):
December 31,
2014
2013
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 159,309
$ 148,541
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
312,968
105,262
113,782
9,045
700,366
288,532
111,426
118,868
11,488
678,855
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(578,612)
(566,211)
Property and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 121,754
$ 112,644
Note F—Accrued Payroll and Benefit Costs
Accrued payroll and benefit costs consisted of the following (in thousands):
Payroll and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $213,962
$184,084
Employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
181,709
150,629
Workers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payroll taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Included in employee deferred compensation plans is the following (in thousands):
December 31,
2014
2013
26,127
26,317
26,671
34,658
$448,115
$396,042
December 31,
2014
2013
Deferred compensation plan and other benefits related to the
Company’s Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 79,060
$ 75,745
32
32
32
33
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2014 Annual Report • Robert Half
Income Taxes. In September 2013, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance
in regards to the presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax
credit carryforward exists. The amendment states that an unrecognized tax benefit or a portion of the unrecognized tax benefit
should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a
similar tax loss, or a tax credit carryforward. This authoritative guidance is to be applied for fiscal years, and interim periods
within those years, beginning after December 15, 2013. The adoption of this guidance in 2014 did not have an impact on the
Company’s Financial Statements.
Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. In April 2014, the FASB
issued authoritative guidance in regards to the criteria for reporting discontinued operations while enhancing disclosures in this
area. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued
operations. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide
financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations.
The amendments in the authoritative guidance are effective in the first quarter of 2015 for public organizations with calendar
year-ends. The Company does not expect the adoption of this guidance to have a material impact on its Financial Statements.
Revenue from Contracts with Customers. In May 2014, the FASB issued authoritative guidance that provides companies
with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue
recognition guidance, including industry-specific revenue guidance. The new guidance requires a company to recognize
revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive
in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing and uncertainty
of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and
assets recognized from costs incurred to obtain or fulfill a contract. The new guidance is effective for annual reporting periods
beginning after December 15, 2016. Early adoption is not permitted. The guidance permits companies to either apply the
requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a
cumulative adjustment. The Company is in the process of evaluating the impact of adoption of this guidance on its Financial
Statements.
Note C—Other Current Assets
Other current assets consisted of the following (in thousands):
Deposits in trusts for employee deferred compensation plans. . . . . . . . . . . . . . . . . .
$172,237
$149,391
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73,100
82,587
December 31,
2014
2013
$245,337
$231,978
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note B—New Accounting Pronouncements
Note D—Goodwill
The following table sets forth the activity in goodwill from December 31, 2012, through December 31, 2014 (in
thousands):
Goodwill
Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $201,339
13
(519)
Balance as of December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,833
—
(1,345)
Balance as of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $199,488
Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note E—Property and Equipment, Net
Property and equipment consisted of the following (in thousands):
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note F—Accrued Payroll and Benefit Costs
Accrued payroll and benefit costs consisted of the following (in thousands):
Payroll and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Workers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payroll taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Included in employee deferred compensation plans is the following (in thousands):
December 31,
2014
$ 159,309
312,968
105,262
113,782
9,045
700,366
(578,612)
$ 121,754
2013
$ 148,541
288,532
111,426
118,868
11,488
678,855
(566,211)
$ 112,644
December 31,
2014
$213,962
181,709
26,127
26,317
$448,115
2013
$184,084
150,629
26,671
34,658
$396,042
December 31,
2014
2013
Deferred compensation plan and other benefits related to the
Company’s Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 79,060
$ 75,745
32
33
33
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2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note H—Income Taxes (continued)
Note G—Notes Payable and Other Indebtedness
The Company issued promissory notes as well as other forms of indebtedness in connection with certain acquisitions and
other payment obligations. These are due in varying installments, carry varying interest rates and, in aggregate, amounted to
$1.3 million at December 31, 2014, and $1.4 million at December 31, 2013. At December 31, 2014, $1.3 million of the notes
were collateralized by a standby letter of credit. The following table shows the schedule of maturities for notes payable and
other indebtedness at December 31, 2014 (in thousands):
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 140
153
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
167
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
183
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
200
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
456
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,299
At December 31, 2014, the notes carried fixed rates and the weighted average interest rate for the above was 9.0% for
each of the years ended December 31, 2014, 2013 and 2012.
The Company has an uncommitted letter of credit facility (the “facility”) of up to $35.0 million, which is available to
cover the issuance of debt support standby letters of credit. The Company had used $16.6 million in debt support standby letters
of credit as of December 31, 2014 and $18.6 million as of December 31, 2013. Of the debt support standby letters of credit
outstanding, $15.3 million as of December 31, 2014 and $17.1 million as of December 31, 2013, satisfies workers’
compensation insurer’s collateral requirements. There is a service fee of 1.125% on the used portion of the facility. The facility
is subject to certain financial covenants and expires on August 31, 2015. The Company intends to renew this facility prior to its
August 31, 2015 expiration.
Note H—Income Taxes
The provision (benefit) for income taxes for the years ended December 31, 2014, 2013 and 2012, consisted of the
following (in thousands):
The income taxes shown above varied from the statutory federal income tax rates for these periods as follows:
Years Ended December 31,
2014
2013
2012
Federal U.S. income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35.0% 35.0% 35.0%
State income taxes, net of federal tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. income taxed at different rates, net of foreign tax
credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact of uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance release, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2
0.6
(0.2)
(0.6)
(0.1)
(0.3)
(0.1)
4.3
0.7
(1.0)
(1.3)
0.1
(1.0)
(0.2)
4.0
0.8
0.7
(0.3)
(1.2)
—
—
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38.5% 36.6% 39.0%
The deferred portion of the tax provision (benefit) consisted of the following (in thousands):
Years Ended December 31,
2014
2013
2012
Amortization of franchise rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
514
$
Amortization of other intangibles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,241
514
621
$
514
1,180
Accrued expenses, deducted for tax when paid . . . . . . . . . . . . . . . . . . . .
(14,221)
(11,190)
(13,494)
Capitalized costs for books, deducted for tax. . . . . . . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal impact of unrecognized tax benefits . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,809
(4,147)
44
(186)
4,303
3,019
(2,597)
(274)
(3,449)
7,395
(7,813)
478
—
97
(3,253)
$ (3,643) $(13,259) $(14,993)
The deferred income tax amounts included on the Consolidated Statements of Financial Position are composed of the
following (in thousands):
Current deferred income tax assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,151
$ 112,881
Long-term deferred income tax liabilities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(26,807)
(10,601)
December 31,
2014
2013
$ 106,344
$ 102,280
Years Ended December 31,
2013
2012
2014
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$146,633
33,054
15,377
$114,687
27,358
16,598
$ 99,354
24,339
25,603
Deferred:
Federal and state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,626)
983
$191,421
(7,759)
(5,500)
$145,384
(15,188)
195
$134,303
Income before the provision for income taxes for the years ended December 31, 2014, 2013 and 2012, consisted of the
following (in thousands):
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2013
$357,382
40,197
$397,579
2012
$286,537
57,708
$344,245
2014
$449,834
47,515
$497,349
34
34
34
35
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2014 Annual Report • Robert Half
Note G—Notes Payable and Other Indebtedness
The Company issued promissory notes as well as other forms of indebtedness in connection with certain acquisitions and
other payment obligations. These are due in varying installments, carry varying interest rates and, in aggregate, amounted to
$1.3 million at December 31, 2014, and $1.4 million at December 31, 2013. At December 31, 2014, $1.3 million of the notes
were collateralized by a standby letter of credit. The following table shows the schedule of maturities for notes payable and
other indebtedness at December 31, 2014 (in thousands):
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 140
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
153
167
183
200
456
$1,299
The Company has an uncommitted letter of credit facility (the “facility”) of up to $35.0 million, which is available to
cover the issuance of debt support standby letters of credit. The Company had used $16.6 million in debt support standby letters
of credit as of December 31, 2014 and $18.6 million as of December 31, 2013. Of the debt support standby letters of credit
outstanding, $15.3 million as of December 31, 2014 and $17.1 million as of December 31, 2013, satisfies workers’
compensation insurer’s collateral requirements. There is a service fee of 1.125% on the used portion of the facility. The facility
is subject to certain financial covenants and expires on August 31, 2015. The Company intends to renew this facility prior to its
August 31, 2015 expiration.
Note H—Income Taxes
following (in thousands):
The provision (benefit) for income taxes for the years ended December 31, 2014, 2013 and 2012, consisted of the
Current:
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$146,633
$114,687
$ 99,354
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,054
15,377
27,358
16,598
24,339
25,603
Federal and state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,626)
983
(7,759)
(5,500)
(15,188)
195
$191,421
$145,384
$134,303
Income before the provision for income taxes for the years ended December 31, 2014, 2013 and 2012, consisted of the
following (in thousands):
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$449,834
$357,382
$286,537
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47,515
40,197
57,708
$497,349
$397,579
$344,245
Years Ended December 31,
2014
2013
2012
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note H—Income Taxes (continued)
The income taxes shown above varied from the statutory federal income tax rates for these periods as follows:
Years Ended December 31,
Federal U.S. income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of federal tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. income taxed at different rates, net of foreign tax
credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact of uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance release, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012
2014
2013
35.0% 35.0% 35.0%
4.3
4.2
0.7
0.6
4.0
0.8
(1.0)
(0.2)
(1.3)
(0.6)
0.1
(0.1)
(1.0)
(0.3)
(0.1)
(0.2)
38.5% 36.6% 39.0%
0.7
(0.3)
(1.2)
—
—
At December 31, 2014, the notes carried fixed rates and the weighted average interest rate for the above was 9.0% for
The deferred portion of the tax provision (benefit) consisted of the following (in thousands):
each of the years ended December 31, 2014, 2013 and 2012.
Years Ended December 31,
2013
2012
2014
Amortization of franchise rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of other intangibles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses, deducted for tax when paid . . . . . . . . . . . . . . . . . . . .
Capitalized costs for books, deducted for tax. . . . . . . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal impact of unrecognized tax benefits . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
514
1,241
(14,221)
8,809
(4,147)
44
(186)
4,303
514
1,180
(13,494)
7,395
(7,813)
478
—
(3,253)
$ (3,643) $(13,259) $(14,993)
514
621
(11,190)
3,019
(2,597)
(274)
(3,449)
97
Years Ended December 31,
2014
2013
2012
following (in thousands):
The deferred income tax amounts included on the Consolidated Statements of Financial Position are composed of the
Current deferred income tax assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term deferred income tax liabilities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2014
$ 133,151
(26,807)
$ 106,344
2013
$ 112,881
(10,601)
$ 102,280
34
35
35
35
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2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note H—Income Taxes (continued)
Note H—Income Taxes (continued)
The components of the deferred income tax amounts at December 31, 2014 and 2013, were as follows (in thousands):
December 31,
2014
2013
Deferred Income Tax Assets
Provision for bad debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred compensation and other benefit obligations . . . . . . . . . . . . . . . . . . . .
