ANNUAL
R E P O R T
2 0 1 6
ABOUT US
1 ROBERT HALF | 2016 ANNUAL REPORT
Robert Half is the world’s first and largest specialized staffing firm. For nearly 70
years, we have helped clients and job candidates find the right fit for their staffing or
employment needs.
We are a recognized leader in professional staffing and consulting services.
Accountemps® places temporary accounting,
finance and bookkeeping professionals.
Robert Half® Finance & Accounting
provides skilled full-time accounting and
finance professionals.
Robert Half® Management Resources
places senior-level finance, accounting and
business systems professionals on an interim
and project basis.
OfficeTeam® specializes in the temporary
and temporary-to-full-time placement of
administrative and office support professionals.
Robert Half® Technology places IT
professionals on a project and full-time basis,
and offers clients a full spectrum of technology
staffing services, including managed services
and IT solutions consulting.
Robert Half® Legal places in-demand legal
personnel on a temporary, project and full-
time basis with law firms and corporate legal
departments.
The Creative Group® connects talented
interactive, design, marketing, advertising and
public relations professionals with companies
on a project, contract-to-hire and full-time basis.
Robert Half was founded in 1948 and operates in 18 countries. The company is traded
on the New York Stock Exchange (symbol: RHI) and is a member of the S&P 500 Index.
Robert Half frequently appears on “Best Places to Work” lists around the world. We
have also been included on FORTUNE magazine’s “Most Admired Companies” list for
the past 19 years, and in 2016 we were the highest-ranked firm in our industry. Robert
Half was named to Forbes’ list of “America’s Best Large Employers” in 2016.
Protiviti®
Robert Half is the parent company of Protiviti, a global consulting firm that delivers
deep expertise, objective insights, a tailored approach and unparalleled collaboration
to help leaders confidently face the future. Through a network of 75 locations in 25
countries, Protiviti and its independently owned Member Firms provide clients with
consulting solutions in finance, technology, operations, data, analytics, governance,
risk and internal audit.
Protiviti has served more than 60 percent of FORTUNE 1000 and 35 percent of FORTUNE
Global 500 companies. The firm also works with smaller, growing companies, including
those looking to go public, as well as with government agencies. In 2017, for the third
straight year, Protiviti was named one of the FORTUNE “100 Best Companies to Work
For.” In 2016, Consulting magazine cited Protiviti as one of the fastest-growing consulting
firms for the second consecutive year. Protiviti is a wholly owned subsidiary of Robert Half.
2 ROBERT HALF | 2016 ANNUAL REPORT
SELECTED FINANCIAL DATA
(in millions, except per share amounts)
YEARS ENDED DEC 31,
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
INCOME
STATEMENT DATA:
Net service revenues
$ 5,250.4 $ 5,094.9 $ 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
Net income
$ 343.4 $ 357.8 $ 305.9 $ 252.2 $ 209.9 $ 149.9 $
66.1 $
37.3 $ 250.2 $ 296.2 $ 283.2
Diluted net income
per share
$
2.67 $
2.69 $
2.26 $
1.83 $
1.50 $
1.04 $
.44 $
.24 $
1.59 $
1.78 $
1.62
Diluted shares
128.8
132.9
135.5
137.6
139.4
141.8
144.0
146.6
152.5
162.6
170.6
Cash dividends
declared per share
CASH FLOW DATA:
Net cash flows
provided by
operating activities
$
.88
$
.80
$
.72
$
.64
$
.60
$
.56
$
.52
$
.48
$
.44
$
.40
$
.32
$ 442.1
$ 438.2
$ 340.7
$ 309.2
$ 289.2
$ 256.3
$ 175.9
$ 240.2
$ 447.1
$ 411.2
$ 376.2
Capital expenditures
$
83.0 $
75.1 $
62.8 $
53.7 $
50.1 $
56.5 $
35.1 $
41.2 $
73.4 $ 83.8 $
80.4
BALANCE SHEET
DATA AT YEAR-END:
Total assets
$ 1,778.0 $ 1,671.0 $ 1,620.8 $ 1,497.7 $ 1,367.0 $ 1,297.4 $ 1,272.6 $ 1,283.5 $ 1,411.9 $ 1,450.3 $ 1,459.0
Debt financing
$
1.0 $
1.2 $
1.3 $
1.4 $
1.5 $
1.7 $
1.8 $
1.9 $
2.0 $
4.1 $
4.2
Stockholders’ equity
$ 1,086.6 $ 1,003.8 $ 979.9 $ 919.6 $ 842.0 $ 800.5 $ 834.4 $ 899.8 $ 983.9 $ 984.0 $ 1,042.7
3 ROBERT HALF | 2016 ANNUAL REPORT
REVENUES (IN MILLIONS)
$5,000
$5,000
$4,000
$4,000
$3,000
$3,000
$2,000
$2,000
$1,000
$1,000
$0
$0
2
0
0
6
2
0
0
6
2
0
0
7
2
0
0
7
2
0
0
8
2
0
0
8
2
0
0
9
2
0
0
9
2
0
1
0
2
0
1
0
2
0
1
1
2
0
1
1
2
0
1
2
2
0
1
2
2
0
1
3
2
0
1
3
2
0
1
4
2
0
1
4
2
0
1
5
2
0
1
5
2
0
1
6
2
0
1
6
DILUTED NET INCOME PER SHARE
$3.00
$2.50
$3.00
$2.00
$2.50
$1.50
$2.00
$1.00
$1.50
$0.50
$1.00
$0
$0.50
$0
4 ROBERT HALF | 2016 ANNUAL REPORT
2
0
0
6
2
0
0
6
2
0
0
7
2
0
0
7
2
0
0
8
2
0
0
8
2
0
0
9
2
0
0
9
2
0
1
0
2
0
1
0
2
0
1
1
2
0
1
1
2
0
1
2
2
0
1
2
2
0
1
3
2
0
1
3
2
0
1
4
2
0
1
4
2
0
1
5
2
0
1
5
2
0
1
6
2
0
1
6
BUSINESS HIGHLIGHTS
$5.25
BILLION
TOTAL 2016
REVENUES, AN
ALL-TIME HIGH
$1.78
BILLION
TOTAL ASSETS
AS OF 12/31/16
215,000
APPROXIMATE NUMBER OF
TEMPORARY EMPLOYEES PLACED
ON ASSIGNMENT IN 2016
33%
2016 RETURN ON
INVESTED CAPITAL
5 ROBERT HALF | 2016 ANNUAL REPORT
6 ROBERT HALF | 2016 ANNUAL REPORT
TO OUR STOCKHOLDERS
R obert Half achieved record revenues
last year in a generally stable economic
environment. Global net service revenues
of $5.25 billion were 3.1 percent ahead
of those in the prior year. The gain was higher,
at 3.4 percent, when results were adjusted to
reflect the effects of foreign currency translation
and the number of billing days in a given year.
The reported revenue increase in the United
States was 2.8 percent while the international gain
was 4 percent. Adjusted domestic and non-U.S.
revenue advances were 2.7 percent and 6.6
percent, respectively. All three of our reportable
segments had gains in service revenues.
Net income of $343 million slipped 4 percent
from the prior year, while diluted earnings per
share of $2.67 were little changed from $2.69
reported a year earlier. There were 3.1 percent
fewer average shares outstanding in 2016,
reflecting the effects of our continuing stock
repurchase program. Both revenue and earnings
increases moderated as the year unfolded.
U.S. real gross domestic product in 2016 grew
1.6 percent, noticeably below the prior year’s
2.6 percent. Last year’s economic performance
extended the sometimes uneven recovery
from the 2008–09 recession. U.S. job growth
continued in 2016, but hiring overall was less
robust than in earlier years. Employers in the
United States added 2.2 million jobs over the
course of last year, which compares with 2.7
million positions added in 2015. The jobless rate
remained at or below 5 percent in each month
last year, a level that many economists believe is
indicative of theoretical full employment.
The overall unemployment rate fails to tell
the whole story, especially about labor
market segments that are relevant to Robert
Half. Supply-and-demand imbalances in the
professional, white-collar segments of the
workforce — the ones in which we specialize
— are becoming more acute. February
2017 government statistics indicate that the
7 ROBERT HALF | 2016 ANNUAL REPORT
unemployment rate for college-degreed
workers 25 years and older is just 2.4 percent.
The rate is even lower in certain technology
and accounting and finance specialties.
We generally thrive when labor markets
are tight. Those conditions provide us with
the opportunity to call on our decades of
experience helping clients find the right
candidates even amid talent shortages.
An unusual hiring development emerged in
U.S. labor markets last year. The hiring cycle
became uncharacteristically long, particularly
in the second half of the year with election
and economic uncertainties. We found that
employers took much more time to make hiring
decisions than in prior years. Their hesitation,
we believe, kept our revenue gains at lower
rates than would have been the case in a more
typical cycle. Recent economic data show a
noticeable lift in optimism about economic
prospects. Renewed confidence in the economy
may be a sign that we could see a return to
familiar levels of employer selectivity and a
shorter hiring cycle.
Our non-U.S. revenues represented 20 percent of
the global total, up from 19 percent the prior year.
The economic recovery outside the United States
generally mirrored what we saw domestically.
As would be expected, however, some markets
were stronger than others. Our operations in
the United Kingdom, Germany and Belgium
performed particularly well last year. Revenues
in those three countries represented slightly more
than half of last year’s non-U.S. total.
Protiviti also had a solid year. Revenue of $804
million was up 8.3 percent from the prior year.
Operating income of $81 million was the third-
highest ever for Protiviti, but a revenue mix shift
kept earnings below 2015’s record level. Protiviti
was launched nearly 15 years ago; since then it
has become an important part of our business.
From its first full year in 2003 through last year,
its revenues compounded at a 15 percent
Chairman and Chief
Executive Officer
Harold M. Messmer, Jr.
Vice Chairman, President and
Chief Financial Officer
M. Keith Waddell
Supply-and-demand
imbalances in the
professional, white-collar
segments of the workforce
— the ones in which
we specialize — are
becoming more acute.
average annual growth rate. Protiviti represented
15 percent of both last year’s companywide
revenues and aggregate operating income.
Protiviti’s business initially focused on helping
clients comply with a myriad of regulations,
including Sarbanes-Oxley. This became
the solid foundation for a broadening
range of growing practices. These include
business performance improvement; data
management and advanced analytics; digital
transformation; forensics; technology consulting;
internal audit and financial advisory; risk and
compliance; and transaction services. Protiviti
has established a global presence and is a
respected professional services organization
with a widely recognized brand name.
FINANCIAL CONDITION
Robert Half continues to enjoy a sound financial
position. The strength of our balance sheet
is explained largely by the favorable cash-
generating characteristics of our business.
But our financial position also has been
helped by decades of sustained profitability;
we have reported an annual profit in each of
the past 30 years.
Year-end assets totaled $1.78 billion. As a
business services company, we require few
fixed assets and no inventory. Our cash
balance of $260 million far exceeded long-
term debt of less than $1 million. Accounts
receivable, our biggest recorded asset, was
$703 million at year-end. Our history of
timely collection of receivables continued in
2016. We benefit from serving a midmarket
customer base and are not exposed to customer,
industry or geographic concentrations. Our
collection diligence is reflected in 49 days sales
outstanding (DSO) as calculated for the full
year, which is consistent with past experience.
Our return on invested capital in 2016 was
33 percent. That compares with our 10-year
average of 24 percent.
Last year’s net cash flow provided by operating
activities was $442 million, modestly ahead of
the prior year. Our first priority in allocating the
cash we generate is to fund capital expenditures.
After spending to operate the business and to
grow it, the great majority of remaining cash is
then returned to stockholders through share
repurchases and cash dividends.
Capital expenditures in 2016 were $83 million,
the highest dollar amount in 10 years but
still relatively modest when compared to our
revenues and cash generated from operations.
Last year’s spending was equivalent to 1.6
percent of revenues and 19 percent of operating
cash flow. Both percentages are consistent with
long-term trends for our business.
The majority of last year’s capital spending
was for technological infrastructure and software,
much of which was internally generated and
therefore tailored to Robert Half’s business
model. We undertook several major projects
last year, two of which were particularly
noteworthy. One was the continued installation of
an updated, cloud-based customer relationship
management (CRM) platform. The system
provides our professional staff with powerful
tools to help them become more effective
and efficient in satisfying client and candidate
needs. Among other things, the new CRM
system provides our team with real-time access
to information and analytics using mobile and
video technologies that are easily accessible in
the office or from remote locations. We expect
to complete the installation of the platform in
remaining non-U.S. locations in 2017, after
which spending should moderate. The other
noteworthy undertaking was the installation
of a client accounting system for Protiviti. We
are already seeing productivity gains from this
critical investment.
Cash provided by operating activities less cash
used for investing activities (free cash flow)
in 2016 was $330 million, up slightly from
8 ROBERT HALF | 2016 ANNUAL REPORT
$320 million a year earlier. Approximately
half of that amount, or $164 million, was
used to repurchase our shares in open market
transactions. We began repurchasing shares
in 1997. In the last decade alone, we spent
$1.8 billion of the $2.5 billion of free cash
flow generated to repurchase 55 million of
our shares. To put the share reduction in
perspective, we ended 2016 with 128 million
shares outstanding. At year-end, there were 6.4
million shares available to repurchase under our
current board-approved repurchase plan.
About a third of last year’s free cash flow was
used to pay cash dividends. Last year’s $0.22
quarterly cash dividend was equivalent to a
total annual outlay of $114 million. We have
paid uninterrupted quarterly cash dividends
since 2004. Subsequent to year-end, the board
increased the dividend to $0.24 per quarter.
The cash dividend has been increased annually
while compounding at a 12 percent average
annual growth rate since it was initiated.
We made no material acquisitions in 2016. It
has been our longstanding preference to grow
organically. The staffing and consulting industries
are global, large and growing. We believe they
provide ample runway to allow us to sustain
growth internally without incurring risks that can
come with undue reliance on acquisitions. We
do look at acquisition opportunities when they
arise from time to time and occasionally acquire
a business. But it is unusual to find reasonably
priced acquisition prospects that are growing,
profitable and, most important, have a business
DNA that matches or complements our own. We
have spent heavily over an extended period to
establish and support our brands, our service-
oriented culture and our values. We therefore are
protective of them and hesitant to put them at risk.
OUR MARKETS
Robert Half clients are predominantly small and
midsize businesses — a large and underserved
segment of the economy. For years, we have
focused intensive marketing, sales and operational
efforts on reaching and servicing this core part
of the market. We bring added value to smaller
clients who often lack formal human resources
departments. They come to rely on the full-
service, consultative approach we provide.
Although small to midsize clients remain
the backbone of our business, we also see
opportunities to serve select larger accounts.
The key for us in working with these clients is to
maintain pricing that adequately compensates
us for the talent and service we provide. That is
never easy in a competitive environment, but
the challenge is lessened for us by the fact that
we provide hard-to-find specialists. The greatest
potential for working with these targeted
larger clients exists through our Robert Half
Management Resources and Robert Half
Technology business units. This is because
larger enterprises more frequently need help
with major IT projects and financial systems
conversions. We recently expanded our service
offerings and formed our Enterprise Solutions
Group, which provides business development
for a full suite of staffing and Protiviti services
to clients with more complex project needs.
We believe we are unique in the industry in
providing an in-house, flexible delivery model
that blends specialized staffing and consulting
services at a quality level comparable to that of
the Big Four accounting firms.
We increasingly are being drawn to opportunities
provided by the labor-intensive, multisegmented
healthcare field. This vast, rapidly growing
and complex industry is undergoing profound
changes. Among other things, the continued
existence of the Affordable Care Act in its present
form is very much in question. It is unclear what
the future healthcare industry will look like, but
it is certain that changes are coming. We are
positioning our business to be able to help both
client companies and healthcare providers with
nonclinical staffing and consulting needs as
changes begin to emerge.
We bring added value
to smaller clients who
often lack formal
human resources
departments.
9 ROBERT HALF | 2016 ANNUAL REPORT
Protiviti has benefited from a strong regulatory
environment, especially in the financial services
industry in recent years. Almost from its outset,
a portion of its business has come from helping
clients comply with complex and changing
regulations. Deregulation is now in the discussion
stage in the new Congress and presidential
administration. If regulations are reduced,
demand for a portion of Protiviti’s compliance-
related services could be affected. It is not
anticipated that all of these services will be
affected equally. Within its mix of compliance-
related services, some offerings such as anti-
money laundering might not be affected at
all and actually may see higher demand. In
addition, many compliance clients affected
directly or tangentially will need Protiviti’s
assistance in analyzing how they should
proceed. On the staffing side of the business,
expected tax changes could drive added
demand for specialists in this complex area.
OUR DIFFERENTIATOR
Like most businesses and industries, Robert
Half and the sectors we serve continue to
innovate and evolve. Early on, the company
pioneered specialty recruiting and staffing
in the accounting and finance fields. Soon
after present management became involved,
we began to transform what was initially a
collection of franchised offices into a network
of U.S. and international company-owned
facilities. Over the years, the network has
expanded and the range of specialty service
offerings has widened. A critically important
part of the growth strategy has been the
creation and strengthening of Robert Half
brands. We believe that few of our direct
competitors can match the high profiles
enjoyed by each of our service lines.
A new dimension has been introduced to our
business in recent years with the arrival of
digital technology in our company and industry.
We have invested heavily in technological
innovation with the dual aims of increasing
the productivity of our professional staff and
making it more convenient for our clients and
job candidates to do business with us. We
continue to direct much of our capital outlay to
creating and strengthening what we believe to
be best-in-class technology.
Examples include our upgraded external
websites that empower clients to determine
their own level of engagement in the candidate
discovery and selection process. We have
developed intelligent algorithms that utilize
our nearly 70 years of placement experience
and data to improve matching outcomes. The
experience we’ve accumulated over our long
history is impossible to duplicate. Moreover,
the algorithms are not static; we continue to
improve them by applying machine learning
capabilities tailored to meet our needs.
Technology alone does not ensure that a new
hire will be the right fit. There are many steps
in the staffing and onboarding process, some
10 ROBERT HALF | 2016 ANNUAL REPORT
of them quite subtle and beyond computerized
abilities. An important consideration is
determining the chemistry and business culture
match between employer and candidate. Face-
to-face involvement is key in many placements.
Combining the strengths of personalized service
and the power of computerized analytics
provides our clients with the best opportunity
to avoid the costly mistakes and business
disruptions that come with a poor hiring fit.
Robert Half is unique in our industry in combining
the strengths of leading-edge technology and
personal service. Some online recruiting and
networking sites depend on technology alone to
serve clients. Others focus on a service orientation
but lack the resources to embrace rapidly evolving
technology. Our combination of high-tech and
personalized service, along with the financial
resources to support these efforts, gives us an
advantage that few, if any, of our competitors can
match. We believe this is a long-term, durable
combination that differentiates us in our industry.
LOOKING AHEAD
We believe economic conditions are favorable
for Robert Half. Moderate (1.7 to 2.3 percent)
U.S. GDP growth is forecast for 2017, and tight
labor markets persist in our specialty areas.
The labor participation rate, which tracks the
share of working-age people in the U.S. labor
force, increased to 63 percent in February
2017, the highest since March 2016. Outside
the United States, moderate GDP growth is also
projected this year in Canada, Germany, the
United Kingdom, the Netherlands, France and
Australia, and the use of temporary workers has
continued to increase in some countries.
Most economists are not forecasting a recession
for 2017, and many are encouraged by the jobs
focus of the new administration in the United
States. We think that the wait-and-see approach
to hiring that affected our results last year could
fade as economic optimism grows. There is good
evidence that optimism already is improving.
11 ROBERT HALF | 2016 ANNUAL REPORT
Robert Half is unique
in our industry in
combining the
strengths of leading-
edge technology and
personal service.
Service providers, for example, were more
upbeat about the business outlook than at any
time since May 2015 in the Markit Flash U.S.
Services PMI Business Activity Index, which
increased to 55.1 in January from 53.9 in
December. And recent data from the National
Federation of Independent Business showed
that, while hiring levels did not increase in the
fourth quarter of 2016, small business optimism
reached its highest level in more than a decade.
We believe this increased business confidence
will spur a greater sense of urgency on the
part of our clients regarding talent shortages
at higher skill levels, prompting them to move
more quickly on hiring.
As a staffing firm, Robert Half is a people
business. And it is also people — our
people — whose talents and commitment
ultimately define our success. In all respects,
we have the best professionals and the
most experienced management teams in
our industry. We salute them for making our
achievements in 2016 possible.
We would also like to express our appreciation
to our board of directors for their wisdom and
counsel during the year. Our most tenured
board member, Andrew S. Berwick, Jr., recently
announced that he plans to retire at the end of
his current term. We wish to thank him for his
tremendous support, encouragement and grace
these past 30 years.
We also want to thank you, our stockholders,
for your continued support of Robert Half.
Respectfully submitted,
Harold M. Messmer, Jr.
M. Keith Waddell
Chairman and
Chief Executive Officer
Vice Chairman, President
and Chief Financial Officer
March 10, 2017
March 10, 2017
MARKET SPECIALIZATION
SPECIALIZED STAFFING AND CONSULTING SOLUTIONS
Robert Half understands that, especially today, businesses seek specialists. Employees in highest demand are those who have
acquired the education and specific knowledge and skills companies need most. As a result, each of our staffing businesses is
specialized around a distinct market segment. We operate three separate accounting and finance staffing divisions, and we are
the global leader in this field. We also operate business units that specialize in staffing for the administrative, information
technology, legal, and marketing and creative fields. In addition to staffing, Protiviti is our global business consulting unit.
Following are descriptions of our primary business units:
Accountemps provides temporary accounting, finance and bookkeeping
personnel for businesses. Established in 1973, Accountemps is our largest
staffing division and the most recognized name in temporary accounting staffing.
In 2016, Accountemps generated revenues of $1.8 billion, an increase of 4.7
percent compared with 2015 on a constant-currency basis. Accountemps’ revenues
represented 34.0 percent of consolidated Robert Half revenues in 2016. During
the year, demand for more experienced, highly specialized accounting and finance
professionals was particularly strong.
Robert Half Management Resources provides senior-level accounting
and finance professionals on a project basis, often for long-term
assignments. Launched in 1997, Robert Half Management Resources delivered
revenues of $608 million in 2016, accounting for 11.6 percent of Robert Half’s
consolidated total and reflecting a year-over-year growth rate of 4.8 percent on
a constant-currency basis. The continuing collaboration between Robert Half
Management Resources and Protiviti provides us with an important competitive
advantage: We combine the experienced interim professionals of Robert Half
Management Resources with Protiviti’s consultants and business solutions to serve
a broad range of client needs at attractive prices. This unit also collaborates with
our other staffing divisions when a client needs an enterprisewide solution, thereby
tapping the full potential of our complementary services and global reach.
Robert Half Finance & Accounting is our permanent-placement business
unit, providing employers with full-time accounting, finance, tax and
accounting operations professionals. Our flagship business, Robert Half
Finance & Accounting was founded in 1948 and remains the most recognizable and
respected name in financial recruitment. In 2016, Robert Half Finance & Accounting
produced revenues of $419 million, an increase of 0.3 percent on a constant-currency
basis compared with 2015. Revenues for this unit represented 8.0 percent of the
consolidated total revenues for the year.
As with our other business units, growth rates for this division were affected by the
elongated sales cycle we saw during the year. Clients became more selective, many
wanting to see a large number of candidates before making a decision. Because
permanent placement is perennially more economically sensitive than our temporary
business, the weaker GDP the United States experienced during the year also played
a role in this division’s performance.
34.0%
ACCOUNTEMPS
11.6%
ROBERT HALF
MANAGEMENT RESOURCES
8.0%
ROBERT HALF
FINANCE & ACCOUNTING
12 ROBERT HALF | 2016 ANNUAL REPORT
Percentage of consolidated global revenues OfficeTeam is our specialty administrative staffing unit. Established in
1991, OfficeTeam serves a niche in the field — customers seeking administrative
professionals at higher skill levels. Last year’s revenues of $972 million decreased
0.1 percent over the prior year on a constant-currency basis. OfficeTeam’s revenues
represented 18.5 percent of the consolidated total.
As the healthcare insurance industry and healthcare providers address reform
efforts and evolving regulations in 2017, demand could rise for OfficeTeam
candidates skilled in areas such as patient intake, coding and enrollment. Healthcare
organizations will also need skilled support staff as they continue to implement or
upgrade technology systems to better track, manage and treat patients.
Robert Half Technology provides professionals skilled in information
technology (IT) support and development. Launched in 1994, Robert Half
Technology has rapidly become a highly regarded name in the technology staffing
sector. This unit performed well in 2016, posting revenues of $660 million, which
represented 12.6 percent of the consolidated total and reflected a growth rate of
0.5 percent on a constant-currency basis compared with 2015.
The strong market for IT talent continued to benefit Robert Half Technology in
2016. This division was not exempt from the elongated sales cycle that affected
all of our business units, however. Demand has been strongest for technology
development positions in areas such as software engineering, where clients have
acute difficulty locating talent. Going forward, this unit should continue to attract
business from our small-to-midmarket client base, for whom the digital world has
become as integral as it is for larger businesses but who cannot justify adding full-
time IT professionals for every need.
Protiviti offers businesses consulting solutions in finance, technology,
operations, data, analytics, governance, risk, compliance and internal
audit. Founded in 2002, Protiviti collaborates with its network of independently
owned Member Firms to serve clients through 75 locations across 25 countries.
This business reported annual revenues of $804 million in 2016, up 8.5 percent
year over year on a constant-currency basis. Protiviti accounted for 15.3 percent of
Robert Half’s consolidated total revenues in 2016.
Globally, all of Protiviti’s solutions experienced growth over the prior year. Protiviti’s
largest solution offering, Internal Audit and Financial Advisory, has continued to see
strong demand in all global markets, finishing the year with double-digit growth. In
2015, Protiviti acquired the assets of Decision First Technologies, which expanded
Protiviti’s consulting capabilities and market position in the rapidly growing area of
data management and advanced analytics.
18.5%
OFFICETEAM
12.6%
ROBERT HALF
TECHNOLOGY
15.3%
PROTIVITI
13 ROBERT HALF | 2016 ANNUAL REPORT
Percentage of consolidated global revenues 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, 2016
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, 2016, the aggregate market value of the Common Stock held by non-affiliates of the registrant was approximately
$4,826,031,702 based on the closing sale price on that date. This amount excludes the market value of 4,269,506 shares of Common
Stock directly or indirectly held by registrant’s directors and officers and their affiliates.
As of January 31, 2017, there were 127,796,557 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 2017, 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.
138808_RHI_A/R_10K.indd 1
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ROBERT HALF | 2016 ANNUAL REPORT
This Page Intentionally Left Blank
Item 1. Business
PART I
Robert Half International Inc. (the “Company”) provides specialized staffing and risk consulting services through such
PART I
divisions as Accountemps®, Robert Half® Finance & Accounting, OfficeTeam®, Robert Half® Technology, Robert Half®
Item 1. Business
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
Robert Half International Inc. (the “Company”) provides specialized staffing and risk consulting services through such
provider of temporary, full-time, and project professionals in the fields of accounting and finance. OfficeTeam specializes in
divisions as Accountemps®, Robert Half® Finance & Accounting, OfficeTeam®, Robert Half® Technology, Robert Half®
highly skilled temporary administrative support personnel. Robert Half Technology provides information technology
Management Resources, Robert Half® Legal, The Creative Group®, and Protiviti®. The Company, through its Accountemps,
professionals. Robert Half Legal provides temporary, project, and full-time staffing of attorneys and specialized support
Robert Half Finance & Accounting, and Robert Half Management Resources divisions, is the world’s largest specialized
personnel within law firms and corporate legal departments. The Creative Group provides project staffing in the interactive
provider of temporary, full-time, and project professionals in the fields of accounting and finance. OfficeTeam specializes in
media, design, and marketing fields. Protiviti, which began operations in 2002, is a global business consulting and internal
highly skilled temporary administrative support personnel. Robert Half Technology provides information technology
audit firm. Protiviti, which primarily employs professionals specializing in risk, advisory and transactional services, is a wholly
professionals. Robert Half Legal provides temporary, project, and full-time staffing of attorneys and specialized support
owned subsidiary of the Company.
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
The Company’s business was originally founded in 1948. Prior to 1986, the Company was primarily a franchisor, under
audit firm. Protiviti, which primarily employs professionals specializing in risk, advisory and transactional services, is a wholly
the names Accountemps and Robert Half (now called Robert Half Finance & Accounting), of offices providing temporary and
owned subsidiary of the Company.
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
The Company’s business was originally founded in 1948. Prior to 1986, the Company was primarily a franchisor, under
direct ownership of offices allows it to better monitor and protect the image of its tradenames, promotes a more consistent and
the names Accountemps and Robert Half (now called Robert Half Finance & Accounting), of offices providing temporary and
higher level of quality and service throughout its network of offices and improves profitability by centralizing many of its
full-time professionals in the fields of accounting and finance. Beginning in 1986, the Company and its current management
administrative functions. Since 1986, the Company has significantly expanded operations at many of the acquired locations,
embarked on a strategy of acquiring franchised locations. All of the franchises have been acquired. The Company believes that
opened many new locations and acquired other local or regional providers of specialized temporary service personnel. The
direct ownership of offices allows it to better monitor and protect the image of its tradenames, promotes a more consistent and
Company has also expanded the scope of its services by launching the new product lines OfficeTeam, Robert Half Technology,
higher level of quality and service throughout its network of offices and improves profitability by centralizing many of its
Robert Half Management Resources, Robert Half Legal and The Creative Group.
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
In 2002, the Company hired more than 700 professionals who had been affiliated with the internal audit and business and
Company has also expanded the scope of its services by launching the new product lines OfficeTeam, Robert Half Technology,
technology risk consulting practice of Arthur Andersen LLP, including more than 50 individuals who had been partners of that
Robert Half Management Resources, Robert Half Legal and The Creative Group.
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
In 2002, the Company hired more than 700 professionals who had been affiliated with the internal audit and business and
its traditional lines of business.
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
Accountemps
enter the market for business consulting and internal audit services, which market the Company believes offers synergies with
its traditional lines of business.
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
Accountemps
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
The Accountemps temporary services division offers customers a reliable and economical means of dealing with uneven
fixed to variable. The cost and inconvenience to clients of hiring and firing regular employees are eliminated by the use of
or peak workloads for accounting, finance, and bookkeeping personnel caused by such predictable events as vacations, taking
Accountemps temporaries. The temporary workers are employees of Accountemps and are paid by Accountemps. The customer
inventories, tax work, month-end activities and special projects, and such unpredictable events as illness and emergencies.
pays a fixed rate only for hours worked.
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 clients may fill their regular employment needs by using an Accountemps employee on a trial basis and, if
Accountemps temporaries. The temporary workers are employees of Accountemps and are paid by Accountemps. The customer
so desired, “converting” the temporary position to a regular position. The client typically pays a one-time fee for such
pays a fixed rate only for hours worked.
conversions.
Accountemps clients may fill their regular employment needs by using an Accountemps employee on a trial basis and, if
OfficeTeam
so desired, “converting” the temporary position to a regular position. The client typically pays a one-time fee for such
conversions.
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
OfficeTeam
representatives. OfficeTeam operates in much the same fashion as the Accountemps division.
The Company’s OfficeTeam division, which commenced operations in 1991, places temporary and full-time office and
Robert Half Finance & Accounting
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.
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
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
1
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ROBERT HALF | 2016 ANNUAL REPORT This Page Intentionally Left Blank
Item 1. Business
PART I
Robert Half International Inc. (the “Company”) provides specialized staffing and risk consulting services through such
PART I
divisions as Accountemps®, Robert Half® Finance & Accounting, OfficeTeam®, Robert Half® Technology, Robert Half®
Item 1. Business
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
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®
provider of temporary, full-time, and project professionals in the fields of accounting and finance. OfficeTeam specializes in
Management Resources, Robert Half® Legal, The Creative Group®, and Protiviti®. The Company, through its Accountemps,
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
Robert Half Finance & Accounting, and Robert Half Management Resources divisions, is the world’s largest specialized
personnel within law firms and corporate legal departments. The Creative Group provides project staffing in the interactive
provider of temporary, full-time, and project professionals in the fields of accounting and finance. OfficeTeam specializes in
media, design, and marketing fields. Protiviti, which began operations in 2002, is a global business consulting and internal
highly skilled temporary administrative support personnel. Robert Half Technology provides information technology
audit firm. Protiviti, which primarily employs professionals specializing in risk, advisory and transactional services, is a wholly
professionals. Robert Half Legal provides temporary, project, and full-time staffing of attorneys and specialized support
owned subsidiary of the Company.
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
The Company’s business was originally founded in 1948. Prior to 1986, the Company was primarily a franchisor, under
audit firm. Protiviti, which primarily employs professionals specializing in risk, advisory and transactional services, is a wholly
the names Accountemps and Robert Half (now called Robert Half Finance & Accounting), of offices providing temporary and
owned subsidiary of the Company.