Workers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credits and net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
9,210
83,065
9,138
14,572
39,309
25,316
$
8,012
72,227
9,538
12,067
49,556
25,953
Total deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
180,610
177,353
Deferred Income Tax Liabilities
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment basis differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(25,060)
(12,384)
(7,261)
(44,705)
(29,561)
(23,305)
(8,098)
(6,626)
(38,029)
(37,044)
Total deferred income tax assets, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$106,344
$102,280
Credits and net operating loss carryforwards primarily include net operating losses in foreign countries of $29.9 million
that expire in 2015 and later; foreign tax credits of $3.6 million that expire in 2024; and California enterprise zone tax credits of
$5.7 million that expire in 2023. Of the $5.7 million of California enterprise zone credits, the Company expects that it will
utilize $3.1 million of these credits prior to expiration.
The Company has not provided deferred income taxes or foreign withholding taxes on $3.7 million and $2.8 million of
undistributed earnings of its non-U.S. subsidiaries as of December 31, 2014 and 2013, respectively, since the Company intends
to reinvest these earnings indefinitely. The U.S. tax impact upon repatriation, net of foreign tax credits, would be zero for the
years ended December 31, 2014 and 2013.
FASB authoritative guidance prescribes a recognition threshold and measurement attribute criteria for the financial
statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The literature also
provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and
transition.
The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2012 to
December 31, 2014 (in thousands):
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross increases—tax positions in prior years . . . . . . . . . . . . . . . . . . . . .
Gross decreases—tax positions in prior years . . . . . . . . . . . . . . . . . . . . .
Gross increases—tax positions in current year . . . . . . . . . . . . . . . . . . . .
Settlements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2013
$ 7,097
559
(369)
38
—
(1,215)
$ 6,110
2014
$ 6,110
1
(333)
35
—
(1,240)
$ 4,573
2012
$11,669
352
(273)
42
(252)
(4,441)
$ 7,097
The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $0.9 million, $1.3
million and $1.0 million for 2014, 2013 and 2012, respectively.
36
36
36
The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax
expense. The total amount of interest and penalties accrued as of December 31, 2014, is $2.5 million, including a $0.3 million
reduction recorded in income tax expense during the year. The total amount of interest and penalties accrued as of
December 31, 2013, was $2.8 million, including a $0.3 million reduction recorded in income tax expense during the year. The
total amount of interest and penalties accrued as of December 31, 2012, was $3.1 million, including a $2.3 million reduction
recorded in income tax expense during the year.
The Company believes it is reasonably possible that the settlement of certain tax uncertainties could occur within the next
twelve months; accordingly, $2.2 million of the unrecognized gross tax benefit has been classified as a current liability as of
December 31, 2014. This amount primarily represents unrecognized tax benefits composed of items related to assessed state
income tax audits and negotiations.
The Company’s major income tax jurisdictions are the United States, Australia, Belgium, Canada, France, Germany and
the United Kingdom. For U.S. federal income tax, the Company remains subject to examination for 2011 and subsequent years.
For major U.S. states, with few exceptions, the Company remains subject to examination for 2010 and subsequent years.
Generally, for the foreign countries, the Company remains subject to examination for 2007 and subsequent years.
Note I—Commitments and Contingencies
Rental expense, primarily for office premises, amounted to $89.9 million, $92.7 million and $96.8 million for the years
ended December 31, 2014, 2013 and 2012, respectively. The approximate minimum rental commitments for 2015 and thereafter
under non-cancelable leases in effect at December 31, 2014 were as follows (in thousands):
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 84,458
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66,375
52,212
36,751
26,442
77,567
$343,805
Additionally, as of December 31, 2014, the Company had future purchase commitments of approximately $76 million
over the next three years primarily related to telecom service agreements, software licenses and subscriptions, and computer
hardware and software maintenance agreements.
On April 23, 2010, Plaintiffs David Opalinski and James McCabe, on behalf of themselves and a putative class of
similarly situated Staffing Managers, filed a Complaint in the United States District Court for the District of New Jersey
naming the Company and one of its subsidiaries as Defendants. The Complaint alleges that salaried Staffing Managers located
throughout the U.S. have been misclassified as exempt from the Fair Labor Standards Act’s overtime pay requirements.
Plaintiffs seek an unspecified amount for unpaid overtime on behalf of themselves and the class they purport to represent.
Plaintiffs also seek an unspecified amount for statutory penalties, attorneys’ fees and other damages. On October 6, 2011, the
Court granted the Company’s motion to compel arbitration of the Plaintiffs’ allegations. At this stage, it is not feasible to predict
the outcome of or a range of loss, should a loss occur, from these allegations and, accordingly, no amounts have been provided
in the Company’s financial statements. The Company believes it has meritorious defenses to the allegations, and the Company
intends to continue to vigorously defend against the allegations.
On March 13, 2014, Plaintiff Leonor Rodriguez, on her own behalf and on behalf of a putative class of allegedly similarly
situated individuals, filed a complaint against the Company in the Superior Court of California, San Diego County. The
complaint alleges that a putative class of current and former employees of the Company working in California since March 13,
2011 were denied compensation for the time they spent interviewing with clients of the Company as well as performing
activities related to the interview process. Rodriguez seeks recovery on her own behalf and on behalf of the putative class in an
unspecified amount for this allegedly unpaid compensation. Rodriguez also seeks recovery of an unspecified amount for the
alleged failure of the Company to provide her and the putative class with accurate wage statements. Rodriguez also seeks an
unspecified amount of other damages, attorneys’ fees, and statutory penalties, including but not limited to statutory penalties on
37
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2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note H—Income Taxes (continued)
Note H—Income Taxes (continued)
The components of the deferred income tax amounts at December 31, 2014 and 2013, were as follows (in thousands):
December 31,
2014
2013
Deferred Income Tax Assets
Provision for bad debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
9,210
$
8,012
Deferred compensation and other benefit obligations . . . . . . . . . . . . . . . . . . . .
Workers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credits and net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
83,065
9,138
14,572
39,309
25,316
72,227
9,538
12,067
49,556
25,953
Total deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
180,610
177,353
Deferred Income Tax Liabilities
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment basis differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(25,060)
(12,384)
(7,261)
(23,305)
(8,098)
(6,626)
Total deferred income tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(44,705)
(38,029)
Valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(29,561)
(37,044)
Total deferred income tax assets, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$106,344
$102,280
Credits and net operating loss carryforwards primarily include net operating losses in foreign countries of $29.9 million
that expire in 2015 and later; foreign tax credits of $3.6 million that expire in 2024; and California enterprise zone tax credits of
$5.7 million that expire in 2023. Of the $5.7 million of California enterprise zone credits, the Company expects that it will
utilize $3.1 million of these credits prior to expiration.
The Company has not provided deferred income taxes or foreign withholding taxes on $3.7 million and $2.8 million of
undistributed earnings of its non-U.S. subsidiaries as of December 31, 2014 and 2013, respectively, since the Company intends
to reinvest these earnings indefinitely. The U.S. tax impact upon repatriation, net of foreign tax credits, would be zero for the
years ended December 31, 2014 and 2013.
FASB authoritative guidance prescribes a recognition threshold and measurement attribute criteria for the financial
statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The literature also
provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and
transition.
December 31, 2014 (in thousands):
The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2012 to
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 6,110
$ 7,097
$11,669
Gross increases—tax positions in prior years . . . . . . . . . . . . . . . . . . . . .
Gross decreases—tax positions in prior years . . . . . . . . . . . . . . . . . . . . .
(333)
Gross increases—tax positions in current year . . . . . . . . . . . . . . . . . . . .
Settlements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,240)
(1,215)
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 4,573
$ 6,110
$ 7,097
December 31,
2014
2013
2012
1
35
—
559
(369)
38
—
352
(273)
42
(252)
(4,441)
The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $0.9 million, $1.3
million and $1.0 million for 2014, 2013 and 2012, respectively.
The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax
expense. The total amount of interest and penalties accrued as of December 31, 2014, is $2.5 million, including a $0.3 million
reduction recorded in income tax expense during the year. The total amount of interest and penalties accrued as of
December 31, 2013, was $2.8 million, including a $0.3 million reduction recorded in income tax expense during the year. The
total amount of interest and penalties accrued as of December 31, 2012, was $3.1 million, including a $2.3 million reduction
recorded in income tax expense during the year.
The Company believes it is reasonably possible that the settlement of certain tax uncertainties could occur within the next
twelve months; accordingly, $2.2 million of the unrecognized gross tax benefit has been classified as a current liability as of
December 31, 2014. This amount primarily represents unrecognized tax benefits composed of items related to assessed state
income tax audits and negotiations.
The Company’s major income tax jurisdictions are the United States, Australia, Belgium, Canada, France, Germany and
the United Kingdom. For U.S. federal income tax, the Company remains subject to examination for 2011 and subsequent years.
For major U.S. states, with few exceptions, the Company remains subject to examination for 2010 and subsequent years.
Generally, for the foreign countries, the Company remains subject to examination for 2007 and subsequent years.
Note I—Commitments and Contingencies
Rental expense, primarily for office premises, amounted to $89.9 million, $92.7 million and $96.8 million for the years
ended December 31, 2014, 2013 and 2012, respectively. The approximate minimum rental commitments for 2015 and thereafter
under non-cancelable leases in effect at December 31, 2014 were as follows (in thousands):
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 84,458
66,375
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52,212
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36,751
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,442
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77,567
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$343,805
Additionally, as of December 31, 2014, the Company had future purchase commitments of approximately $76 million
over the next three years primarily related to telecom service agreements, software licenses and subscriptions, and computer
hardware and software maintenance agreements.
On April 23, 2010, Plaintiffs David Opalinski and James McCabe, on behalf of themselves and a putative class of
similarly situated Staffing Managers, filed a Complaint in the United States District Court for the District of New Jersey
naming the Company and one of its subsidiaries as Defendants. The Complaint alleges that salaried Staffing Managers located
throughout the U.S. have been misclassified as exempt from the Fair Labor Standards Act’s overtime pay requirements.
Plaintiffs seek an unspecified amount for unpaid overtime on behalf of themselves and the class they purport to represent.
Plaintiffs also seek an unspecified amount for statutory penalties, attorneys’ fees and other damages. On October 6, 2011, the
Court granted the Company’s motion to compel arbitration of the Plaintiffs’ allegations. At this stage, it is not feasible to predict
the outcome of or a range of loss, should a loss occur, from these allegations and, accordingly, no amounts have been provided
in the Company’s financial statements. The Company believes it has meritorious defenses to the allegations, and the Company
intends to continue to vigorously defend against the allegations.
On March 13, 2014, Plaintiff Leonor Rodriguez, on her own behalf and on behalf of a putative class of allegedly similarly
situated individuals, filed a complaint against the Company in the Superior Court of California, San Diego County. The
complaint alleges that a putative class of current and former employees of the Company working in California since March 13,
2011 were denied compensation for the time they spent interviewing with clients of the Company as well as performing
activities related to the interview process. Rodriguez seeks recovery on her own behalf and on behalf of the putative class in an
unspecified amount for this allegedly unpaid compensation. Rodriguez also seeks recovery of an unspecified amount for the
alleged failure of the Company to provide her and the putative class with accurate wage statements. Rodriguez also seeks an
unspecified amount of other damages, attorneys’ fees, and statutory penalties, including but not limited to statutory penalties on
36
37
37
37
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2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note I—Commitments and Contingencies (continued)
Note J—Stockholders’ Equity (continued)
behalf of herself and other allegedly “aggrieved employees” as defined by California’s Labor Code Private Attorney General
Act (“PAGA”). On October 10, 2014, the Court granted a motion by the Company to compel all of Rodriguez’s claims, except
the PAGA claim, to individual arbitration. At this stage of the litigation, it is not feasible to predict the outcome of or a range of
loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the Company’s Financial
Statements. The Company believes it has meritorious defenses to the allegations and the Company intends to continue to
vigorously defend against the litigation.