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
The Company’s business was originally founded in 1948. Prior to 1986, the Company was primarily a franchisor, under
direct ownership of offices allows it to better monitor and protect the image of its tradenames, promotes a more consistent and
the names Accountemps and Robert Half (now called Robert Half Finance & Accounting), of offices providing temporary and
higher level of quality and service throughout its network of offices and improves profitability by centralizing many of its
full-time professionals in the fields of accounting and finance. Beginning in 1986, the Company and its current management
administrative functions. Since 1986, the Company has significantly expanded operations at many of the acquired locations,
embarked on a strategy of acquiring franchised locations. All of the franchises have been acquired. The Company believes that
opened many new locations and acquired other local or regional providers of specialized temporary service personnel. The
direct ownership of offices allows it to better monitor and protect the image of its tradenames, promotes a more consistent and
Company has also expanded the scope of its services by launching the new product lines OfficeTeam, Robert Half Technology,
higher level of quality and service throughout its network of offices and improves profitability by centralizing many of its
Robert Half Management Resources, Robert Half Legal and The Creative Group.
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
In 2002, the Company hired more than 700 professionals who had been affiliated with the internal audit and business and
Company has also expanded the scope of its services by launching the new product lines OfficeTeam, Robert Half Technology,
technology risk consulting practice of Arthur Andersen LLP, including more than 50 individuals who had been partners of that
Robert Half Management Resources, Robert Half Legal and The Creative Group.
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
In 2002, the Company hired more than 700 professionals who had been affiliated with the internal audit and business and
its traditional lines of business.
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
Accountemps
enter the market for business consulting and internal audit services, which market the Company believes offers synergies with
its traditional lines of business.
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
Accountemps
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
The Accountemps temporary services division offers customers a reliable and economical means of dealing with uneven
fixed to variable. The cost and inconvenience to clients of hiring and firing regular employees are eliminated by the use of
or peak workloads for accounting, finance, and bookkeeping personnel caused by such predictable events as vacations, taking
Accountemps temporaries. The temporary workers are employees of Accountemps and are paid by Accountemps. The customer
inventories, tax work, month-end activities and special projects, and such unpredictable events as illness and emergencies.
pays a fixed rate only for hours worked.
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 clients may fill their regular employment needs by using an Accountemps employee on a trial basis and, if
Accountemps temporaries. The temporary workers are employees of Accountemps and are paid by Accountemps. The customer
so desired, “converting” the temporary position to a regular position. The client typically pays a one-time fee for such
pays a fixed rate only for hours worked.
conversions.
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
OfficeTeam
conversions.
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
OfficeTeam
representatives. OfficeTeam operates in much the same fashion as the Accountemps division.
The Company’s OfficeTeam division, which commenced operations in 1991, places temporary and full-time office and
Robert Half Finance & Accounting
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.
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
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
1
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ROBERT HALF | 2016 ANNUAL REPORT 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.
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.
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 and employment candidates via both national and local advertising
activities. Advertising consists of client- and employment candidate-facing buys in radio, streaming audio, outdoor, digital
display, search engine marketing, social media, print and trade publications, job boards and events. The Company also markets
its services, as well as hiring and career management advice content and thought leadership, via its search engine-optimized
website, corporate-owned social media and blog feeds, and e-mail marketing program. Direct marketing via telephone
solicitation is a significant portion of the Company’s total marketing efforts. Additionally, the Company has expanded its use of
job boards and job aggregators in all aspects of sales and recruitment. Joint marketing arrangements have been entered into
with major software manufacturers and typically provide for the development of proprietary skills tests, cooperative
advertising, joint e-mail campaigns, and similar promotional activities. The Company also actively seeks endorsements and
affiliations with professional organizations in the accounting and finance, technology, legal, and creative and marketing 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 print, digital, and
video thought leadership. Robert Half staffing and recruiting professionals are encouraged to be active in civic organizations
and industry trade groups in their local communities.
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
Competition
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, 2016, the Company conducted its staffing services operations through 325 offices
in 42 states, the District of Columbia and 17 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, 2016, Protiviti had 56 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.
The Company has approximately 16,400 full-time employees, including approximately 3,600 engaged directly in
Protiviti operations. In addition, the Company placed approximately 215,000 temporary employees on assignments with clients
during 2016. 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.
Employees
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
138808_RHI_A/R_10K.indd 2
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2
3
ROBERT HALF | 2016 ANNUAL REPORT 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.
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
practice areas.
Robert Half Management Resources
financial consolidation.
The Creative Group
Protiviti
compliance, and transaction services.
Marketing and Recruiting
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
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 and employment candidates via both national and local advertising
activities. Advertising consists of client- and employment candidate-facing buys in radio, streaming audio, outdoor, digital
display, search engine marketing, social media, print and trade publications, job boards and events. The Company also markets
its services, as well as hiring and career management advice content and thought leadership, via its search engine-optimized
website, corporate-owned social media and blog feeds, and e-mail marketing program. Direct marketing via telephone
solicitation is a significant portion of the Company’s total marketing efforts. Additionally, the Company has expanded its use of
job boards and job aggregators in all aspects of sales and recruitment. Joint marketing arrangements have been entered into
with major software manufacturers and typically provide for the development of proprietary skills tests, cooperative
advertising, joint e-mail campaigns, and similar promotional activities. The Company also actively seeks endorsements and
affiliations with professional organizations in the accounting and finance, technology, legal, and creative and marketing 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 print, digital, and
video thought leadership. Robert Half staffing and recruiting professionals are encouraged to be active in civic organizations
and industry trade groups in their local communities.
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, 2016, the Company conducted its staffing services operations through 325 offices
in 42 states, the District of Columbia and 17 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, 2016, Protiviti had 56 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 16,400 full-time employees, including approximately 3,600 engaged directly in
Protiviti operations. In addition, the Company placed approximately 215,000 temporary employees on assignments with clients
during 2016. 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.
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
2
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ROBERT HALF | 2016 ANNUAL REPORT 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:
Any reduction in global economic activity may harm the Company’s business and financial condition. 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. Certain of the Company’s markets have recently or are currently experiencing
prolonged economic downturns characterized by high unemployment, limited availability of credit and decreased consumer and
business spending. In addition, certain geopolitical events, including the United Kingdom’s vote to withdraw from the
European Union (“Brexit”), have caused significant economic, market, political and regulatory uncertainty in some of the
Company’s markets. Any decline in the economic condition or employment 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. Further, continued or intensifying economic, political or regulatory uncertainty in the Company’s markets
could reduce demand for the Company’s services.
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. The
Company depends on its reputation and name recognition to secure engagements and to hire qualified employees and
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 or are believed to have engaged 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
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, failure to compensate certain employees for time spent performing activities related to the interviewing
process, 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. In
particular, Brexit has contributed to, and may continue to contribute to, European economic, market and regulatory uncertainty
and could adversely affect European or worldwide economic, market, regulatory, or political conditions. To the extent that
adverse economic conditions and uncertainty in Europe (related to Brexit or otherwise) 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.
The Company could also be exposed to fines and penalties under U.S. or local jurisdiction trade sanctions and controls as
well as laws prohibiting corrupt payments to governmental officials. Although the Company has implemented policies and
procedures designed to ensure compliance with these laws, it cannot be sure that its employees, contractors or agents will not
violate such policies. Any such violations could materially damage the Company’s reputation, brand, business and operating
results. Further, changes in U.S. laws and policies governing foreign trade or investment and use of foreign operations or
workers, and any negative sentiments towards the United States as a result of such changes, could adversely affect the
Company’s operations.
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. Additionally, as the
Company expands existing service offerings, adds new service offerings, or enters new markets, it may become subject to
additional restrictions and regulations which may impede its business, increase costs and impact profitability.
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
138808_RHI_A/R_10K.indd 4
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ROBERT HALF | 2016 ANNUAL REPORT 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
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.
Information about foreign operations is contained in Note M of Notes to Consolidated Financial Statements in Item 8.
Company’s business is subject to government contracts.
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:
Any reduction in global economic activity may harm the Company’s business and financial condition. 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. Certain of the Company’s markets have recently or are currently experiencing
prolonged economic downturns characterized by high unemployment, limited availability of credit and decreased consumer and
business spending. In addition, certain geopolitical events, including the United Kingdom’s vote to withdraw from the
European Union (“Brexit”), have caused significant economic, market, political and regulatory uncertainty in some of the
Company’s markets. Any decline in the economic condition or employment 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. Further, continued or intensifying economic, political or regulatory uncertainty in the Company’s markets
could reduce demand for the Company’s services.
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. The
Company depends on its reputation and name recognition to secure engagements and to hire qualified employees and
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 or are believed to have engaged 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
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, failure to compensate certain employees for time spent performing activities related to the interviewing
process, 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,
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. In
particular, Brexit has contributed to, and may continue to contribute to, European economic, market and regulatory uncertainty
and could adversely affect European or worldwide economic, market, regulatory, or political conditions. To the extent that
adverse economic conditions and uncertainty in Europe (related to Brexit or otherwise) 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.
The Company could also be exposed to fines and penalties under U.S. or local jurisdiction trade sanctions and controls as
well as laws prohibiting corrupt payments to governmental officials. Although the Company has implemented policies and
procedures designed to ensure compliance with these laws, it cannot be sure that its employees, contractors or agents will not
violate such policies. Any such violations could materially damage the Company’s reputation, brand, business and operating
results. Further, changes in U.S. laws and policies governing foreign trade or investment and use of foreign operations or
workers, and any negative sentiments towards the United States as a result of such changes, could adversely affect the
Company’s operations.
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. Additionally, as the
Company expands existing service offerings, adds new service offerings, or enters new markets, it may become subject to
additional restrictions and regulations which may impede its business, increase costs and impact profitability.
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
4
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ROBERT HALF | 2016 ANNUAL REPORT 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.
In many cases, the Company has agreed to indemnify its clients in respect of these types of claims. 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 sufficient
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 in the U.S. 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. Further, changes to existing regulation or licensing requirements could impose
additional costs and other burdens or limitations on the Company’s operations. 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. In 2015, the Company redesigned its employee benefits to offer health insurance coverage to its
temporary candidates in order to meet the requirements of the PPACA’s employer mandate.
Numerous statements made by President Trump and members of the U.S. Congress indicate that it is likely that
legislation will be passed by Congress and signed into law by President Trump that repeals the PPACA, in whole or in part,
and/or introduces a new form of health care reform. It is unclear at this point what the scope of such legislation will be and
when it will become effective. Because of the uncertainty surrounding this replacement health care reform legislation, we
cannot predict with any certainty the likely impact of the PPACA’s repeal or the adoption of any other health care reform
legislation on the Company’s financial condition or operating results. Whether or not there is alternative health care legislation
enacted in the U.S., there is likely to be significant disruption to the health care market in the coming months and years and the
costs of the Company’s health care expenditures may increase.
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, some of which
are managed by third-party vendors. 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 and those of the Company’s vendors. In particular, the Company’s
employees or vendors 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 or those of its third-party vendors 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
government sanctions and liability under its contracts and laws that protect personal data and confidential information, resulting
in increased costs or loss of revenue. The potential risk of security breaches and cyber-attacks may increase as the Company
introduces new service offerings. It is also possible that certain jurisdictions may enact laws or regulations in respect of control
of personal information that could increase the Company’s costs or otherwise adversely impact its operations.
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. Further, many analysts are expecting the new U.S.
Congress and President Trump to seek to repeal or modify legislation that is viewed as having over-regulated certain sectors of
the U.S. economy and decreased the incentive for U.S. companies to go public and their ability to effectively compete with
foreign competition. These or other similar modifications of the regulatory 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. Additionally, the Company’s clients will frequently enter into non-exclusive arrangements
with several firms, which the client is generally able to terminate on short notice and without penalty. The nature of these
arrangements further exacerbates the difficulty in predicting our future 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 qualified, skilled 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
138808_RHI_A/R_10K.indd 6
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6
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ROBERT HALF | 2016 ANNUAL REPORT Company will, in light of competitive pressures, be able to remain profitable or, if profitable, maintain its current profit
The Company’s computer and communications hardware and software systems are vulnerable to damage and
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.
In many cases, the Company has agreed to indemnify its clients in respect of these types of claims. 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 sufficient
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 in the U.S. 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. Further, changes to existing regulation or licensing requirements could impose
additional costs and other burdens or limitations on the Company’s operations. 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. In 2015, the Company redesigned its employee benefits to offer health insurance coverage to its
temporary candidates in order to meet the requirements of the PPACA’s employer mandate.
Numerous statements made by President Trump and members of the U.S. Congress indicate that it is likely that
legislation will be passed by Congress and signed into law by President Trump that repeals the PPACA, in whole or in part,
and/or introduces a new form of health care reform. It is unclear at this point what the scope of such legislation will be and
when it will become effective. Because of the uncertainty surrounding this replacement health care reform legislation, we
cannot predict with any certainty the likely impact of the PPACA’s repeal or the adoption of any other health care reform
legislation on the Company’s financial condition or operating results. Whether or not there is alternative health care legislation
enacted in the U.S., there is likely to be significant disruption to the health care market in the coming months and years and the
costs of the Company’s health care expenditures may increase.
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, some of which
are managed by third-party vendors. 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 and those of the Company’s vendors. In particular, the Company’s
employees or vendors 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 or those of its third-party vendors 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
government sanctions and liability under its contracts and laws that protect personal data and confidential information, resulting
in increased costs or loss of revenue. The potential risk of security breaches and cyber-attacks may increase as the Company
introduces new service offerings. It is also possible that certain jurisdictions may enact laws or regulations in respect of control
of personal information that could increase the Company’s costs or otherwise adversely impact its operations.
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. Further, many analysts are expecting the new U.S.
Congress and President Trump to seek to repeal or modify legislation that is viewed as having over-regulated certain sectors of
the U.S. economy and decreased the incentive for U.S. companies to go public and their ability to effectively compete with
foreign competition. These or other similar modifications of the regulatory 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. Additionally, the Company’s clients will frequently enter into non-exclusive arrangements
with several firms, which the client is generally able to terminate on short notice and without penalty. The nature of these
arrangements further exacerbates the difficulty in predicting our future 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 qualified, skilled 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
6
7
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ROBERT HALF | 2016 ANNUAL REPORT unspecified amount of other damages, attorneys’ fees, and statutory penalties, including penalties for allegedly not paying all
wages due upon separation to former employees and statutory penalties on behalf of herself and other allegedly “aggrieved
employees” as defined by PAGA. On January 4, 2016, the Court denied a motion by the Company to compel all of Gentry’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.
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.
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,
price of services and depth of skills of personnel, there can be no assurance that Protiviti will be successful in attracting and
retaining clients or be able to maintain the technology, personnel and other requirements to successfully compete.
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.
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, 2016,
placement activities were conducted through 325 offices located in the United States, Canada, the United Kingdom, Belgium,
Brazil, France, the Netherlands, Germany, Luxembourg, Switzerland, Japan, China, Singapore, Australia, New Zealand,
Austria, the United Arab Emirates, and Chile. As of December 31, 2016, Protiviti had 56 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 March 23, 2015, Plaintiff Jessica Gentry, 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 Francisco County, which
was subsequently amended on October 23, 2015. The complaint, which was filed by the same plaintiffs’ law firm that brought
the Rodriguez matter described above, alleges claims similar to those alleged in Rodriguez. Specifically, the complaint alleges
that a putative class of current and former employees of the Company working in California since March 13, 2010 were denied
compensation for the time they spent interviewing “for temporary and permanent employment opportunities” as well as
performing activities related to the interview process. Gentry seeks recovery on her own behalf and on behalf of the putative
class in an unspecified amount for this allegedly unpaid compensation. Gentry 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. Gentry also seeks an
138808_RHI_A/R_10K.indd 8
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8
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ROBERT HALF | 2016 ANNUAL REPORT unspecified amount of other damages, attorneys’ fees, and statutory penalties, including penalties for allegedly not paying all
wages due upon separation to former employees and statutory penalties on behalf of herself and other allegedly “aggrieved
employees” as defined by PAGA. On January 4, 2016, the Court denied a motion by the Company to compel all of Gentry’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.
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.
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,
price of services and depth of skills of personnel, there can be no assurance that Protiviti will be successful in attracting and
retaining clients or be able to maintain the technology, personnel and other requirements to successfully compete.
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.
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, 2016,
placement activities were conducted through 325 offices located in the United States, Canada, the United Kingdom, Belgium,
Brazil, France, the Netherlands, Germany, Luxembourg, Switzerland, Japan, China, Singapore, Australia, New Zealand,
Austria, the United Arab Emirates, and Chile. As of December 31, 2016, Protiviti had 56 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 March 23, 2015, Plaintiff Jessica Gentry, 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 Francisco County, which
was subsequently amended on October 23, 2015. The complaint, which was filed by the same plaintiffs’ law firm that brought
the Rodriguez matter described above, alleges claims similar to those alleged in Rodriguez. Specifically, the complaint alleges
that a putative class of current and former employees of the Company working in California since March 13, 2010 were denied
compensation for the time they spent interviewing “for temporary and permanent employment opportunities” as well as
performing activities related to the interview process. Gentry seeks recovery on her own behalf and on behalf of the putative
class in an unspecified amount for this allegedly unpaid compensation. Gentry 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. Gentry also seeks an
8
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ROBERT HALF | 2016 ANNUAL REPORT Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
PART II
Stock Performance Graph
Market Price, Dividends and Related Matters
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
The Company’s Common Stock is listed for trading on the New York Stock Exchange under the symbol “RHI”. On
PART II
Securities
January 31, 2017, there were 1,286 holders of record of the Common Stock.
Market Price, Dividends and Related Matters
Following is a list by fiscal quarters of the sales prices of the stock:
The Company’s Common Stock is listed for trading on the New York Stock Exchange under the symbol “RHI”. On
January 31, 2017, there were 1,286 holders of record of the Common Stock.
Sales Prices
Following is a list by fiscal quarters of the sales prices of the stock:
2016
4th Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3rd Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1st Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4th Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3rd Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1st Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015
4th Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3rd Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1st Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4th Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3rd Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
declared and paid in each quarter of 2015.
1st Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Low
$ 34.42
$ 35.67
$ 34.34
Low
$ 36.17
$ 34.42
$ 35.67
$ 34.34
$ 36.17
Low
$ 44.95
$ 49.18
$ 54.58
Low
$ 55.60
$ 44.95
$ 49.18
Cash dividends of $.22 per share were declared and paid in each quarter of 2016. Cash dividends of $.20 per share were
$ 54.58
$ 55.60
High
$ 49.63
$ 41.50
$ 47.26
High
$ 46.75
$ 49.63
$ 41.50
$ 47.26
$ 46.75
High
$ 54.01
$ 58.00
$ 60.54
High
$ 63.27
$ 54.01
$ 58.00
$ 60.54
$ 63.27
Sales Prices
Sales Prices
Sales Prices
Cash dividends of $.22 per share were declared and paid in each quarter of 2016. Cash dividends of $.20 per share were
Issuer Purchases of Equity Securities
declared and paid in each quarter of 2015.
The following graph compares, through December 31, 2016, 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.
Issuer Purchases of Equity Securities
Total
Number of
Shares
Purchased
as Part of
Total
Publicly
Number of
Announced
Shares
Plans
Purchased
100,000
as Part of
Publicly
347,179
Announced
Plans
666,015
100,000
1,113,194
347,179
666,015
1,113,194
Maximum
Number of
Shares that May
Yet Be
Purchased
Maximum
Under Publicly
Number of
Announced
Shares that May
Plans (b)
Yet Be
7,379,781
Purchased
Under Publicly
7,032,602
Announced
Plans (b)
6,366,587
7,379,781
7,032,602
6,366,587
Average
Price Paid
per Share
37.39
$
Average
$
41.53
Price Paid
per Share
48.86
$
37.39
$
41.53
$
48.86
$
Total
Number of
Shares
Purchased
100,000
Total
Number of
347,179
Shares
Purchased
757,563
100,000
1,204,742
347,179
757,563
1,204,742
(a)
October 1, 2016 to October 31, 2016 . . . . . . . . . . . . . . . . . . .
November 1, 2016 to November 30, 2016 . . . . . . . . . . . . . . .
December 1, 2016 to December 31, 2016 . . . . . . . . . . . . . . .
October 1, 2016 to October 31, 2016 . . . . . . . . . . . . . . . . . . .
Total October 1, 2016 to December 31, 2016 . . . . . . . . . . . .
November 1, 2016 to November 30, 2016 . . . . . . . . . . . . . . .
December 1, 2016 to December 31, 2016 . . . . . . . . . . . . . . .
(a)
Total October 1, 2016 to December 31, 2016 . . . . . . . . . . . .
(b) Commencing in October 1997, the Company’s Board of Directors has, at various times, authorized the repurchase, from
(a)
Includes 91,548 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.
time to time, of the Company’s common stock on the open market or in privately negotiated transactions depending on
Includes 91,548 shares repurchased in connection with employee stock plans, whereby Company shares were tendered
market conditions. Since plan inception, a total of 108,000,000 shares have been authorized for repurchase of which
by employees for the payment of applicable withholding taxes and/or exercise price.
101,633,413 shares have been repurchased as of December 31, 2016.
time to time, of the Company’s common stock on the open market or in privately negotiated transactions depending on
The remainder of the information required by this item is incorporated by reference to Part III, Item 12 of this Form 10-K.
market conditions. Since plan inception, a total of 108,000,000 shares have been authorized for repurchase of which
101,633,413 shares have been repurchased as of December 31, 2016.
(b) Commencing in October 1997, the Company’s Board of Directors has, at various times, authorized the repurchase, from
(a)
The remainder of the information required by this item is incorporated by reference to Part III, Item 12 of this Form 10-K.
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Stock Performance Graph
The following graph compares, through December 31, 2016, 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.
PART II
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Securities
Market Price, Dividends and Related Matters
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
The Company’s Common Stock is listed for trading on the New York Stock Exchange under the symbol “RHI”. On
January 31, 2017, there were 1,286 holders of record of the Common Stock.
Market Price, Dividends and Related Matters
Following is a list by fiscal quarters of the sales prices of the stock:
The Company’s Common Stock is listed for trading on the New York Stock Exchange under the symbol “RHI”. On
January 31, 2017, there were 1,286 holders of record of the Common Stock.
Following is a list by fiscal quarters of the sales prices of the stock:
2016
4th Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 49.63
$ 34.42
3rd Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 41.50
Sales Prices
$ 35.67
2016
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1st Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4th Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3rd Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1st Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015
4th Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 54.01
$ 44.95
3rd Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1st Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4th Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3rd Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends of $.22 per share were declared and paid in each quarter of 2016. Cash dividends of $.20 per share were
$ 60.54
$ 54.58
declared and paid in each quarter of 2015.
1st Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 63.27
$ 55.60
Sales Prices
High
Low
$ 47.26
High
$ 46.75
$ 49.63
$ 41.50
$ 47.26
$ 46.75
High
$ 34.34
Low
$ 36.17
$ 34.42
$ 35.67
$ 34.34
$ 36.17
Low
Sales Prices
$ 58.00
Sales Prices
$ 49.18
$ 60.54
High
$ 63.27
$ 54.01
$ 58.00
$ 54.58
Low
$ 55.60
$ 44.95
$ 49.18
Issuer Purchases of Equity Securities
Cash dividends of $.22 per share were declared and paid in each quarter of 2016. Cash dividends of $.20 per share were
declared and paid in each quarter of 2015.
Issuer Purchases of Equity Securities
October 1, 2016 to October 31, 2016 . . . . . . . . . . . . . . . . . . .
November 1, 2016 to November 30, 2016 . . . . . . . . . . . . . . .
December 1, 2016 to December 31, 2016 . . . . . . . . . . . . . . .
October 1, 2016 to October 31, 2016 . . . . . . . . . . . . . . . . . . .
Total October 1, 2016 to December 31, 2016 . . . . . . . . . . . .
November 1, 2016 to November 30, 2016 . . . . . . . . . . . . . . .
Total
Number of
Shares
Purchased
100,000
Total
Number of
347,179
Shares
Purchased
757,563
100,000
1,204,742
347,179
(a)
Average
Price Paid
per Share
$
37.39
Average
41.53
Price Paid
$
per Share
48.86
$
$
$
37.39
41.53
Total
Number of
Shares
Purchased
as Part of
Total
Publicly
Number of
Announced
Shares
Plans
Purchased
100,000
as Part of
Publicly
347,179
Announced
Plans
666,015
100,000
1,113,194
347,179
Maximum
Number of
Shares that May
Yet Be
Purchased
Maximum
Under Publicly
Number of
Announced
Shares that May
Plans (b)
Yet Be
Purchased
7,379,781
Under Publicly
7,032,602
Announced
Plans (b)
6,366,587
7,379,781
7,032,602
December 1, 2016 to December 31, 2016 . . . . . . . . . . . . . . .
Includes 91,548 shares repurchased in connection with employee stock plans, whereby Company shares were tendered
6,366,587
757,563
666,015
48.86
(a)
(a)
$
Total October 1, 2016 to December 31, 2016 . . . . . . . . . . . .
by employees for the payment of applicable withholding taxes and/or exercise price.
1,204,742
1,113,194
(b) Commencing in October 1997, the Company’s Board of Directors has, at various times, authorized the repurchase, from
(a)
time to time, of the Company’s common stock on the open market or in privately negotiated transactions depending on
Includes 91,548 shares repurchased in connection with employee stock plans, whereby Company shares were tendered
market conditions. Since plan inception, a total of 108,000,000 shares have been authorized for repurchase of which
by employees for the payment of applicable withholding taxes and/or exercise price.
(b) Commencing in October 1997, the Company’s Board of Directors has, at various times, authorized the repurchase, from
101,633,413 shares have been repurchased as of December 31, 2016.
time to time, of the Company’s common stock on the open market or in privately negotiated transactions depending on
The remainder of the information required by this item is incorporated by reference to Part III, Item 12 of this Form 10-K.
market conditions. Since plan inception, a total of 108,000,000 shares have been authorized for repurchase of which
101,633,413 shares have been repurchased as of December 31, 2016.
The remainder of the information required by this item is incorporated by reference to Part III, Item 12 of this Form 10-K.
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10
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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.
2016
2015
2014
2013
2012
Years Ended December 31,
(in thousands)
Income Statement Data:
Net service revenues . . . . . . . . . . . . . . . . . $5,250,399
Direct costs of services, consisting of
$5,094,933
$4,695,014
$4,245,895
$4,111,213
payroll, payroll taxes, benefit costs and
reimbursable expenses . . . . . . . . . . . . .
Gross margin. . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative
3,089,723
2,160,676
2,980,462
2,114,471
2,772,098
1,922,916
2,522,803
1,723,092
2,462,153
1,649,060
1,237
1,606,217
expenses . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . .
Interest income, net. . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . .
210,721
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 343,389
Net income available to common
stockholders—diluted . . . . . . . . . . . . . . . . $ 343,389
554,110
(888)
1,533,799
1,425,734
1,324,815
1,305,614
192
(550)
581,030
223,234
557
(724)
497,349
191,421
1,700
(1,002)
397,579
145,384
398
(1,197)
344,245
134,303
$ 357,796
$ 305,928
$ 252,195
$ 209,942
$ 357,796
$ 305,928
$ 252,192
$ 208,867
Years Ended December 31,
2016
2015
2014
2013
2012
(in thousands, except per share amounts)
Net Income Per Share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . $
2.68
2.67
$
$
2.72
2.69
$
$
2.28
2.26
$
$
1.85
1.83
$
$
1.51
1.50
Shares:
Basic . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . .
Cash Dividends Declared Per Share . . . . . $
127,991
128,766
131,749
132,930
134,358
135,541
136,153
137,589
138,201
139,409
.88
$
.80
$
.72
$
.64
$
.60
2016
2015
2014
2013
2012
(in thousands)
December 31,
Balance Sheet Data:
Total assets . . . . . . . . . . . . . . . . . . . . . . . . $1,777,971
Notes payable and other indebtedness,
less current portion
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
840
Stockholders’ equity . . . . . . . . . . . . . . . . . $1,086,599
$1,671,044 (a) $1,620,830 (a) $1,479,670 (a) $1,367,027 (a)
$
1,007
$
1,159
$
1,300
$
1,428
$1,003,781
$ 979,858
$ 919,643
$ 842,011
(a) Reflects the impact of the adoption of the new accounting standard in fiscal year 2016 related to balance sheet
classification of deferred taxes. See Note B - New Accounting Pronouncements (Part II, Item 8 of this Form 10-K) for
further discussion.
138808_RHI_A/R_10K.indd 12
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12
13
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.”
Executive Overview
Demand for the Company’s temporary and permanent staffing and risk consulting and internal audit services is
largely dependent upon general economic and labor trends both domestically and abroad. Correspondingly, financial results for
the year ended December 31, 2016 were positively impacted by stable global economic conditions. Annual net service revenues
reached $5.25 billion in 2016, an increase of 3% from the prior year. Full-year 2016 net income decreased 4% to $343 million
and diluted net income per share decreased 1% to $2.67. All three of the Company's reportable segments experienced revenue
growth, led by Protiviti which increased 9% in 2016 on a same-day, constant-currency basis compared to last year.
During the third quarter of 2016, the Company successfully implemented a new front-office Customer Relationship
Management ("CRM") system for all temporary and permanent staffing branches in the United States as well as a new project
management system for its risk consulting and internal audit services segment. The conversions went smoothly, and the
Company estimates that the related disruption and out-of-pocket costs had an adverse impact to its revenue and net income per
share for the year of $9 million and $0.05, respectively.
We believe that the Company is well positioned in the current macroeconomic environment. The United States economic
backdrop during 2016 was stable for the Company as real gross domestic product (GDP) grew 1.6%, while the unemployment
rate declined from 5.0% in December 2015 to 4.7% in December 2016. In the United States, the number of job openings has
exceeded the number of hires since February 2015, creating competition for skilled talent that increases the Company's value to
clients. A number of professional occupations are nearing full employment, which is placing pressure on the supply of available
talent and increasing our value to clients. The secular demand for temporary staffing is also ongoing. The number of temporary
workers as a percentage of the overall U.S. workforce remains near an all-time high, a sign employers are building flexible
staffing options into their human resource plans with increasing frequency.
ROBERT HALF | 2016 ANNUAL REPORT
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.
2016
2015
2014
2013
2012
Years Ended December 31,
(in thousands)
Net service revenues . . . . . . . . . . . . . . . . . $5,250,399
$5,094,933
$4,695,014
$4,245,895
$4,111,213
Income Statement Data:
Direct costs of services, consisting of
payroll, payroll taxes, benefit costs and
reimbursable expenses . . . . . . . . . . . . .
3,089,723
Gross margin. . . . . . . . . . . . . . . . . . . . . . .
2,160,676
Selling, general and administrative
2,980,462
2,114,471
2,772,098
1,922,916
2,522,803
1,723,092
2,462,153
1,649,060
expenses . . . . . . . . . . . . . . . . . . . . . . . .
1,606,217
1,533,799
1,425,734
1,324,815
1,305,614
Amortization of intangible assets . . . . . . .
Interest income, net. . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . .
1,237
(888)
554,110
210,721
192
(550)
581,030
223,234
557
(724)
497,349
191,421
1,700
(1,002)
397,579
145,384
398
(1,197)
344,245
134,303
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 343,389
$ 357,796
$ 305,928
$ 252,195
$ 209,942
Net income available to common
stockholders—diluted . . . . . . . . . . . . . . . . $ 343,389
$ 357,796
$ 305,928
$ 252,192
$ 208,867
Years Ended December 31,
2016
2015
2014
2013
2012
(in thousands, except per share amounts)
Net Income Per Share:
Shares:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . $
2.68
2.67
$
$
2.72
2.69
$
$
2.28
2.26
$
$
1.85
1.83
$
$
1.51
1.50
Basic . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . .
127,991
128,766
131,749
132,930
134,358
135,541
136,153
137,589
138,201
139,409
Cash Dividends Declared Per Share . . . . . $
.88
$
.80
$
.72
$
.64
$
.60
2016
2015
2014
2013
2012
December 31,
(in thousands)
Total assets . . . . . . . . . . . . . . . . . . . . . . . . $1,777,971
$1,671,044 (a) $1,620,830 (a) $1,479,670 (a) $1,367,027 (a)
Balance Sheet Data:
Notes payable and other indebtedness,
less current portion
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
840
$
1,007
$
1,159
$
1,300
$
1,428
Stockholders’ equity . . . . . . . . . . . . . . . . . $1,086,599
$1,003,781
$ 979,858
$ 919,643
$ 842,011
(a) Reflects the impact of the adoption of the new accounting standard in fiscal year 2016 related to balance sheet
classification of deferred taxes. See Note B - New Accounting Pronouncements (Part II, Item 8 of this Form 10-K) for
further discussion.
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.”
Executive Overview
Demand for the Company’s temporary and permanent staffing and risk consulting and internal audit services is
largely dependent upon general economic and labor trends both domestically and abroad. Correspondingly, financial results for
the year ended December 31, 2016 were positively impacted by stable global economic conditions. Annual net service revenues
reached $5.25 billion in 2016, an increase of 3% from the prior year. Full-year 2016 net income decreased 4% to $343 million
and diluted net income per share decreased 1% to $2.67. All three of the Company's reportable segments experienced revenue
growth, led by Protiviti which increased 9% in 2016 on a same-day, constant-currency basis compared to last year.
During the third quarter of 2016, the Company successfully implemented a new front-office Customer Relationship
Management ("CRM") system for all temporary and permanent staffing branches in the United States as well as a new project
management system for its risk consulting and internal audit services segment. The conversions went smoothly, and the
Company estimates that the related disruption and out-of-pocket costs had an adverse impact to its revenue and net income per
share for the year of $9 million and $0.05, respectively.
We believe that the Company is well positioned in the current macroeconomic environment. The United States economic
backdrop during 2016 was stable for the Company as real gross domestic product (GDP) grew 1.6%, while the unemployment
rate declined from 5.0% in December 2015 to 4.7% in December 2016. In the United States, the number of job openings has
exceeded the number of hires since February 2015, creating competition for skilled talent that increases the Company's value to
clients. A number of professional occupations are nearing full employment, which is placing pressure on the supply of available
talent and increasing our value to clients. The secular demand for temporary staffing is also ongoing. The number of temporary
workers as a percentage of the overall U.S. workforce remains near an all-time high, a sign employers are building flexible
staffing options into their human resource plans with increasing frequency.
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ROBERT HALF | 2016 ANNUAL REPORT
Protiviti has successfully diversified its service offerings, built a loyal and growing client base, and is seeing steady
demand in all of its major consulting solutions. Protiviti provides clients with consulting solutions in finance, technology,
operations, data, analytics, governance, risk and internal audit.
We monitor various economic indicators and business trends in all of the countries in which we operate to anticipate
demand for the Company’s services. We evaluate these trends to determine the appropriate level of investment, including
personnel, which will best position the Company for success in the current and future global macroeconomic environment. The
Company’s investments in headcount are typically structured to proactively support and align with expected revenue growth
trends. As such, during 2016, temporary and permanent staffing headcount was relatively consistent with prior year-end levels,
while risk consulting and internal audit headcount increased.
We have limited visibility into future revenues not only due to the dependence on macroeconomic conditions noted above,
interim impairment assessment.
but also because of the relatively short duration of the Company’s client engagements. Accordingly, we typically assess
headcount and other investments on at least a quarterly basis. That said, based on current trends and conditions, we expect
headcount levels for our full-time staff to remain relatively flat for each of our reporting segments throughout the first quarter of
2017.
Capital expenditures in 2016 totaled $83 million, approximately 60% of which represented investments in software
initiatives and technology infrastructure, both of which are important to the Company’s future growth opportunities. Major
software initiatives include upgrades to enterprise resource planning and project management applications and the continued
implementation of a global CRM application. Infrastructure and computer hardware initiatives for the year of 2016 have
focused on delivering mobile technology to the Company's professional staff, upgrading data networks, and enhancing video
capabilities and telecommunication systems. Our major software initiatives were substantially implemented in 2016, therefore
we expect reduced capital expenditures in 2017. Capital expenditures also included amounts spent on tenant improvements and
furniture and equipment in the Company's leased offices. We currently expect that 2017 capital expenditures will range from
$65 million to $75 million.
Critical Accounting Policies and Estimates
As described below, the Company’s most critical accounting policies and estimates are those that involve subjective
December 31, 2016.
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 4.5% and 4.7% as of December 31, 2016 and 2015, respectively. As of December 31, 2016, 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 $1.7 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.
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 $18.9 million and $26.3 million were recorded as of December 31, 2016 and 2015,
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, 2016, and determined that no adjustment to the carrying value of goodwill was required. There were no
events or changes in circumstances since the annual goodwill impairment assessment that caused the Company to perform an
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, 2016, of
$126.9 million, $26.0 million, $0.0 million, $7.0 million, $0.0 million and $49.9 million, respectively, totaling $209.8 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 most recent
assessment would continue for all reporting units through 2016, 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 2018 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 model used to calculate fair value extends 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 9.8% discount rate, which is
slightly lower than the 10.0% discount rate used for the Company’s test during the second quarter of 2015. This decrease in
discount rate is attributable to decreases in the risk free rate and the equity market risk premium, offset by a slight increase in
beta.
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 75% 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.
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ROBERT HALF | 2016 ANNUAL REPORT Protiviti has successfully diversified its service offerings, built a loyal and growing client base, and is seeing steady
demand in all of its major consulting solutions. Protiviti provides clients with consulting solutions in finance, technology,
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.
operations, data, analytics, governance, risk and internal audit.
We monitor various economic indicators and business trends in all of the countries in which we operate to anticipate
differences in actual experience may materially affect the future financial results of the Company.
While management believes that its judgments and interpretations regarding income taxes are appropriate, significant
demand for the Company’s services. We evaluate these trends to determine the appropriate level of investment, including
personnel, which will best position the Company for success in the current and future global macroeconomic environment. The
Company’s investments in headcount are typically structured to proactively support and align with expected revenue growth
trends. As such, during 2016, temporary and permanent staffing headcount was relatively consistent with prior year-end levels,
while risk consulting and internal audit headcount increased.
We have limited visibility into future revenues not only due to the dependence on macroeconomic conditions noted above,
but also because of the relatively short duration of the Company’s client engagements. Accordingly, we typically assess
headcount and other investments on at least a quarterly basis. That said, based on current trends and conditions, we expect
headcount levels for our full-time staff to remain relatively flat for each of our reporting segments throughout the first quarter of
2017.
Capital expenditures in 2016 totaled $83 million, approximately 60% of which represented investments in software
initiatives and technology infrastructure, both of which are important to the Company’s future growth opportunities. Major
software initiatives include upgrades to enterprise resource planning and project management applications and the continued
implementation of a global CRM application. Infrastructure and computer hardware initiatives for the year of 2016 have
focused on delivering mobile technology to the Company's professional staff, upgrading data networks, and enhancing video
capabilities and telecommunication systems. Our major software initiatives were substantially implemented in 2016, therefore
we expect reduced capital expenditures in 2017. Capital expenditures also included amounts spent on tenant improvements and
furniture and equipment in the Company's leased offices. We currently expect that 2017 capital expenditures will range from
$65 million to $75 million.
Critical Accounting Policies and Estimates
decisions or assessments.
As described below, the Company’s most critical accounting policies and estimates are those that involve subjective
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 4.5% and 4.7% as of December 31, 2016 and 2015, respectively. As of December 31, 2016, 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 $1.7 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.
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 $18.9 million and $26.3 million were recorded as of December 31, 2016 and 2015,
respectively. The valuation allowances recorded related primarily to net operating losses in certain foreign operations. If such
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, 2016, and determined that no adjustment to the carrying value of goodwill was required. There were no
events or changes in circumstances since the annual goodwill impairment assessment 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, 2016, of
$126.9 million, $26.0 million, $0.0 million, $7.0 million, $0.0 million and $49.9 million, respectively, totaling $209.8 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, 2016.
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 most recent
assessment would continue for all reporting units through 2016, 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 2018 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 model used to calculate fair value extends 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 9.8% discount rate, which is
slightly lower than the 10.0% discount rate used for the Company’s test during the second quarter of 2015. This decrease in
discount rate is attributable to decreases in the risk free rate and the equity market risk premium, offset by a slight increase in
beta.
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 75% 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.
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ROBERT HALF | 2016 ANNUAL REPORT 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 $0.9 million,
$4.6 million and $5.7 million, representing 0.02%, 0.11% and 0.16% of applicable U.S. revenue for the years ended
December 31, 2016, 2015 and 2014, 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, 2016, 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 $0.1 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.
constant currency calculation.
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, 2016, the Company utilized an historical volatility of 22.82%, a 0% dividend
yield and a risk-free interest rate of 0.99%. The historical volatility was based on the most recent 2.77-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, 2016, 2015 and 2014, compensation expense related to restricted stock and stock units
was $42.7 million, $41.3 million and $40.8 million, respectively, of which $11.0 million, $11.1 million and $11.7 million was
related to grants made in 2016, 2015 and 2014, respectively. Based on the Company’s results for the year ended December 31,
2016, 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.
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 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 stable global economic conditions during 2016. Because of the inherent difficulty in
predicting economic trends and the absence of material long-term contracts in any of the Company's business units, future
demand for the Company’s services cannot be forecast with certainty. We believe the Company is well positioned in the current
United States macroeconomic environment.
The Company’s temporary and permanent staffing business has 325 offices in 42 states, the District of Columbia and
17 foreign countries, while Protiviti has 56 offices in 23 states and 11 foreign countries.
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
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.
Refer to Item 7a. "Quantitative and Qualitative Disclosures About Market Risk" for further discussion of the impact of
foreign currency exchange rates on the Company's results of operations and financial condition.
Years ended December 31, 2016 and 2015
Revenues. The Company’s revenues were $5.25 billion for the year ended December 31, 2016, increasing by 3.1%
compared to $5.09 billion for the year ended December 31, 2015. Revenues from foreign operations represented 20% and 19%
of total revenues for the years ended December 31, 2016 and 2015, 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 2016, revenues for temporary and consultant staffing and risk consulting and internal audit services were up and
revenue for permanent placement staffing was down compared to 2015. Revenue growth was strongest internationally, most
notably within Europe. Risk consulting and internal audit services continued to post strong growth rates. Contributing factors
for each reportable segment are discussed below in further detail.
Temporary and consultant staffing revenues were $4.03 billion for the year ended December 31, 2016, increasing by 2.4%
compared to revenues of $3.93 billion for the year ended December 31, 2015. Key drivers of temporary and consultant staffing
revenues include average hourly bill rates and the number of hours worked by the Company’s temporary employees on client
engagements. On a same-day, constant-currency basis, temporary and consultant staffing revenues increased 2.8% for 2016,
compared to 2015, due primarily to a 4.2% increase in average bill rates, partially offset by fewer hours worked by the
Company's temporary employees. In the U.S., 2016 revenues increased 2.0% on an as reported basis and 1.9% on a same-day
basis, compared to 2015. For the Company’s international operations, 2016 revenues increased 4.2% on an as reported basis
and 6.9% on a same-day, constant-currency basis, compared to 2015.
Permanent placement staffing revenues were $419 million for the year ended December 31, 2016, decreasing by 0.5%
compared to revenues of $421 million for the year ended December 31, 2015. Key drivers of permanent placement staffing
revenues consist of the number of candidate placements and average fees earned per placement. On a same-day, constant-
currency basis, permanent placement revenues increased 0.3% for 2016 compared to 2015. The decrease in as reported revenue
was driven primarily by a decrease in number of placements, partially offset by an increase in average fees earned per
placement. In the U.S., 2016 revenues increased 0.3% on an as reported basis and 0.1% on a same-day basis, compared to 2015.
For the Company’s international operations, 2016 revenues decreased 2.3% on an as reported basis, and on a same-day,
constant-currency basis increased 0.6%, compared to 2015. Historically, demand for permanent placement services is even
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ROBERT HALF | 2016 ANNUAL REPORT Workers’ Compensation. Except for states which require participation in state-operated insurance funds, the Company
Non-GAAP Financial Measures
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 $0.9 million,
$4.6 million and $5.7 million, representing 0.02%, 0.11% and 0.16% of applicable U.S. revenue for the years ended
December 31, 2016, 2015 and 2014, 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, 2016, 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 $0.1 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, 2016, the Company utilized an historical volatility of 22.82%, a 0% dividend
yield and a risk-free interest rate of 0.99%. The historical volatility was based on the most recent 2.77-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, 2016, 2015 and 2014, compensation expense related to restricted stock and stock units
was $42.7 million, $41.3 million and $40.8 million, respectively, of which $11.0 million, $11.1 million and $11.7 million was
related to grants made in 2016, 2015 and 2014, respectively. Based on the Company’s results for the year ended December 31,
2016, 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.
See Note B—“New Accounting Pronouncements” to the Company’s Consolidated Financial Statements included under
Recent Accounting Pronouncements
Part II—Item 8 of this report.
Results of Operations
Demand for the Company’s temporary and permanent staffing 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 stable global economic conditions during 2016. Because of the inherent difficulty in
predicting economic trends and the absence of material long-term contracts in any of the Company's business units, future
demand for the Company’s services cannot be forecast with certainty. We believe the Company is well positioned in the current
United States macroeconomic environment.
The Company’s temporary and permanent staffing business has 325 offices in 42 states, the District of Columbia and
17 foreign countries, while Protiviti has 56 offices in 23 states and 11 foreign countries.
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.
Refer to Item 7a. "Quantitative and Qualitative Disclosures About Market Risk" for further discussion of the impact of
foreign currency exchange rates on the Company's results of operations and financial condition.
Years ended December 31, 2016 and 2015
Revenues. The Company’s revenues were $5.25 billion for the year ended December 31, 2016, increasing by 3.1%
compared to $5.09 billion for the year ended December 31, 2015. Revenues from foreign operations represented 20% and 19%
of total revenues for the years ended December 31, 2016 and 2015, 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 2016, revenues for temporary and consultant staffing and risk consulting and internal audit services were up and
revenue for permanent placement staffing was down compared to 2015. Revenue growth was strongest internationally, most
notably within Europe. Risk consulting and internal audit services continued to post strong growth rates. Contributing factors
for each reportable segment are discussed below in further detail.
Temporary and consultant staffing revenues were $4.03 billion for the year ended December 31, 2016, increasing by 2.4%
compared to revenues of $3.93 billion for the year ended December 31, 2015. Key drivers of temporary and consultant staffing
revenues include average hourly bill rates and the number of hours worked by the Company’s temporary employees on client
engagements. On a same-day, constant-currency basis, temporary and consultant staffing revenues increased 2.8% for 2016,
compared to 2015, due primarily to a 4.2% increase in average bill rates, partially offset by fewer hours worked by the
Company's temporary employees. In the U.S., 2016 revenues increased 2.0% on an as reported basis and 1.9% on a same-day
basis, compared to 2015. For the Company’s international operations, 2016 revenues increased 4.2% on an as reported basis
and 6.9% on a same-day, constant-currency basis, compared to 2015.
Permanent placement staffing revenues were $419 million for the year ended December 31, 2016, decreasing by 0.5%
compared to revenues of $421 million for the year ended December 31, 2015. Key drivers of permanent placement staffing
revenues consist of the number of candidate placements and average fees earned per placement. On a same-day, constant-
currency basis, permanent placement revenues increased 0.3% for 2016 compared to 2015. The decrease in as reported revenue
was driven primarily by a decrease in number of placements, partially offset by an increase in average fees earned per
placement. In the U.S., 2016 revenues increased 0.3% on an as reported basis and 0.1% on a same-day basis, compared to 2015.
For the Company’s international operations, 2016 revenues decreased 2.3% on an as reported basis, and on a same-day,
constant-currency basis increased 0.6%, compared to 2015. Historically, demand for permanent placement services is even
16
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ROBERT HALF | 2016 ANNUAL REPORT more sensitive to economic and labor market conditions than demand for temporary and consulting staffing and this is expected
to continue.
Risk consulting and internal audit services revenues were $804 million for the year ended December 31, 2016, increasing
by 8.3% compared to revenues of $743 million for the year ended December 31, 2015. Key drivers of risk consulting and
internal audit services revenues are the billable hours worked by consultants on client engagements and average hourly bill
rates. On a same-day, constant-currency basis, risk consulting and internal audit services revenues increased 8.5% for 2016
compared to 2015, due primarily to an increase in number of hours worked, partially offset by a decrease in average hourly bill
rates. In the U.S., 2016 revenues increased 8.0% on an as reported basis, or 7.9% on a same-day basis, compared to 2015. For
the Company’s international operations, 2016 revenues increased 9.6% on an as reported basis and 11.7% on a same-day,
constant-currency basis, compared to 2015.
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, 2016, 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.4 %
-0.1 %
0.5 %
2.8 %
-0.5 %
-0.1 %
0.9 %
0.3 %
8.3 %
-0.2 %
0.4 %
8.5 %
2.0%
-0.1%
—
1.9%
0.3%
-0.2%
—
0.1%
8.0%
-0.1%
—
7.9%
4.2%
-0.1%
2.8%
6.9%
-2.3%
-0.1%
3.0%
0.6%
9.6%
-0.2%
2.3%
11.7%
Gross Margin. The Company’s gross margin dollars were $2.16 billion for the year ended December 31, 2016, up 2.2%
from $2.11 billion for the year ended December 31, 2015. Contributing factors for each reportable segment are discussed below
in further detail.
Gross margin dollars from the Company’s temporary and consultant staffing represent revenues less direct costs of
services, which consist of payroll, payroll taxes and benefit costs for temporary employees, and reimbursable expenses. The key
drivers of gross margin are: i) pay/bill spreads, which represent the differential between wages paid to temporary employees
and amounts billed to clients; ii) fringe costs, which are primarily composed of payroll taxes and benefit costs for temporary
and consultant staffing employees; and iii) conversion revenues, which are earned when a temporary position converts to a
permanent position with the Company's client. Gross margin dollars for the Company’s temporary and consultant staffing
division were $1.51 billion for the year ended December 31, 2016, up 3.2% from $1.46 billion for the year ended December 31,
2015. As a percentage of revenues, gross margin dollars for temporary and consultant staffing were 37.5% in 2016, up from
37.2% in 2015. This year-over-year improvement in gross margin percentage of 0.3% was primarily attributable to higher pay/
bill spreads and lower payroll taxes and workers compensation costs, partially offset by lower conversion revenues as a
percentage of applicable revenue in 2016 compared to 2015.
Gross margin dollars from permanent placement staffing represent revenues less reimbursable expenses. Gross margin
dollars for the Company’s permanent placement staffing division were $419 million for the year ended December 31, 2016,
down 0.5% from $421 million for the year ended December 31, 2015. Because reimbursable expenses for permanent placement
staffing services are de minimis, the decrease in gross margin dollars is substantially explained by the decrease 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. The primary drivers of
risk consulting and internal audit services gross margin are: i) the relative composition of and number of professional staff and
their respective pay and bill rates; and ii) staff utilization, which is the relationship of time spent on client engagements in
proportion to the total time available for the Company’s risk consulting and internal audit services staff. Gross margin dollars
for the Company’s risk consulting and internal audit division were $231 million for the year ended December 31, 2016, up
0.4% from $230 million for the year ended December 31, 2015. As a percentage of revenues, gross margin dollars for risk
consulting and internal audit services were 28.7% in 2016, down from 31.0% in 2015. The decline in 2016 gross margin
percentage compared to 2015 was due to lower staff utilization rates and the mix impact of lower financial services and
regulatory compliance revenues, which is typically a higher margin business for the Company.
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 $1.61 billion for the year ended December 31, 2016, up 4.7% from $1.53 billion for the year
ended December 31, 2015. As a percentage of revenues, the Company’s selling, general and administrative expenses were
30.6% for 2016, up from 30.1% for 2015. 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 division were $1.12
billion for the year ended December 31, 2016, up 5.0% from $1.06 billion for the year ended December 31, 2015. As a
percentage of revenues, selling, general and administrative expenses for temporary and consultant staffing were 27.7% in 2016,
up from 27.1% in 2015. For 2016 compared to 2015, the increase in selling, general and administrative expenses as a
percentage of revenue is primarily due to increases in staff compensation costs, inclusive of employee medical costs, and
variable overhead, including costs related to the Company’s new CRM and project management systems.
Selling, general and administrative expenses for the Company’s permanent placement staffing division were $339 million
for the year ended December 31, 2016, up 0.8% from $336 million for the year ended December 31, 2015. As a percentage of
revenues, selling, general and administrative expenses for permanent placement staffing services were 80.7% in 2016, up from
79.7% in 2015. For 2016 compared to 2015, the increase in selling, general and administrative expenses as a percentage of
revenue is primarily due to increases in staff compensation costs, inclusive of employee medical costs.
Selling, general and administrative expenses for the Company’s risk consulting and internal audit services division were
$150 million for the year ended December 31, 2016, up 11.9% from $134 million for the year ended December 31, 2015. As a
percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services were 18.7%
in 2016, up from 18.1% in 2015. For 2016 compared to 2015, the increase in selling, general and administrative expenses as a
percentage of revenue is primarily due to an increase in administrative compensation and fixed overhead.
Operating Income. The Company’s total operating income was $555 million, or 10.6% of revenues, for the year ended
December 31, 2016, down 4.5% from $581 million, or 11.4% of revenues, for the year ended December 31, 2015. For the
Company’s temporary and consultant staffing division, operating income was $394 million, or 9.8% of applicable revenues,
down 1.5% from $400 million, or 10.2% of applicable revenues, in 2015. For the Company’s permanent placement staffing
division, operating income was $80 million, or 19.1% of applicable revenues, down 5.9% from operating income of $85
million, or 20.2% of applicable revenues, in 2015. For the Company’s risk consulting and internal audit services division,
operating income was $81 million, or 10.0% of applicable revenues, down 15.7% from operating income of $96 million, or
12.9% of applicable revenues, in 2015.
Provision for income taxes. The provision for income taxes was 38.0% and 38.4% for the years ended December 31,
2016 and 2015, respectively. The decrease is primarily due to an increase of federal and state credits in the U.S, and benefit of
foreign losses.
138808_RHI_A/R_10K.indd 18
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ROBERT HALF | 2016 ANNUAL REPORT
more sensitive to economic and labor market conditions than demand for temporary and consulting staffing and this is expected
to continue.
Risk consulting and internal audit services revenues were $804 million for the year ended December 31, 2016, increasing
by 8.3% compared to revenues of $743 million for the year ended December 31, 2015. Key drivers of risk consulting and
internal audit services revenues are the billable hours worked by consultants on client engagements and average hourly bill
rates. On a same-day, constant-currency basis, risk consulting and internal audit services revenues increased 8.5% for 2016
compared to 2015, due primarily to an increase in number of hours worked, partially offset by a decrease in average hourly bill
rates. In the U.S., 2016 revenues increased 8.0% on an as reported basis, or 7.9% on a same-day basis, compared to 2015. For
the Company’s international operations, 2016 revenues increased 9.6% on an as reported basis and 11.7% on a same-day,
constant-currency basis, compared to 2015.
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, 2016, 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.4 %
-0.1 %
0.5 %
2.8 %
-0.5 %
-0.1 %
0.9 %
0.3 %
8.3 %
-0.2 %
0.4 %
8.5 %
2.0%
-0.1%
—
1.9%
0.3%
-0.2%
—
0.1%
8.0%
-0.1%
—
7.9%
4.2%
-0.1%
2.8%
6.9%
-2.3%
-0.1%
3.0%
0.6%
9.6%
-0.2%
2.3%
11.7%
Gross Margin. The Company’s gross margin dollars were $2.16 billion for the year ended December 31, 2016, up 2.2%
from $2.11 billion for the year ended December 31, 2015. Contributing factors for each reportable segment are discussed below
in further detail.
Gross margin dollars from the Company’s temporary and consultant staffing represent revenues less direct costs of
services, which consist of payroll, payroll taxes and benefit costs for temporary employees, and reimbursable expenses. The key
drivers of gross margin are: i) pay/bill spreads, which represent the differential between wages paid to temporary employees
and amounts billed to clients; ii) fringe costs, which are primarily composed of payroll taxes and benefit costs for temporary
and consultant staffing employees; and iii) conversion revenues, which are earned when a temporary position converts to a
permanent position with the Company's client. Gross margin dollars for the Company’s temporary and consultant staffing
division were $1.51 billion for the year ended December 31, 2016, up 3.2% from $1.46 billion for the year ended December 31,
2015. As a percentage of revenues, gross margin dollars for temporary and consultant staffing were 37.5% in 2016, up from
37.2% in 2015. This year-over-year improvement in gross margin percentage of 0.3% was primarily attributable to higher pay/
bill spreads and lower payroll taxes and workers compensation costs, partially offset by lower conversion revenues as a
percentage of applicable revenue in 2016 compared to 2015.
Gross margin dollars from permanent placement staffing represent revenues less reimbursable expenses. Gross margin
dollars for the Company’s permanent placement staffing division were $419 million for the year ended December 31, 2016,
down 0.5% from $421 million for the year ended December 31, 2015. Because reimbursable expenses for permanent placement
staffing services are de minimis, the decrease in gross margin dollars is substantially explained by the decrease 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. The primary drivers of
risk consulting and internal audit services gross margin are: i) the relative composition of and number of professional staff and
their respective pay and bill rates; and ii) staff utilization, which is the relationship of time spent on client engagements in
proportion to the total time available for the Company’s risk consulting and internal audit services staff. Gross margin dollars
for the Company’s risk consulting and internal audit division were $231 million for the year ended December 31, 2016, up
0.4% from $230 million for the year ended December 31, 2015. As a percentage of revenues, gross margin dollars for risk
consulting and internal audit services were 28.7% in 2016, down from 31.0% in 2015. The decline in 2016 gross margin
percentage compared to 2015 was due to lower staff utilization rates and the mix impact of lower financial services and
regulatory compliance revenues, which is typically a higher margin business for the Company.
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 $1.61 billion for the year ended December 31, 2016, up 4.7% from $1.53 billion for the year
ended December 31, 2015. As a percentage of revenues, the Company’s selling, general and administrative expenses were
30.6% for 2016, up from 30.1% for 2015. 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 division were $1.12
billion for the year ended December 31, 2016, up 5.0% from $1.06 billion for the year ended December 31, 2015. As a
percentage of revenues, selling, general and administrative expenses for temporary and consultant staffing were 27.7% in 2016,
up from 27.1% in 2015. For 2016 compared to 2015, the increase in selling, general and administrative expenses as a
percentage of revenue is primarily due to increases in staff compensation costs, inclusive of employee medical costs, and
variable overhead, including costs related to the Company’s new CRM and project management systems.
Selling, general and administrative expenses for the Company’s permanent placement staffing division were $339 million
for the year ended December 31, 2016, up 0.8% from $336 million for the year ended December 31, 2015. As a percentage of
revenues, selling, general and administrative expenses for permanent placement staffing services were 80.7% in 2016, up from
79.7% in 2015. For 2016 compared to 2015, the increase in selling, general and administrative expenses as a percentage of
revenue is primarily due to increases in staff compensation costs, inclusive of employee medical costs.
Selling, general and administrative expenses for the Company’s risk consulting and internal audit services division were
$150 million for the year ended December 31, 2016, up 11.9% from $134 million for the year ended December 31, 2015. As a
percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services were 18.7%
in 2016, up from 18.1% in 2015. For 2016 compared to 2015, the increase in selling, general and administrative expenses as a
percentage of revenue is primarily due to an increase in administrative compensation and fixed overhead.
Operating Income. The Company’s total operating income was $555 million, or 10.6% of revenues, for the year ended
December 31, 2016, down 4.5% from $581 million, or 11.4% of revenues, for the year ended December 31, 2015. For the
Company’s temporary and consultant staffing division, operating income was $394 million, or 9.8% of applicable revenues,
down 1.5% from $400 million, or 10.2% of applicable revenues, in 2015. For the Company’s permanent placement staffing
division, operating income was $80 million, or 19.1% of applicable revenues, down 5.9% from operating income of $85
million, or 20.2% of applicable revenues, in 2015. For the Company’s risk consulting and internal audit services division,
operating income was $81 million, or 10.0% of applicable revenues, down 15.7% from operating income of $96 million, or
12.9% of applicable revenues, in 2015.
Provision for income taxes. The provision for income taxes was 38.0% and 38.4% for the years ended December 31,
2016 and 2015, respectively. The decrease is primarily due to an increase of federal and state credits in the U.S, and benefit of
foreign losses.
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ROBERT HALF | 2016 ANNUAL REPORT
Years ended December 31, 2015 and 2014
Revenues. The Company’s revenues were $5.09 billion for the year ended December 31, 2015, increasing by 8.5%
compared to $4.70 billion for the year ended December 31, 2014. Revenues from foreign operations represented 19% and 23%
of total revenues for the years ended December 31, 2015 and 2014, 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 2015, revenues for all three of the Company’s reportable segments were up compared to 2014. Results were
strongest domestically with demand also improving in several other countries, most notably within Europe. Risk consulting
and internal audit services continued to post strong growth rates. Contributing factors for each reportable segment are discussed
below in further detail.
Temporary and consultant staffing revenues were $3.93 billion for the year ended December 31, 2015, increasing by 6.9%
compared to revenues of $3.68 billion for the year ended December 31, 2014. Key drivers of temporary and consultant staffing
revenues include average hourly bill rates and the number of hours worked by the Company’s temporary employees on client
engagements. On a same-day, constant-currency basis, temporary and consultant staffing revenues increased 10.3% for 2015,
compared to 2014, due primarily to an increase in temporary hours worked by the Company's temporary employees and
inclusive of a 4.5% increase in average bill rates. In the U.S., 2015 revenues increased 11.5% on an as reported basis and 11.4%
on a same-day basis, compared to 2014. For the Company’s international operations, 2015 revenues decreased 8.9% on an as
reported basis and increased 6.4% on a same-day, constant-currency basis, compared to 2014.
Permanent placement staffing revenues were $421 million for the year ended December 31, 2015, increasing by 6.8%
compared to revenues of $395 million for the year ended December 31, 2014. Key drivers of permanent placement staffing
revenues consist of the number of candidate placements and average fees earned per placement. On a same-day, constant-
currency basis, permanent placement revenues increased 11.7% for 2015 compared to 2014. In the U.S., 2015 revenues
increased 15.5% on an as reported basis and 15.4% on a same-day basis, compared to 2014. For the Company’s international
operations, 2015 revenues decreased 9.3% on an as reported basis, and on a same-day, constant-currency basis increased 4.9%,
compared to 2014, driven primarily by an increase in number of placements. Historically, demand for permanent placement
services is even more sensitive to economic and labor market conditions than demand for temporary and consulting staffing and
this is expected to continue.
Risk consulting and internal audit services revenues were $743 million for the year ended December 31, 2015, increasing
by 19.0% compared to revenues of $624 million for the year ended December 31, 2014. Key drivers of risk consulting and
internal audit services revenues are the billable hours worked by consultants on client engagements and average hourly bill
rates. On a same-day, constant-currency basis, risk consulting and internal audit services revenues increased 21.8% for 2015
compared to 2014, due primarily to an increase in billable hours worked. In the U.S., 2015 revenues increased 22.3% on an as
reported basis, or 22.5% on a same-day basis, compared to 2014. For the Company’s international operations, 2015 revenues
increased 4.0% on an as reported basis, and on a same-day, constant-currency basis increased 18.7%, compared to 2014.
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, 2015, is presented in the following table:
Global
United States
International
Temporary and consultant staffing
As Reported. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.9%
0.0%
3.4%
Same Billing Days and Constant Currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.3%
Permanent placement staffing
As Reported. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Same Billing Days and Constant Currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.8%
-0.1%
5.0%
11.7%
Risk consulting and internal audit services
As Reported. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19.0%
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.1%
2.7%
Same Billing Days and Constant Currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21.8%
11.5%
-0.1%
—
11.4%
15.5%
-0.1%
—
15.4%
22.3%
0.2%
—
22.5%
-8.9%
-0.1%
15.4%
6.4%
-9.3%
0.0%
14.2%
4.9%
4.0%
0.2%
14.5%
18.7%
Gross Margin. The Company’s gross margin dollars were $2.11 billion for the year ended December 31, 2015, up
10.0% from $1.92 billion for the year ended December 31, 2014. For 2015 compared to 2014, 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 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 represent revenues less direct costs of
services, which consist of payroll, payroll taxes and benefit costs for temporary employees, and reimbursable expenses. The
key drivers of gross margin are: i) pay/bill spreads, which represent the differential between wages paid to temporary
employees and amounts billed to clients; ii) fringe costs, which are primarily composed of payroll taxes and benefit costs for
temporary and consultant staffing employees; and iii) conversion revenues, which are earned when a temporary position
converts to a permanent position with the Company's client. Gross margin dollars for the Company’s temporary and consultant
staffing division were $1.46 billion for the year ended December 31, 2015, up 8.8% from $1.35 billion for the year ended
December 31, 2014. As a percentage of revenues, gross margin dollars for temporary and consultant staffing were 37.2% in
2015, up from 36.6% in 2014. This year-over-year improvement in gross margin percentage of 0.6% was primarily attributable
to higher pay/bill spreads and lower fringe costs driven by lower state unemployment insurance expenses in 2015 compared to
2014.
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 $421 million for the year ended December 31,
2015, up 6.7% from $394 million for the year ended December 31, 2014. 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. The primary drivers of
risk consulting and internal audit services gross margin are: i) the relative composition of and number of professional staff and
their respective pay and bill rates; and ii) staff utilization, which is the relationship of time spent on client engagements in
proportion to the total time available for the Company’s risk consulting and internal audit services staff. Gross margin dollars
for the Company’s risk consulting and internal audit division were $230 million for the year ended December 31, 2015, up
25.6% from $183 million for the year ended December 31, 2014. As a percentage of revenues, gross margin dollars for risk
consulting and internal audit services were 31.0% in 2015, up from 29.4% in 2014. The improvement in 2015 compared to
2014 was due to a better alignment of the mix of professional staff relative to client demand.
138808_RHI_A/R_10K.indd 20
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ROBERT HALF | 2016 ANNUAL REPORT
Years ended December 31, 2015 and 2014
Revenues. The Company’s revenues were $5.09 billion for the year ended December 31, 2015, increasing by 8.5%
compared to $4.70 billion for the year ended December 31, 2014. Revenues from foreign operations represented 19% and 23%
of total revenues for the years ended December 31, 2015 and 2014, 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 2015, revenues for all three of the Company’s reportable segments were up compared to 2014. Results were
strongest domestically with demand also improving in several other countries, most notably within Europe. Risk consulting
and internal audit services continued to post strong growth rates. Contributing factors for each reportable segment are discussed
below in further detail.