On September 5, 2014, Plaintiff Theresa Daniels, on behalf of herself and a putative class of salaried Recruiting
Managers, filed a complaint in California Superior Court naming the Company as Defendant. The complaint alleges that
salaried Recruiting Managers based in California have been misclassified under California law as exempt employees, and seeks
an unspecified amount for unpaid overtime pay alleged to be due to them had they been paid as non-exempt hourly employees,
as well as statutory penalties for alleged violations of the California Labor Code arising from such alleged misclassification.
The complaint also alleges a claim under California Business and Professions Code section 17200 for unfair competition. The
Plaintiff also seeks an unspecified amount for other damages, attorneys’ fees, and statutory penalties. On or about September
17, 2014, the Plaintiff provided written notice to the California Labor and Workforce Development Agency of her alleged
claims. On October 27, 2014, the Plaintiff filed a First Amended Complaint adding a representative claim and request for
penalties under the California Private Attorney General Act. At this stage of the litigation, it is not feasible to predict the
outcome of or a range of loss, should a loss occur, from this proceeding, and accordingly, no amounts have been provided in the
Company’s financial statements. The Company believes it has meritorious defenses to the allegations in this case, and the
Company intends to continue to vigorously defend against the litigation.
The Company is involved in a number of other lawsuits arising in the ordinary course of business. While management
does not expect any of these other matters to have a material adverse effect on the Company’s results of operations, financial
position or cash flows, litigation is subject to certain inherent uncertainties.
Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred.
Note J—Stockholders’ Equity
Stock Repurchase Program. As of December 31, 2014, the Company is authorized to repurchase, from time to time, up
to 4.8 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions,
depending on market conditions. The number and the cost of common stock shares repurchased during the years ended
December 31, 2014, 2013 and 2012, are reflected in the following table (in thousands):
Common stock repurchased (in shares) . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2014
3,336
$161,587
2013
3,305
$117,864
2012
4,689
$132,691
Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were
tendered by employees for the payment of exercise price and applicable statutory withholding taxes. The number and the cost of
employee stock plan repurchases made during the years ended December 31, 2014, 2013 and 2012, are reflected in the
following table (in thousands):
Employee stock plan repurchased (in shares) . . . . . . . . . . . . . . . . . . . . . . . .
Employee stock plan repurchased. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
462
$ 22,386
2014
2013
1,157
$ 44,169
2012
1,661
$ 50,045
Years Ended December 31,
The repurchased shares are held in treasury and are presented as if constructively retired. Treasury stock is accounted for
using the cost method. Treasury stock activity for each of the three years ended December 31, 2014, 2013 and 2012 (consisting
of stock option exercises and the purchase of shares for the treasury) is presented in the Consolidated Statements of
Stockholders’ Equity.
Cash Dividends. The Company’s Board of Directors may at their discretion declare and pay dividends upon the shares of
the Company’s stock either out of the Company’s retained earnings or capital surplus. The cash dividends declared during the
years ended December 31, 2014, 2013 and 2012, are reflected in the following table:
Cash dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .72
$ .64
$ .60
Repurchases of shares and issuances of cash dividends are applied first to the extent of retained earnings and any
remaining amounts are applied to capital surplus.
Years Ended December 31,
2014
2013
2012
Note K—Stock Plans
Under various stock plans, officers, employees, and outside directors have received or may receive grants of restricted
stock, stock units, stock appreciation rights or options to purchase common stock. Grants have been made at the discretion of
the Committees of the Board of Directors. Grants generally vest either on a straight-line basis over four years or on a cliff basis
over three years. Shares offered under the plan are authorized but unissued shares or treasury shares.
Options currently outstanding under the plans have an exercise price equal to the fair market value of the Company’s
common stock at the date of grant and consist of non-statutory stock options under the Internal Revenue Code, and generally
have a term of 10 years. The Company has not granted any options to purchase common stock since 2006.
Recipients of restricted stock do not pay any cash consideration to the Company for the shares, have the right to vote all
shares subject to such grant, and for grants made prior to July 28, 2009, receive all dividends with respect to such shares on the
dividend payment dates, whether or not the shares have vested as long as any performance condition has been met. Restricted
stock grants made on or after July 28, 2009, contain forfeitable rights to dividends. Dividends for these grants are accrued on
the dividend payment dates but are not paid until the shares vest, and dividends accrued for shares that ultimately do not vest
are forfeited. Recipients of stock units do not pay any cash consideration for the units, do not have the right to vote, and do not
receive dividends with respect to such units.
FASB authoritative guidance requires that excess tax benefits be recognized as an addition to capital surplus and that
unrealized tax benefits be recognized as income tax expense unless there are excess tax benefits from previous equity awards to
which it can be offset. The Company calculates the amount of eligible excess tax benefits that are available to offset future tax
shortfalls in accordance with the long-form method described in the FASB authoritative guidance.
The Company recognizes compensation expense equal to the grant-date fair value for all stock-based payment awards
that are expected to vest. This expense is recorded on a straight-line basis over the requisite service period of the entire award,
unless the awards are subject to performance conditions, in which case the Company recognizes compensation expense over the
requisite service period of each separate vesting tranche. The Company determines the grant-date fair value of its restricted
stock and stock unit awards using the fair market value on the grant date, unless the awards are subject to market conditions, in
which case the Company utilizes a binomial-lattice model (i.e., Monte Carlo simulation model). The Monte Carlo simulation
model utilizes multiple input variables to determine the stock-based compensation expense.
During the year ended December 31, 2014, the Company granted performance shares to its executives in the form of
restricted stock. The shares granted contain (1) a performance condition based on target net income per share, and (2) a market
condition based on Total Shareholder Return (“TSR”). The TSR market condition measures the Company’s performance
against a peer group. Shares will be delivered at the end of the three year vesting and TSR performance period based on the
Company’s actual performance compared to the peer group. Actual shares earned will range from fifty percent (50%) to one
hundred fifty percent (150%) of the target award after any adjustment made for the performance condition. The fair value of
this award was determined using a Monte Carlo simulation with the following assumptions: an historical volatility of 31.55%,
0% dividend yield and a risk-free interest rate of 0.79%. The historical volatility was based on the most recent 2.75-year period
for the Company and the components of the peer group. The stock price projection for the Company and the components of the
peer group assumes a 0% dividend yield. This is mathematically equivalent to reinvesting dividends in the issuing entity over
38
38
38
39
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2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note I—Commitments and Contingencies (continued)
Note J—Stockholders’ Equity (continued)
behalf of herself and other allegedly “aggrieved employees” as defined by California’s Labor Code Private Attorney General
Act (“PAGA”). On October 10, 2014, the Court granted a motion by the Company to compel all of Rodriguez’s claims, except
the PAGA claim, to individual arbitration. At this stage of the litigation, it is not feasible to predict the outcome of or a range of
loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the Company’s Financial
Statements. The Company believes it has meritorious defenses to the allegations and the Company intends to continue to
vigorously defend against the litigation.
On September 5, 2014, Plaintiff Theresa Daniels, on behalf of herself and a putative class of salaried Recruiting
Managers, filed a complaint in California Superior Court naming the Company as Defendant. The complaint alleges that
salaried Recruiting Managers based in California have been misclassified under California law as exempt employees, and seeks
an unspecified amount for unpaid overtime pay alleged to be due to them had they been paid as non-exempt hourly employees,
as well as statutory penalties for alleged violations of the California Labor Code arising from such alleged misclassification.
The complaint also alleges a claim under California Business and Professions Code section 17200 for unfair competition. The
Plaintiff also seeks an unspecified amount for other damages, attorneys’ fees, and statutory penalties. On or about September
17, 2014, the Plaintiff provided written notice to the California Labor and Workforce Development Agency of her alleged
claims. On October 27, 2014, the Plaintiff filed a First Amended Complaint adding a representative claim and request for
penalties under the California Private Attorney General Act. At this stage of the litigation, it is not feasible to predict the
outcome of or a range of loss, should a loss occur, from this proceeding, and accordingly, no amounts have been provided in the
Company’s financial statements. The Company believes it has meritorious defenses to the allegations in this case, and the
Company intends to continue to vigorously defend against the litigation.
The Company is involved in a number of other lawsuits arising in the ordinary course of business. While management
does not expect any of these other matters to have a material adverse effect on the Company’s results of operations, financial
position or cash flows, litigation is subject to certain inherent uncertainties.
Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred.
Note J—Stockholders’ Equity
Stock Repurchase Program. As of December 31, 2014, the Company is authorized to repurchase, from time to time, up
to 4.8 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions,
depending on market conditions. The number and the cost of common stock shares repurchased during the years ended
December 31, 2014, 2013 and 2012, are reflected in the following table (in thousands):
Common stock repurchased (in shares) . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$161,587
$117,864
$132,691
Years Ended December 31,
2014
3,336
2013
3,305
2012
4,689
Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were
tendered by employees for the payment of exercise price and applicable statutory withholding taxes. The number and the cost of
employee stock plan repurchases made during the years ended December 31, 2014, 2013 and 2012, are reflected in the
following table (in thousands):
Employee stock plan repurchased (in shares) . . . . . . . . . . . . . . . . . . . . . . . .
Employee stock plan repurchased. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 22,386
$ 44,169
$ 50,045
Years Ended December 31,
2014
462
2013
1,157
2012
1,661
The repurchased shares are held in treasury and are presented as if constructively retired. Treasury stock is accounted for
using the cost method. Treasury stock activity for each of the three years ended December 31, 2014, 2013 and 2012 (consisting
of stock option exercises and the purchase of shares for the treasury) is presented in the Consolidated Statements of
Stockholders’ Equity.
Cash Dividends. The Company’s Board of Directors may at their discretion declare and pay dividends upon the shares of
the Company’s stock either out of the Company’s retained earnings or capital surplus. The cash dividends declared during the
years ended December 31, 2014, 2013 and 2012, are reflected in the following table:
Cash dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2014
$ .72
2013
$ .64
2012
$ .60
Repurchases of shares and issuances of cash dividends are applied first to the extent of retained earnings and any
remaining amounts are applied to capital surplus.
Note K—Stock Plans
Under various stock plans, officers, employees, and outside directors have received or may receive grants of restricted
stock, stock units, stock appreciation rights or options to purchase common stock. Grants have been made at the discretion of
the Committees of the Board of Directors. Grants generally vest either on a straight-line basis over four years or on a cliff basis
over three years. Shares offered under the plan are authorized but unissued shares or treasury shares.