Temporary and consultant staffing revenues were $3.93 billion for the year ended December 31, 2015, increasing by 6.9%
compared to revenues of $3.68 billion for the year ended December 31, 2014. Key drivers of temporary and consultant staffing
revenues include average hourly bill rates and the number of hours worked by the Company’s temporary employees on client
engagements. On a same-day, constant-currency basis, temporary and consultant staffing revenues increased 10.3% for 2015,
compared to 2014, due primarily to an increase in temporary hours worked by the Company's temporary employees and
inclusive of a 4.5% increase in average bill rates. In the U.S., 2015 revenues increased 11.5% on an as reported basis and 11.4%
on a same-day basis, compared to 2014. For the Company’s international operations, 2015 revenues decreased 8.9% on an as
reported basis and increased 6.4% on a same-day, constant-currency basis, compared to 2014.
Permanent placement staffing revenues were $421 million for the year ended December 31, 2015, increasing by 6.8%
compared to revenues of $395 million for the year ended December 31, 2014. Key drivers of permanent placement staffing
revenues consist of the number of candidate placements and average fees earned per placement. On a same-day, constant-
currency basis, permanent placement revenues increased 11.7% for 2015 compared to 2014. In the U.S., 2015 revenues
increased 15.5% on an as reported basis and 15.4% on a same-day basis, compared to 2014. For the Company’s international
operations, 2015 revenues decreased 9.3% on an as reported basis, and on a same-day, constant-currency basis increased 4.9%,
compared to 2014, driven primarily by an increase in number of placements. Historically, demand for permanent placement
services is even more sensitive to economic and labor market conditions than demand for temporary and consulting staffing and
this is expected to continue.
Risk consulting and internal audit services revenues were $743 million for the year ended December 31, 2015, increasing
by 19.0% compared to revenues of $624 million for the year ended December 31, 2014. Key drivers of risk consulting and
internal audit services revenues are the billable hours worked by consultants on client engagements and average hourly bill
rates. On a same-day, constant-currency basis, risk consulting and internal audit services revenues increased 21.8% for 2015
compared to 2014, due primarily to an increase in billable hours worked. In the U.S., 2015 revenues increased 22.3% on an as
reported basis, or 22.5% on a same-day basis, compared to 2014. For the Company’s international operations, 2015 revenues
increased 4.0% on an as reported basis, and on a same-day, constant-currency basis increased 18.7%, compared to 2014.
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, 2015, 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.9%
0.0%
3.4%
10.3%
6.8%
-0.1%
5.0%
11.7%
19.0%
0.1%
2.7%
21.8%
11.5%
-0.1%
—
11.4%
15.5%
-0.1%
—
15.4%
22.3%
0.2%
—
22.5%
-8.9%
-0.1%
15.4%
6.4%
-9.3%
0.0%
14.2%
4.9%
4.0%
0.2%
14.5%
18.7%
Gross Margin. The Company’s gross margin dollars were $2.11 billion for the year ended December 31, 2015, up
10.0% from $1.92 billion for the year ended December 31, 2014. For 2015 compared to 2014, 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 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 represent revenues less direct costs of
services, which consist of payroll, payroll taxes and benefit costs for temporary employees, and reimbursable expenses. The
key drivers of gross margin are: i) pay/bill spreads, which represent the differential between wages paid to temporary
employees and amounts billed to clients; ii) fringe costs, which are primarily composed of payroll taxes and benefit costs for
temporary and consultant staffing employees; and iii) conversion revenues, which are earned when a temporary position
converts to a permanent position with the Company's client. Gross margin dollars for the Company’s temporary and consultant
staffing division were $1.46 billion for the year ended December 31, 2015, up 8.8% from $1.35 billion for the year ended
December 31, 2014. As a percentage of revenues, gross margin dollars for temporary and consultant staffing were 37.2% in
2015, up from 36.6% in 2014. This year-over-year improvement in gross margin percentage of 0.6% was primarily attributable
to higher pay/bill spreads and lower fringe costs driven by lower state unemployment insurance expenses in 2015 compared to
2014.
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 $421 million for the year ended December 31,
2015, up 6.7% from $394 million for the year ended December 31, 2014. 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. The primary drivers of
risk consulting and internal audit services gross margin are: i) the relative composition of and number of professional staff and
their respective pay and bill rates; and ii) staff utilization, which is the relationship of time spent on client engagements in
proportion to the total time available for the Company’s risk consulting and internal audit services staff. Gross margin dollars
for the Company’s risk consulting and internal audit division were $230 million for the year ended December 31, 2015, up
25.6% from $183 million for the year ended December 31, 2014. As a percentage of revenues, gross margin dollars for risk
consulting and internal audit services were 31.0% in 2015, up from 29.4% in 2014. The improvement in 2015 compared to
2014 was due to a better alignment of the mix of professional staff relative to client demand.
20
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ROBERT HALF | 2016 ANNUAL REPORT
Selling, General and Administrative Expenses. The Company’s selling, general and administrative expenses consist
composed of net income of $306 million adjusted upward for non-cash items of $90 million, offset by net cash used in changes
primarily of staff compensation, advertising, depreciation and occupancy costs. The Company’s selling, general and
administrative expenses were $1.53 billion for the year ended December 31, 2015, up 7.6% from $1.43 billion for the year
ended December 31, 2014. As a percentage of revenues, the Company’s selling, general and administrative expenses were
30.1% for 2015, down from 30.4% for 2014. In 2015, selling, general and administrative expenses increased for all three of the
Company’s reportable segments compared to 2014. As percentage of revenue, selling, general and administrative expenses for
the Company’s permanent placement staffing and risk consulting and internal audit services divisions decreased in 2015
compared to 2014, however for the temporary and consulting staffing division, selling, general and administrative expenses
increased as a percentage of revenue. 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 division were $1.06
billion for the year ended December 31, 2015, up 7.8% from $987 million for the year ended December 31, 2014. As a
percentage of revenues, selling, general and administrative expenses for temporary and consultant staffing were 27.1% in 2015,
up from 26.8% in 2014. For 2015 compared to 2014, the increase in selling, general and administrative expenses as a
percentage of revenue is primarily due to an increase in field compensation expense and variable overhead, partially offset by a
decrease in administrative compensation and fixed overhead.
Selling, general and administrative expenses for the Company’s permanent placement staffing division were $336 million
included repurchases of $154 million in common stock, $97 million in cash dividends to stockholders, offset by proceeds of
for the year ended December 31, 2015, up 6.2% from $316 million for the year ended December 31, 2014. As a percentage of
revenues, selling, general and administrative expenses for permanent placement staffing services were 79.7% in 2015, down
from 80.1% in 2014. For 2015 compared to 2014, decreases in fixed overhead and variable overhead, partially offset by an
increase in field compensation 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
$134 million for the year ended December 31, 2015, up 9.3% from $123 million for the year ended December 31, 2014. As a
percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services were 18.1%
in 2015, down from 19.7% in 2014. For 2015 compared to 2014, improved leverage of 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 $581 million, or 11.4% of revenues, for the year ended
December 31, 2015, up 16.8% from $497 million, or 10.6% of revenues, for the year ended December 31, 2014. For the
Company’s temporary and consultant staffing division, operating income was $400 million, or 10.2% of applicable revenues,
up 11.5% from $359 million, or 9.8% of applicable revenues, in 2014. For the Company’s permanent placement staffing
division, operating income was $85 million, or 20.2% of applicable revenues, up 8.5% from operating income of $78 million,
or 19.9% of applicable revenues, in 2014. For the Company’s risk consulting and internal audit services division, operating
income was $96 million, or 12.9% of applicable revenues, up 58.9% from operating income of $60 million, or 9.7% of
applicable revenues, in 2014.
Provision for income taxes. The provision for income taxes was relatively consistent at 38.4% and 38.5% for the years
ended December 31, 2015 and 2014, respectively.
Liquidity and Capital Resources
The change in the Company’s liquidity during the years ended December 31, 2016, 2015 and 2014, 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 $260 million, $225 million, and $287 million at December 31, 2016, 2015 and 2014,
respectively. Operating activities provided $442 million during the year ended December 31, 2016, offset by $112 million and
$288 million of net cash used in investing activities and financing activities, respectively. Operating activities provided $438
million during the year ended December 31, 2015, offset by $118 million and $369 million of net cash used in investing
activities and financing activities, 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—Net cash provided by operating activities for the year ended December 31, 2016, was $442 million.
This was composed of net income of $343 million adjusted upward for non-cash items of $113 million, offset by net cash used
in changes in working capital of $14 million. Net cash provided by operating activities for the year ended December 31, 2015,
was composed of net income of $358 million adjusted upward for non-cash items of $89 million, offset by net cash used in
changes in working capital of $9 million. Net cash provided by operating activities for the year ended December 31, 2014, was
138808_RHI_A/R_10K.indd 22
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23
in working capital of $55 million.
Investing activities—Cash used in investing activities for the year ended December 31, 2016, was $112 million. This was
composed of capital expenditures of $83 million, deposits to trusts for employee deferred compensation plans of $27 million,
and payments for acquisitions, net of cash acquired, of $2 million. Cash used in investing activities for the year ended
December 31, 2015, was $118 million. This was primarily composed of capital expenditures of $75 million and deposits to
trusts for employee deferred compensation plans of $28 million, and payment for an acquisition, net of cash acquired, of $15
million. 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 $26 million.
Financing activities—Cash used in financing activities for the year ended December 31, 2016, was $288 million. This
included repurchases of $176 million in common stock and $114 million in cash dividends to stockholders, offset by the excess
tax benefits from stock-based compensation of $2 million. Cash used in financing activities for the year ended December 31,
2015, was $369 million. This included repurchases of $271 million in common stock and $108 million in cash dividends to
stockholders, offset by the proceeds of $2 million from exercises of stock options and the excess tax benefits from stock-based
compensation of $9 million. Cash used in financing activities for the year ended December 31, 2014, was $230 million. This
$14 million from exercises of stock options and the excess tax benefits from stock-based compensation of $7 million.
As of December 31, 2016, the Company is authorized to repurchase, from time to time, up to 6.4 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, 2016, 2015 and 2014, the Company repurchased approximately 4.0 million shares,
4.3 million shares and 3.3 million shares of common stock on the open market for a total cost of $164 million, $228 million and
$162 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, 2016, 2015 and 2014, such repurchases totaled approximately 0.4 million shares,
0.5 million shares and 0.5 million shares at a cost of $15 million, $25 million and $22 million, respectively. Repurchases of
shares have been funded with cash generated from operations.
The Company’s working capital at December 31, 2016, included $260 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 8, 2017, the Company announced a quarterly dividend of $.24 per share to be paid to all shareholders of
record on February 24, 2017. The dividend will be paid on March 15, 2017.
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, 2016 (in thousands):
Payments due by period
2018 and
2020 and
Contractual Obligations
2017
2019
2021
Thereafter
Total
Long-term debt obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
252
$
505
$
505
$
— $
1,262
Operating lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
85,143
52,920
1,251
126,554
19,936
1,539
81,304
111
1,402
66,939
359,940
—
5,866
72,967
10,058
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$139,566
$148,534
$ 83,322
$ 72,805
$444,227
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 2017 and thereafter under non-cancelable leases in effect at December 31, 2016. Purchase obligations consist
of purchase commitments primarily related to telecom service agreements, software subscriptions, and computer hardware and
software maintenance agreements. Other liabilities consist of asset retirement and deferred compensation obligations.
ROBERT HALF | 2016 ANNUAL REPORT
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 $1.53 billion for the year ended December 31, 2015, up 7.6% from $1.43 billion for the year
ended December 31, 2014. As a percentage of revenues, the Company’s selling, general and administrative expenses were
30.1% for 2015, down from 30.4% for 2014. In 2015, selling, general and administrative expenses increased for all three of the
Company’s reportable segments compared to 2014. As percentage of revenue, selling, general and administrative expenses for
the Company’s permanent placement staffing and risk consulting and internal audit services divisions decreased in 2015
compared to 2014, however for the temporary and consulting staffing division, selling, general and administrative expenses
increased as a percentage of revenue. 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 division were $1.06
billion for the year ended December 31, 2015, up 7.8% from $987 million for the year ended December 31, 2014. As a
percentage of revenues, selling, general and administrative expenses for temporary and consultant staffing were 27.1% in 2015,
up from 26.8% in 2014. For 2015 compared to 2014, the increase in selling, general and administrative expenses as a
percentage of revenue is primarily due to an increase in field compensation expense and variable overhead, partially offset by a
decrease in administrative compensation and fixed overhead.
Selling, general and administrative expenses for the Company’s permanent placement staffing division were $336 million
for the year ended December 31, 2015, up 6.2% from $316 million for the year ended December 31, 2014. As a percentage of
revenues, selling, general and administrative expenses for permanent placement staffing services were 79.7% in 2015, down
from 80.1% in 2014. For 2015 compared to 2014, decreases in fixed overhead and variable overhead, partially offset by an
increase in field compensation 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
$134 million for the year ended December 31, 2015, up 9.3% from $123 million for the year ended December 31, 2014. As a
percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services were 18.1%
in 2015, down from 19.7% in 2014. For 2015 compared to 2014, improved leverage of 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 $581 million, or 11.4% of revenues, for the year ended
December 31, 2015, up 16.8% from $497 million, or 10.6% of revenues, for the year ended December 31, 2014. For the
Company’s temporary and consultant staffing division, operating income was $400 million, or 10.2% of applicable revenues,
up 11.5% from $359 million, or 9.8% of applicable revenues, in 2014. For the Company’s permanent placement staffing
division, operating income was $85 million, or 20.2% of applicable revenues, up 8.5% from operating income of $78 million,
or 19.9% of applicable revenues, in 2014. For the Company’s risk consulting and internal audit services division, operating
income was $96 million, or 12.9% of applicable revenues, up 58.9% from operating income of $60 million, or 9.7% of
applicable revenues, in 2014.
Provision for income taxes. The provision for income taxes was relatively consistent at 38.4% and 38.5% for the years
ended December 31, 2015 and 2014, respectively.
Liquidity and Capital Resources
The change in the Company’s liquidity during the years ended December 31, 2016, 2015 and 2014, 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 $260 million, $225 million, and $287 million at December 31, 2016, 2015 and 2014,
respectively. Operating activities provided $442 million during the year ended December 31, 2016, offset by $112 million and
$288 million of net cash used in investing activities and financing activities, respectively. Operating activities provided $438
million during the year ended December 31, 2015, offset by $118 million and $369 million of net cash used in investing
activities and financing activities, 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—Net cash provided by operating activities for the year ended December 31, 2016, was $442 million.
This was composed of net income of $343 million adjusted upward for non-cash items of $113 million, offset by net cash used
in changes in working capital of $14 million. Net cash provided by operating activities for the year ended December 31, 2015,
was composed of net income of $358 million adjusted upward for non-cash items of $89 million, offset by net cash used in
changes in working capital of $9 million. Net cash provided by operating activities for the year ended December 31, 2014, was
composed of net income of $306 million adjusted upward for non-cash items of $90 million, offset by net cash used in changes
in working capital of $55 million.
Investing activities—Cash used in investing activities for the year ended December 31, 2016, was $112 million. This was
composed of capital expenditures of $83 million, deposits to trusts for employee deferred compensation plans of $27 million,
and payments for acquisitions, net of cash acquired, of $2 million. Cash used in investing activities for the year ended
December 31, 2015, was $118 million. This was primarily composed of capital expenditures of $75 million and deposits to
trusts for employee deferred compensation plans of $28 million, and payment for an acquisition, net of cash acquired, of $15
million. 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 $26 million.
Financing activities—Cash used in financing activities for the year ended December 31, 2016, was $288 million. This
included repurchases of $176 million in common stock and $114 million in cash dividends to stockholders, offset by the excess
tax benefits from stock-based compensation of $2 million. Cash used in financing activities for the year ended December 31,
2015, was $369 million. This included repurchases of $271 million in common stock and $108 million in cash dividends to
stockholders, offset by the proceeds of $2 million from exercises of stock options and the excess tax benefits from stock-based
compensation of $9 million. Cash used in financing activities for the year ended December 31, 2014, was $230 million. This
included repurchases of $154 million in common stock, $97 million in cash dividends to stockholders, offset by proceeds of
$14 million from exercises of stock options and the excess tax benefits from stock-based compensation of $7 million.
As of December 31, 2016, the Company is authorized to repurchase, from time to time, up to 6.4 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, 2016, 2015 and 2014, the Company repurchased approximately 4.0 million shares,
4.3 million shares and 3.3 million shares of common stock on the open market for a total cost of $164 million, $228 million and
$162 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, 2016, 2015 and 2014, such repurchases totaled approximately 0.4 million shares,
0.5 million shares and 0.5 million shares at a cost of $15 million, $25 million and $22 million, respectively. Repurchases of
shares have been funded with cash generated from operations.
The Company’s working capital at December 31, 2016, included $260 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 8, 2017, the Company announced a quarterly dividend of $.24 per share to be paid to all shareholders of
record on February 24, 2017. The dividend will be paid on March 15, 2017.
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, 2016 (in thousands):
Payments due by period
Contractual Obligations
Long-term debt obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017
$
252
85,143
52,920
1,251
$139,566
2018 and
2019
$
505
126,554
19,936
1,539
$148,534
2020 and
2021
$
505
81,304
111
1,402
$ 83,322
Thereafter
$
— $
66,939
—
5,866
$ 72,805
Total
1,262
359,940
72,967
10,058
$444,227
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 2017 and thereafter under non-cancelable leases in effect at December 31, 2016. Purchase obligations consist
of purchase commitments primarily related to telecom service agreements, software subscriptions, and computer hardware and
software maintenance agreements. Other liabilities consist of asset retirement and deferred compensation obligations.
22
23
138808_RHI_A/R_10K.indd 23
2/17/17 1:30 AM
ROBERT HALF | 2016 ANNUAL REPORT
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Because a portion of the Company’s net revenues are derived from its operations outside the U.S. and are denominated in
local currencies, 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 revenues, expenses, earnings, assets and liabilities.
For the year ended December 31, 2016, approximately 20% of the Company’s revenues were generated outside of the
United States. These operations transact business in their functional currency, which is the same as their local 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. Under GAAP, 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.
During 2016, the U.S. dollar fluctuated, but generally strengthened, against the primary currencies in which the Company
conducts business. Currency exchange rates had the effect of decreasing reported net service revenues by $27 million, or 0.5%,
in 2016 compared to prior year. The general strengthening of the U.S. dollar also affected the reported level of expenses
incurred in the Company's foreign operations. Because substantially all of the Company's foreign operations generated
revenues and incurred expenses within the same country and currency, the favorable effect of lower reported operating
expenses largely offset the decline in reported revenues. Reported net income was $0.5 million, or 0.2%, lower in the year
ended December 31, 2016 compared to prior year due to the effect of currency exchange rates.
For the month ended January 31, 2017, the U.S. dollar weakened against the Euro, British Pound, Canadian Dollar, and
Australian dollar. If currency exchange rates were to remain at January 2017 levels throughout 2017, the Company’s 2017 full-
year reported revenues would be impacted favorably, mostly offset by an unfavorable impact to operating expenses. Thus, the
impact to reported net income would likely be immaterial.
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. Although currency fluctuations impact the Company’s reported results and shareholders’ equity, such
fluctuations generally do not affect cash flow or result in actual economic gains or losses. The Company generally has few
cross-border transfers of funds, except for transfers to the U.S. for payment of intercompany loans, working capital loans made
between the U.S. and the Company’s foreign subsidiaries, and dividends from the Company’s foreign subsidiaries.
Item 8. Financial Statements and Supplementary Data
Item 8. Financial Statements and Supplementary Data
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
(in thousands, except share amounts)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands, except share amounts)
December 31,
December 31,
2015
2015
2016
2016
ASSETS
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 260,201
$ 224,577
Accounts receivable, less allowances of $33,133 and $35,087 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
703,228
704,640
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 260,201
320,805
$ 224,577
268,780
Accounts receivable, less allowances of $33,133 and $35,087 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
703,228
1,284,234
320,805
209,793
1,284,234
3,671
209,793
161,509
118,764
3,671
704,640
1,197,997
268,780
208,579
1,197,997
4,508
208,579
142,906
117,054
4,508
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
161,509
$1,777,971
118,764
142,906
$1,671,044
117,054
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,777,971
$ 135,540
$1,671,044
$ 148,108
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
539,048
504,782
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 135,540
5,141
$ 148,108
2,506
LIABILITIES
LIABILITIES
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of notes payable and other indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of notes payable and other indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes payable and other indebtedness, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes payable and other indebtedness, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and Contingencies (Note I)
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
STOCKHOLDERS’ EQUITY
Commitments and Contingencies (Note I)
Preferred stock, $.001 par value authorized 5,000,000 shares; issued and outstanding
zero shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
STOCKHOLDERS’ EQUITY
Preferred stock, $.001 par value authorized 5,000,000 shares; issued and outstanding
Common stock, $.001 par value authorized 260,000,000 shares; issued and
zero shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
outstanding 127,796,558 and 131,156,043 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
539,048
167
5,141
679,896
167
840
679,896
10,636
840
691,372
10,636
691,372
—
128
—
504,782
153
2,506
655,549
153
1,007
655,549
10,707
1,007
667,263
10,707
667,263
—
131
—
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock, $.001 par value authorized 260,000,000 shares; issued and
Accumulated other comprehensive loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
outstanding 127,796,558 and 131,156,043 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,022,411
128
(20,502)
1,022,411
84,562
(20,502)
1,086,599
84,562
$1,777,971
1,086,599
979,477
131
(10,294)
979,477
34,467
(10,294)
1,003,781
34,467
$1,671,044
1,003,781
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,777,971
$1,671,044
138808_RHI_A/R_10K.indd 24
2/17/17 1:30 AM
24
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
25
25
ROBERT HALF | 2016 ANNUAL REPORT
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Because a portion of the Company’s net revenues are derived from its operations outside the U.S. and are denominated in
local currencies, 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 revenues, expenses, earnings, assets and liabilities.
For the year ended December 31, 2016, approximately 20% of the Company’s revenues were generated outside of the
United States. These operations transact business in their functional currency, which is the same as their local 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. Under GAAP, 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.
During 2016, the U.S. dollar fluctuated, but generally strengthened, against the primary currencies in which the Company
conducts business. Currency exchange rates had the effect of decreasing reported net service revenues by $27 million, or 0.5%,
in 2016 compared to prior year. The general strengthening of the U.S. dollar also affected the reported level of expenses
incurred in the Company's foreign operations. Because substantially all of the Company's foreign operations generated
revenues and incurred expenses within the same country and currency, the favorable effect of lower reported operating
expenses largely offset the decline in reported revenues. Reported net income was $0.5 million, or 0.2%, lower in the year
ended December 31, 2016 compared to prior year due to the effect of currency exchange rates.
For the month ended January 31, 2017, the U.S. dollar weakened against the Euro, British Pound, Canadian Dollar, and
Australian dollar. If currency exchange rates were to remain at January 2017 levels throughout 2017, the Company’s 2017 full-
year reported revenues would be impacted favorably, mostly offset by an unfavorable impact to operating expenses. Thus, the
impact to reported net income would likely be immaterial.
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. Although currency fluctuations impact the Company’s reported results and shareholders’ equity, such
fluctuations generally do not affect cash flow or result in actual economic gains or losses. The Company generally has few
cross-border transfers of funds, except for transfers to the U.S. for payment of intercompany loans, working capital loans made
between the U.S. and the Company’s foreign subsidiaries, and dividends from the Company’s foreign subsidiaries.
Item 8. Financial Statements and Supplementary Data
Item 8. Financial Statements and Supplementary Data
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
(in thousands, except share amounts)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands, except share amounts)
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ASSETS
Accounts receivable, less allowances of $33,133 and $35,087 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, less allowances of $33,133 and $35,087 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIABILITIES
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIABILITIES
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of notes payable and other indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of notes payable and other indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes payable and other indebtedness, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes payable and other indebtedness, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and Contingencies (Note I)
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
STOCKHOLDERS’ EQUITY
Commitments and Contingencies (Note I)
Preferred stock, $.001 par value authorized 5,000,000 shares; issued and outstanding
STOCKHOLDERS’ EQUITY
zero shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock, $.001 par value authorized 5,000,000 shares; issued and outstanding
Common stock, $.001 par value authorized 260,000,000 shares; issued and
zero shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
outstanding 127,796,558 and 131,156,043 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock, $.001 par value authorized 260,000,000 shares; issued and
outstanding 127,796,558 and 131,156,043 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2016
2015
December 31,
2016
$ 260,201
703,228
$ 260,201
320,805
703,228
1,284,234
320,805
209,793
1,284,234
3,671
209,793
161,509
3,671
118,764
161,509
$1,777,971
118,764
$1,777,971
$ 135,540
539,048
$ 135,540
5,141
539,048
167
5,141
679,896
167
840
679,896
10,636
840
691,372
10,636
691,372
2015
$ 224,577
704,640
$ 224,577
268,780
704,640
1,197,997
268,780
208,579
1,197,997
4,508
208,579
142,906
4,508
117,054
142,906
$1,671,044
117,054
$1,671,044
$ 148,108
504,782
$ 148,108
2,506
504,782
153
2,506
655,549
153
1,007
655,549
10,707
1,007
667,263
10,707
667,263
—
—
128
—
1,022,411
128
(20,502)
1,022,411
84,562
(20,502)
1,086,599
84,562
$1,777,971
1,086,599
131
—
979,477
131
(10,294)
979,477
34,467
(10,294)
1,003,781
34,467
$1,671,044
1,003,781
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,777,971
$1,671,044
24
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
25
25
138808_RHI_A/R_10K.indd 25
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ROBERT HALF | 2016 ANNUAL REPORT
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
(in thousands, except per share amounts)
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct costs of services, consisting of payroll, payroll taxes, benefit
costs and reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct costs of services, consisting of payroll, payroll taxes, benefit
costs and reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income per share :
Net income per share :
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares:
Shares:
Years Ended December 31,
2016
2015
Years Ended December 31,
2014
2016
$5,250,399
$5,250,399
3,089,723
3,089,723
2,160,676
2,160,676
1,606,217
1,237
1,606,217
(888)
1,237
(888)
554,110
554,110
210,721
210,721
$ 343,389
$ 343,389
$
$
$
$
$
$
2.68
2.67
2.68
2.67
127,991
128,766
127,991
128,766
.88
.88
2015
$5,094,933
$5,094,933
2,980,462
2,980,462
2,114,471
2,114,471
1,533,799
192
1,533,799
(550)
192
(550)
581,030
581,030
223,234
223,234
$ 357,796
$ 357,796
$
$
$
$
$
$
2.72
2.69
2.72
2.69
131,749
132,930
131,749
132,930
.80
.80
2014
$4,695,014
$4,695,014
2,772,098
2,772,098
1,922,916
1,922,916
1,425,734
557
1,425,734
(724)
557
(724)
497,349
497,349
191,421
191,421
$ 305,928
$ 305,928
$
$
$
$
$
$
2.28
2.26
2.28
2.26
134,358
135,541
134,358
135,541
.72
.72
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(in thousands)
COMPREHENSIVE INCOME:
COMPREHENSIVE INCOME:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 343,389
$ 357,796
$ 305,928
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total comprehensive income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10,208)
$ 343,389
$ 333,181
(10,208)
(25,024)
$ 357,796
$ 332,772
(25,024)
(23,341)
$ 305,928
$ 282,587
(23,341)
Total comprehensive income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 333,181
$ 332,772
$ 282,587
Years Ended December 31,
2016
Years Ended December 31,
2015
2014
2016
2015
2014
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
26
26
The accompanying Notes to Consolidated Financial Statements
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
are an integral part of these financial statements.
27
27
138808_RHI_A/R_10K.indd 26
2/17/17 1:30 AM
ROBERT HALF | 2016 ANNUAL REPORT
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(in thousands, except per share amounts)
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct costs of services, consisting of payroll, payroll taxes, benefit
costs and reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct costs of services, consisting of payroll, payroll taxes, benefit
costs and reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2016
Years Ended December 31,
2015
2014
2016
$5,250,399
2015
$5,094,933
2014
$4,695,014
$5,250,399
3,089,723
$5,094,933
2,980,462
$4,695,014
2,772,098
3,089,723
2,160,676
2,160,676
1,606,217
1,606,217
1,237
(888)
1,237
(888)
554,110
554,110
210,721
2,980,462
2,114,471
2,114,471
1,533,799
1,533,799
192
(550)
192
(550)
581,030
581,030
223,234
2,772,098
1,922,916
1,922,916
1,425,734
1,425,734
557
(724)
557
(724)
497,349
497,349
191,421
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
210,721
$ 343,389
223,234
$ 357,796
191,421
$ 305,928
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income per share :
$ 343,389
$ 357,796
$ 305,928
Net income per share :
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares:
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
$
$
2.68
2.67
2.68
2.67
127,991
128,766
127,991
128,766
.88
.88
$
$
$
$
$
$
2.72
2.69
2.72
2.69
131,749
132,930
131,749
132,930
.80
.80
$
$
$
$
$
$
2.28
2.26
2.28
2.26
134,358
135,541
134,358
135,541
.72
.72
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
(in thousands)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Years Ended December 31,
2016
2015
Years Ended December 31,
2014
COMPREHENSIVE INCOME:
COMPREHENSIVE INCOME:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total comprehensive income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total comprehensive income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016
2015
2014
$ 343,389
(10,208)
$ 343,389
$ 333,181
(10,208)
$ 333,181
$ 357,796
(25,024)
$ 357,796
$ 332,772
(25,024)
$ 332,772
$ 305,928
(23,341)
$ 305,928
$ 282,587
(23,341)
$ 282,587
The accompanying Notes to Consolidated Financial Statements
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
are an integral part of these financial statements.
26
26
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
27
27
138808_RHI_A/R_10K.indd 27
2/17/17 1:30 AM
ROBERT HALF | 2016 ANNUAL REPORT
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
(in thousands, except per share amounts)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except per share amounts)
CAPITAL SURPLUS:
CAPITAL SURPLUS:
COMMON STOCK—SHARES:
COMMON STOCK—SHARES:
COMMON STOCK—PAR VALUE:
COMMON STOCK—PAR VALUE:
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock at par value. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock at par value. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options—excess over par value . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact of equity incentive plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options—excess over par value . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact of equity incentive plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME:
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME:
RETAINED EARNINGS:
RETAINED EARNINGS:
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock—excess over par value. . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends ($.88 per share, $.80 per share and $.72 per share) . . . . . . . . . . .
Repurchases of common stock—excess over par value. . . . . . . . . . . . . . . . . . . . .
Cash dividends ($.88 per share, $.80 per share and $.72 per share) . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2016
2015
Years Ended December 31,
2014
2016
2015
2014
131,156
1,039
131,156
(4,405)
1,039
7
(4,405)
7
127,797
127,797
135,134
785
135,134
(4,817)
785
54
(4,817)
54
131,156
131,156
137,466
938
137,466
(3,798)
938
528
(3,798)
528
135,134
135,134
$
$
$
$
131
1
131
(4)
1
—
(4)
—
128
128
$
$
$
$
135
1
135
(5)
1
—
(5)
—
131
131
$
$
$
$
137
1
137
(4)
1
1
(4)
1
135
135
$ 979,477
(1)
$ 979,477
42,699
(1)
223
42,699
13
223
13
$1,022,411
$1,022,411
$ 928,157
(1)
$ 928,157
41,292
(1)
1,529
41,292
8,500
1,529
8,500
$ 979,477
$ 979,477
$ 868,120
(1)
$ 868,120
40,821
(1)
14,323
40,821
4,894
14,323
4,894
$ 928,157
$ 928,157
14,730
(25,024)
14,730
(25,024)
$
$ (10,294) $
(10,208)
$
$ (10,294) $
$ (20,502) $ (10,294) $
(10,208)
$ (20,502) $ (10,294) $
$
$
$
$
$
$
34,467
343,389
34,467
(178,780)
343,389
(114,514)
(178,780)
(114,514)
84,562
84,562
$
$
36,836
357,796
36,836
(252,916)
357,796
(107,249)
(252,916)
(107,249)
34,467
34,467
$
$
$
$
38,071
(23,341)
38,071
14,730
(23,341)
14,730
13,315
305,928
13,315
(183,969)
305,928
(98,438)
(183,969)
(98,438)
36,836
36,836
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(in thousands)
Years Ended December 31,
2016
Years Ended December 31,
2015
2014
2016
2015
2014
CASH FLOWS FROM OPERATING ACTIVITIES:
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 343,389
$ 357,796
$ 305,928
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating activities:
$ 343,389
$ 357,796
$ 305,928
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense—restricted stock and stock
Depreciation expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense—restricted stock and stock
Excess tax benefits from stock-based compensation. . . . . . . . . . . . . . . . . . . . . . . .
units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from stock-based compensation. . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in assets and liabilities, net of effects of acquisitions:
Provision for doubtful accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in accounts payable, accrued expenses, accrued payroll and benefit
Increase in accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in accounts payable, accrued expenses, accrued payroll and benefit
(Decrease) increase in income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in other assets, net of change in other liabilities . . . . . . . . . . . . . . . . . . . .