Options currently outstanding under the plans have an exercise price equal to the fair market value of the Company’s
common stock at the date of grant and consist of non-statutory stock options under the Internal Revenue Code, and generally
have a term of 10 years. The Company has not granted any options to purchase common stock since 2006.
Recipients of restricted stock do not pay any cash consideration to the Company for the shares, have the right to vote all
shares subject to such grant, and for grants made prior to July 28, 2009, receive all dividends with respect to such shares on the
dividend payment dates, whether or not the shares have vested as long as any performance condition has been met. Restricted
stock grants made on or after July 28, 2009, contain forfeitable rights to dividends. Dividends for these grants are accrued on
the dividend payment dates but are not paid until the shares vest, and dividends accrued for shares that ultimately do not vest
are forfeited. Recipients of stock units do not pay any cash consideration for the units, do not have the right to vote, and do not
receive dividends with respect to such units.
FASB authoritative guidance requires that excess tax benefits be recognized as an addition to capital surplus and that
unrealized tax benefits be recognized as income tax expense unless there are excess tax benefits from previous equity awards to
which it can be offset. The Company calculates the amount of eligible excess tax benefits that are available to offset future tax
shortfalls in accordance with the long-form method described in the FASB authoritative guidance.
The Company recognizes compensation expense equal to the grant-date fair value for all stock-based payment awards
that are expected to vest. This expense is recorded on a straight-line basis over the requisite service period of the entire award,
unless the awards are subject to performance conditions, in which case the Company recognizes compensation expense over the
requisite service period of each separate vesting tranche. The Company determines the grant-date fair value of its restricted
stock and stock unit awards using the fair market value on the grant date, unless the awards are subject to market conditions, in
which case the Company utilizes a binomial-lattice model (i.e., Monte Carlo simulation model). The Monte Carlo simulation
model utilizes multiple input variables to determine the stock-based compensation expense.
During the year ended December 31, 2014, the Company granted performance shares to its executives in the form of
restricted stock. The shares granted contain (1) a performance condition based on target net income per share, and (2) a market
condition based on Total Shareholder Return (“TSR”). The TSR market condition measures the Company’s performance
against a peer group. Shares will be delivered at the end of the three year vesting and TSR performance period based on the
Company’s actual performance compared to the peer group. Actual shares earned will range from fifty percent (50%) to one
hundred fifty percent (150%) of the target award after any adjustment made for the performance condition. The fair value of
this award was determined using a Monte Carlo simulation with the following assumptions: an historical volatility of 31.55%,
0% dividend yield and a risk-free interest rate of 0.79%. The historical volatility was based on the most recent 2.75-year period
for the Company and the components of the peer group. The stock price projection for the Company and the components of the
peer group assumes a 0% dividend yield. This is mathematically equivalent to reinvesting dividends in the issuing entity over
38
39
39
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2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note K—Stock Plans (continued)
Note K—Stock Plans (continued)
the performance period. The risk-free interest rate is equal to the yield, as of the measurement date, of the zero-coupon U.S.
Treasury bill that is commensurate with the remaining performance measurement period.
The total pre-tax intrinsic value of stock options exercised and the total fair value of shares vested during the years ended
December 31, 2014, 2013 and 2012, are reflected in the following table (in thousands):
Stock-based compensation expense consisted of the following (in thousands):
Restricted stock and stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2014
$ 40,821
2013
$ 38,867
2012
$ 41,464
Unrecognized compensation cost is expected to be recognized over the next four years. Total unrecognized compensation
cost, net of estimated forfeitures, consisted of the following (in thousands):
Restricted stock and stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2014
$ 54,968
2013
$ 53,646
2012
$ 51,877
The following table reflects activity under all stock plans from December 31, 2011 through December 31, 2014, and the
weighted average exercise prices (in thousands, except per share amounts):
Restricted Stock Plans
without Market-Condition
Restricted Stock Plans
with Market-Condition
Number of
Shares/
Units
Weighted
Average
Grant Date
Fair Value
Number of
Shares/
Units
Weighted
Average
Grant Date
Fair Value
Stock Option Plans
Number of
Shares/
Units
Weighted
Average Exercise
Price Per Share
523
517
—
(240)
(42)
758
400
—
(259)
—
899
335
—
—
—
1,234
$33.42
$29.53
—
$33.42
$33.42
$30.77
$42.04
—
$29.53
—
$36.58
$50.09
—
—
—
$40.24
4,450
—
(2,260)
—
(99)
2,091
—
(1,397)
—
(62)
632
—
(528)
—
(27)
77
$21.85
—
$19.00
—
$24.74
$24.80
—
$23.82
—
$20.48
$27.41
—
$27.12
—
$27.83
$29.22
Outstanding, December 31, 2011 . . . . .
Granted. . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . .
Forfeited. . . . . . . . . . . . . . . . . . . . .
Outstanding, December 31, 2012 . . . . .
Granted. . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . .
Forfeited. . . . . . . . . . . . . . . . . . . . .
Outstanding, December 31, 2013 . . . . .
Granted. . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . .
Forfeited. . . . . . . . . . . . . . . . . . . . .
2,392
937
—
(1,550)
(42)
1,737
688
—
(1,087)
(21)
1,317
585
—
(712)
(25)
Outstanding, December 31, 2014 . . . . .
1,165
$24.47
$27.71
—
$22.20
$24.26
$28.25
$35.34
—
$28.53
$31.29
$31.68
$41.60
—
$31.96
$32.82
$36.47
40
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robert_half_10k_FIN_1-54.indd 40
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Total pre-tax intrinsic value of stock options exercised . . . . . . . . . . . . . . . $ 9,150
Total fair value of shares vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 38,566
$ 17,092
$ 53,931
$ 23,678
$ 55,186
The following table summarizes information about options outstanding and exercisable as of December 31, 2014 (in
thousands, except number of years and per share amounts):
Years Ended December 31,
2014
2013
2012
Range of
Exercise Prices
$25.34 to $25.34
$30.34 to $30.34
$32.36 to $32.36
$33.89 to $33.89
Options Outstanding and Exercisable
Number
Outstanding
and Exercisable as of
December 31,
2014
Weighted
Average
Remaining
Contractual
Weighted
Average
Exercise
Price
$25.34
$30.34
$32.36
$33.89
$29.22
Aggregate
Intrinsic
Value
$ 991
601
477
184
$2,253
Life
0.34
0.08
1.58
0.58
0.59
30
21
18
8
77
The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the Company’s
closing stock price of $58.38 as of December 31, 2014, which would have been received by the option holders had they
exercised their in-the-money options as of that date.
At December 31, 2014, the total number of available shares to grant under the plans (consisting of either restricted stock,
stock units, stock appreciation rights or options to purchase common stock) was approximately 6.5 million. All of the 77
thousand options outstanding at December 31, 2014, were exercisable with a weighted average exercise price of $29.22.
41
2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note K—Stock Plans (continued)
Note K—Stock Plans (continued)
the performance period. The risk-free interest rate is equal to the yield, as of the measurement date, of the zero-coupon U.S.
The total pre-tax intrinsic value of stock options exercised and the total fair value of shares vested during the years ended
Treasury bill that is commensurate with the remaining performance measurement period.
December 31, 2014, 2013 and 2012, are reflected in the following table (in thousands):
Years Ended December 31,
2014
2013
2012
Total pre-tax intrinsic value of stock options exercised . . . . . . . . . . . . . . .
Total fair value of shares vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2014
$ 9,150
$ 38,566
2013
$ 17,092
$ 53,931
2012
$ 23,678
$ 55,186
The following table summarizes information about options outstanding and exercisable as of December 31, 2014 (in
thousands, except number of years and per share amounts):
Range of
Exercise Prices
$25.34 to $25.34
$30.34 to $30.34
$32.36 to $32.36
$33.89 to $33.89
Options Outstanding and Exercisable
Number
Outstanding
and Exercisable as of
December 31,
2014
30
21
18
8
77
Weighted
Average
Remaining
Contractual
Life
0.34
0.08
1.58
0.58
0.59
Weighted
Average
Exercise
Price
$25.34
$30.34
$32.36
$33.89
$29.22
Aggregate
Intrinsic
Value
$ 991
601
477
184
$2,253
The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the Company’s
closing stock price of $58.38 as of December 31, 2014, which would have been received by the option holders had they
exercised their in-the-money options as of that date.
At December 31, 2014, the total number of available shares to grant under the plans (consisting of either restricted stock,
stock units, stock appreciation rights or options to purchase common stock) was approximately 6.5 million. All of the 77
thousand options outstanding at December 31, 2014, were exercisable with a weighted average exercise price of $29.22.
41
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robert_half_10k_FIN_1-54.indd 41
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Stock-based compensation expense consisted of the following (in thousands):
Restricted stock and stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 40,821
$ 38,867
$ 41,464
Unrecognized compensation cost is expected to be recognized over the next four years. Total unrecognized compensation
cost, net of estimated forfeitures, consisted of the following (in thousands):
Restricted stock and stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 54,968
$ 53,646
$ 51,877
December 31,
2014
2013
2012
The following table reflects activity under all stock plans from December 31, 2011 through December 31, 2014, and the
weighted average exercise prices (in thousands, except per share amounts):
Restricted Stock Plans
without Market-Condition
Restricted Stock Plans
with Market-Condition
Number of
Shares/
Units
Weighted
Average
Grant Date
Fair Value
Number of
Shares/
Units
Weighted
Average
Grant Date
Fair Value
Stock Option Plans
Number of
Shares/
Units
Weighted
Average Exercise
Price Per Share
Outstanding, December 31, 2011 . . . . .
2,392
Outstanding, December 31, 2012 . . . . .
1,737
Granted. . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . .
Forfeited. . . . . . . . . . . . . . . . . . . . .
Granted. . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . .
Forfeited. . . . . . . . . . . . . . . . . . . . .
Granted. . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . .
Forfeited. . . . . . . . . . . . . . . . . . . . .
937
—
(1,550)
(42)
688
—
(1,087)
(21)
585
—
(712)
(25)
Outstanding, December 31, 2013 . . . . .
1,317
523
517
—
(240)
(42)
758
400
—
(259)
—
899
335
—
—
—
$33.42
$29.53
—
$33.42
$33.42
$30.77
$42.04
$29.53
—
—
$36.58
$50.09
—
—
—
4,450
—
(2,260)
—
(99)
2,091
—
(1,397)
—
(62)
632
—
(528)
—
(27)
77
$21.85
$19.00
—
—
$24.74
$24.80
$23.82
—
—
$20.48
$27.41
$27.12
—
—
$27.83
$29.22
Outstanding, December 31, 2014 . . . . .
1,165
1,234
$40.24
$24.47
$27.71
—
$22.20
$24.26
$28.25
$35.34
—
$28.53
$31.29
$31.68
$41.60
—
$31.96
$32.82
$36.47
40
2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note M—Business Segments (continued)
Note L—Net Income Per Share
The calculation of net income per share for the three years ended December 31, 2014 is reflected in the following table
(in thousands, except per share amounts):
results (in thousands):
The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated
Years Ended December 31,
2014
2013
2012
Basic net income per share:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income allocated to participating securities . . . . . . . . . . . . . . . . . .
Net income available to common
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$305,928
—
$252,195
3
$209,942
1,081
$305,928
$252,192
$208,861
134,358
2.28
$
136,153
1.85
$
138,201
1.51
$
Diluted net income per share:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income allocated to participating securities . . . . . . . . . . . . . . . . . .
Net income available to common
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of potential common shares. . . . . . . . . . . . . . . . . . .
Diluted weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted net income per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$305,928
—
$252,195
3
$209,942
1,075
$305,928
134,358
1,183
135,541
2.26
$
$252,192
136,153
1,436
137,589
1.83
$
$208,867
138,201
1,208
139,409
1.50
$
Potential common shares include the dilutive effect of stock options, unvested performance-based restricted stock,
restricted stock which contains forfeitable rights to dividends, and stock units. The weighted average diluted common shares
outstanding for the years ended December 31, 2014, 2013 and 2012, excludes the effect of the following (in thousands):
Years Ended December 31,
2014
2013
2012
Net service revenues
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . $3,676,281
$3,369,840
$3,324,286
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . .
394,515
347,715
334,198
Risk consulting and internal audit
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
624,218
528,340
452,729
$4,695,014
$4,245,895
$4,111,213
Operating income
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . $ 358,533
$ 301,185
$ 276,826
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . .
78,333
54,390
55,745
Risk consulting and internal audit
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 497,349
$ 397,579
$ 344,245
60,316
497,182
557
(724)
42,702
398,277
1,700
(1,002)
10,875
343,446
398
(1,197)
The Company does not report total assets by segment. The following tables represent identifiable assets by business
segment (in thousands):
Accounts receivable
Temporary and consultant staffing . . . . . . . . . . . . . . . . . . . . . . . . . $403,615
$349,364
$336,468
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . .
December 31,
2014
2013
2012
115,563
169,042
100,550
129,252
88,436
112,800
$688,220
$579,166
$537,704
December 31,
2014
2013
2012
Goodwill
Temporary and consultant staffing . . . . . . . . . . . . . . . . . . . . . . . . . $133,964
$134,692
$134,756
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . .
26,450
39,074
26,574
39,567
26,586
39,997
$199,488
$200,833
$201,339
Employee stock options will have a dilutive effect under the treasury method only when the respective period’s average
market value of the Company’s common stock exceeds the exercise proceeds. Under the treasury method, exercise proceeds
include the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that
the Company has not yet recognized, and the amount of tax benefits that would be recorded in capital surplus, if the options
were exercised and the stock units and performance-based restricted stock had vested.
Note M—Business Segments
The Company, which aggregates its operating segments based on the nature of services, has three reportable segments:
temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The temporary
and consultant segment provides specialized staffing in the accounting and finance, administrative and office, information
technology, legal, advertising, marketing and web design fields. The permanent placement segment provides full-time personnel
in the accounting, finance, administrative and office, and information technology fields. The risk consulting segment provides
business and technology risk consulting and internal audit services.
The accounting policies of the segments are set forth in Note A—Summary of Significant Accounting Policies. The
Company evaluates performance based on income or loss from operations before net interest income, intangible amortization
expense, and income taxes.
42
42
42
43
robert_half_10k_FIN_1-54.indd 42
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Total number of anti-dilutive potential common shares. . . . . . . . . . . . . . . . . . . . . . . .
Years Ended
December 31,
2013
2012
— 227
2014
1
2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note M—Business Segments (continued)
Note L—Net Income Per Share
(in thousands, except per share amounts):
The calculation of net income per share for the three years ended December 31, 2014 is reflected in the following table
The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated
results (in thousands):
Years Ended December 31,
2014
2013
2012
Basic net income per share:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$305,928
$252,195
$209,942
Income allocated to participating securities . . . . . . . . . . . . . . . . . .
—
3
1,081
Net income available to common
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$305,928
$252,192
$208,861
Basic weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .
134,358
136,153
138,201
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2.28
$
1.85
$
1.51
Diluted net income per share:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$305,928
$252,195
$209,942
Income allocated to participating securities . . . . . . . . . . . . . . . . . .
—
3
1,075
Net income available to common
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$305,928
$252,192
$208,867
Basic weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .
134,358
136,153
138,201
Dilutive effect of potential common shares. . . . . . . . . . . . . . . . . . .
1,183
1,436
1,208
Diluted weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . .
135,541
137,589
139,409
Diluted net income per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2.26
$
1.83
$
1.50
Potential common shares include the dilutive effect of stock options, unvested performance-based restricted stock,
restricted stock which contains forfeitable rights to dividends, and stock units. The weighted average diluted common shares
outstanding for the years ended December 31, 2014, 2013 and 2012, excludes the effect of the following (in thousands):
Total number of anti-dilutive potential common shares. . . . . . . . . . . . . . . . . . . . . . . .
1 — 227
Employee stock options will have a dilutive effect under the treasury method only when the respective period’s average
market value of the Company’s common stock exceeds the exercise proceeds. Under the treasury method, exercise proceeds
include the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that
the Company has not yet recognized, and the amount of tax benefits that would be recorded in capital surplus, if the options
were exercised and the stock units and performance-based restricted stock had vested.
Note M—Business Segments
The Company, which aggregates its operating segments based on the nature of services, has three reportable segments:
temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The temporary
and consultant segment provides specialized staffing in the accounting and finance, administrative and office, information
technology, legal, advertising, marketing and web design fields. The permanent placement segment provides full-time personnel
in the accounting, finance, administrative and office, and information technology fields. The risk consulting segment provides
business and technology risk consulting and internal audit services.
The accounting policies of the segments are set forth in Note A—Summary of Significant Accounting Policies. The
Company evaluates performance based on income or loss from operations before net interest income, intangible amortization
expense, and income taxes.
Net service revenues
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2014
2013
2012
$3,676,281
394,515
$3,369,840
347,715
$3,324,286
334,198
624,218
528,340
452,729
$4,695,014
$4,245,895
$4,111,213
$ 358,533
78,333
$ 301,185
54,390
$ 276,826
55,745
60,316
497,182
557
(724)
$ 497,349
42,702
398,277
1,700
(1,002)
$ 397,579
10,875
343,446
398
(1,197)
$ 344,245
The Company does not report total assets by segment. The following tables represent identifiable assets by business
segment (in thousands):
Years Ended
December 31,
2014
2013
2012
Accounts receivable
Temporary and consultant staffing . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . .
Goodwill
Temporary and consultant staffing . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . .
December 31,
2013
2012
2014
$403,615
115,563
169,042
$688,220
$349,364
100,550
129,252
$579,166
$336,468
88,436
112,800
$537,704
December 31,
2014
2013
2012
$133,964
26,450
39,074
$199,488
$134,692
26,574
39,567
$200,833
$134,756
26,586
39,997
$201,339
42
43
43
43
robert_half_10k_FIN_1-54.indd 43
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2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note M—Business Segments (continued)
The Company operates internationally, with operations in North America, South America, Europe, Asia and Australia.
The following tables represent revenues and long-lived assets by geographic location (in thousands):
Note O—Subsequent Events
On February 11, 2015 the Company announced the following:
Net service revenues
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets, long-lived
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2014
2013
2012
$3,623,812
1,071,202
$4,695,014
$3,219,820
1,026,075
$4,245,895
$3,022,274
1,088,939
$4,111,213
December 31,
2014
2013
2012
$ 101,181
20,573
$ 121,754
$
92,252
20,392
$ 112,644
$
86,239
21,441
$ 107,680
Note N—Quarterly Financial Data (Unaudited)
The following tabulation shows certain quarterly financial data for 2014 and 2013 (in thousands, except per share
amounts):
Quarterly dividend per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Declaration date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$.20
February 11, 2015
February 25, 2015
March 13, 2015
On January 23, 2015, Plaintiff April Washington, on her own behalf and on behalf of two separate putative subclasses,
filed a complaint against the Company in the Superior Court of California, San Mateo County. The complaint alleges that the
Company violated the disclosure requirements of the Fair Credit Reporting Act (the “FCRA”) by: (i) procuring background
checks on Plaintiff and other putative class members for employment purposes without first making all required disclosures in a
standalone document; and (ii) procuring drug tests on Plaintiff and other putative class members for employment purposes
without first making all required disclosures in a standalone document. Washington seeks recovery on her own behalf and on
behalf of the putative subclasses in an unspecified amount for statutory damages of not less than $100 and not more than $1,000
for each class member, punitive damages, attorneys’ fees, litigation expenses, and costs. At this stage of the litigation, it is not
feasible to predict the outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts
have been provided in the Company’s Financial Statements. The Company believes it has meritorious defenses to the
allegations and the Company intends to vigorously defend against the litigation.
2014
Net service revenues . . . . . . . . . . . . . . . . . . . . . $1,084,342
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 438,495
Income before income taxes . . . . . . . . . . . . . . . $ 102,014
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
61,551
Net income available to common
1
stockholders - diluted . . . . . . . . . . . . . . . . . . $
Basic net income per share . . . . . . . . . . . . . . . . $
Diluted net income per share . . . . . . . . . . . . . . $
61,551
.45
.45
2013
Net service revenues . . . . . . . . . . . . . . . . . . . . . $1,023,684
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 410,290
89,376
Income before income taxes . . . . . . . . . . . . . . . $
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
55,863
Net income available to common
1
stockholders - diluted . . . . . . . . . . . . . . . . . . $
Basic net income per share . . . . . . . . . . . . . . . . $
Diluted net income per share . . . . . . . . . . . . . . $
55,861
.41
.40
44
44
44
Quarter
2
$1,164,914
$ 478,444
$ 123,653
75,140
$
$
$
$
75,140
.56
.55
3
$1,224,308
$ 505,220
$ 138,361
85,184
$
$
$
$
85,184
.64
.63
Quarter
2
$1,063,228
$ 432,108
$ 100,596
63,089
$
$
$
$
63,088
.46
.46
3
$1,075,119
$ 437,478
$ 103,713
66,358
$
$
$
$
66,358
.49
.48
4
$1,221,450
$ 500,757
$ 133,321
84,053
$
$
$
$
84,053
.63
.62
4
$1,083,864
$ 443,216
$ 103,894
66,885
$
$
$
$
66,885
.49
.49
45
robert_half_10k_FIN_1-54.indd 44
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2014 Annual Report • Robert Half
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note M—Business Segments (continued)
The Company operates internationally, with operations in North America, South America, Europe, Asia and Australia.
The following tables represent revenues and long-lived assets by geographic location (in thousands):
Note O—Subsequent Events
On February 11, 2015 the Company announced the following:
Quarterly dividend per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Declaration date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$.20
February 11, 2015
February 25, 2015
March 13, 2015
On January 23, 2015, Plaintiff April Washington, on her own behalf and on behalf of two separate putative subclasses,
filed a complaint against the Company in the Superior Court of California, San Mateo County. The complaint alleges that the
Company violated the disclosure requirements of the Fair Credit Reporting Act (the “FCRA”) by: (i) procuring background
checks on Plaintiff and other putative class members for employment purposes without first making all required disclosures in a
standalone document; and (ii) procuring drug tests on Plaintiff and other putative class members for employment purposes
without first making all required disclosures in a standalone document. Washington seeks recovery on her own behalf and on
behalf of the putative subclasses in an unspecified amount for statutory damages of not less than $100 and not more than $1,000
for each class member, punitive damages, attorneys’ fees, litigation expenses, and costs. At this stage of the litigation, it is not
feasible to predict the outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts
have been provided in the Company’s Financial Statements. The Company believes it has meritorious defenses to the
allegations and the Company intends to vigorously defend against the litigation.