(Decrease) increase in income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash flows provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in other assets, net of change in other liabilities . . . . . . . . . . . . . . . . . . . .
1,237
63,078
1,237
63,078
42,699
42,699
(1,822)
(1,868)
(1,822)
9,192
(1,868)
9,192
(15,888)
(15,888)
19,726
19,726
(8,246)
(9,416)
(8,246)
(9,416)
442,081
192
53,273
192
53,273
41,292
41,292
(8,762)
(8,579)
(8,762)
12,005
(8,579)
12,005
557
49,124
557
49,124
40,821
40,821
(7,174)
(3,643)
(7,174)
9,825
(3,643)
9,825
(75,745)
(134,917)
(75,745)
60,232
60,232
19,948
(13,416)
19,948
(13,416)
438,236
(134,917)
71,740
71,740
16,359
(7,922)
16,359
(7,922)
340,698
Net cash flows provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CASH FLOWS FROM INVESTING ACTIVITIES:
442,081
438,236
340,698
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments to trusts for employee deferred compensation plans. . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,200)
(82,956)
(2,200)
(27,079)
(82,956)
(14,668)
(75,057)
(14,668)
(28,225)
(75,057)
Payments to trusts for employee deferred compensation plans. . . . . . . . . . . . . . . .
Net cash flows used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(27,079)
(112,235)
(28,225)
(117,950)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash flows used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(112,235)
(117,950)
—
(62,830)
—
(25,811)
(62,830)
(25,811)
(88,641)
(88,641)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in notes payable and other indebtedness . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from stock-based compensation. . . . . . . . . . . . . . . . . . . . . . . .
Decrease in notes payable and other indebtedness . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from stock-based compensation. . . . . . . . . . . . . . . . . . . . . . . .
(176,031)
(114,164)
(176,031)
(114,164)
(154)
1,822
(154)
223
1,822
(271,138)
(107,561)
(271,138)
(107,561)
(140)
8,762
(140)
1,529
8,762
(153,821)
(97,604)
(153,821)
(97,604)
(128)
7,174
(128)
14,324
7,174
Net cash flows used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(288,304)
223
(368,548)
1,529
(230,055)
14,324
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . .
Net cash flows used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(288,304)
(5,918)
(368,548)
(14,280)
(230,055)
(10,647)
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,918)
35,624
(14,280)
(62,542)
(10,647)
11,355
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
224,577
35,624
287,119
(62,542)
275,764
11,355
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 260,201
224,577
$ 224,577
287,119
$ 287,119
275,764
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 260,201
$ 224,577
$ 287,119
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Cash paid during the year for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
266
$
285
$
330
Income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash items:
Income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 219,415
266
$
$ 219,415
$ 212,668
285
$
$ 212,668
$ 178,375
330
$
$ 178,375
Non-cash items:
Stock repurchases awaiting settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 14,688
$ 11,935
$ 30,152
Stock repurchases awaiting settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 14,688
$ 11,935
$ 30,152
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
28
28
The accompanying Notes to Consolidated Financial Statements
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
are an integral part of these financial statements.
29
29
138808_RHI_A/R_10K.indd 28
2/17/17 1:30 AM
ROBERT HALF | 2016 ANNUAL REPORT
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except per share amounts)
(in thousands, except per share amounts)
COMMON STOCK—SHARES:
COMMON STOCK—SHARES:
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMMON STOCK—PAR VALUE:
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMMON STOCK—PAR VALUE:
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CAPITAL SURPLUS:
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
Years Ended December 31,
2016
Years Ended December 31,
2015
2014
2016
2015
2014
131,156
1,039
131,156
(4,405)
1,039
(4,405)
7
127,797
7
127,797
135,134
135,134
785
(4,817)
785
(4,817)
54
131,156
54
131,156
137,466
137,466
938
(3,798)
938
528
(3,798)
135,134
528
135,134
131
1
131
(4)
1
—
(4)
—
128
128
$
$
$
$
135
1
135
(5)
1
—
(5)
—
131
131
137
1
137
(4)
1
1
(4)
1
135
135
CAPITAL SURPLUS:
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 979,477
$ 928,157
$ 868,120
Net issuances of restricted stock at par value. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuances of restricted stock at par value. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options—excess over par value . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact of equity incentive plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercises of stock options—excess over par value . . . . . . . . . . . . . . . . . . . . . . . .
$ 979,477
(1)
$ 928,157
(1)
$ 868,120
(1)
42,699
(1)
42,699
223
13
223
41,292
(1)
1,529
41,292
8,500
1,529
40,821
(1)
14,323
40,821
4,894
14,323
Tax impact of equity incentive plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,022,411
13
$ 979,477
8,500
$ 928,157
4,894
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME:
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,022,411
$ 979,477
$ 928,157
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME:
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (10,294) $
14,730
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (10,294) $
(10,208)
(25,024)
14,730
$ (20,502) $ (10,294) $
(10,208)
(25,024)
RETAINED EARNINGS:
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (20,502) $ (10,294) $
RETAINED EARNINGS:
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock—excess over par value. . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends ($.88 per share, $.80 per share and $.72 per share) . . . . . . . . . . .
Repurchases of common stock—excess over par value. . . . . . . . . . . . . . . . . . . . .
Cash dividends ($.88 per share, $.80 per share and $.72 per share) . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
34,467
343,389
34,467
(178,780)
343,389
(114,514)
(178,780)
(114,514)
84,562
84,562
$
$
$
$
36,836
357,796
36,836
(252,916)
357,796
(107,249)
(252,916)
(107,249)
34,467
34,467
38,071
(23,341)
38,071
14,730
(23,341)
14,730
13,315
305,928
13,315
(183,969)
305,928
(98,438)
(183,969)
(98,438)
36,836
36,836
$
$
$
$
$
$
$
$
$
$
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
(in thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES:
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Changes in assets and liabilities, net of effects of acquisitions:
Changes in assets and liabilities, net of effects of acquisitions:
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense—restricted stock and stock
Depreciation expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense—restricted stock and stock
Excess tax benefits from stock-based compensation. . . . . . . . . . . . . . . . . . . . . . . .
units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from stock-based compensation. . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in accounts payable, accrued expenses, accrued payroll and benefit
Increase in accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in accounts payable, accrued expenses, accrued payroll and benefit
costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Decrease) increase in income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in other assets, net of change in other liabilities . . . . . . . . . . . . . . . . . . . .
(Decrease) increase in income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in other assets, net of change in other liabilities . . . . . . . . . . . . . . . . . . . .
Net cash flows provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash flows provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CASH FLOWS FROM INVESTING ACTIVITIES:
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments to trusts for employee deferred compensation plans. . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments to trusts for employee deferred compensation plans. . . . . . . . . . . . . . . .
Net cash flows used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash flows used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CASH FLOWS FROM FINANCING ACTIVITIES:
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in notes payable and other indebtedness . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from stock-based compensation. . . . . . . . . . . . . . . . . . . . . . . .
Decrease in notes payable and other indebtedness . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from stock-based compensation. . . . . . . . . . . . . . . . . . . . . . . .
Net cash flows used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from exercises of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash flows used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Cash paid during the year for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock repurchases awaiting settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock repurchases awaiting settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash items:
Non-cash items:
2016
2015
Years Ended December 31,
2014
2016
2015
2014
$ 343,389
$ 343,389
$ 357,796
$ 357,796
$ 305,928
$ 305,928
1,237
63,078
1,237
63,078
42,699
42,699
(1,822)
(1,868)
(1,822)
9,192
(1,868)
9,192
(15,888)
(15,888)
19,726
19,726
(8,246)
(9,416)
(8,246)
(9,416)
442,081
442,081
(2,200)
(82,956)
(2,200)
(27,079)
(82,956)
(27,079)
(112,235)
(112,235)
(176,031)
(114,164)
(176,031)
(154)
(114,164)
1,822
(154)
223
1,822
(288,304)
223
(288,304)
(5,918)
(5,918)
35,624
35,624
224,577
224,577
$ 260,201
$ 260,201
192
53,273
192
53,273
41,292
41,292
(8,762)
(8,579)
(8,762)
12,005
(8,579)
12,005
(75,745)
(75,745)
60,232
60,232
19,948
(13,416)
19,948
(13,416)
438,236
438,236
(14,668)
(75,057)
(14,668)
(28,225)
(75,057)
(28,225)
(117,950)
(117,950)
(271,138)
(107,561)
(271,138)
(140)
(107,561)
8,762
(140)
1,529
8,762
(368,548)
1,529
(368,548)
(14,280)
(14,280)
(62,542)
(62,542)
287,119
287,119
$ 224,577
$ 224,577
557
49,124
557
49,124
40,821
40,821
(7,174)
(3,643)
(7,174)
9,825
(3,643)
9,825
(134,917)
(134,917)
71,740
71,740
16,359
(7,922)
16,359
(7,922)
340,698
340,698
—
(62,830)
—
(25,811)
(62,830)
(25,811)
(88,641)
(88,641)
(153,821)
(97,604)
(153,821)
(128)
(97,604)
7,174
(128)
14,324
7,174
(230,055)
14,324
(230,055)
(10,647)
(10,647)
11,355
11,355
275,764
275,764
$ 287,119
$ 287,119
266
$
$ 219,415
266
$
$ 219,415
$ 14,688
$ 14,688
285
$
$ 212,668
285
$
$ 212,668
$ 11,935
$ 11,935
330
$
$ 178,375
330
$
$ 178,375
$ 30,152
$ 30,152
The accompanying Notes to Consolidated Financial Statements
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
are an integral part of these financial statements.
28
28
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
29
29
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2/17/17 1:30 AM
ROBERT HALF | 2016 ANNUAL REPORT
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, data, analytics,
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”).
adjustments.
adjustments.
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, 2016, 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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Costs of Services. Direct costs of temporary and consultant staffing consist of payroll, payroll taxes and benefit costs for
Costs of Services. Direct costs of temporary and consultant staffing 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 services
the Company’s temporary employees, as well as reimbursable expenses. Direct costs of permanent placement staffing services
consist of reimbursable expenses. Risk consulting and internal audit costs of services include professional staff payroll, payroll
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.
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
Advertising Costs. The Company expenses all advertising costs as incurred. Advertising costs for the years ended
December 31, 2016, 2015 and 2014, are reflected in the following table (in thousands):
December 31, 2016, 2015 and 2014, are reflected in the following table (in thousands):
Years Ended December 31,
Years Ended December 31,
2015
2015
2014
2014
2016
2016
Advertising Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advertising Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 47,312
$ 47,312
$ 44,015
$ 44,015
$ 42,335
$ 42,335
Comprehensive Income. Comprehensive income includes net income and certain other items that are recorded directly
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
to Stockholders’ Equity. The Company’s only source of other comprehensive income is foreign currency translation
Fair Value of Financial Instruments. The Company does not have any financial instruments which require re-
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
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.
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
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.
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
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
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
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
impairment. The Company completed its annual goodwill impairment analysis as of June 30 in each of the three years ended
December 31, 2016, and determined that no adjustment to the carrying value of goodwill was required. There were no events or
December 31, 2016, 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, 2016 that caused the Company to perform an interim
changes in circumstances during the six months ended December 31, 2016 that caused the Company to perform an interim
impairment assessment.
impairment assessment.
Income Tax Assets and Liabilities. In establishing its deferred income tax assets and liabilities, the Company makes
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.
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
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
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
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
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.
strategies in the various relevant jurisdictions.
The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts.
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
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
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
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 $18.9 million and $26.3 million were recorded as of December 31, 2016 and 2015,
not be realized. Valuation allowances of $18.9 million and $26.3 million were recorded as of December 31, 2016 and 2015,
respectively. The valuation allowances recorded related primarily to net operating losses in certain foreign operations. If such
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
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.
of the valuation reserve.
Workers’ Compensation. Except for states which require participation in state-operated insurance funds, the Company
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
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
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
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,
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
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.
(“IBNR”) claims and for the ongoing development of existing claims.
30
31
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ROBERT HALF | 2016 ANNUAL REPORT
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, data, analytics,
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, 2016, 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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Costs of Services. Direct costs of temporary and consultant staffing consist of payroll, payroll taxes and benefit costs for
Costs of Services. Direct costs of temporary and consultant staffing 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 services
the Company’s temporary employees, as well as reimbursable expenses. Direct costs of permanent placement staffing services
consist of reimbursable expenses. Risk consulting and internal audit costs of services include professional staff payroll, payroll
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.
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
Advertising Costs. The Company expenses all advertising costs as incurred. Advertising costs for the years ended
December 31, 2016, 2015 and 2014, are reflected in the following table (in thousands):
December 31, 2016, 2015 and 2014, are reflected in the following table (in thousands):
Advertising Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advertising Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
$ 44,015
$ 44,015
2014
2014
$ 42,335
$ 42,335
2016
2016
$ 47,312
$ 47,312
Comprehensive Income. Comprehensive income includes net income and certain other items that are recorded directly
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
to Stockholders’ Equity. The Company’s only source of other comprehensive income is foreign currency translation
adjustments.
adjustments.
Fair Value of Financial Instruments. The Company does not have any financial instruments which require re-
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
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.
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
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.
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
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
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
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
impairment. The Company completed its annual goodwill impairment analysis as of June 30 in each of the three years ended
December 31, 2016, and determined that no adjustment to the carrying value of goodwill was required. There were no events or
December 31, 2016, 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, 2016 that caused the Company to perform an interim
changes in circumstances during the six months ended December 31, 2016 that caused the Company to perform an interim
impairment assessment.
impairment assessment.
Income Tax Assets and Liabilities. In establishing its deferred income tax assets and liabilities, the Company makes
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.
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
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
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
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
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.
strategies in the various relevant jurisdictions.
The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts.
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
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
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
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 $18.9 million and $26.3 million were recorded as of December 31, 2016 and 2015,
not be realized. Valuation allowances of $18.9 million and $26.3 million were recorded as of December 31, 2016 and 2015,
respectively. The valuation allowances recorded related primarily to net operating losses in certain foreign operations. If such
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
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.
of the valuation reserve.
Workers’ Compensation. Except for states which require participation in state-operated insurance funds, the Company
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
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
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
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,
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
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.
(“IBNR”) claims and for the ongoing development of existing claims.
30
31
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ROBERT HALF | 2016 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The reserves for IBNR claims and for the ongoing development of existing claims in each reporting period includes
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
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
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
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
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.
assumptions may materially affect the Company’s future results.
Foreign Currency Translation. The reporting currency of the Company and its subsidiaries is the U.S. dollar. The
Foreign Currency Translation. The reporting currency of the Company and its subsidiaries is the U.S. dollar. The
functional currency of the Company's foreign subsidiaries is their local currency. The results of operations of the Company’s
functional currency of the Company's foreign subsidiaries is their local currency. 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
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
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
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
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.
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
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.
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
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,
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
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
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
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
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.
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
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.
any options to purchase common stock since 2006.
Property and Equipment. Property and equipment are recorded at cost. Depreciation expense is computed using the
Property and Equipment. Property and equipment are recorded at cost. Depreciation expense is computed using the
straight-line method over the following useful lives:
straight-line method over the following useful lives:
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 5 years
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 5 years
Furniture and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years
Furniture and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Term of lease,
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Term of lease,
5 years maximum
5 years maximum
Internal-use Software. The Company capitalizes direct costs incurred in the development of internal-use software.
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
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, 2016, 2015 and 2014, are reflected in the following table (in
development costs capitalized for the years ended December 31, 2016, 2015 and 2014, are reflected in the following table (in
thousands):
thousands):
Note B—New Accounting Pronouncements
Note B—New Accounting Pronouncements
Recently Adopted Accounting Pronouncements
Recently Adopted Accounting Pronouncements
Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. In April 2015, the Financial Accounting
Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. In April 2015, the Financial Accounting
Standards Board ("FASB") issued authoritative guidance designed to assist customers in their determination of whether a cloud
Standards Board ("FASB") issued authoritative guidance designed to assist customers in their determination of whether a cloud
computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the
computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the
customer should account for the software license element of the arrangement consistent with the acquisition of other software
customer should account for the software license element of the arrangement consistent with the acquisition of other software
licenses. If a cloud computing arrangement does not include a software license, the customer should account for the
licenses. If a cloud computing arrangement does not include a software license, the customer should account for the
arrangement as a service contract. The guidance did not change GAAP for a customer’s accounting for service contracts. This
arrangement as a service contract. The guidance did not change GAAP for a customer’s accounting for service contracts. This
guidance was effective for the Company in the first quarter of 2016. The adoption of this guidance did not have a material
guidance was effective for the Company in the first quarter of 2016. The adoption of this guidance did not have a material
impact on the Company's financial statements.
impact on the Company's financial statements.
Business Combinations. In September 2015, the FASB issued authoritative guidance that eliminates the requirement to
Business Combinations. In September 2015, the FASB issued authoritative guidance that eliminates the requirement to
restate prior period financial statements for measurement period adjustments following a business combination. The new
restate prior period financial statements for measurement period adjustments following a business combination. The new
guidance requires that an acquirer record in the same period’s financial statements the effects of the cumulative impact of
guidance requires that an acquirer record in the same period’s financial statements the effects of the cumulative impact of
adjustments including the impact on prior periods. The prior period impact of the adjustments should be presented separately on
adjustments including the impact on prior periods. The prior period impact of the adjustments should be presented separately on
the face of the income statement or disclosed in the notes. The new guidance was effective for the Company in the first quarter
the face of the income statement or disclosed in the notes. The new guidance was effective for the Company in the first quarter
of 2016. The adoption of this guidance did not have a material impact on the Company's financial statements.
of 2016. The adoption of this guidance did not have a material impact on the Company's financial statements.
Balance Sheet Classification of Deferred Taxes. During November 2015, the FASB issued authoritative guidance which
Balance Sheet Classification of Deferred Taxes. During November 2015, the FASB issued authoritative guidance which
changes how deferred taxes are classified on a company's balance sheet. The new guidance provides presentation requirements
changes how deferred taxes are classified on a company's balance sheet. The new guidance provides presentation requirements
to classify deferred tax assets and liabilities as noncurrent in a classified statement of financial position. The standard is
to classify deferred tax assets and liabilities as noncurrent in a classified statement of financial position. The standard is
effective for fiscal year beginning after December 15, 2016, including interim periods within that reporting period. The
effective for fiscal year beginning after December 15, 2016, including interim periods within that reporting period. The
Company early adopted this guidance effective December 31, 2016, retrospectively. The adoption resulted in a $145.7 million
Company early adopted this guidance effective December 31, 2016, retrospectively. The adoption resulted in a $145.7 million
decrease in current deferred income taxes, a $113.8 million increase in noncurrent deferred income taxes, and a $31.9 million
decrease in current deferred income taxes, a $113.8 million increase in noncurrent deferred income taxes, and a $31.9 million
decrease in other liabilities, in the Company's Consolidated Statement of Financial Position at December 31, 2015. The
decrease in other liabilities, in the Company's Consolidated Statement of Financial Position at December 31, 2015. The
adoption of this guidance had no impact on the Company's results of operations.
adoption of this guidance had no impact on the Company's results of operations.
Recently Issued Accounting Pronouncements Not Yet Adopted
Recently Issued Accounting Pronouncements Not Yet Adopted
Revenue from Contracts with Customers. In May 2014, the FASB issued authoritative guidance that provides companies
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
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
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
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
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
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 guidance permits companies to either apply the
assets recognized from costs incurred to obtain or fulfill a contract. 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
requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a
cumulative adjustment. The amended guidance also requires additional quantitative and qualitative disclosures. In March 2016,
cumulative adjustment. The amended guidance also requires additional quantitative and qualitative disclosures. In March 2016,
amended guidance was issued to clarify implementation guidance on principal versus agent consideration. In April 2016 an
amended guidance was issued to clarify implementation guidance on principal versus agent consideration. In April 2016 an
amendment provided clarifications on determining whether a promised license provides a customer with a right to use or a right
amendment provided clarifications on determining whether a promised license provides a customer with a right to use or a right
to access an entity’s intellectual property. In May 2016 an amendment provided narrow scope improvements and practical
to access an entity’s intellectual property. In May 2016 an amendment provided narrow scope improvements and practical
expedients to reduce the potential diversity, cost and complexity of applying new revenue standard. These amendments, as well
expedients to reduce the potential diversity, cost and complexity of applying new revenue standard. These amendments, as well
as the original guidance, are all effective for annual and interim periods beginning after December 15, 2017. The new standard
as the original guidance, are all effective for annual and interim periods beginning after December 15, 2017. The new standard
will be effective for the Company beginning January 1, 2018 and the Company intends to implement the standard with the
will be effective for the Company beginning January 1, 2018 and the Company intends to implement the standard with the
modified retrospective approach, which recognizes the cumulative effect of application recognized on that date. The Company
modified retrospective approach, which recognizes the cumulative effect of application recognized on that date. The Company
is in the process of evaluating the impact of adoption of this guidance on its financial statements. Based on our progress to date,
is in the process of evaluating the impact of adoption of this guidance on its financial statements. Based on our progress to date,
the Company does not anticipate any significant changes to systems, processes, or controls, and no one area will be
the Company does not anticipate any significant changes to systems, processes, or controls, and no one area will be
significantly impacted upon adoption.
significantly impacted upon adoption.
Lease Accounting. In February 2016, the FASB issued authoritative guidance which changes financial reporting as it
Lease Accounting. In February 2016, the FASB issued authoritative guidance which changes financial reporting as it
relates to leasing transactions. Under the new guidance, lessees will be required to recognize a lease liability, measured on a
relates to leasing transactions. Under the new guidance, lessees will be required to recognize a lease liability, measured on a
discounted basis; and a right-of-use asset, for the lease term. The new guidance is effective for annual and interim periods
discounted basis; and a right-of-use asset, for the lease term. The new guidance is effective for annual and interim periods
beginning after December 15, 2018. Early application is permitted for all entities upon issuance. Lessees and lessors must apply
beginning after December 15, 2018. Early application is permitted for all entities upon issuance. Lessees and lessors must apply
a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest
a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest
Internal-use software development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internal-use software development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
$ 31,964
$ 31,964
2016
2016
$ 33,753
$ 33,753
2014
2014
$ 24,367
$ 24,367
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The reserves for IBNR claims and for the ongoing development of existing claims in each reporting period includes
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
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
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
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
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.
assumptions may materially affect the Company’s future results.
Foreign Currency Translation. The reporting currency of the Company and its subsidiaries is the U.S. dollar. The
Foreign Currency Translation. The reporting currency of the Company and its subsidiaries is the U.S. dollar. The
functional currency of the Company's foreign subsidiaries is their local currency. The results of operations of the Company’s
functional currency of the Company's foreign subsidiaries is their local currency. 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
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
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
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
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.
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
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.
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
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,
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
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
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
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
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.
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
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.
any options to purchase common stock since 2006.
Property and Equipment. Property and equipment are recorded at cost. Depreciation expense is computed using the
Property and Equipment. Property and equipment are recorded at cost. Depreciation expense is computed using the
straight-line method over the following useful lives:
straight-line method over the following useful lives:
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 5 years
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 5 years
Furniture and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years
Furniture and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Term of lease,
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Term of lease,
5 years maximum
5 years maximum
Internal-use Software. The Company capitalizes direct costs incurred in the development of internal-use software.
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
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, 2016, 2015 and 2014, are reflected in the following table (in
development costs capitalized for the years ended December 31, 2016, 2015 and 2014, are reflected in the following table (in
thousands):
thousands):
Internal-use software development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internal-use software development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 33,753
$ 33,753
$ 31,964
$ 31,964
$ 24,367
$ 24,367
Years Ended December 31,
Years Ended December 31,
2016
2016
2015
2015
2014
2014
Note B—New Accounting Pronouncements
Note B—New Accounting Pronouncements
Recently Adopted Accounting Pronouncements
Recently Adopted Accounting Pronouncements
Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. In April 2015, the Financial Accounting
Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. In April 2015, the Financial Accounting
Standards Board ("FASB") issued authoritative guidance designed to assist customers in their determination of whether a cloud
Standards Board ("FASB") issued authoritative guidance designed to assist customers in their determination of whether a cloud
computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the
computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the
customer should account for the software license element of the arrangement consistent with the acquisition of other software
customer should account for the software license element of the arrangement consistent with the acquisition of other software
licenses. If a cloud computing arrangement does not include a software license, the customer should account for the
licenses. If a cloud computing arrangement does not include a software license, the customer should account for the
arrangement as a service contract. The guidance did not change GAAP for a customer’s accounting for service contracts. This
arrangement as a service contract. The guidance did not change GAAP for a customer’s accounting for service contracts. This
guidance was effective for the Company in the first quarter of 2016. The adoption of this guidance did not have a material
guidance was effective for the Company in the first quarter of 2016. The adoption of this guidance did not have a material
impact on the Company's financial statements.
impact on the Company's financial statements.
Business Combinations. In September 2015, the FASB issued authoritative guidance that eliminates the requirement to
Business Combinations. In September 2015, the FASB issued authoritative guidance that eliminates the requirement to
restate prior period financial statements for measurement period adjustments following a business combination. The new
restate prior period financial statements for measurement period adjustments following a business combination. The new
guidance requires that an acquirer record in the same period’s financial statements the effects of the cumulative impact of
guidance requires that an acquirer record in the same period’s financial statements the effects of the cumulative impact of
adjustments including the impact on prior periods. The prior period impact of the adjustments should be presented separately on
adjustments including the impact on prior periods. The prior period impact of the adjustments should be presented separately on
the face of the income statement or disclosed in the notes. The new guidance was effective for the Company in the first quarter
the face of the income statement or disclosed in the notes. The new guidance was effective for the Company in the first quarter
of 2016. The adoption of this guidance did not have a material impact on the Company's financial statements.
of 2016. The adoption of this guidance did not have a material impact on the Company's financial statements.
Balance Sheet Classification of Deferred Taxes. During November 2015, the FASB issued authoritative guidance which
Balance Sheet Classification of Deferred Taxes. During November 2015, the FASB issued authoritative guidance which
changes how deferred taxes are classified on a company's balance sheet. The new guidance provides presentation requirements
changes how deferred taxes are classified on a company's balance sheet. The new guidance provides presentation requirements
to classify deferred tax assets and liabilities as noncurrent in a classified statement of financial position. The standard is
to classify deferred tax assets and liabilities as noncurrent in a classified statement of financial position. The standard is
effective for fiscal year beginning after December 15, 2016, including interim periods within that reporting period. The
effective for fiscal year beginning after December 15, 2016, including interim periods within that reporting period. The
Company early adopted this guidance effective December 31, 2016, retrospectively. The adoption resulted in a $145.7 million
Company early adopted this guidance effective December 31, 2016, retrospectively. The adoption resulted in a $145.7 million
decrease in current deferred income taxes, a $113.8 million increase in noncurrent deferred income taxes, and a $31.9 million
decrease in current deferred income taxes, a $113.8 million increase in noncurrent deferred income taxes, and a $31.9 million
decrease in other liabilities, in the Company's Consolidated Statement of Financial Position at December 31, 2015. The
decrease in other liabilities, in the Company's Consolidated Statement of Financial Position at December 31, 2015. The
adoption of this guidance had no impact on the Company's results of operations.
adoption of this guidance had no impact on the Company's results of operations.
Recently Issued Accounting Pronouncements Not Yet Adopted
Recently Issued Accounting Pronouncements Not Yet Adopted
Revenue from Contracts with Customers. In May 2014, the FASB issued authoritative guidance that provides companies
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
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
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
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
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
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 guidance permits companies to either apply the
assets recognized from costs incurred to obtain or fulfill a contract. 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
requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a
cumulative adjustment. The amended guidance also requires additional quantitative and qualitative disclosures. In March 2016,
cumulative adjustment. The amended guidance also requires additional quantitative and qualitative disclosures. In March 2016,
amended guidance was issued to clarify implementation guidance on principal versus agent consideration. In April 2016 an
amended guidance was issued to clarify implementation guidance on principal versus agent consideration. In April 2016 an
amendment provided clarifications on determining whether a promised license provides a customer with a right to use or a right
amendment provided clarifications on determining whether a promised license provides a customer with a right to use or a right
to access an entity’s intellectual property. In May 2016 an amendment provided narrow scope improvements and practical
to access an entity’s intellectual property. In May 2016 an amendment provided narrow scope improvements and practical
expedients to reduce the potential diversity, cost and complexity of applying new revenue standard. These amendments, as well
expedients to reduce the potential diversity, cost and complexity of applying new revenue standard. These amendments, as well
as the original guidance, are all effective for annual and interim periods beginning after December 15, 2017. The new standard
as the original guidance, are all effective for annual and interim periods beginning after December 15, 2017. The new standard
will be effective for the Company beginning January 1, 2018 and the Company intends to implement the standard with the
will be effective for the Company beginning January 1, 2018 and the Company intends to implement the standard with the
modified retrospective approach, which recognizes the cumulative effect of application recognized on that date. The Company
modified retrospective approach, which recognizes the cumulative effect of application recognized on that date. The Company
is in the process of evaluating the impact of adoption of this guidance on its financial statements. Based on our progress to date,
is in the process of evaluating the impact of adoption of this guidance on its financial statements. Based on our progress to date,
the Company does not anticipate any significant changes to systems, processes, or controls, and no one area will be
the Company does not anticipate any significant changes to systems, processes, or controls, and no one area will be
significantly impacted upon adoption.
significantly impacted upon adoption.
Lease Accounting. In February 2016, the FASB issued authoritative guidance which changes financial reporting as it
Lease Accounting. In February 2016, the FASB issued authoritative guidance which changes financial reporting as it
relates to leasing transactions. Under the new guidance, lessees will be required to recognize a lease liability, measured on a
relates to leasing transactions. Under the new guidance, lessees will be required to recognize a lease liability, measured on a
discounted basis; and a right-of-use asset, for the lease term. The new guidance is effective for annual and interim periods
discounted basis; and a right-of-use asset, for the lease term. The new guidance is effective for annual and interim periods
beginning after December 15, 2018. Early application is permitted for all entities upon issuance. Lessees and lessors must apply
beginning after December 15, 2018. Early application is permitted for all entities upon issuance. Lessees and lessors must apply
a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest
a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
comparative period presented in the financial statements. The Company is in the process of evaluating the impact of adoption
comparative period presented in the financial statements. The Company is in the process of evaluating the impact of adoption
of this guidance on its financial statements.
of this guidance on its financial statements.
Stock Compensation. In March 2016, the FASB issued authoritative guidance which changes financial reporting as it
Stock Compensation. In March 2016, the FASB issued authoritative guidance which changes financial reporting as it
relates to Employee Share-Based Payment Accounting. Under the new guidance, several aspects of the accounting for share-
relates to Employee Share-Based Payment Accounting. Under the new guidance, several aspects of the accounting for share-
based payment award transactions will be simplified, including: i) income tax consequences; ii) classification of awards as
based payment award transactions will be simplified, including: i) income tax consequences; ii) classification of awards as
either equity or liabilities; and iii) classification on the statement of cash flows. The new guidance is effective for annual and
either equity or liabilities; and iii) classification on the statement of cash flows. The new guidance is effective for annual and
interim periods beginning after December 15, 2016. Early application is permitted for any organization in any interim or annual
interim periods beginning after December 15, 2016. Early application is permitted for any organization in any interim or annual
period. The Company believes the most significant impacts of the new guidance will be: i) the added volatility to the
period. The Company believes the most significant impacts of the new guidance will be: i) the added volatility to the
Company’s effective tax rate from the change in accounting for income taxes and ii) on its classification of excess tax benefits
Company’s effective tax rate from the change in accounting for income taxes and ii) on its classification of excess tax benefits
on the Consolidated Statements of Cash Flows. The impact of this guidance on future periods is dependent on the Company's
on the Consolidated Statements of Cash Flows. The impact of this guidance on future periods is dependent on the Company's
stock price at the time the awards vest and the number of awards that vest.
stock price at the time the awards vest and the number of awards that vest.
Classification of Certain Cash Receipts and Cash Payments in Statement of Cash Flows. In August 2016, the FASB
Classification of Certain Cash Receipts and Cash Payments in Statement of Cash Flows. In August 2016, the FASB
issued authoritative guidance designed to address diversity in how certain cash receipts and cash payments are presented and
issued authoritative guidance designed to address diversity in how certain cash receipts and cash payments are presented and
classified in the statement of cash flows, including: i) contingent consideration payments made after a business combination; ii)
classified in the statement of cash flows, including: i) contingent consideration payments made after a business combination; ii)
proceeds from the settlement of insurance claims; and iii) proceeds from the settlement of corporate-owned life insurance
proceeds from the settlement of insurance claims; and iii) proceeds from the settlement of corporate-owned life insurance
policies. The new guidance is effective for the Company for fiscal years beginning after December 15, 2017, and interim
policies. The new guidance is effective for the Company for fiscal years beginning after December 15, 2017, and interim
periods within those fiscal years. Early adoption is permitted in any interim or annual period. The Company believes the
periods within those fiscal years. Early adoption is permitted in any interim or annual period. The Company believes the
adoption of this guidance will not have a material impact on its financial statements.
adoption of this guidance will not have a material impact on its financial statements.
Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued authoritative guidance to simplify the
Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued authoritative guidance to simplify the
goodwill impairment testing process. The new standard eliminates Step 2 of the goodwill impairment test. If a company
goodwill impairment testing process. The new standard eliminates Step 2 of the goodwill impairment test. If a company
determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is less than the fair value, an
determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is less than the fair value, an
impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. The new guidance is
impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. The new guidance is
effective for the Company beginning after December 31, 2019, although early adoption is permitted.
effective for the Company beginning after December 31, 2019, although early adoption is permitted.
Note C—Other Current Assets
Note C—Other Current Assets
Other current assets consisted of the following (in thousands):
Other current assets consisted of the following (in thousands):
Deposits in trusts for employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits in trusts for employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
December 31,
2016
2016
$ 236,371
$ 236,371
84,434
84,434
$ 320,805
$ 320,805
2015
2015
$ 198,256
$ 198,256
70,524
70,524
$ 268,780
$ 268,780
Note D—Goodwill
Note D—Goodwill
thousands):
thousands):
The following table sets forth the activity in goodwill from December 31, 2014, through December 31, 2016 (in
The following table sets forth the activity in goodwill from December 31, 2014, through December 31, 2016 (in
Balance as of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,964
Balance as of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,964
Acquisitions (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,173
Balance as of December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,173
$ 26,251
$ 26,251
$ 49,155
$ 49,155
$ 208,579
$ 208,579
Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,875
Balance as of December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,875
$ 26,015
$ 26,015
$ 49,903
$ 49,903
$ 209,793
$ 209,793
Goodwill
Goodwill
Temporary
Temporary
and
and
consultant
consultant
staffing
staffing
—
—
(791)
(791)
1,248
1,248
(546)
(546)
Permanent
Permanent
placement
placement
staffing
staffing
$ 26,450
$ 26,450
—
—
(199)
(199)
—
—
(236)
(236)
Risk
Risk
consulting
consulting
and
and
internal
internal
audit
audit
services
services
10,988
10,988
(907)
(907)
299
299
449
449
Total
Total
10,988
10,988
(1,897)
(1,897)
1,547
1,547
(333)
(333)
$ 39,074
$ 39,074
$ 199,488
$ 199,488
(a) In November 2015 the Company, through its wholly owned subsidiary Protiviti, acquired certain assets of Decision First
(a) In November 2015 the Company, through its wholly owned subsidiary Protiviti, acquired certain assets of Decision First
Technologies, a company specializing in business intelligence solutions. As part of the asset acquisition, the Company
Technologies, a company specializing in business intelligence solutions. As part of the asset acquisition, the Company
recorded goodwill of $11 million within its risk consulting and internal audit services segment.
recorded goodwill of $11 million within its risk consulting and internal audit services segment.
Note E—Property and Equipment, Net
Note E—Property and Equipment, Net
Property and equipment consisted of the following (in thousands):
Property and equipment consisted of the following (in thousands):
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note F—Accrued Payroll and Benefit Costs
Note F—Accrued Payroll and Benefit Costs
Accrued payroll and benefit costs consisted of the following (in thousands):
Accrued payroll and benefit costs consisted of the following (in thousands):
Payroll and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payroll and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Workers’ compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Workers’ compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payroll taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payroll taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
December 31,
2016
2016
$ 170,746
$ 170,746
374,490
374,490
100,472
100,472
133,541
133,541
9,993
9,993
789,242
789,242
(627,733)
(627,733)
$ 161,509
$ 161,509
2015
2015
$ 162,346
$ 162,346
339,634
339,634
96,536
96,536
118,491
118,491
9,560
9,560
726,567
726,567
(583,661)
(583,661)
$ 142,906
$ 142,906
December 31,
December 31,
2016
2016
$ 243,301
$ 243,301
252,349
252,349
19,361
19,361
24,037
24,037
$ 539,048
$ 539,048
2015
2015
$ 240,793
$ 240,793
212,220
212,220
25,834
25,834
25,935
25,935
$ 504,782
$ 504,782
34
34
35
35
138808_RHI_A/R_10K.indd 34
2/17/17 1:30 AM
ROBERT HALF | 2016 ANNUAL REPORT
of this guidance on its financial statements.
of this guidance on its financial statements.
Stock Compensation. In March 2016, the FASB issued authoritative guidance which changes financial reporting as it
Stock Compensation. In March 2016, the FASB issued authoritative guidance which changes financial reporting as it
relates to Employee Share-Based Payment Accounting. Under the new guidance, several aspects of the accounting for share-
relates to Employee Share-Based Payment Accounting. Under the new guidance, several aspects of the accounting for share-
based payment award transactions will be simplified, including: i) income tax consequences; ii) classification of awards as
based payment award transactions will be simplified, including: i) income tax consequences; ii) classification of awards as
either equity or liabilities; and iii) classification on the statement of cash flows. The new guidance is effective for annual and
either equity or liabilities; and iii) classification on the statement of cash flows. The new guidance is effective for annual and
interim periods beginning after December 15, 2016. Early application is permitted for any organization in any interim or annual
interim periods beginning after December 15, 2016. Early application is permitted for any organization in any interim or annual
period. The Company believes the most significant impacts of the new guidance will be: i) the added volatility to the
period. The Company believes the most significant impacts of the new guidance will be: i) the added volatility to the
Company’s effective tax rate from the change in accounting for income taxes and ii) on its classification of excess tax benefits
Company’s effective tax rate from the change in accounting for income taxes and ii) on its classification of excess tax benefits
on the Consolidated Statements of Cash Flows. The impact of this guidance on future periods is dependent on the Company's
on the Consolidated Statements of Cash Flows. The impact of this guidance on future periods is dependent on the Company's
stock price at the time the awards vest and the number of awards that vest.
stock price at the time the awards vest and the number of awards that vest.
Classification of Certain Cash Receipts and Cash Payments in Statement of Cash Flows. In August 2016, the FASB
Classification of Certain Cash Receipts and Cash Payments in Statement of Cash Flows. In August 2016, the FASB
issued authoritative guidance designed to address diversity in how certain cash receipts and cash payments are presented and
issued authoritative guidance designed to address diversity in how certain cash receipts and cash payments are presented and
classified in the statement of cash flows, including: i) contingent consideration payments made after a business combination; ii)
classified in the statement of cash flows, including: i) contingent consideration payments made after a business combination; ii)
proceeds from the settlement of insurance claims; and iii) proceeds from the settlement of corporate-owned life insurance
proceeds from the settlement of insurance claims; and iii) proceeds from the settlement of corporate-owned life insurance
policies. The new guidance is effective for the Company for fiscal years beginning after December 15, 2017, and interim
policies. The new guidance is effective for the Company for fiscal years beginning after December 15, 2017, and interim
periods within those fiscal years. Early adoption is permitted in any interim or annual period. The Company believes the
periods within those fiscal years. Early adoption is permitted in any interim or annual period. The Company believes the
adoption of this guidance will not have a material impact on its financial statements.
adoption of this guidance will not have a material impact on its financial statements.
Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued authoritative guidance to simplify the
Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued authoritative guidance to simplify the
goodwill impairment testing process. The new standard eliminates Step 2 of the goodwill impairment test. If a company
goodwill impairment testing process. The new standard eliminates Step 2 of the goodwill impairment test. If a company
determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is less than the fair value, an
determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is less than the fair value, an
impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. The new guidance is
impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. The new guidance is
effective for the Company beginning after December 31, 2019, although early adoption is permitted.
effective for the Company beginning after December 31, 2019, although early adoption is permitted.
Note C—Other Current Assets
Note C—Other Current Assets
Other current assets consisted of the following (in thousands):
Other current assets consisted of the following (in thousands):
Deposits in trusts for employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits in trusts for employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
comparative period presented in the financial statements. The Company is in the process of evaluating the impact of adoption
comparative period presented in the financial statements. The Company is in the process of evaluating the impact of adoption
Note D—Goodwill
Note D—Goodwill
The following table sets forth the activity in goodwill from December 31, 2014, through December 31, 2016 (in
The following table sets forth the activity in goodwill from December 31, 2014, through December 31, 2016 (in
thousands):
thousands):
Temporary
Temporary
and
and
consultant
consultant
staffing
staffing
Acquisitions (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,964
Balance as of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,964
—
—
(791)
(791)
Balance as of December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,173
Balance as of December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,173
1,248
1,248
(546)
(546)
Balance as of December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,875
Balance as of December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,875
Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent
Permanent
placement
placement
staffing
staffing
$ 26,450
$ 26,450
—
—
(199)
(199)
$ 26,251
$ 26,251
—
—
(236)
(236)
$ 26,015
$ 26,015
Goodwill
Goodwill
Risk
Risk
consulting
consulting
and
and
internal
internal
audit
audit
services
services
$ 39,074
$ 39,074
10,988
10,988
(907)
(907)
$ 49,155
$ 49,155
299
299
449
449
$ 49,903
$ 49,903
Total
Total
$ 199,488
$ 199,488
10,988
10,988
(1,897)
(1,897)
$ 208,579
$ 208,579
1,547
1,547
(333)
(333)
$ 209,793
$ 209,793
(a) In November 2015 the Company, through its wholly owned subsidiary Protiviti, acquired certain assets of Decision First
(a) In November 2015 the Company, through its wholly owned subsidiary Protiviti, acquired certain assets of Decision First
Technologies, a company specializing in business intelligence solutions. As part of the asset acquisition, the Company
Technologies, a company specializing in business intelligence solutions. As part of the asset acquisition, the Company
recorded goodwill of $11 million within its risk consulting and internal audit services segment.
recorded goodwill of $11 million within its risk consulting and internal audit services segment.
Note E—Property and Equipment, Net
Note E—Property and Equipment, Net
Property and equipment consisted of the following (in thousands):
Property and equipment consisted of the following (in thousands):
December 31,
December 31,
2016
2016
$ 236,371
$ 236,371
84,434
84,434
$ 320,805
$ 320,805
2015
2015
$ 198,256
$ 198,256
70,524
70,524
$ 268,780
$ 268,780
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note F—Accrued Payroll and Benefit Costs
Note F—Accrued Payroll and Benefit Costs
Accrued payroll and benefit costs consisted of the following (in thousands):
Accrued payroll and benefit costs consisted of the following (in thousands):
December 31,
December 31,
2016
2016
$ 170,746
$ 170,746
374,490
374,490
100,472
100,472
133,541
133,541
9,993
9,993
789,242
789,242
(627,733)
(627,733)
$ 161,509
$ 161,509
2015
2015
$ 162,346
$ 162,346
339,634
339,634
96,536
96,536
118,491
118,491
9,560
9,560
726,567
726,567
(583,661)
(583,661)
$ 142,906
$ 142,906
2016
2016
$ 243,301
Payroll and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 243,301
Payroll and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
252,349
Employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
252,349
Employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,361
Workers’ compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,361
Workers’ compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,037
Payroll taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,037
Payroll taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 539,048
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 539,048
2015
2015
$ 240,793
$ 240,793
212,220
212,220
25,834
25,834
25,935
25,935
$ 504,782
$ 504,782
December 31,
December 31,
34
34
35
35
138808_RHI_A/R_10K.indd 35
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ROBERT HALF | 2016 ANNUAL REPORT
following (in thousands):
following (in thousands):
The income taxes shown above varied from the statutory federal income tax rates for these periods as follows:
The income taxes shown above varied from the statutory federal income tax rates for these periods as follows:
Federal U.S. income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal U.S. income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of federal tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of federal tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. income taxed at different rates, net of foreign tax
Non-U.S. income taxed at different rates, net of foreign tax
credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact of uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact of uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance release, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance release, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The deferred portion of the tax provision (benefit) consisted of the following (in thousands):
The deferred portion of the tax provision (benefit) consisted of the following (in thousands):
Amortization of franchise rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of franchise rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of other intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of other intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses, deducted for tax when paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses, deducted for tax when paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized costs for books, deducted for tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized costs for books, deducted for tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal impact of unrecognized tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal impact of unrecognized tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2016
2016
$ 494,890
$ 494,890
59,220
59,220
$ 554,110
$ 554,110
2015
2015
$ 528,916
$ 528,916
52,114
52,114
$ 581,030
$ 581,030
2014
2014
$ 446,886
$ 446,886
50,463
50,463
$ 497,349
$ 497,349
Years Ended December 31,
Years Ended December 31,
2016
2016
35.0%
35.0%
2015
2015
35.0%
35.0%
2014
2014
35.0%
35.0%
4.2
4.2
0.5
0.5
(0.6)
(0.6)
(0.8)
(0.8)
—
—
(0.1)
(0.1)
(0.2)
(0.2)
4.2
4.2
0.5
0.5
0.1
0.1
(0.6)
(0.6)
(0.2)
(0.2)
(0.5)
(0.5)
(0.1)
(0.1)
4.2
4.2
0.6
0.6
(0.2)
(0.2)
(0.6)
(0.6)
(0.1)
(0.1)
(0.3)
(0.3)
(0.1)
(0.1)
38.0%
38.0%
38.4%
38.4%
38.5%
38.5%
Years Ended December 31,
Years Ended December 31,
$
$
$
$
$
$
2016
2016
500
500
1,221
1,221
(6,889)
(6,889)
5,901
5,901
(2,405)
(2,405)
75
75
—
—
(271)
(271)
2015
2015
514
514
1,590
1,590
(17,664)
(17,664)
5,315
5,315
(5,932)
(5,932)
1,058
1,058
3,636
3,636
2,904
2,904
2014
2014
514
514
1,241
1,241
(14,221)
(14,221)
8,809
8,809
(4,147)
(4,147)
44
44
(186)
(186)
4,303
4,303
$ (1,868) $ (8,579) $ (3,643)
$ (1,868) $ (8,579) $ (3,643)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Included in employee deferred compensation plans is the following (in thousands):
Included in employee deferred compensation plans is the following (in thousands):
Income before the provision for income taxes for the years ended December 31, 2016, 2015 and 2014, consisted of the
Income before the provision for income taxes for the years ended December 31, 2016, 2015 and 2014, consisted of the
Deferred compensation plan and other benefits related to the
Deferred compensation plan and other benefits related to the
Company’s Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83,899
Company’s Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83,899
$ 81,874
$ 81,874
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
December 31,
2016
2016
2015
2015
Note G—Notes Payable and Other Indebtedness
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
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
other payment obligations. These are due in varying installments, carry varying interest rates and, in aggregate, amounted to
$1.0 million at December 31, 2016, and $1.2 million at December 31, 2015. At December 31, 2016, $1.0 million of the notes
$1.0 million at December 31, 2016, and $1.2 million at December 31, 2015. At December 31, 2016, $1.0 million of the notes
were collateralized by a standby letter of credit. The following table shows the schedule of maturities for notes payable and
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, 2016 (in thousands):
other indebtedness at December 31, 2016 (in thousands):
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
167
167
183
183
200
200
218
218
239
239
1,007
1,007
At December 31, 2016, the notes carried fixed rates and the weighted average interest rate for the above was 9.0% for
At December 31, 2016, 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, 2016, 2015 and 2014.
each of the years ended December 31, 2016, 2015 and 2014.
The Company has an uncommitted letter of credit facility (the “facility”) of up to $35.0 million, which is available to
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 $15.8 million in debt support standby letters
cover the issuance of debt support standby letters of credit. The Company had used $15.8 million in debt support standby letters
of credit as of December 31, 2016 and $13.5 million as of December 31, 2015. Of the debt support standby letters of credit
of credit as of December 31, 2016 and $13.5 million as of December 31, 2015. Of the debt support standby letters of credit
outstanding, $14.8 million as of December 31, 2016 and $12.3 million as of December 31, 2015, satisfies workers’
outstanding, $14.8 million as of December 31, 2016 and $12.3 million as of December 31, 2015, satisfies workers’
compensation insurer’s collateral requirements. There is a service fee of 1.125% on the used portion of the facility. The facility
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, 2017. The Company intends to renew this facility prior to its
is subject to certain financial covenants and expires on August 31, 2017. The Company intends to renew this facility prior to its
August 31, 2017 expiration.
August 31, 2017 expiration.
Note H—Income Taxes
Note H—Income Taxes
The provision (benefit) for income taxes for the years ended December 31, 2016, 2015 and 2014, consisted of the
The provision (benefit) for income taxes for the years ended December 31, 2016, 2015 and 2014, consisted of the
following (in thousands):
following (in thousands):
Current:
Current:
Deferred:
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal and state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal and state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
2014
2014
2016
2016
$ 156,937
$ 156,937
34,927
34,927
20,725
20,725
$ 181,640
$ 181,640
36,281
36,281
13,892
13,892
$ 146,633
$ 146,633
33,054
33,054
15,377
15,377
(3,785)
(3,785)
1,917
1,917
$ 210,721
$ 210,721
(8,398)
(8,398)
(181)
(181)
$ 223,234
$ 223,234
(4,626)
(4,626)
983
983
$ 191,421
$ 191,421
36
36
37
37
138808_RHI_A/R_10K.indd 36
2/17/17 1:30 AM
ROBERT HALF | 2016 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Included in employee deferred compensation plans is the following (in thousands):
Included in employee deferred compensation plans is the following (in thousands):
Income before the provision for income taxes for the years ended December 31, 2016, 2015 and 2014, consisted of the
Income before the provision for income taxes for the years ended December 31, 2016, 2015 and 2014, consisted of the
following (in thousands):
following (in thousands):
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
$ 528,916
$ 528,916
52,114
52,114
$ 581,030
$ 581,030
2014
2014
$ 446,886
$ 446,886
50,463
50,463
$ 497,349
$ 497,349
2016
2016
$ 494,890
$ 494,890
59,220
59,220
$ 554,110
$ 554,110
The income taxes shown above varied from the statutory federal income tax rates for these periods as follows:
The income taxes shown above varied from the statutory federal income tax rates for these periods as follows:
Federal U.S. income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal U.S. income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of federal tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of federal tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. income taxed at different rates, net of foreign tax
Non-U.S. income taxed at different rates, net of foreign tax
credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact of uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact of uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance release, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance release, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
35.0%
35.0%
4.2
4.2
0.5
0.5
2016
2016
35.0%
35.0%
4.2
4.2
0.5
0.5
2014
2014
35.0%
35.0%
4.2
4.2
0.6
0.6
(0.6)
(0.6)
(0.8)
(0.8)
—
—
(0.1)
(0.1)
(0.2)
(0.2)
38.0%
38.0%
0.1
0.1
(0.6)
(0.6)
(0.2)
(0.2)
(0.5)
(0.5)
(0.1)
(0.1)
38.4%
38.4%
(0.2)
(0.2)
(0.6)
(0.6)
(0.1)
(0.1)
(0.3)
(0.3)
(0.1)
(0.1)
38.5%
38.5%
The deferred portion of the tax provision (benefit) consisted of the following (in thousands):
The deferred portion of the tax provision (benefit) consisted of the following (in thousands):
Amortization of franchise rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of franchise rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of other intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of other intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses, deducted for tax when paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses, deducted for tax when paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized costs for books, deducted for tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized costs for books, deducted for tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal impact of unrecognized tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal impact of unrecognized tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
2014
2014
2016
2016
$
$
$
$
$
$
500
500
1,221
1,221
(6,889)
(6,889)
5,901
5,901
(2,405)
(2,405)
75
75
—
—
(271)
(271)
514
514
1,241
1,241
(14,221)
(14,221)
8,809
8,809
(4,147)
(4,147)
44
44
(186)
(186)
4,303
4,303
$ (1,868) $ (8,579) $ (3,643)
$ (1,868) $ (8,579) $ (3,643)
514
514
1,590
1,590
(17,664)
(17,664)
5,315
5,315
(5,932)
(5,932)
1,058
1,058
3,636
3,636
2,904
2,904
December 31,
December 31,
2016
2016
2015
2015
Deferred compensation plan and other benefits related to the
Deferred compensation plan and other benefits related to the
Company’s Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83,899
Company’s Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83,899
$ 81,874
$ 81,874
Note G—Notes Payable and Other Indebtedness
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
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
other payment obligations. These are due in varying installments, carry varying interest rates and, in aggregate, amounted to
$1.0 million at December 31, 2016, and $1.2 million at December 31, 2015. At December 31, 2016, $1.0 million of the notes
$1.0 million at December 31, 2016, and $1.2 million at December 31, 2015. At December 31, 2016, $1.0 million of the notes
were collateralized by a standby letter of credit. The following table shows the schedule of maturities for notes payable and
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, 2016 (in thousands):
other indebtedness at December 31, 2016 (in thousands):
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
167
167
183
183
200
200
218
218
239
239
$
$
1,007
1,007
At December 31, 2016, the notes carried fixed rates and the weighted average interest rate for the above was 9.0% for
At December 31, 2016, 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, 2016, 2015 and 2014.
each of the years ended December 31, 2016, 2015 and 2014.
The Company has an uncommitted letter of credit facility (the “facility”) of up to $35.0 million, which is available to
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 $15.8 million in debt support standby letters
cover the issuance of debt support standby letters of credit. The Company had used $15.8 million in debt support standby letters
of credit as of December 31, 2016 and $13.5 million as of December 31, 2015. Of the debt support standby letters of credit
of credit as of December 31, 2016 and $13.5 million as of December 31, 2015. Of the debt support standby letters of credit
outstanding, $14.8 million as of December 31, 2016 and $12.3 million as of December 31, 2015, satisfies workers’
outstanding, $14.8 million as of December 31, 2016 and $12.3 million as of December 31, 2015, satisfies workers’
compensation insurer’s collateral requirements. There is a service fee of 1.125% on the used portion of the facility. The facility
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, 2017. The Company intends to renew this facility prior to its
is subject to certain financial covenants and expires on August 31, 2017. The Company intends to renew this facility prior to its
August 31, 2017 expiration.
August 31, 2017 expiration.
Note H—Income Taxes
Note H—Income Taxes
following (in thousands):
following (in thousands):
The provision (benefit) for income taxes for the years ended December 31, 2016, 2015 and 2014, consisted of the
The provision (benefit) for income taxes for the years ended December 31, 2016, 2015 and 2014, consisted of the
Years Ended December 31,
Years Ended December 31,
2016
2016
2015
2015
2014
2014
Current:
Current:
Deferred:
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 156,937
$ 156,937
34,927
34,927
20,725
20,725
$ 181,640
$ 181,640
36,281
36,281
13,892
13,892
$ 146,633
$ 146,633
33,054
33,054
15,377
15,377
Federal and state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal and state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,785)
(3,785)
1,917
1,917
(8,398)
(8,398)
(181)
(181)
(4,626)
(4,626)
983
983
$ 210,721
$ 210,721
$ 223,234
$ 223,234
$ 191,421
$ 191,421
36
36
37
37
138808_RHI_A/R_10K.indd 37
2/17/17 1:30 AM
ROBERT HALF | 2016 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The components of the deferred income tax amounts at December 31, 2016 and 2015, were as follows (in thousands):
The components of the deferred income tax amounts at December 31, 2016 and 2015, were as follows (in thousands):
Deferred Income Tax Assets
Deferred Income Tax Assets
Provision for bad debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for bad debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred compensation and other benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred compensation and other benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Workers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Workers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credits and net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credits and net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred Income Tax Liabilities
Deferred Income Tax Liabilities
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment basis differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment basis differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax assets, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax assets, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
December 31,
2016
2016
2015
2015
$ 10,510
$ 10,510
112,811
112,811
5,634
5,634
16,772
16,772
30,534
30,534
18,116
18,116
194,377
194,377
$ 11,092
$ 11,092
96,948
96,948
8,206
8,206
15,814
15,814
35,499
35,499
23,885
23,885
191,444
191,444
(28,681)
(28,681)
(16,640)
(16,640)
(11,658)
(11,658)
(56,979)
(56,979)
(18,907)
(18,907)
$ 118,491
$ 118,491
(26,960)
(26,960)
(11,890)
(11,890)
(9,720)
(9,720)
(48,570)
(48,570)
(26,329)
(26,329)
$ 116,545
$ 116,545
Credits and net operating loss carryforwards primarily include net operating losses in foreign countries of $24.5 million
Credits and net operating loss carryforwards primarily include net operating losses in foreign countries of $24.5 million
that expire in 2017 and later; and California enterprise zone tax credits of $3.4 million that expire in 2023. Of the $3.4 million
that expire in 2017 and later; and California enterprise zone tax credits of $3.4 million that expire in 2023. Of the $3.4 million
of California enterprise zone tax credits, the Company expects that it will utilize $2.4 million of these credits prior to expiration.
of California enterprise zone tax credits, the Company expects that it will utilize $2.4 million of these credits prior to expiration.
Valuation allowances of $17.9 million have been established for net operating losses carryforwards and other deferred items in
Valuation allowances of $17.9 million have been established for net operating losses carryforwards and other deferred items in
foreign countries. In addition, a valuation allowance of $1.0 million has been established for California enterprise zone tax
foreign countries. In addition, a valuation allowance of $1.0 million has been established for California enterprise zone tax
credits.
credits.
The Company has not provided deferred income taxes or foreign withholding taxes on $16.9 million and $5.7 million of
The Company has not provided deferred income taxes or foreign withholding taxes on $16.9 million and $5.7 million of
undistributed earnings of its non-U.S. subsidiaries as of December 31, 2016 and 2015, respectively, since the Company intends
undistributed earnings of its non-U.S. subsidiaries as of December 31, 2016 and 2015, respectively, since the Company intends
to reinvest these earnings indefinitely. The U.S. tax impact upon repatriation, net of foreign tax credits, would be $2.1 million
to reinvest these earnings indefinitely. The U.S. tax impact upon repatriation, net of foreign tax credits, would be $2.1 million
and zero for the years ended December 31, 2016 and 2015, respectively.
and zero for the years ended December 31, 2016 and 2015, respectively.
FASB authoritative guidance prescribes a recognition threshold and measurement attribute criteria for the financial
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
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
provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and
transition.
transition.
The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2014 to
The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2014 to
December 31, 2016 (in thousands):
December 31, 2016 (in thousands):
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross increases—tax positions in prior years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross increases—tax positions in prior years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross decreases—tax positions in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross decreases—tax positions in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross increases—tax positions in current year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross increases—tax positions in current year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lapse of statute of limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lapse of statute of limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
2016
2016
814
814
92
92
—
—
114
114
—
—
(289)
(289)
731
731
$
$
December 31,
December 31,
2015
2015
4,573
4,573
—
—
(1,807)
(1,807)
120
120
(520)
(520)
(1,552)
(1,552)
814
814
$
$
2014
2014
6,110
6,110
1
1
(333)
(333)
35
35
—
—
(1,240)
(1,240)
4,573
4,573
$
$
$
$
The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $0.5 million, $0.5
The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $0.5 million, $0.5
million and $0.9 million for 2016, 2015 and 2014, respectively.
million and $0.9 million for 2016, 2015 and 2014, respectively.
38
38
39
39
138808_RHI_A/R_10K.indd 38
2/17/17 1:30 AM
The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax
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, 2016, is $0.1 million, including a $0.1 million
expense. The total amount of interest and penalties accrued as of December 31, 2016, is $0.1 million, including a $0.1 million
reduction recorded in income tax expense during the year. The total amount of interest and penalties accrued as of December
reduction recorded in income tax expense during the year. The total amount of interest and penalties accrued as of December
31, 2015 is $0.2 million, including a $2.3 million reduction recorded in income tax expense during the year. The total amount of
31, 2015 is $0.2 million, including a $2.3 million reduction recorded in income tax expense during the year. The total amount of
interest and penalties accrued as of December 31, 2014, was $2.5 million, including a $0.3 million reduction recorded in
interest and penalties accrued as of December 31, 2014, was $2.5 million, including a $0.3 million reduction recorded in
income tax expense during the year.
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
The Company believes it is reasonably possible that the settlement of certain tax uncertainties could occur within the next
twelve months; accordingly, $0.3 million of the unrecognized gross tax benefit has been classified as a current liability as of
twelve months; accordingly, $0.3 million of the unrecognized gross tax benefit has been classified as a current liability as of
December 31, 2016. This amount primarily represents unrecognized tax benefits composed of items related to assessed state
December 31, 2016. This amount primarily represents unrecognized tax benefits composed of items related to assessed state
income tax audits and negotiations.
income tax audits and negotiations.
The Company’s major income tax jurisdictions are the United States, Australia, Belgium, Canada, France, Germany and
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 2013 and subsequent years.
the United Kingdom. For U.S. federal income tax, the Company remains subject to examination for 2013 and subsequent years.
For major U.S. states, with few exceptions, the Company remains subject to examination for 2012 and subsequent years.
For major U.S. states, with few exceptions, the Company remains subject to examination for 2012 and subsequent years.
Generally, for the foreign countries, the Company remains subject to examination for 2009 and subsequent years.
Generally, for the foreign countries, the Company remains subject to examination for 2009 and subsequent years.
Note I—Commitments and Contingencies
Note I—Commitments and Contingencies
Rental expense, primarily for office premises, amounted to $87.3 million, $85.9 million and $89.9 million for the years
Rental expense, primarily for office premises, amounted to $87.3 million, $85.9 million and $89.9 million for the years
ended December 31, 2016, 2015 and 2014, respectively. The approximate minimum rental commitments for 2017 and thereafter
ended December 31, 2016, 2015 and 2014, respectively. The approximate minimum rental commitments for 2017 and thereafter
under non-cancelable leases in effect at December 31, 2016 were as follows (in thousands):
under non-cancelable leases in effect at December 31, 2016 were as follows (in thousands):
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 85,143
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 85,143
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70,863
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70,863
55,691
55,691
47,642
47,642
33,662
33,662
66,939
66,939
$ 359,940
$ 359,940
On April 23, 2010, Plaintiffs David Opalinski and James McCabe, on behalf of themselves and a putative class of
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
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
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.
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 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
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
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
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
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.
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
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
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,
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
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
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
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
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
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
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
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
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
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
Statements. The Company believes it has meritorious defenses to the allegations and the Company intends to continue to
vigorously defend against the litigation.
vigorously defend against the litigation.
ROBERT HALF | 2016 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The components of the deferred income tax amounts at December 31, 2016 and 2015, were as follows (in thousands):
The components of the deferred income tax amounts at December 31, 2016 and 2015, were as follows (in thousands):
December 31,
December 31,
2016
2016
2015
2015
Deferred Income Tax Assets
Deferred Income Tax Assets
Provision for bad debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for bad debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred compensation and other benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred compensation and other benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Workers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Workers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credits and net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credits and net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 10,510
$ 10,510
112,811
112,811
5,634
5,634
16,772
16,772
30,534
30,534
18,116
18,116
194,377
194,377
$ 11,092
$ 11,092
96,948
96,948
8,206
8,206
15,814
15,814
35,499
35,499
23,885
23,885
191,444
191,444
Deferred Income Tax Liabilities
Deferred Income Tax Liabilities
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment basis differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment basis differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax assets, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax assets, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(28,681)
(28,681)
(16,640)
(16,640)
(11,658)
(11,658)
(56,979)
(56,979)
(18,907)
(18,907)
(26,960)
(26,960)
(11,890)
(11,890)
(9,720)
(9,720)
(48,570)
(48,570)
(26,329)
(26,329)
$ 118,491
$ 118,491
$ 116,545
$ 116,545
Credits and net operating loss carryforwards primarily include net operating losses in foreign countries of $24.5 million
Credits and net operating loss carryforwards primarily include net operating losses in foreign countries of $24.5 million
that expire in 2017 and later; and California enterprise zone tax credits of $3.4 million that expire in 2023. Of the $3.4 million
that expire in 2017 and later; and California enterprise zone tax credits of $3.4 million that expire in 2023. Of the $3.4 million
of California enterprise zone tax credits, the Company expects that it will utilize $2.4 million of these credits prior to expiration.
of California enterprise zone tax credits, the Company expects that it will utilize $2.4 million of these credits prior to expiration.
Valuation allowances of $17.9 million have been established for net operating losses carryforwards and other deferred items in
Valuation allowances of $17.9 million have been established for net operating losses carryforwards and other deferred items in
foreign countries. In addition, a valuation allowance of $1.0 million has been established for California enterprise zone tax
foreign countries. In addition, a valuation allowance of $1.0 million has been established for California enterprise zone tax
The Company has not provided deferred income taxes or foreign withholding taxes on $16.9 million and $5.7 million of
The Company has not provided deferred income taxes or foreign withholding taxes on $16.9 million and $5.7 million of
undistributed earnings of its non-U.S. subsidiaries as of December 31, 2016 and 2015, respectively, since the Company intends
undistributed earnings of its non-U.S. subsidiaries as of December 31, 2016 and 2015, respectively, since the Company intends
to reinvest these earnings indefinitely. The U.S. tax impact upon repatriation, net of foreign tax credits, would be $2.1 million
to reinvest these earnings indefinitely. The U.S. tax impact upon repatriation, net of foreign tax credits, would be $2.1 million
and zero for the years ended December 31, 2016 and 2015, respectively.
and zero for the years ended December 31, 2016 and 2015, respectively.
FASB authoritative guidance prescribes a recognition threshold and measurement attribute criteria for the financial
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
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
provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and
credits.
credits.
transition.
transition.