Net service revenues
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,623,812
$3,219,820
$3,022,274
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,071,202
1,026,075
1,088,939
Years Ended December 31,
2014
2013
2012
$4,695,014
$4,245,895
$4,111,213
December 31,
2014
2013
2012
Assets, long-lived
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 101,181
$
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,573
92,252
20,392
$
86,239
21,441
$ 121,754
$ 112,644
$ 107,680
Note N—Quarterly Financial Data (Unaudited)
amounts):
The following tabulation shows certain quarterly financial data for 2014 and 2013 (in thousands, except per share
2014
1
2
3
4
Net service revenues . . . . . . . . . . . . . . . . . . . . . $1,084,342
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 438,495
Income before income taxes . . . . . . . . . . . . . . . $ 102,014
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
61,551
Net income available to common
stockholders - diluted . . . . . . . . . . . . . . . . . . $
61,551
Basic net income per share . . . . . . . . . . . . . . . . $
Diluted net income per share . . . . . . . . . . . . . . $
.45
.45
$1,164,914
$ 478,444
$ 123,653
$1,224,308
$ 505,220
$ 138,361
$1,221,450
$ 500,757
$ 133,321
75,140
75,140
.56
.55
85,184
85,184
.64
.63
84,053
84,053
.63
.62
2013
1
2
3
4
Net service revenues . . . . . . . . . . . . . . . . . . . . . $1,023,684
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 410,290
Income before income taxes . . . . . . . . . . . . . . . $
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
89,376
55,863
Net income available to common
stockholders - diluted . . . . . . . . . . . . . . . . . . $
55,861
Basic net income per share . . . . . . . . . . . . . . . . $
Diluted net income per share . . . . . . . . . . . . . . $
.41
.40
$1,063,228
$ 432,108
$ 100,596
$1,075,119
$ 437,478
$ 103,713
$1,083,864
$ 443,216
$ 103,894
63,089
63,088
.46
.46
66,358
66,358
.49
.48
66,885
66,885
.49
.49
Quarter
Quarter
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
44
45
45
45
robert_half_10k_FIN_1-54.indd 45
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2014 Annual Report • Robert Half
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
To the Board of Directors and Stockholders of Robert Half International Inc.:
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in
all material respects, the financial position of Robert Half International Inc. and its subsidiaries at December 31, 2014 and 2013,
and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014 in
conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the
financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion,
the Company 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 (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements
and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial
Reporting appearing in Item 9A. Our responsibility is to express opinions on these financial statements, on the financial
statement schedule, and on the Company's internal control over financial reporting based on our integrated 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 audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement and whether effective internal control over financial reporting was maintained in
all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting
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
audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our
audits provide a reasonable basis for our opinions.
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 (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, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ PricewaterhouseCoopers LLP
San Francisco, California
February 13, 2015
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures. Management, including the Company’s Chairman and Chief Executive Officer and
the Vice Chairman and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s
disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Chairman
and Chief Executive Officer and the Vice Chairman and Chief Financial Officer concluded that the disclosure controls and
procedures were effective to ensure that information required to be disclosed in the reports the Company files and submits
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and
forms of the Securities and Exchange Commission and that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its
principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting. There have been no changes in the Company’s internal controls
over financial reporting identified in connection with the evaluation required by Rule 13a-15 of the Securities Exchange Act of
1934 that occurred during the Company’s fourth quarter that has materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting. Management is responsible for establishing and
maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act
of 1934, as amended). Management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2014, using criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and concluded that the Company maintained effective internal
control over financial reporting as of December 31, 2014.
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 and procedures may deteriorate.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2014, has been audited
by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included
herein.
Item 9B. Other Information
None.
46
46
46
47
robert_half_10k_FIN_1-54.indd 46
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2014 Annual Report • Robert Half
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
all material respects, the financial position of Robert Half International Inc. and its subsidiaries at December 31, 2014 and 2013,
Disclosure Controls and Procedures. Management, including the Company’s Chairman and Chief Executive Officer and
the Vice Chairman and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s
disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Chairman
and Chief Executive Officer and the Vice Chairman and Chief Financial Officer concluded that the disclosure controls and
procedures were effective to ensure that information required to be disclosed in the reports the Company files and submits
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and
forms of the Securities and Exchange Commission and that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its
principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting. There have been no changes in the Company’s internal controls
over financial reporting identified in connection with the evaluation required by Rule 13a-15 of the Securities Exchange Act of
1934 that occurred during the Company’s fourth quarter that has materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting. Management is responsible for establishing and
maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act
of 1934, as amended). Management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2014, using criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and concluded that the Company maintained effective internal
control over financial reporting as of December 31, 2014.
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 and procedures may deteriorate.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2014, has been audited
by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included
herein.
Item 9B. Other Information
None.
To the Board of Directors and Stockholders of Robert Half International Inc.:
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in
and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014 in
conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the
financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion,
the Company 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 (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements
and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial
Reporting appearing in Item 9A. Our responsibility is to express opinions on these financial statements, on the financial
statement schedule, and on the Company's internal control over financial reporting based on our integrated 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 audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement and whether effective internal control over financial reporting was maintained in
all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting
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
audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our
audits provide a reasonable basis for our opinions.
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 (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, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ PricewaterhouseCoopers LLP
San Francisco, California
February 13, 2015
46
47
47
47
robert_half_10k_FIN_1-54.indd 47
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2014 Annual Report • Robert Half
Except as provided below in this Part III, the information required by Items 10 through 14 of Part III is incorporated by
Item 15. Exhibits and Financial Statement Schedules
PART III
PART IV
reference from Item 1 of this Report and from the registrant’s Proxy Statement, under the captions “Nomination and Election of
Directors,” “Beneficial Stock Ownership,” “Compensation Discussion and Analysis,” “Compensation Tables,” “Corporate
Governance,” “The Board and Committees” and “Independent Registered Public Accounting Firm” which Proxy Statement
will be mailed to stockholders in connection with the registrant’s annual meeting of stockholders which is scheduled to be held
in May 2015.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Equity Compensation Plan Information
Plan Category
Equity compensation plans approved by security
holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity compensation plan not approved by
security holders(a) . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
A
Weighted average
exercise price of
outstanding options,
warrants and rights
B
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column A)
C
55,827
21,439
77,266
$28.79
$30.34
$29.22
6,504,020
—
6,504,020
(a)
This plan, by its terms, expressly prohibited any grants to directors or executive officers. The plan was terminated in May
2005, and no future grants may be made under it. The information in the table reflects shares issuable upon the exercise
of options granted before the plan was terminated.
Since May 2005, all grants have been made pursuant to the Stock Incentive Plan, which was approved by stockholders in
May 2005 and re-approved in May 2008, May 2011, May 2013, and May 2014. Such plan authorizes the issuance of stock
options, restricted stock, stock units and stock appreciation rights to directors, executive officers and employees.
Description of Equity Plan Not Approved by Stockholders
The following plan was terminated in May 2005 and no future grants may be made under it.
StockPlus Plan. The StockPlus Plan authorized the grant of stock options to employees other than directors and executive
officers. No option could have a term of more than ten years and the last outstanding options expired as of January 31, 2015.
(a) 1. Financial Statements
The following consolidated financial statements of the Company and its subsidiaries are included in Item 8 of this report:
Consolidated statements of financial position at December 31, 2014 and 2013.
Consolidated statements of operations for the years ended December 31, 2014, 2013, and 2012.
Consolidated statements of comprehensive income for the years ended December 31, 2014, 2013, and 2012.
Consolidated statements of stockholders’ equity for the years ended December 31, 2014, 2013, and 2012.
Consolidated statements of cash flows for the years ended December 31, 2014, 2013, and 2012.
Selected quarterly financial data for the years ended December 31, 2014 and 2013 are set forth in Note N—Quarterly
Notes to consolidated financial statements.
Report of independent registered public accounting firm.
Financial Data (Unaudited) included in Item 8 of this report.
2. Financial Statement Schedules
Schedule II—Valuation and Qualifying Accounts
Schedules I, III, IV and V have been omitted as they are not applicable.
48
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2014 Annual Report • Robert Half
Except as provided below in this Part III, the information required by Items 10 through 14 of Part III is incorporated by
Item 15. Exhibits and Financial Statement Schedules
PART III
PART IV
reference from Item 1 of this Report and from the registrant’s Proxy Statement, under the captions “Nomination and Election of
Directors,” “Beneficial Stock Ownership,” “Compensation Discussion and Analysis,” “Compensation Tables,” “Corporate
Governance,” “The Board and Committees” and “Independent Registered Public Accounting Firm” which Proxy Statement
will be mailed to stockholders in connection with the registrant’s annual meeting of stockholders which is scheduled to be held
in May 2015.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Equity Compensation Plan Information
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
A
Weighted average
exercise price of
outstanding options,
warrants and rights
B
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column A)
Plan Category
Equity compensation plans approved by security
holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity compensation plan not approved by
security holders(a) . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55,827
21,439
77,266
$28.79
$30.34
$29.22
C
—
6,504,020
6,504,020
(a)
This plan, by its terms, expressly prohibited any grants to directors or executive officers. The plan was terminated in May
2005, and no future grants may be made under it. The information in the table reflects shares issuable upon the exercise
of options granted before the plan was terminated.
Since May 2005, all grants have been made pursuant to the Stock Incentive Plan, which was approved by stockholders in
May 2005 and re-approved in May 2008, May 2011, May 2013, and May 2014. Such plan authorizes the issuance of stock
options, restricted stock, stock units and stock appreciation rights to directors, executive officers and employees.
Description of Equity Plan Not Approved by Stockholders
The following plan was terminated in May 2005 and no future grants may be made under it.
StockPlus Plan. The StockPlus Plan authorized the grant of stock options to employees other than directors and executive
officers. No option could have a term of more than ten years and the last outstanding options expired as of January 31, 2015.
(a) 1. Financial Statements
The following consolidated financial statements of the Company and its subsidiaries are included in Item 8 of this report:
Consolidated statements of financial position at December 31, 2014 and 2013.
Consolidated statements of operations for the years ended December 31, 2014, 2013, and 2012.
Consolidated statements of comprehensive income for the years ended December 31, 2014, 2013, and 2012.
Consolidated statements of stockholders’ equity for the years ended December 31, 2014, 2013, and 2012.
Consolidated statements of cash flows for the years ended December 31, 2014, 2013, and 2012.
Notes to consolidated financial statements.
Report of independent registered public accounting firm.
Selected quarterly financial data for the years ended December 31, 2014 and 2013 are set forth in Note N—Quarterly
Financial Data (Unaudited) included in Item 8 of this report.
2. Financial Statement Schedules
Schedule II—Valuation and Qualifying Accounts
Schedules I, III, IV and V have been omitted as they are not applicable.
48
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2014 Annual Report • Robert Half
3. Exhibits
Exhibit
No.
3.1
3.2
4.1
*10.1
*10.2
*10.3
*10.4
*10.5
*10.6
*10.7
*10.8
Exhibit
Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009.
By-Laws, incorporated by reference to Exhibit 3.2 to Registrant’s Annual Report on Form
10-K for the fiscal year ended December 31, 2003.
Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
Form of Power of Attorney and Indemnification Agreement, incorporated by reference to
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2002.
Employment Agreement between the Registrant and Harold M. Messmer, Jr., incorporated
by reference to (i) Exhibit 10.(c) to the Registrant’s Annual Report on Form 10-K for the
fiscal year ended December 31, 1985, (ii) Exhibit 10.2(b) to Registrant’s Registration
Statement on Form S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended December 31, 1987, (iv) Exhibit 10.2(d) to
the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1988,
(v) Exhibit 28.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1990, (vi) Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K
for the fiscal year ended December 31, 1991, (vii) Exhibit 10.1 to the Registrant’s Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1993, (viii) Exhibit 10.7 to the
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993,
(ix) Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1995, (x) Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for
the fiscal year ended December 31, 1995, (xi) Exhibit 10.2 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended December 31, 1996, (xii) Exhibit 10.2 to the
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997,
(xiii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, (xiv) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for
the fiscal year ended December 31, 1999, (xv) Exhibit 10.1 to the Registrant’s Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2004, (xvi) Exhibit 10.5 to the
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2008, and
(xvii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2010.
Amended and Restated Retirement Agreement between Registrant and Harold M. Messmer
Jr., incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-
K dated December 7, 2006.
Amended and Restated Deferred Compensation Plan, incorporated by reference to Exhibit
10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 2008.
Amended and Restated Severance Agreement dated as of February 9, 2011, between
Registrant and Paul F. Gentzkow, incorporated by reference to Exhibit 10.8 to Registrant’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
Agreement dated as of July 31, 1995, between Registrant and Paul F. Gentzkow,
incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q
for the fiscal quarter ended September 30, 2000.
Form of Amended and Restated Severance Agreement, incorporated by reference to Exhibit
10.10 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31,
2010.
Form of Indemnification Agreement for Directors of the Registrant, incorporated by
reference to (i) Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K for the fiscal
year ended December 31, 1989 and (ii) Exhibit 10.19 to the Registrant’s Annual Report on
Form 10-K for the fiscal year ended December 31, 1993.
50
50
50
Exhibit
No.
*10.9
*10.10
*10.11
*10.12
*10.13
*10.14
*10.15
*10.16
*10.17
*10.18
*10.19
*10.20
*10.21
*10.22
*10.23
21.1
23.1
31.1
Exhibit
Form of Indemnification Agreement for Executive Officers of Registrant, incorporated by
reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2000.
Senior Executive Retirement Plan, incorporated by reference to Exhibit 10.13 to
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
Collateral Assignment of Split Dollar Insurance Agreement, incorporated by reference to
(i) Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2000, and (ii) Exhibit 10.18 to the Registrant’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2003.
Form of Part-Time Employment Agreement, as amended and restated, incorporated by
reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2014.
Annual Performance Bonus Plan, as amended and restated, incorporated by reference to
Exhibit 99.1 to Registrant’s Current Report on Form 8-K dated May 23, 2013.
Summary of Outside Director Cash Remuneration, incorporated by reference to Exhibit
10.2 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2010.
2014.
Stock Incentive Plan, as amended and restated, incorporated by reference to Exhibit 10.2 to
the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective
April 15, 2013, incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report
on Form 10-Q for the fiscal quarter ended March 31, 2013.
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective
through April 14, 2013, incorporated by reference to Exhibit 99.3 to Registrant’s Current
Report on Form 8-K dated May 3, 2005.
Amendment to Restricted Share Agreement dated as of May 9, 2012, between Registrant
and Harold M. Messmer, Jr., incorporated by reference to Exhibit 10.1 to Registrant’s
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012.
Form of Amendment to Restricted Share Agreement dated as of May 9, 2012, incorporated
by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 2012.
Form of Amendment to Restricted Share Agreement dated as of November 8, 2012,
incorporated by reference to Exhibit 10.27 to Registrant’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2012.
Stock Incentive Plan—Form of Stock Option Agreement for Executive Officers,
incorporated by reference to Exhibit 99.4 to Registrant’s Current Report on Form 8-K dated
May 3, 2005.
Stock Incentive Plan—Form of Restricted Share Agreement for Outside Directors,
incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q
for the fiscal quarter ended March 31, 2006.
Stock Incentive Plan—Form of Stock Option Agreement for Outside Directors,
incorporated by reference to Exhibit 99.6 to Registrant’s Current Report on Form 8-K dated
May 3, 2005.
Subsidiaries of the Registrant.
Independent Registered Public Accounting Firm’s Consent.
Rule 13a-14(a) Certification of Chief Executive Officer.
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2014 Annual Report • Robert Half
3. Exhibits
Exhibit
No.
3.1
3.2
4.1
*10.1
*10.2
*10.3
*10.4
*10.5
*10.6
*10.7
*10.8
Exhibit
Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009.
By-Laws, incorporated by reference to Exhibit 3.2 to Registrant’s Annual Report on Form
10-K for the fiscal year ended December 31, 2003.
Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
Form of Power of Attorney and Indemnification Agreement, incorporated by reference to
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2002.
Employment Agreement between the Registrant and Harold M. Messmer, Jr., incorporated
by reference to (i) Exhibit 10.(c) to the Registrant’s Annual Report on Form 10-K for the
fiscal year ended December 31, 1985, (ii) Exhibit 10.2(b) to Registrant’s Registration
Statement on Form S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended December 31, 1987, (iv) Exhibit 10.2(d) to
the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1988,
(v) Exhibit 28.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1990, (vi) Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K
for the fiscal year ended December 31, 1991, (vii) Exhibit 10.1 to the Registrant’s Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1993, (viii) Exhibit 10.7 to the
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993,
(ix) Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1995, (x) Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for
the fiscal year ended December 31, 1995, (xi) Exhibit 10.2 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended December 31, 1996, (xii) Exhibit 10.2 to the
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997,
(xiii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, (xiv) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for
the fiscal year ended December 31, 1999, (xv) Exhibit 10.1 to the Registrant’s Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2004, (xvi) Exhibit 10.5 to the
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2008, and
(xvii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2010.
Amended and Restated Retirement Agreement between Registrant and Harold M. Messmer
Jr., incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-
K dated December 7, 2006.
Amended and Restated Deferred Compensation Plan, incorporated by reference to Exhibit
10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 2008.
Amended and Restated Severance Agreement dated as of February 9, 2011, between
Registrant and Paul F. Gentzkow, incorporated by reference to Exhibit 10.8 to Registrant’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
Agreement dated as of July 31, 1995, between Registrant and Paul F. Gentzkow,
incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q
for the fiscal quarter ended September 30, 2000.
Form of Amended and Restated Severance Agreement, incorporated by reference to Exhibit
10.10 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31,
2010.
Form of Indemnification Agreement for Directors of the Registrant, incorporated by
reference to (i) Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K for the fiscal
year ended December 31, 1989 and (ii) Exhibit 10.19 to the Registrant’s Annual Report on
Form 10-K for the fiscal year ended December 31, 1993.
50
Exhibit
No.
*10.9
*10.10
*10.11
*10.12
*10.13
*10.14
*10.15
*10.16
*10.17
*10.18
*10.19
*10.20
*10.21
*10.22
*10.23
21.1
23.1
31.1
Exhibit
Form of Indemnification Agreement for Executive Officers of Registrant, incorporated by
reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2000.
Senior Executive Retirement Plan, incorporated by reference to Exhibit 10.13 to
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
Collateral Assignment of Split Dollar Insurance Agreement, incorporated by reference to
(i) Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2000, and (ii) Exhibit 10.18 to the Registrant’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2003.
Form of Part-Time Employment Agreement, as amended and restated, incorporated by
reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2014.
Annual Performance Bonus Plan, as amended and restated, incorporated by reference to
Exhibit 99.1 to Registrant’s Current Report on Form 8-K dated May 23, 2013.
Summary of Outside Director Cash Remuneration, incorporated by reference to Exhibit
10.2 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2010.
Stock Incentive Plan, as amended and restated, incorporated by reference to Exhibit 10.2 to
the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
2014.
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective
April 15, 2013, incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report
on Form 10-Q for the fiscal quarter ended March 31, 2013.
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective
through April 14, 2013, incorporated by reference to Exhibit 99.3 to Registrant’s Current
Report on Form 8-K dated May 3, 2005.
Amendment to Restricted Share Agreement dated as of May 9, 2012, between Registrant
and Harold M. Messmer, Jr., incorporated by reference to Exhibit 10.1 to Registrant’s
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012.
Form of Amendment to Restricted Share Agreement dated as of May 9, 2012, incorporated
by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 2012.
Form of Amendment to Restricted Share Agreement dated as of November 8, 2012,
incorporated by reference to Exhibit 10.27 to Registrant’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2012.
Stock Incentive Plan—Form of Stock Option Agreement for Executive Officers,
incorporated by reference to Exhibit 99.4 to Registrant’s Current Report on Form 8-K dated
May 3, 2005.
Stock Incentive Plan—Form of Restricted Share Agreement for Outside Directors,
incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q
for the fiscal quarter ended March 31, 2006.
Stock Incentive Plan—Form of Stock Option Agreement for Outside Directors,
incorporated by reference to Exhibit 99.6 to Registrant’s Current Report on Form 8-K dated
May 3, 2005.
Subsidiaries of the Registrant.
Independent Registered Public Accounting Firm’s Consent.
Rule 13a-14(a) Certification of Chief Executive Officer.
51
51
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2014 Annual Report • Robert Half
Exhibit
No.
31.2
32.1
32.2
101.1
Exhibit
Rule 13a-14(a) Certification of Chief Financial Officer.
Rule 1350 Certification of Chief Executive Officer.
Rule 1350 Certification of Chief Financial Officer.
Part II, Item 8 of this Form 10-K formatted in XBRL.
* Management contract or compensatory plan.
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.
SIGNATURES
ROBERT HALF INTERNATIONAL INC.
(Registrant)
/s/ M. KEITH WADDELL
M. Keith Waddell
Vice Chairman, President and
Chief Financial Officer
(Principal Financial Officer)
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.
52
52
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Date: February 13, 2015
Date: February 13, 2015
Date: February 13, 2015
Date: February 13, 2015
Date: February 13, 2015
Date: February 13, 2015
Date: February 13, 2015
Date: February 13, 2015
/s/ HAROLD M. MESSMER, JR.
Harold M. Messmer, Jr.
Chairman of the Board,
Chief Executive Officer,
and a Director
(Principal Executive Officer)
/s/ ANDREW S. BERWICK, JR.