The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2014 to
The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2014 to
December 31, 2016 (in thousands):
December 31, 2016 (in thousands):
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross increases—tax positions in prior years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross increases—tax positions in prior years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross decreases—tax positions in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross decreases—tax positions in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross increases—tax positions in current year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross increases—tax positions in current year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lapse of statute of limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lapse of statute of limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
December 31,
December 31,
$
$
2015
2015
4,573
4,573
—
—
(1,807)
(1,807)
120
120
(520)
(520)
(1,552)
(1,552)
814
814
2014
2014
$
$
6,110
6,110
(333)
(333)
1
1
35
35
—
—
(1,240)
(1,240)
4,573
4,573
$
$
2016
2016
814
814
92
92
—
—
114
114
—
—
(289)
(289)
731
731
$
$
The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $0.5 million, $0.5
The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $0.5 million, $0.5
million and $0.9 million for 2016, 2015 and 2014, respectively.
million and $0.9 million for 2016, 2015 and 2014, respectively.
The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax
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, 2016, is $0.1 million, including a $0.1 million
expense. The total amount of interest and penalties accrued as of December 31, 2016, is $0.1 million, including a $0.1 million
reduction recorded in income tax expense during the year. The total amount of interest and penalties accrued as of December
reduction recorded in income tax expense during the year. The total amount of interest and penalties accrued as of December
31, 2015 is $0.2 million, including a $2.3 million reduction recorded in income tax expense during the year. The total amount of
31, 2015 is $0.2 million, including a $2.3 million reduction recorded in income tax expense during the year. The total amount of
interest and penalties accrued as of December 31, 2014, was $2.5 million, including a $0.3 million reduction recorded in
interest and penalties accrued as of December 31, 2014, was $2.5 million, including a $0.3 million reduction recorded in
income tax expense during the year.
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
The Company believes it is reasonably possible that the settlement of certain tax uncertainties could occur within the next
twelve months; accordingly, $0.3 million of the unrecognized gross tax benefit has been classified as a current liability as of
twelve months; accordingly, $0.3 million of the unrecognized gross tax benefit has been classified as a current liability as of
December 31, 2016. This amount primarily represents unrecognized tax benefits composed of items related to assessed state
December 31, 2016. This amount primarily represents unrecognized tax benefits composed of items related to assessed state
income tax audits and negotiations.
income tax audits and negotiations.
The Company’s major income tax jurisdictions are the United States, Australia, Belgium, Canada, France, Germany and
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 2013 and subsequent years.
the United Kingdom. For U.S. federal income tax, the Company remains subject to examination for 2013 and subsequent years.
For major U.S. states, with few exceptions, the Company remains subject to examination for 2012 and subsequent years.
For major U.S. states, with few exceptions, the Company remains subject to examination for 2012 and subsequent years.
Generally, for the foreign countries, the Company remains subject to examination for 2009 and subsequent years.
Generally, for the foreign countries, the Company remains subject to examination for 2009 and subsequent years.
Note I—Commitments and Contingencies
Note I—Commitments and Contingencies
Rental expense, primarily for office premises, amounted to $87.3 million, $85.9 million and $89.9 million for the years
Rental expense, primarily for office premises, amounted to $87.3 million, $85.9 million and $89.9 million for the years
ended December 31, 2016, 2015 and 2014, respectively. The approximate minimum rental commitments for 2017 and thereafter
ended December 31, 2016, 2015 and 2014, respectively. The approximate minimum rental commitments for 2017 and thereafter
under non-cancelable leases in effect at December 31, 2016 were as follows (in thousands):
under non-cancelable leases in effect at December 31, 2016 were as follows (in thousands):
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 85,143
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 85,143
70,863
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70,863
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55,691
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55,691
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47,642
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47,642
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,662
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,662
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66,939
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66,939
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 359,940
$ 359,940
On April 23, 2010, Plaintiffs David Opalinski and James McCabe, on behalf of themselves and a putative class of
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
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
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.
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 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
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
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
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
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.
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
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
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,
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
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
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
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
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
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
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
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
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
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
Statements. The Company believes it has meritorious defenses to the allegations and the Company intends to continue to
vigorously defend against the litigation.
vigorously defend against the litigation.
38
38
39
39
138808_RHI_A/R_10K.indd 39
2/17/17 1:30 AM
ROBERT HALF | 2016 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
On March 23, 2015, Plaintiff Jessica Gentry, on her own behalf and on behalf of a putative class of allegedly similarly
On March 23, 2015, Plaintiff Jessica Gentry, 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 Francisco County, which
situated individuals, filed a complaint against the Company in the Superior Court of California, San Francisco County, which
was subsequently amended on October 23, 2015. The complaint, which was filed by the same plaintiffs’ law firm that brought
was subsequently amended on October 23, 2015. The complaint, which was filed by the same plaintiffs’ law firm that brought
the Rodriguez matter described above, alleges claims similar to those alleged in Rodriguez. Specifically, the complaint alleges
the Rodriguez matter described above, alleges claims similar to those alleged in Rodriguez. Specifically, the complaint alleges
that a putative class of current and former employees of the Company working in California since March 13, 2010 were denied
that a putative class of current and former employees of the Company working in California since March 13, 2010 were denied
compensation for the time they spent interviewing “for temporary and permanent employment opportunities” as well as
compensation for the time they spent interviewing “for temporary and permanent employment opportunities” as well as
performing activities related to the interview process. Gentry seeks recovery on her own behalf and on behalf of the putative
performing activities related to the interview process. Gentry seeks recovery on her own behalf and on behalf of the putative
class in an unspecified amount for this allegedly unpaid compensation. Gentry also seeks recovery of an unspecified amount for
class in an unspecified amount for this allegedly unpaid compensation. Gentry 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. Gentry also seeks an
the alleged failure of the Company to provide her and the putative class with accurate wage statements. Gentry also seeks an
unspecified amount of other damages, attorneys’ fees, and statutory penalties, including penalties for allegedly not paying all
unspecified amount of other damages, attorneys’ fees, and statutory penalties, including penalties for allegedly not paying all
wages due upon separation to former employees and statutory penalties on behalf of herself and other allegedly “aggrieved
wages due upon separation to former employees and statutory penalties on behalf of herself and other allegedly “aggrieved
employees” as defined by PAGA. On January 4, 2016, the Court denied a motion by the Company to compel all of Gentry’s
employees” as defined by PAGA. On January 4, 2016, the Court denied a motion by the Company to compel all of Gentry’s
claims, except the PAGA claim, to individual arbitration. At this stage of the litigation, it is not feasible to predict the outcome
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
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
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.
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
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
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.
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.
Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred.
Note J—Stockholders’ Equity
Note J—Stockholders’ Equity
Stock Repurchase Program. As of December 31, 2016, the Company is authorized to repurchase, from time to time, up
Stock Repurchase Program. As of December 31, 2016, the Company is authorized to repurchase, from time to time, up
to 6.4 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions,
to 6.4 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
depending on market conditions. The number and the cost of common stock shares repurchased during the years ended
December 31, 2016, 2015 and 2014, are reflected in the following table (in thousands):
December 31, 2016, 2015 and 2014, are reflected in the following table (in thousands):
Common stock repurchased (in shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock repurchased (in shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock repurchased. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock repurchased. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
4,343
4,343
$ 228,166
$ 228,166
2014
2014
3,336
3,336
$ 161,587
$ 161,587
2016
2016
4,046
4,046
$ 163,614
$ 163,614
Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were
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
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, 2016, 2015 and 2014, are reflected in the
employee stock plan repurchases made during the years ended December 31, 2016, 2015 and 2014, are reflected in the
following table (in thousands):
following table (in thousands):
Cash Dividends. The Company’s Board of Directors may at their discretion declare and pay dividends upon the shares of
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
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, 2016, 2015 and 2014, are reflected in the following table:
years ended December 31, 2016, 2015 and 2014, are reflected in the following table:
Years Ended December 31,
Years Ended December 31,
2016
2016
2015
2015
2014
2014
.72
.72
Cash dividends declared per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
.88
.88
$
$
.80
.80
$
$
Repurchases of shares and issuances of cash dividends are applied first to the extent of retained earnings and any
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.
remaining amounts are applied to capital surplus.
Note K—Stock Plans
Note K—Stock Plans
Under various stock plans, officers, employees, and outside directors have received or may receive grants of restricted
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
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
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.
over three years. Shares offered under the plan are authorized but unissued shares or treasury shares.
Recipients of restricted stock do not pay any cash consideration to the Company for the shares, have the right to vote all
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 the years of 2016, 2015 and 2014, there were no grants outstanding that received dividends
shares subject to such grant, and for the years of 2016, 2015 and 2014, there were no grants outstanding that received dividends
prior to vesting. Restricted stock grants made on or after July 28, 2009, contain forfeitable rights to dividends. Dividends for
prior to vesting. 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
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
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.
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
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
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
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.
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
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,
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
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
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
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
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.
model utilizes multiple input variables to determine the stock-based compensation expense.
During the year ended December 31, 2016, the Company granted performance shares to its executives in the form of
During the year ended December 31, 2016, 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
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
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
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
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
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 22.82%,
this award was determined using a Monte Carlo simulation with the following assumptions: an historical volatility of 22.82%,
0% dividend yield and a risk-free interest rate of 0.99%. The historical volatility was based on the most recent 2.77-year period
0% dividend yield and a risk-free interest rate of 0.99%. The historical volatility was based on the most recent 2.77-year period
for the Company and the components of the peer group. The stock price projection for the Company and the components of the
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
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.
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.
Treasury bill that is commensurate with the remaining performance measurement period.
Stock-based compensation expense consisted of the following (in thousands):
Stock-based compensation expense consisted of the following (in thousands):
Restricted stock and stock units - expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock and stock units - expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 42,699
$ 42,699
$ 41,292
$ 41,292
$ 40,821
$ 40,821
Years Ended December 31,
Years Ended December 31,
2016
2016
2015
2015
2014
2014
The repurchased shares are held in treasury and are presented as if constructively retired. Treasury stock is accounted for
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, 2016, 2015 and 2014 (consisting
using the cost method. Treasury stock activity for each of the three years ended December 31, 2016, 2015 and 2014 (consisting
of stock option exercises and the purchase of shares for the treasury) is presented in the Consolidated Statements of
of stock option exercises and the purchase of shares for the treasury) is presented in the Consolidated Statements of
Stockholders’ Equity.
Stockholders’ Equity.
40
40
41
41
138808_RHI_A/R_10K.indd 40
2/17/17 1:30 AM
Repurchases related to employee stock plans (in shares) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases related to employee stock plans (in shares) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases related to employee stock plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases related to employee stock plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
359
359
$ 15,170
$ 15,170
474
474
$ 24,755
$ 24,755
462
462
$ 22,386
$ 22,386
2016
2016
2014
2014
ROBERT HALF | 2016 ANNUAL REPORT
$
$
$
$
.72
.72
.80
.80
.88
.88
2014
2014
2016
2016
Years Ended December 31,
Years Ended December 31,
2015
2015
Cash dividends declared per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Cash Dividends. The Company’s Board of Directors may at their discretion declare and pay dividends upon the shares of
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
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, 2016, 2015 and 2014, are reflected in the following table:
years ended December 31, 2016, 2015 and 2014, are reflected in the following table:
On March 23, 2015, Plaintiff Jessica Gentry, on her own behalf and on behalf of a putative class of allegedly similarly
On March 23, 2015, Plaintiff Jessica Gentry, 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 Francisco County, which
situated individuals, filed a complaint against the Company in the Superior Court of California, San Francisco County, which
was subsequently amended on October 23, 2015. The complaint, which was filed by the same plaintiffs’ law firm that brought
was subsequently amended on October 23, 2015. The complaint, which was filed by the same plaintiffs’ law firm that brought
the Rodriguez matter described above, alleges claims similar to those alleged in Rodriguez. Specifically, the complaint alleges
the Rodriguez matter described above, alleges claims similar to those alleged in Rodriguez. Specifically, the complaint alleges
that a putative class of current and former employees of the Company working in California since March 13, 2010 were denied
that a putative class of current and former employees of the Company working in California since March 13, 2010 were denied
compensation for the time they spent interviewing “for temporary and permanent employment opportunities” as well as
compensation for the time they spent interviewing “for temporary and permanent employment opportunities” as well as
performing activities related to the interview process. Gentry seeks recovery on her own behalf and on behalf of the putative
performing activities related to the interview process. Gentry seeks recovery on her own behalf and on behalf of the putative
class in an unspecified amount for this allegedly unpaid compensation. Gentry also seeks recovery of an unspecified amount for
class in an unspecified amount for this allegedly unpaid compensation. Gentry 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. Gentry also seeks an
the alleged failure of the Company to provide her and the putative class with accurate wage statements. Gentry also seeks an
unspecified amount of other damages, attorneys’ fees, and statutory penalties, including penalties for allegedly not paying all
unspecified amount of other damages, attorneys’ fees, and statutory penalties, including penalties for allegedly not paying all
wages due upon separation to former employees and statutory penalties on behalf of herself and other allegedly “aggrieved
wages due upon separation to former employees and statutory penalties on behalf of herself and other allegedly “aggrieved
employees” as defined by PAGA. On January 4, 2016, the Court denied a motion by the Company to compel all of Gentry’s
employees” as defined by PAGA. On January 4, 2016, the Court denied a motion by the Company to compel all of Gentry’s
claims, except the PAGA claim, to individual arbitration. At this stage of the litigation, it is not feasible to predict the outcome
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
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
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.
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
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
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.
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.
Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred.
Note J—Stockholders’ Equity
Note J—Stockholders’ Equity
Stock Repurchase Program. As of December 31, 2016, the Company is authorized to repurchase, from time to time, up
Stock Repurchase Program. As of December 31, 2016, the Company is authorized to repurchase, from time to time, up
to 6.4 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions,
to 6.4 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
depending on market conditions. The number and the cost of common stock shares repurchased during the years ended
December 31, 2016, 2015 and 2014, are reflected in the following table (in thousands):
December 31, 2016, 2015 and 2014, are reflected in the following table (in thousands):
Common stock repurchased (in shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock repurchased (in shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock repurchased. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock repurchased. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were
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
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, 2016, 2015 and 2014, are reflected in the
employee stock plan repurchases made during the years ended December 31, 2016, 2015 and 2014, are reflected in the
following table (in thousands):
following table (in thousands):
Years Ended December 31,
Years Ended December 31,
2016
2016
4,046
4,046
$ 163,614
$ 163,614
2015
2015
4,343
4,343
$ 228,166
$ 228,166
2014
2014
3,336
3,336
$ 161,587
$ 161,587
Repurchases related to employee stock plans (in shares) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases related to employee stock plans (in shares) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases related to employee stock plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases related to employee stock plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The repurchased shares are held in treasury and are presented as if constructively retired. Treasury stock is accounted for
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, 2016, 2015 and 2014 (consisting
using the cost method. Treasury stock activity for each of the three years ended December 31, 2016, 2015 and 2014 (consisting
of stock option exercises and the purchase of shares for the treasury) is presented in the Consolidated Statements of
of stock option exercises and the purchase of shares for the treasury) is presented in the Consolidated Statements of
Stockholders’ Equity.
Stockholders’ Equity.
Years Ended December 31,
Years Ended December 31,
2016
2016
359
359
2015
2015
474
474
2014
2014
462
462
$ 15,170
$ 15,170
$ 24,755
$ 24,755
$ 22,386
$ 22,386
Repurchases of shares and issuances of cash dividends are applied first to the extent of retained earnings and any
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.
remaining amounts are applied to capital surplus.
Note K—Stock Plans
Note K—Stock Plans
Under various stock plans, officers, employees, and outside directors have received or may receive grants of restricted
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
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
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.
over three years. Shares offered under the plan are authorized but unissued shares or treasury shares.
Recipients of restricted stock do not pay any cash consideration to the Company for the shares, have the right to vote all
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 the years of 2016, 2015 and 2014, there were no grants outstanding that received dividends
shares subject to such grant, and for the years of 2016, 2015 and 2014, there were no grants outstanding that received dividends
prior to vesting. Restricted stock grants made on or after July 28, 2009, contain forfeitable rights to dividends. Dividends for
prior to vesting. 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
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
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.
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
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
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
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.
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
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,
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
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
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
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
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.
model utilizes multiple input variables to determine the stock-based compensation expense.
During the year ended December 31, 2016, the Company granted performance shares to its executives in the form of
During the year ended December 31, 2016, 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
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
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
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
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
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 22.82%,
this award was determined using a Monte Carlo simulation with the following assumptions: an historical volatility of 22.82%,
0% dividend yield and a risk-free interest rate of 0.99%. The historical volatility was based on the most recent 2.77-year period
0% dividend yield and a risk-free interest rate of 0.99%. The historical volatility was based on the most recent 2.77-year period
for the Company and the components of the peer group. The stock price projection for the Company and the components of the
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
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.
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.
Treasury bill that is commensurate with the remaining performance measurement period.
Stock-based compensation expense consisted of the following (in thousands):
Stock-based compensation expense consisted of the following (in thousands):
40
40
41
41
Restricted stock and stock units - expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock and stock units - expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
$ 41,292
$ 41,292
2014
2014
$ 40,821
$ 40,821
2016
2016
$ 42,699
$ 42,699
138808_RHI_A/R_10K.indd 41
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ROBERT HALF | 2016 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unrecognized compensation cost is expected to be recognized over the next four years. Total unrecognized compensation
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):
cost, net of estimated forfeitures, consisted of the following (in thousands):
Restricted stock and stock units - unrecognized future costs . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock and stock units - unrecognized future costs . . . . . . . . . . . . . . . . . . . . . . . .
2016
2016
$ 60,481
$ 60,481
December 31,
December 31,
2015
2015
$ 60,627
$ 60,627
2014
2014
$ 54,968
$ 54,968
The following table reflects activity under all stock plans from December 31, 2013 through December 31, 2016, and the
The following table reflects activity under all stock plans from December 31, 2013 through December 31, 2016, and the
weighted average exercise prices (in thousands, except per share amounts):
weighted average exercise prices (in thousands, except per share amounts):
Restricted Stock Plans
Restricted Stock Plans
without Market-Condition
without Market-Condition
Weighted
Weighted
Average
Average
Grant Date
Grant Date
Fair Value
Fair Value
$31.68
$31.68
$41.60
$41.60
—
—
$31.96
$31.96
$32.82
$32.82
$36.47
$36.47
$58.14
$58.14
—
—
$36.30
$36.30
$37.63
$37.63
$46.88
$46.88
$38.47
$38.47
—
—
$42.42
$42.42
$41.28
$41.28
$43.78
$43.78
Number of
Number of
Shares/
Shares/
Units
Units
1,317
1,317
585
585
—
—
(712)
(712)
(25)
(25)
1,165
1,165
502
502
—
—
(599)
(599)
(16)
(16)
1,052
1,052
772
772
—
—
(545)
(545)
(36)
(36)
1,243
1,243
Outstanding, December 31, 2013 . . . . .
Outstanding, December 31, 2013 . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . .
Outstanding, December 31, 2014 . . . . .
Outstanding, December 31, 2014 . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . .
Outstanding, December 31, 2015 . . . . .
Outstanding, December 31, 2015 . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . .
Outstanding, December 31, 2016 . . . . .
Outstanding, December 31, 2016 . . . . .
Restricted Stock Plans
Restricted Stock Plans
with Market-Condition
with Market-Condition
Number of
Number of
Shares/
Shares/
Units
Units
899
899
335
335
—
—
—
—
—
—
1,234
1,234
257
257
—
—
(499)
(499)
—
—
992
992
358
358
—
—
(364)
(364)
(36)
(36)
950
950
Weighted
Weighted
Average
Average
Grant Date
Grant Date
Fair Value
Fair Value
$36.58
$36.58
$50.09
$50.09
—
—
—
—
—
—
$40.24
$40.24
$71.86
$71.86
—
—
$31.41
$31.41
—
—
$52.89
$52.89
$45.93
$45.93
—
—
$43.04
$43.04
$43.04
$43.04
$54.42
$54.42
Stock Option Plans
Stock Option Plans
Number of
Number of
Shares/
Shares/
Units
Units
632
632
—
—
(528)
(528)
—
—
(27)
(27)
77
77
—
—
(54)
(54)
—
—
(11)
(11)
12
12
—
—
(7)
(7)
—
—
(5)
(5)
—
—
Weighted
Weighted
Average Exercise
Average Exercise
Price Per Share
Price Per Share
$27.41
$27.41
—
—
$27.12
$27.12
—
—
$27.83
$27.83
$29.22
$29.22
—
—
$28.18
$28.18
—
—
$30.94
$30.94
$32.36
$32.36
—
—
$32.36
$32.36
—
—
$32.36
$32.36
—
—
The total pre-tax intrinsic value of stock options exercised and the total fair value of shares vested during the years ended
The total pre-tax intrinsic value of stock options exercised and the total fair value of shares vested during the years ended
December 31, 2016, 2014 and 2013, are reflected in the following table (in thousands):
December 31, 2016, 2014 and 2013, are reflected in the following table (in thousands):
Total pre-tax intrinsic value of stock options exercised. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total pre-tax intrinsic value of stock options exercised. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total fair value of shares vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total fair value of shares vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016
2016
Years Ended December 31,
Years Ended December 31,
2015
2015
1,709
$
1,709
$
$ 56,570
$ 56,570
2014
2014
9,150
$
9,150
$
$ 38,566
$ 38,566
52
$
52
$
$ 39,302
$ 39,302
At December 31, 2016, the total number of available shares to grant under the plans (consisting of either restricted stock,
At December 31, 2016, 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 4.7 million.
stock units, stock appreciation rights or options to purchase common stock) was approximately 4.7 million.
42
42
43
43
138808_RHI_A/R_10K.indd 42
2/17/17 1:30 AM
Note L—Net Income Per Share
Note L—Net Income Per Share
(in thousands, except per share amounts):
(in thousands, except per share amounts):
The calculation of net income per share for the three years ended December 31, 2016 is reflected in the following table
The calculation of net income per share for the three years ended December 31, 2016 is reflected in the following table
Years Ended December 31,
Years Ended December 31,
2015
2015
2014
2014
2016
2016
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 343,389
$ 343,389
$ 357,796
$ 357,796
$ 305,928
$ 305,928
Weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
127,991
127,991
131,749
131,749
134,358
134,358
Basic:
Basic:
Diluted:
Diluted:
Weighted average shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of potential common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of potential common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
127,991
127,991
775
775
128,766
128,766
131,749
131,749
1,181
1,181
132,930
132,930
134,358
134,358
1,183
1,183
135,541
135,541
Net income per share:
Net income per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
2.68
2.68
2.67
2.67
$
$
$
$
2.72
2.72
2.69
2.69
$
$
$
$
2.28
2.28
2.26
2.26
Potential common shares include the dilutive effect of stock options, unvested performance-based restricted stock,
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.
restricted stock which contains forfeitable rights to dividends, and stock units.
Employee stock options will have a dilutive effect under the treasury method only when the respective period’s average
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
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
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
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.
were exercised and the stock units and performance-based restricted stock had vested.
Note M—Business Segments
Note M—Business Segments
The Company, which aggregates its operating segments based on the nature of services, has three reportable 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
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
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
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
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.
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
The accounting policies of the segments are set forth in Note A—Summary of Significant Accounting Policies. The
Company evaluates performance based on income from operations before net interest income, intangible amortization expense,
Company evaluates performance based on income from operations before net interest income, intangible amortization expense,
and income taxes.
and income taxes.
ROBERT HALF | 2016 ANNUAL REPORT
Unrecognized compensation cost is expected to be recognized over the next four years. Total unrecognized compensation
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):
cost, net of estimated forfeitures, consisted of the following (in thousands):
Restricted stock and stock units - unrecognized future costs . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock and stock units - unrecognized future costs . . . . . . . . . . . . . . . . . . . . . . . .
$ 60,481
$ 60,481
$ 60,627
$ 60,627
$ 54,968
$ 54,968
December 31,
December 31,
2015
2015
2014
2014
2016
2016
The following table reflects activity under all stock plans from December 31, 2013 through December 31, 2016, and the
The following table reflects activity under all stock plans from December 31, 2013 through December 31, 2016, and the
weighted average exercise prices (in thousands, except per share amounts):
weighted average exercise prices (in thousands, except per share amounts):
Restricted Stock Plans
Restricted Stock Plans
without Market-Condition
without Market-Condition
Restricted Stock Plans
Restricted Stock Plans
with Market-Condition
with Market-Condition
Weighted
Weighted
Average
Average
Grant Date
Grant Date
Fair Value
Fair Value
Number of
Number of
Shares/
Shares/
Units
Units
Stock Option Plans
Stock Option Plans
Number of
Number of
Shares/
Shares/
Units
Units
Weighted
Average Exercise
Weighted
Average Exercise
Price Per Share
Price Per Share
Outstanding, December 31, 2013 . . . . .
Outstanding, December 31, 2013 . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . .
Outstanding, December 31, 2014 . . . . .
Outstanding, December 31, 2014 . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . .
Outstanding, December 31, 2015 . . . . .
Outstanding, December 31, 2015 . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . .
Outstanding, December 31, 2016 . . . . .
Outstanding, December 31, 2016 . . . . .
Number of
Number of
Shares/
Shares/
Units
Units
1,317
1,317
585
585
—
—
(712)
(712)
(25)
(25)
1,165
1,165
502
502
—
—
(599)
(599)
(16)
(16)
1,052
1,052
772
772
—
—
(545)
(545)
(36)
(36)
1,243
1,243
$31.68
$31.68
$41.60
$41.60
—
—
$31.96
$31.96
$32.82
$32.82
$36.47
$36.47
$58.14
$58.14
—
—
$36.30
$36.30
$37.63
$37.63
$46.88
$46.88
$38.47
$38.47
—
—
$42.42
$42.42
$41.28
$41.28
$43.78
$43.78
Weighted
Weighted
Average
Average
Grant Date
Grant Date
Fair Value
Fair Value
$36.58
$36.58
$50.09
$50.09
—
—
—
—
—
—
$40.24
$40.24
$71.86
$71.86
$31.41
$31.41
—
—
—
—
$52.89
$52.89
$45.93
$45.93
—
—
$43.04
$43.04
$43.04
$43.04
$54.42
$54.42
899
899
335
335
—
—
—
—
—
—
1,234
1,234
257
257
—
—
(499)
(499)
—
—
992
992
358
358
—
—
(364)
(364)
(36)
(36)
950
950
632
632
—
—
(528)
(528)
—
—
(27)
(27)
77
77
—
—
(54)
(54)
—
—
(11)
(11)
12
12
—
—
(7)
(7)
—
—
(5)
(5)
—
—
$27.41
$27.41
—
—
—
—
$27.12
$27.12
$27.83
$27.83
$29.22
$29.22
—
—
—
—
$28.18
$28.18
$30.94
$30.94
$32.36
$32.36
$32.36
$32.36
$32.36
$32.36
—
—
—
—
—
—
The total pre-tax intrinsic value of stock options exercised and the total fair value of shares vested during the years ended
The total pre-tax intrinsic value of stock options exercised and the total fair value of shares vested during the years ended
December 31, 2016, 2014 and 2013, are reflected in the following table (in thousands):
December 31, 2016, 2014 and 2013, are reflected in the following table (in thousands):
Total pre-tax intrinsic value of stock options exercised. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total pre-tax intrinsic value of stock options exercised. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total fair value of shares vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total fair value of shares vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
At December 31, 2016, the total number of available shares to grant under the plans (consisting of either restricted stock,
At December 31, 2016, 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 4.7 million.
stock units, stock appreciation rights or options to purchase common stock) was approximately 4.7 million.
Years Ended December 31,
Years Ended December 31,
2016
2016
$
$
52
52
$ 39,302
$ 39,302
2015
2015
$
$
1,709
1,709
$ 56,570
$ 56,570
2014
2014
$
$
9,150
9,150
$ 38,566
$ 38,566
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note L—Net Income Per Share
Note L—Net Income Per Share
The calculation of net income per share for the three years ended December 31, 2016 is reflected in the following table
The calculation of net income per share for the three years ended December 31, 2016 is reflected in the following table
(in thousands, except per share amounts):
(in thousands, except per share amounts):
Diluted:
Diluted:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic:
Basic:
Weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of potential common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of potential common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income per share:
Net income per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
2014
2014
2016
2016
$ 343,389
$ 343,389
$ 357,796
$ 357,796
$ 305,928
$ 305,928
127,991
127,991
131,749
131,749
134,358
134,358
127,991
127,991
775
775
128,766
128,766
131,749
131,749
1,181
1,181
132,930
132,930
134,358
134,358
1,183
1,183
135,541
135,541
$
$
$
$
2.68
2.68
2.67
2.67
$
$
$
$
2.72
2.72
2.69
2.69
$
$
$
$
2.28
2.28
2.26
2.26
Potential common shares include the dilutive effect of stock options, unvested performance-based restricted stock,
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.
restricted stock which contains forfeitable rights to dividends, and stock units.
Employee stock options will have a dilutive effect under the treasury method only when the respective period’s average
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
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
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
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.
were exercised and the stock units and performance-based restricted stock had vested.
Note M—Business Segments
Note M—Business Segments
The Company, which aggregates its operating segments based on the nature of services, has three reportable 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
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
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
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
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.
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
The accounting policies of the segments are set forth in Note A—Summary of Significant Accounting Policies. The
Company evaluates performance based on income from operations before net interest income, intangible amortization expense,
Company evaluates performance based on income from operations before net interest income, intangible amortization expense,
and income taxes.
and income taxes.
42
42
43
43
138808_RHI_A/R_10K.indd 43
2/17/17 1:30 AM
ROBERT HALF | 2016 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated
The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated
results (in thousands):
results (in thousands):
The Company operates internationally, with operations in North America, South America, Europe, Asia and Australia.
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):
The following tables represent revenues and long-lived assets by geographic location (in thousands):
Net service revenues
Net service revenues
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit
Risk consulting and internal audit
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income
Operating income
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit
Risk consulting and internal audit
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
2014
2014
2016
2016
$4,026,777
$4,026,777
419,314
419,314
804,308
804,308
$5,250,399
$5,250,399
$3,930,843
$3,930,843
421,411
421,411
742,679
742,679
$5,094,933
$5,094,933
$3,676,281
$3,676,281
394,515
394,515
624,218
624,218
$4,695,014
$4,695,014
$ 393,704
$ 393,704
80,001
80,001
$ 399,808
$ 399,808
85,019
85,019
$ 358,533
$ 358,533
78,333
78,333
80,754
80,754
554,459
554,459
1,237
1,237
(888)
(888)
$ 554,110
$ 554,110
95,845
95,845
580,672
580,672
192
192
(550)
(550)
$ 581,030
$ 581,030
60,316
60,316
497,182
497,182
557
557
(724)
(724)
$ 497,349
$ 497,349
The Company does not report total assets by segment. The following tables represent identifiable assets by business
The Company does not report total assets by segment. The following tables represent identifiable assets by business
segment (in thousands):
segment (in thousands):
Accounts receivable
Accounts receivable
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
Goodwill
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016
2016
December 31,
December 31,
2015
2015
2014
2014
$ 403,074
$ 403,074
129,506
129,506
203,781
203,781
$ 736,361
$ 736,361
$ 425,179
$ 425,179
121,670
121,670
192,878
192,878
$ 739,727
$ 739,727
$ 403,615
$ 403,615
115,563
115,563
169,042
169,042
$ 688,220
$ 688,220
2016
2016
December 31,
December 31,
2015
2015
2014
2014
$ 133,875
$ 133,875
26,015
26,015
49,903
49,903
$ 209,793
$ 209,793
$ 133,173
$ 133,173
26,251
26,251
49,155
49,155
$ 208,579
$ 208,579
$ 133,964
$ 133,964
26,450
26,450
39,074
39,074
$ 199,488
$ 199,488
44
44
45
45
138808_RHI_A/R_10K.indd 44
2/17/17 1:30 AM
Net service revenues (a)
Net service revenues (a)
Domestic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Domestic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets, long-lived
Assets, long-lived
Domestic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Domestic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
2014
2014
2016
2016
$4,220,477
$4,220,477
1,029,922
1,029,922
$5,250,399
$5,250,399
$4,105,013
$4,105,013
989,920
989,920
$5,094,933
$5,094,933
$3,623,812
$3,623,812
1,071,202
1,071,202
$4,695,014
$4,695,014
2016
2016
December 31,
December 31,
2015
2015
2014
2014
$ 136,434
$ 136,434
$ 117,176
$ 117,176
$ 101,181
$ 101,181
25,075
25,075
25,730
25,730
20,573
20,573
$ 161,509
$ 161,509
$ 142,906
$ 142,906
$ 121,754
$ 121,754
(a) There were no customers that accounted for more than 10% of the Company's total net revenue in any year presented.
(a) There were no customers that accounted for more than 10% of the Company's total net revenue in any year presented.
(b) No individual country represented more than 10% of revenues in any year presented.
(b) No individual country represented more than 10% of revenues in any year presented.