Andrew S. Berwick, Jr., Director
/s/ BARBARA J. NOVOGRADAC
Barbara J. Novogradac, Director
/s/ ROBERT J. PACE
Robert J. Pace, Director
/s/ FREDERICK A. RICHMAN
Frederick A. Richman, Director
/s/ M. KEITH WADDELL
M. Keith Waddell
Vice Chairman, President,
Chief Financial Officer and a Director
(Principal Financial Officer)
/s/ MICHAEL C. BUCKLEY
Michael C. Buckley
Executive Vice President and Treasurer
(Principal Accounting Officer)
By:
By:
By:
By:
By:
By:
By:
By:
53
2014 Annual Report • Robert Half
Exhibit
No.
31.2
32.1
32.2
101.1
Exhibit
Rule 13a-14(a) Certification of Chief Financial Officer.
Rule 1350 Certification of Chief Executive Officer.
Rule 1350 Certification of Chief Financial Officer.
Part II, Item 8 of this Form 10-K formatted in XBRL.
* Management contract or compensatory plan.
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.
SIGNATURES
ROBERT HALF INTERNATIONAL INC.
(Registrant)
Date: February 13, 2015
By:
/s/ M. KEITH WADDELL
M. Keith Waddell
Vice Chairman, President and
Chief Financial Officer
(Principal Financial Officer)
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.
Date: February 13, 2015
Date: February 13, 2015
Date: February 13, 2015
Date: February 13, 2015
Date: February 13, 2015
Date: February 13, 2015
Date: February 13, 2015
/s/ HAROLD M. MESSMER, JR.
Harold M. Messmer, Jr.
Chairman of the Board,
Chief Executive Officer,
and a Director
(Principal Executive Officer)
/s/ ANDREW S. BERWICK, JR.
Andrew S. Berwick, Jr., Director
/s/ BARBARA J. NOVOGRADAC
Barbara J. Novogradac, Director
/s/ ROBERT J. PACE
Robert J. Pace, Director
/s/ FREDERICK A. RICHMAN
Frederick A. Richman, Director
/s/ M. KEITH WADDELL
M. Keith Waddell
Vice Chairman, President,
Chief Financial Officer and a Director
(Principal Financial Officer)
/s/ MICHAEL C. BUCKLEY
Michael C. Buckley
Executive Vice President and Treasurer
(Principal Accounting Officer)
By:
By:
By:
By:
By:
By:
By:
53
53
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52
2014 Annual Report • Robert Half
Schedule II—Valuation and Qualifying Accounts
(in thousands)
Year Ended December 31, 2012
Allowance for doubtful accounts
receivable . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax valuation allowance . . . . . . .
Year Ended December 31, 2013
Allowance for doubtful accounts
receivable . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax valuation allowance . . . . . . .
Year Ended December 31, 2014
Allowance for doubtful accounts
receivable . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax valuation allowance . . . . . . .
Balance at
Beginning of
Period
$22,627
$36,334
$24,852
$39,310
$27,261
$37,044
Charged to
Expenses
Deductions
Translation
Adjustments
Balance at
End of Period
7,133
6,558
7,467
7,053
9,825
1,742
(3,845)
(2,774)
(4,313)
(8,135)
(3,670)
(6,056)
(1,063)
(808)
(745)
(1,184)
(2,872)
(3,169)
$24,852
$39,310
$27,261
$37,044
$30,544
$29,561
54
54
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2014 Annual Report • Robert Half SUBSIDIARIES OF ROBERT HALF INTERNATIONAL INC.
Name of Subsidiary
RH Holding Company, Inc.
Benchmark Staffing Inc.
BMK Resources, Inc.
Robert Half of California, Inc.
Robert Half Staffing, LLC
Robert Half Temporaries, Inc.
Jersey Temporaries, Inc.
Protiviti Inc.
Protiviti Holdings Inc.
RH-TM Resources, Inc.
Protiviti Government Services, Inc.
Penta Advisory Services, LLC
Robert Half Corporation
Robert Half Nevada Staff, Inc.
EXHIBIT 21.1
Jurisdiction of
Incorporation
California
California
California
California
California
California
Delaware
Delaware
Delaware
Delaware
Maryland
Maryland
Nevada
Nevada
Robert Half of Pennsylvania, Inc.
Pennsylvania
Protiviti Pty. Limited
Robert Half Australia Pty. Limited
Robert Half Austria GmbH
Robert Half BVBA
Robert Half Consulting Services BVBA
Robert Half Trabalho Temporário Ltda.
Australia
Australia
Austria
Belgium
Belgium
Brazil
2014 Annual Report • Robert Half
Name of Subsidiary
Protiviti EOOD
Robert Half Canada Inc.
Robert Half Internacional Empresa De Servicios Transitorios Limitada
Protiviti Shanghai Co. Ltd.
Robert Half Human Resources Shanghai Company Limited
Robert Half Hong Kong Limited
Protiviti Hong Kong Co. Limited
Protiviti SAS
Robert Half International France SAS
Robert Half SAS
Protiviti GmbH
Robert Half Deutschland Beteiligungsgesellschaft GmbH
Robert Half Deutschland GmbH & Co. KG
Protiviti Consulting Private Limited
Protiviti S.r.l.
Robert Half S.r.l.
Protiviti LLC
Robert Half Japan Ltd.
Robert Half Sarl
Robert Half Holding Sarl
Protiviti B.V.
Robert Half International B.V.
Robert Half Nederland B.V.
Jurisdiction of
Incorporation
Bulgaria
Canada
Chile
China
China
China, Hong Kong SAR
China, Hong Kong SAR
France
France
France
Germany
Germany
Germany
India
Italy
Italy
Japan
Japan
Luxembourg
Luxembourg
Netherlands
Netherlands
Netherlands
2014 Annual Report • Robert Half
Name of Subsidiary
Robert Half New Zealand Limited
Protiviti Pte. Ltd.
Robert Half International Pte. Ltd.
Robert Half S.L.
Robert Half GmbH
Jurisdiction of
Incorporation
New Zealand
Singapore
Singapore
Spain
Switzerland
Robert Half International (Dubai) Ltd.
United Arab Emirates
Protiviti Limited
Robert Half Holdings Limited
Robert Half Limited
United Kingdom
United Kingdom
United Kingdom
2014 Annual Report • Robert Half
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
EXHIBIT 23.1
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 33-14706,
33-32622, 33-32623, 33-39187, 33-39204, 33-40795, 33-52617, 33-56639, 33-56641, 33-57763, 33-62138, 33-62140,
33-65401, 33-65403, 333-05743, 333-05745, 333-18283, 333-18339, 333-38786, 333-38820, 333-42471, 333-42573,
333-42343, 333-42269, 333-50068, 333-50094, 333-66038, 333-66042, 333-68193, 333-68135, 333-68273, 333-75694,
333-79793, 333-79829, 333-88001, 333-91173, 333-91151, 333-91167, 333-98737, 333-125044, 333-151015, and
333-196291) of Robert Half International Inc., of our report dated February 13, 2015, relating to the consolidated financial
statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this
Form 10-K.
/s/ PricewaterhouseCoopers LLP
San Francisco, California
February 13, 2015
2014 Annual Report • Robert Half
EXHIBIT 31.1
Certification Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934
I, Harold M. Messmer, Jr., certify that:
1.
2.
3.
4.
I have reviewed this report on Form 10-K of Robert Half International Inc.;
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;
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;
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)
(b)
(c)
(d)
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;
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;
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
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 fiscal 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 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)
b)
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
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 13, 2015
/s/ HAROLD M. MESSMER, JR.
Harold M. Messmer, Jr.
Chairman and Chief Executive Officer
2014 Annual Report • Robert Half
EXHIBIT 31.2
Certification Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934
I, M. Keith Waddell, certify that:
1.
2.
3.
4.
I have reviewed this report on Form 10-K of Robert Half International Inc.;
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;
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;
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)
(b)
(c)
(d)
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;
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;
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
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 fiscal 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 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)
b)
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
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 13, 2015
/s/ M. KEITH WADDELL
M. Keith Waddell
Vice Chairman, President and
Chief Financial Officer
2014 Annual Report • Robert Half
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K for the fiscal year ended December 31, 2014 of Robert Half
International Inc. (the “Form 10-K”), I, Harold M. Messmer, Jr., Chief Executive Officer of Robert Half International Inc.,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 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 Robert Half International Inc.
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or
otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by
Section 906, has been provided to Robert Half International Inc. and will be retained by Robert Half International Inc. and
furnished to the Securities and Exchange Commission or its staff upon request.
February 13, 2015
/s/ Harold M. Messmer, Jr.
Harold M. Messmer, Jr.
Chief Executive Officer
Robert Half International Inc.
2014 Annual Report • Robert Half
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K for the fiscal year ended December 31, 2014 of Robert Half
International Inc. (the “Form 10-K”), I, M. Keith Waddell, Chief Financial Officer of Robert Half International Inc., certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 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 Robert Half International Inc.
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or
otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by
Section 906, has been provided to Robert Half International Inc. and will be retained by Robert Half International Inc. and
furnished to the Securities and Exchange Commission or its staff upon request.
February 13, 2015
/s/ M. Keith Waddell
M. Keith Waddell
Chief Financial Officer
Robert Half International Inc.
2014 Annual Report • Robert Half
CORPORATE DIRECTORY
BOARD OF DIRECTORS
Andrew S. Berwick, Jr.
President and Chief Executive Officer of
Berwick-Pacific Corporation, a real estate
development company
Harold M. Messmer, Jr.
Chairman of the Board and Chief Executive
Officer of Robert Half International
Barbara J. Novogradac
President of Novogradac Investment Company,
a private real estate investment company
Robert J. Pace
Retired partner and Managing Director of
Goldman, Sachs & Co., a global investment
banking and securities firm
Frederick A. Richman
Consultant to Deloitte Tax LLP
M. Keith Waddell
Vice Chairman of the Board, President
and Chief Financial Officer of Robert Half
International
Corporate Headquarters
2884 Sand Hill Road
Menlo Park, California 94025
650.234.6000
www.roberthalf.com
MANAGEMENT
Executive Officers
Harold M. Messmer, Jr.
Chairman of the Board and Chief Executive Officer
M. Keith Waddell
Vice Chairman of the Board, President and
Chief Financial Officer
Paul F. Gentzkow
President and Chief Operating Officer – Staffing Services
Robert W. Glass
Executive Vice President, Corporate Development
Michael C. Buckley
Executive Vice President, Chief Administrative Officer,
Treasurer and Assistant Secretary
Officers
Evelyn Crane-Oliver
Senior Vice President – Legal and Secretary
Lex Doherty
Senior Vice President, Corporate Controller
Kenneth D. Gitlin
Senior Vice President, Operational Support
Tami A. Munns
Senior Vice President, Corporate Services – Staffing
M. Sean Perry
Senior Vice President, Chief Information Officer
Registrar and Stock Transfer Agent
Lynda Ward Pierce
Computershare
211 Quality Circle, Suite 210
College Station, Texas 77845
800.676.0894
800.952.9245 (Hearing Impaired)
201.680.6578 (Foreign Shareholders)
www.computershare.com/investor
Senior Vice President, Human Resources and Compensation
Reesa M. Staten
Senior Vice President, Corporate Communications
Paula M. Streit
Senior Vice President, Corporate Services – Protiviti
2014 Annual Report • Robert Half ACCOUNTEMPS®
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