Note N—Quarterly Financial Data (Unaudited)
Note N—Quarterly Financial Data (Unaudited)
The following tabulation shows certain quarterly financial data for 2016 and 2015 (in thousands, except per share
The following tabulation shows certain quarterly financial data for 2016 and 2015 (in thousands, except per share
amounts):
amounts):
2016
2016
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,302,625
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,302,625
Gross margin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 531,972
Gross margin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 531,972
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,791
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,791
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
83,416
83,416
.65
.65
.64
.64
2015
2015
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,205,563
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,205,563
Gross margin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 494,087
Gross margin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 494,087
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 128,174
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 128,174
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
77,922
77,922
.59
.59
.58
.58
1
1
1
1
$1,344,160
$1,344,160
$ 556,993
$ 556,993
$ 149,414
$ 149,414
91,616
91,616
$1,338,541
$1,338,541
$ 552,509
$ 552,509
$ 146,324
$ 146,324
90,569
90,569
$1,265,073
$1,265,073
$ 519,202
$ 519,202
$ 124,581
$ 124,581
77,788
77,788
Quarter
Quarter
.71
.71
.71
.71
Quarter
Quarter
2
2
2
2
3
3
3
3
$
$
$
$
$
$
$
$
$
$
$
$
.68
.68
.67
.67
$
$
$
$
$
$
$
$
$
$
$
$
.71
.71
.71
.71
.74
.74
.73
.73
$
$
$
$
$
$
$
$
$
$
$
$
$1,272,058
$1,272,058
$ 530,502
$ 530,502
$ 149,235
$ 149,235
89,706
89,706
$1,312,718
$1,312,718
$ 549,801
$ 549,801
$ 159,306
$ 159,306
96,725
96,725
$1,304,594
$1,304,594
$ 540,081
$ 540,081
$ 144,315
$ 144,315
93,443
93,443
4
4
4
4
.61
.61
.61
.61
.71
.71
.71
.71
ROBERT HALF | 2016 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated
The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated
The Company operates internationally, with operations in North America, South America, Europe, Asia and Australia.
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):
The following tables represent revenues and long-lived assets by geographic location (in thousands):
Net service revenues (a)
Net service revenues (a)
Domestic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Domestic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets, long-lived
Assets, long-lived
Domestic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Domestic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
Years Ended December 31,
2015
2015
2014
2014
2016
2016
$4,220,477
$4,220,477
1,029,922
1,029,922
$5,250,399
$5,250,399
$4,105,013
$4,105,013
989,920
989,920
$5,094,933
$5,094,933
$3,623,812
$3,623,812
1,071,202
1,071,202
$4,695,014
$4,695,014
2016
2016
December 31,
December 31,
2015
2015
2014
2014
$ 136,434
$ 136,434
25,075
25,075
$ 161,509
$ 161,509
$ 117,176
$ 117,176
25,730
25,730
$ 142,906
$ 142,906
$ 101,181
$ 101,181
20,573
20,573
$ 121,754
$ 121,754
(a) There were no customers that accounted for more than 10% of the Company's total net revenue in any year presented.
(a) There were no customers that accounted for more than 10% of the Company's total net revenue in any year presented.
(b) No individual country represented more than 10% of revenues in any year presented.
(b) No individual country represented more than 10% of revenues in any year presented.
Note N—Quarterly Financial Data (Unaudited)
Note N—Quarterly Financial Data (Unaudited)
The following tabulation shows certain quarterly financial data for 2016 and 2015 (in thousands, except per share
The following tabulation shows certain quarterly financial data for 2016 and 2015 (in thousands, except per share
amounts):
amounts):
results (in thousands):
results (in thousands):
Net service revenues
Net service revenues
Operating income
Operating income
segment (in thousands):
segment (in thousands):
Accounts receivable
Accounts receivable
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit
Risk consulting and internal audit
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 393,704
$ 393,704
80,001
80,001
$ 399,808
$ 399,808
85,019
85,019
$ 358,533
$ 358,533
78,333
78,333
Risk consulting and internal audit
Risk consulting and internal audit
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Company does not report total assets by segment. The following tables represent identifiable assets by business
The Company does not report total assets by segment. The following tables represent identifiable assets by business
Years Ended December 31,
Years Ended December 31,
2015
2015
2014
2014
2016
2016
$4,026,777
$4,026,777
419,314
419,314
804,308
804,308
$5,250,399
$5,250,399
$3,930,843
$3,930,843
421,411
421,411
742,679
742,679
$5,094,933
$5,094,933
$3,676,281
$3,676,281
394,515
394,515
624,218
624,218
$4,695,014
$4,695,014
80,754
80,754
554,459
554,459
1,237
1,237
(888)
(888)
95,845
95,845
580,672
580,672
192
192
(550)
(550)
60,316
60,316
497,182
497,182
557
557
(724)
(724)
$ 554,110
$ 554,110
$ 581,030
$ 581,030
$ 497,349
$ 497,349
2016
2016
December 31,
December 31,
2015
2015
2014
2014
$ 403,074
$ 403,074
$ 425,179
$ 425,179
$ 403,615
$ 403,615
129,506
129,506
203,781
203,781
121,670
121,670
192,878
192,878
115,563
115,563
169,042
169,042
$ 736,361
$ 736,361
$ 739,727
$ 739,727
$ 688,220
$ 688,220
2016
2016
December 31,
December 31,
2015
2015
2014
2014
$ 133,875
$ 133,875
$ 133,173
$ 133,173
$ 133,964
$ 133,964
26,015
26,015
49,903
49,903
26,251
26,251
49,155
49,155
26,450
26,450
39,074
39,074
$ 209,793
$ 209,793
$ 208,579
$ 208,579
$ 199,488
$ 199,488
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
Goodwill
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consultant staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
2
$1,344,160
$1,344,160
$ 556,993
$ 556,993
$ 149,414
$ 149,414
91,616
$
91,616
$
.71
$
.71
$
.71
$
.71
$
3
3
$1,338,541
$1,338,541
$ 552,509
$ 552,509
$ 146,324
$ 146,324
90,569
$
90,569
$
.71
$
.71
$
.71
$
.71
$
Quarter
Quarter
2016
2016
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,302,625
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,302,625
Gross margin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 531,972
Gross margin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 531,972
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,791
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 133,791
83,416
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
83,416
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.65
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.65
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.64
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.64
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1
1
2015
2015
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,205,563
Net service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,205,563
Gross margin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 494,087
Gross margin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 494,087
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 128,174
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 128,174
77,922
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
77,922
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.59
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.59
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.58
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.58
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1
1
4
4
$1,265,073
$1,265,073
$ 519,202
$ 519,202
$ 124,581
$ 124,581
77,788
$
77,788
$
.61
$
.61
$
.61
$
.61
$
4
4
$1,304,594
$1,304,594
$ 540,081
$ 540,081
$ 144,315
$ 144,315
93,443
$
93,443
$
.71
$
.71
$
.71
$
.71
$
Quarter
Quarter
2
2
$1,272,058
$1,272,058
$ 530,502
$ 530,502
$ 149,235
$ 149,235
89,706
$
89,706
$
.68
$
.68
$
.67
$
.67
$
3
3
$1,312,718
$1,312,718
$ 549,801
$ 549,801
$ 159,306
$ 159,306
96,725
$
96,725
$
.74
$
.74
$
.73
$
.73
$
44
44
45
45
138808_RHI_A/R_10K.indd 45
2/17/17 1:30 AM
ROBERT HALF | 2016 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Note O—Subsequent Events
Note O—Subsequent Events
On February 8, 2017 the Company announced the following:
On February 8, 2017 the Company announced the following:
$.24
Quarterly dividend per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$.24
Quarterly dividend per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 8, 2017
Declaration date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 8, 2017
Declaration date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 24, 2017
Record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 24, 2017
Payment date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 15, 2017
Payment date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 15, 2017
46
46
138808_RHI_A/R_10K.indd 46
2/17/17 1:30 AM
To the Board of Directors and Stockholders of Robert Half International Inc.:
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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, 2016 and 2015,
and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 in
conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all
financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the
material respects, the financial position of Robert Half International Inc. and its subsidiaries at December 31, 2016 and 2015,
information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion,
and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 in
the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016,
conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the
based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the
Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements
information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion,
and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the
the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016,
effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial
based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Reporting appearing in Item 9A. Our responsibility is to express opinions on these financial statements, on the financial
Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements
statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We
and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
Reporting appearing in Item 9A. Our responsibility is to express opinions on these financial statements, on the financial
statements are free of material misstatement and whether effective internal control over financial reporting was maintained in
statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We
all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting
statements are free of material misstatement and whether effective internal control over financial reporting was maintained in
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the
exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our
management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting
audits provide a reasonable basis for our opinions.
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
As discussed in Note B to the consolidated financial statements, the Company changed the manner in which it classifies
deferred tax assets and liabilities on the consolidated balance sheets in 2016.
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
As discussed in Note B to the consolidated financial statements, the Company changed the manner in which it classifies
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
deferred tax assets and liabilities on the consolidated balance sheets in 2016.
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
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
expenditures of the company are being made only in accordance with authorizations of management and directors of the
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
disposition of the company’s assets that could have a material effect on the financial statements.
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
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
disposition of the company’s assets that could have a material effect on the financial statements.
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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
/s/ PricewaterhouseCoopers LLP
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
San Francisco, California
February 13, 2017
/s/ PricewaterhouseCoopers LLP
San Francisco, California
February 13, 2017
47
47
ROBERT HALF | 2016 ANNUAL REPORT
Note O—Subsequent Events
Note O—Subsequent Events
On February 8, 2017 the Company announced the following:
On February 8, 2017 the Company announced the following:
Quarterly dividend per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Quarterly dividend per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Declaration date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Declaration date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 24, 2017
Record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 24, 2017
Payment date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 15, 2017
Payment date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 15, 2017
February 8, 2017
February 8, 2017
$.24
$.24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Robert Half International Inc.:
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all
To the Board of Directors and Stockholders of Robert Half International Inc.:
material respects, the financial position of Robert Half International Inc. and its subsidiaries at December 31, 2016 and 2015,
and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 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
material respects, the financial position of Robert Half International Inc. and its subsidiaries at December 31, 2016 and 2015,
information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion,
and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 in
the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016,
conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the
based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the
Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements
information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion,
and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the
the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016,
effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial
based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Reporting appearing in Item 9A. Our responsibility is to express opinions on these financial statements, on the financial
Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements
statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We
and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
Reporting appearing in Item 9A. Our responsibility is to express opinions on these financial statements, on the financial
statements are free of material misstatement and whether effective internal control over financial reporting was maintained in
statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We
all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting
statements are free of material misstatement and whether effective internal control over financial reporting was maintained in
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the
exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our
management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting
audits provide a reasonable basis for our opinions.
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
deferred tax assets and liabilities on the consolidated balance sheets in 2016.
audits provide a reasonable basis for our opinions.
As discussed in Note B to the consolidated financial statements, the Company changed the manner in which it classifies
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
As discussed in Note B to the consolidated financial statements, the Company changed the manner in which it classifies
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
deferred tax assets and liabilities on the consolidated balance sheets in 2016.
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
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
expenditures of the company are being made only in accordance with authorizations of management and directors of the
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
disposition of the company’s assets that could have a material effect on the financial statements.
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
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
disposition of the company’s assets that could have a material effect on the financial statements.
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
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
/s/ PricewaterhouseCoopers LLP
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
San Francisco, California
February 13, 2017
/s/ PricewaterhouseCoopers LLP
San Francisco, California
February 13, 2017
47
47
138808_RHI_A/R_10K.indd 47
2/17/17 1:30 AM
46
46
ROBERT HALF | 2016 ANNUAL REPORT
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
PART III
None.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
None.
Disclosure Controls and Procedures. Management, including the Company’s Chairman and Chief Executive Officer and
Changes in Internal Control over Financial Reporting. There have been no changes in the Company’s internal controls
Changes in Internal Control over Financial Reporting. There have been no changes in the Company’s internal controls
the Vice Chairman and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s
Item 9A. Controls and Procedures
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
Disclosure Controls and Procedures. Management, including the Company’s Chairman and Chief Executive Officer and
procedures were effective to ensure that information required to be disclosed in the reports the Company files and submits
the Vice Chairman and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and
disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Chairman
forms of the Securities and Exchange Commission and that information required to be disclosed by the Company in the reports
and Chief Executive Officer and the Vice Chairman and Chief Financial Officer concluded that the disclosure controls and
that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its
procedures were effective to ensure that information required to be disclosed in the reports the Company files and submits
principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
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
over financial reporting identified in connection with the evaluation required by Rule 13a-15 of the Securities Exchange Act of
principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
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.
over financial reporting identified in connection with the evaluation required by Rule 13a-15 of the Securities Exchange Act of
Management’s Report on Internal Control over Financial Reporting. Management is responsible for establishing and
1934 that occurred during the Company’s fourth quarter that has materially affected, or is reasonably likely to materially affect,
maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act
the Company’s internal control over financial reporting.
of 1934, as amended). Management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2016, using criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of
Management’s Report on Internal Control over Financial Reporting. Management is responsible for establishing and
Sponsoring Organizations of the Treadway Commission (COSO) and concluded that the Company maintained effective internal
maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act
control over financial reporting as of December 31, 2016.
of 1934, as amended). Management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2016, using criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Sponsoring Organizations of the Treadway Commission (COSO) and concluded that the Company maintained effective internal
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
control over financial reporting as of December 31, 2016.
inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2016, has been audited
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included
inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
herein.
Except as provided below in this Part III, the information required by Items 10 through 14 of Part III is incorporated by
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
PART III
will be mailed to stockholders in connection with the registrant’s annual meeting of stockholders which is scheduled to be held
in May 2017.
Except as provided below in this Part III, the information required by Items 10 through 14 of Part III is incorporated by
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
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Governance,” “The Board and Committees” and “Independent Registered Public Accounting Firm” which Proxy Statement
Equity Compensation Plan Information
will be mailed to stockholders in connection with the registrant’s annual meeting of stockholders which is scheduled to be held
in May 2017.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
A
Number of securities
to be issued upon
—
exercise of
outstanding options,
warrants and rights
—
Weighted average
exercise price of
outstanding options,
warrants and rights
B
$—
Weighted average
exercise price of
outstanding options,
warrants and rights
—
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column A)
C
Number of securities
remaining available for
4,707,916
future issuance under
equity compensation plans
(excluding securities
reflected in column A)
—
Equity Compensation Plan Information
Plan Category
Equity compensation plans approved by security
holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity compensation plans not approved by
security holders. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan Category
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity compensation plans approved by security
holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Since May 2005, all grants have been made pursuant to the Stock Incentive Plan, which was approved by stockholders in
Equity compensation plans not approved by
May 2005 and re-approved in May 2008, May 2011, May 2013, and May 2014. Such plan authorizes the issuance of stock
security holders. . . . . . . . . . . . . . . . . . . . . . . . . . . .
options, restricted stock, stock units and stock appreciation rights to directors, executive officers and employees.
—
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A
—
—
—
—
B
$—
$—
—
$—
C
4,707,916
4,707,916
4,707,916
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.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2016, has been audited
Item 9B. Other Information
by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included
herein.
None.
Item 9B. Other Information
None.
48
48
49
49
138808_RHI_A/R_10K.indd 48
2/17/17 1:30 AM
ROBERT HALF | 2016 ANNUAL REPORT
None.
None.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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
Item 9A. Controls and Procedures
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
Disclosure Controls and Procedures. Management, including the Company’s Chairman and Chief Executive Officer and
procedures were effective to ensure that information required to be disclosed in the reports the Company files and submits
the Vice Chairman and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and
disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Chairman
forms of the Securities and Exchange Commission and that information required to be disclosed by the Company in the reports
and Chief Executive Officer and the Vice Chairman and Chief Financial Officer concluded that the disclosure controls and
that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its
procedures were effective to ensure that information required to be disclosed in the reports the Company files and submits
principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
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
Changes in Internal Control over Financial Reporting. There have been no changes in the Company’s internal controls
that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its
over financial reporting identified in connection with the evaluation required by Rule 13a-15 of the Securities Exchange Act of
principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
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.
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
Management’s Report on Internal Control over Financial Reporting. Management is responsible for establishing and
1934 that occurred during the Company’s fourth quarter that has materially affected, or is reasonably likely to materially affect,
maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act
the Company’s internal control over financial reporting.
of 1934, as amended). Management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2016, using criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of
Management’s Report on Internal Control over Financial Reporting. Management is responsible for establishing and
Sponsoring Organizations of the Treadway Commission (COSO) and concluded that the Company maintained effective internal
maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act
control over financial reporting as of December 31, 2016.
of 1934, as amended). Management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2016, using criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Sponsoring Organizations of the Treadway Commission (COSO) and concluded that the Company maintained effective internal
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
control over financial reporting as of December 31, 2016.
inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2016, has been audited
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included
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, 2016, has been audited
Item 9B. Other Information
by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included
herein.
herein.
None.
None.
Item 9B. Other Information
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
PART III
Except as provided below in this Part III, the information required by Items 10 through 14 of Part III is incorporated by
Except as provided below in this Part III, the information required by Items 10 through 14 of Part III is incorporated by
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
PART III
will be mailed to stockholders in connection with the registrant’s annual meeting of stockholders which is scheduled to be held
in May 2017.
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
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Governance,” “The Board and Committees” and “Independent Registered Public Accounting Firm” which Proxy Statement
Equity Compensation Plan Information
will be mailed to stockholders in connection with the registrant’s annual meeting of stockholders which is scheduled to be held
in May 2017.
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 plans not approved by
security holders. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan Category
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity compensation plans approved by security
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
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
4,707,916
future issuance under
equity compensation plans
(excluding securities
—
reflected in column A)
C
4,707,916
holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Since May 2005, all grants have been made pursuant to the Stock Incentive Plan, which was approved by stockholders in
Equity compensation plans not approved by
May 2005 and re-approved in May 2008, May 2011, May 2013, and May 2014. Such plan authorizes the issuance of stock
security holders. . . . . . . . . . . . . . . . . . . . . . . . . . . .
options, restricted stock, stock units and stock appreciation rights to directors, executive officers and employees.
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,707,916
4,707,916
$—
$—
—
—
—
—
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.
48
48
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Item 15. Exhibits and Financial Statement Schedules
(a) 1. Financial Statements
PART IV
PART IV
Item 15. Exhibits and Financial Statement Schedules
The following consolidated financial statements of the Company and its subsidiaries are included in Item 8 of this report:
(a) 1. Financial Statements
Consolidated statements of financial position at December 31, 2016 and 2015.
Consolidated statements of operations for the years ended December 31, 2016, 2015, and 2014.
The following consolidated financial statements of the Company and its subsidiaries are included in Item 8 of this report:
Consolidated statements of comprehensive income for the years ended December 31, 2016, 2015, and 2014.
Consolidated statements of financial position at December 31, 2016 and 2015.
Consolidated statements of stockholders’ equity for the years ended December 31, 2016, 2015, and 2014.
Consolidated statements of operations for the years ended December 31, 2016, 2015, and 2014.
Consolidated statements of cash flows for the years ended December 31, 2016, 2015, and 2014.
Consolidated statements of comprehensive income for the years ended December 31, 2016, 2015, and 2014.
Notes to consolidated financial statements.
Consolidated statements of stockholders’ equity for the years ended December 31, 2016, 2015, and 2014.
Report of independent registered public accounting firm.
Consolidated statements of cash flows for the years ended December 31, 2016, 2015, and 2014.
Selected quarterly financial data for the years ended December 31, 2016 and 2015 are set forth in Note N—Quarterly
Notes to consolidated financial statements.
Financial Data (Unaudited) included in Item 8 of this report.
Report of independent registered public accounting firm.
2. Financial Statement Schedules
Selected quarterly financial data for the years ended December 31, 2016 and 2015 are set forth in Note N—Quarterly
Financial Data (Unaudited) included in Item 8 of this report.
Schedule II—Valuation and Qualifying Accounts
Schedules I, III, IV and V have been omitted as they are not applicable.
2. Financial Statement Schedules
Schedule II—Valuation and Qualifying Accounts
Schedules I, III, IV and V have been omitted as they are not applicable.
50
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138808_RHI_A/R_10K.indd 50
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3. Exhibits
Exhibit
No.
3. Exhibits
3.1
Exhibit
No.
3.2
3.1
4.1
3.2
*10.1
4.1
*10.2
*10.1
*10.2
*10.3
*10.3
*10.4
*10.4
*10.5
*10.5
*10.6
*10.6
*10.7
*10.7
*10.8
*10.8
Exhibit
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.
Amended and Restated By-Laws, incorporated by reference to Exhibit 3.2 to Registrant’s
Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2016.
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009.
Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
Amended and Restated By-Laws, incorporated by reference to Exhibit 3.2 to Registrant’s
Form of Power of Attorney and Indemnification Agreement, incorporated by reference to
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2016.
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
September 30, 2002.
September 30, 2002.
Employment Agreement between the Registrant and Harold M. Messmer, Jr., incorporated
Form of Power of Attorney and Indemnification Agreement, incorporated by reference to
by reference to (i) Exhibit 10.(c) to the Registrant’s Annual Report on Form 10-K for the
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
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
Employment Agreement between the Registrant and Harold M. Messmer, Jr., incorporated
Report on Form 10-K for the fiscal year ended December 31, 1987, (iv) Exhibit 10.2(d) to
by reference to (i) Exhibit 10.(c) to the Registrant’s Annual Report on Form 10-K for the
the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1988,
fiscal year ended December 31, 1985, (ii) Exhibit 10.2(b) to Registrant’s Registration
(v) Exhibit 28.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
Statement on Form S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to the Registrant’s Annual
ended March 31, 1990, (vi) Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K
Report on Form 10-K for the fiscal year ended December 31, 1987, (iv) Exhibit 10.2(d) to
for the fiscal year ended December 31, 1991, (vii) Exhibit 10.1 to the Registrant’s Quarterly
the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1988,
Report on Form 10-Q for the fiscal quarter ended June 30, 1993, (viii) Exhibit 10.7 to the
(v) Exhibit 28.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993,
ended March 31, 1990, (vi) Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K
(ix) Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
for the fiscal year ended December 31, 1991, (vii) Exhibit 10.1 to the Registrant’s Quarterly
ended March 31, 1995, (x) Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for
Report on Form 10-Q for the fiscal quarter ended June 30, 1993, (viii) Exhibit 10.7 to the
the fiscal year ended December 31, 1995, (xi) Exhibit 10.2 to the Registrant’s Annual
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993,
Report on Form 10-K for the fiscal year ended December 31, 1996, (xii) Exhibit 10.2 to the
(ix) Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997,
ended March 31, 1995, (x) Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for
(xiii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended
the fiscal year ended December 31, 1995, (xi) Exhibit 10.2 to the Registrant’s Annual
December 31, 1998, (xiv) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for
Report on Form 10-K for the fiscal year ended December 31, 1996, (xii) Exhibit 10.2 to the
the fiscal year ended December 31, 1999, (xv) Exhibit 10.1 to the Registrant’s Quarterly
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997,
Report on Form 10-Q for the fiscal quarter ended March 31, 2004, (xvi) Exhibit 10.5 to the
(xiii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2008, and
December 31, 1998, (xiv) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for
(xvii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year
the fiscal year ended December 31, 1999, (xv) Exhibit 10.1 to the Registrant’s Quarterly
ended December 31, 2010.
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
Amended and Restated Retirement Agreement between Registrant and Harold M. Messmer
(xvii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year
Jr., incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-
ended December 31, 2010.
K dated December 7, 2006.
Amended and Restated Retirement Agreement between Registrant and Harold M. Messmer
Amended and Restated Deferred Compensation Plan, incorporated by reference to Exhibit
Jr., incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-
10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
K dated December 7, 2006.
June 30, 2008.
Amended and Restated Deferred Compensation Plan, incorporated by reference to Exhibit
Amended and Restated Severance Agreement dated as of February 9, 2011, between
10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
Registrant and Paul F. Gentzkow, incorporated by reference to Exhibit 10.8 to Registrant’s
June 30, 2008.
Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
Amended and Restated Severance Agreement dated as of February 9, 2011, between
Agreement dated as of July 31, 1995, between Registrant and Paul F. Gentzkow,
Registrant and Paul F. Gentzkow, incorporated by reference to Exhibit 10.8 to Registrant’s
incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q
Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
for the fiscal quarter ended September 30, 2000.
Agreement dated as of July 31, 1995, between Registrant and Paul F. Gentzkow,
Form of Amended and Restated Severance Agreement, incorporated by reference to Exhibit
incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q
10.10 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31,
for the fiscal quarter ended September 30, 2000.
2010.
Form of Amended and Restated Severance Agreement, incorporated by reference to Exhibit
Form of Indemnification Agreement for Directors of the Registrant, incorporated by
10.10 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31,
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
2010.
Form 10-K for the fiscal year ended December 31, 1993.
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.
51
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ROBERT HALF | 2016 ANNUAL REPORT
Item 15. Exhibits and Financial Statement Schedules
(a) 1. Financial Statements
PART IV
PART IV
Item 15. Exhibits and Financial Statement Schedules
The following consolidated financial statements of the Company and its subsidiaries are included in Item 8 of this report:
(a) 1. Financial Statements
Consolidated statements of financial position at December 31, 2016 and 2015.
Consolidated statements of operations for the years ended December 31, 2016, 2015, and 2014.
The following consolidated financial statements of the Company and its subsidiaries are included in Item 8 of this report:
Consolidated statements of comprehensive income for the years ended December 31, 2016, 2015, and 2014.
Consolidated statements of financial position at December 31, 2016 and 2015.
Consolidated statements of stockholders’ equity for the years ended December 31, 2016, 2015, and 2014.
Consolidated statements of operations for the years ended December 31, 2016, 2015, and 2014.
Consolidated statements of cash flows for the years ended December 31, 2016, 2015, and 2014.
Consolidated statements of comprehensive income for the years ended December 31, 2016, 2015, and 2014.
Notes to consolidated financial statements.
Consolidated statements of stockholders’ equity for the years ended December 31, 2016, 2015, and 2014.
Report of independent registered public accounting firm.
Consolidated statements of cash flows for the years ended December 31, 2016, 2015, and 2014.
Selected quarterly financial data for the years ended December 31, 2016 and 2015 are set forth in Note N—Quarterly
Notes to consolidated financial statements.
Financial Data (Unaudited) included in Item 8 of this report.
Report of independent registered public accounting firm.
2. Financial Statement Schedules
Selected quarterly financial data for the years ended December 31, 2016 and 2015 are set forth in Note N—Quarterly
Financial Data (Unaudited) included in Item 8 of this report.
Schedule II—Valuation and Qualifying Accounts
Schedules I, III, IV and V have been omitted as they are not applicable.
2. Financial Statement Schedules
Schedule II—Valuation and Qualifying Accounts
Schedules I, III, IV and V have been omitted as they are not applicable.
50
50
3. Exhibits
Exhibit
No.
3. Exhibits
3.1
Exhibit
No.
3.2
3.1
4.1
3.2
*10.1
4.1
*10.2
*10.1
*10.2
*10.3
*10.3
*10.4
*10.4
*10.5
*10.5
*10.6
*10.6
*10.7
*10.7
*10.8
*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.
Exhibit
Amended and Restated By-Laws, incorporated by reference to Exhibit 3.2 to Registrant’s
Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2016.
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009.
Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
Amended and Restated By-Laws, incorporated by reference to Exhibit 3.2 to Registrant’s
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2016.
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
Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
September 30, 2002.
Employment Agreement between the Registrant and Harold M. Messmer, Jr., incorporated
Form of Power of Attorney and Indemnification Agreement, incorporated by reference to
by reference to (i) Exhibit 10.(c) to the Registrant’s Annual Report on Form 10-K for the
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
fiscal year ended December 31, 1985, (ii) Exhibit 10.2(b) to Registrant’s Registration
September 30, 2002.
Statement on Form S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to the Registrant’s Annual
Employment Agreement between the Registrant and Harold M. Messmer, Jr., incorporated
Report on Form 10-K for the fiscal year ended December 31, 1987, (iv) Exhibit 10.2(d) to
by reference to (i) Exhibit 10.(c) to the Registrant’s Annual Report on Form 10-K for the
the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1988,
fiscal year ended December 31, 1985, (ii) Exhibit 10.2(b) to Registrant’s Registration
(v) Exhibit 28.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
Statement on Form S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to the Registrant’s Annual
ended March 31, 1990, (vi) Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K
Report on Form 10-K for the fiscal year ended December 31, 1987, (iv) Exhibit 10.2(d) to
for the fiscal year ended December 31, 1991, (vii) Exhibit 10.1 to the Registrant’s Quarterly
the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1988,
Report on Form 10-Q for the fiscal quarter ended June 30, 1993, (viii) Exhibit 10.7 to the
(v) Exhibit 28.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993,
ended March 31, 1990, (vi) Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K
(ix) Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
for the fiscal year ended December 31, 1991, (vii) Exhibit 10.1 to the Registrant’s Quarterly
ended March 31, 1995, (x) Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for
Report on Form 10-Q for the fiscal quarter ended June 30, 1993, (viii) Exhibit 10.7 to the
the fiscal year ended December 31, 1995, (xi) Exhibit 10.2 to the Registrant’s Annual
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993,
Report on Form 10-K for the fiscal year ended December 31, 1996, (xii) Exhibit 10.2 to the
(ix) Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997,
ended March 31, 1995, (x) Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for
(xiii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended
the fiscal year ended December 31, 1995, (xi) Exhibit 10.2 to the Registrant’s Annual
December 31, 1998, (xiv) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for
Report on Form 10-K for the fiscal year ended December 31, 1996, (xii) Exhibit 10.2 to the
the fiscal year ended December 31, 1999, (xv) Exhibit 10.1 to the Registrant’s Quarterly
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997,
Report on Form 10-Q for the fiscal quarter ended March 31, 2004, (xvi) Exhibit 10.5 to the
(xiii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2008, and
December 31, 1998, (xiv) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for
(xvii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year
the fiscal year ended December 31, 1999, (xv) Exhibit 10.1 to the Registrant’s Quarterly
ended December 31, 2010.
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
Amended and Restated Retirement Agreement between Registrant and Harold M. Messmer
(xvii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year
Jr., incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-
ended December 31, 2010.
K dated December 7, 2006.
Amended and Restated Retirement Agreement between Registrant and Harold M. Messmer
Amended and Restated Deferred Compensation Plan, incorporated by reference to Exhibit
Jr., incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-
10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
K dated December 7, 2006.
June 30, 2008.
Amended and Restated Deferred Compensation Plan, incorporated by reference to Exhibit
Amended and Restated Severance Agreement dated as of February 9, 2011, between
10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
Registrant and Paul F. Gentzkow, incorporated by reference to Exhibit 10.8 to Registrant’s
June 30, 2008.
Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
Amended and Restated Severance Agreement dated as of February 9, 2011, between
Agreement dated as of July 31, 1995, between Registrant and Paul F. Gentzkow,
Registrant and Paul F. Gentzkow, incorporated by reference to Exhibit 10.8 to Registrant’s
incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q
Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
for the fiscal quarter ended September 30, 2000.
Agreement dated as of July 31, 1995, between Registrant and Paul F. Gentzkow,
Form of Amended and Restated Severance Agreement, incorporated by reference to Exhibit
incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q
10.10 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31,
for the fiscal quarter ended September 30, 2000.
2010.
Form of Amended and Restated Severance Agreement, incorporated by reference to Exhibit
Form of Indemnification Agreement for Directors of the Registrant, incorporated by
10.10 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31,
reference to (i) Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K for the fiscal
2010.
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.
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.
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ROBERT HALF | 2016 ANNUAL REPORT
Exhibit
No.
*10.9
Exhibit
No.
*10.9
*10.10
*10.11
*10.10
*10.11
*10.12
*10.12
*10.13
*10.14
*10.13
*10.14
*10.15
*10.15
*10.16
*10.16
*10.17
*10.17
*10.18
*10.18
*10.19
*10.19
*10.20
*10.20
*10.21
*10.21
*10.22
*10.22
*10.23
*10.23
21.1
23.1
21.1
31.1
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.
Exhibit
Form of Indemnification Agreement for Executive Officers of Registrant, incorporated by
Senior Executive Retirement Plan, incorporated by reference to Exhibit 10.13 to
reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
quarter ended September 30, 2000.
Collateral Assignment of Split Dollar Insurance Agreement, incorporated by reference to
Senior Executive Retirement Plan, incorporated by reference to Exhibit 10.13 to
(i) Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
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.
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
Form of Part-Time Employment Agreement, as amended and restated, incorporated by
ended September 30, 2000, and (ii) Exhibit 10.18 to the Registrant’s Annual Report on
reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
Form 10-K for the fiscal year ended December 31, 2003.
quarter ended September 30, 2014.
Form of Part-Time Employment Agreement, as amended and restated, incorporated by
Annual Performance Bonus Plan, as amended and restated, incorporated by reference to
reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
Exhibit 99.1 to Registrant’s Current Report on Form 8-K dated May 23, 2013.
quarter ended September 30, 2014.
Summary of Outside Director Cash Remuneration, incorporated by reference to Exhibit
Annual Performance Bonus Plan, as amended and restated, incorporated by reference to
10.2 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March
Exhibit 99.1 to Registrant’s Current Report on Form 8-K dated May 23, 2013.
31, 2010.
Summary of Outside Director Cash Remuneration, incorporated by reference to Exhibit
Stock Incentive Plan, as amended and restated, incorporated by reference to Exhibit 10.2 to
10.2 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March
the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
31, 2010.
2014.
Stock Incentive Plan, as amended and restated, incorporated by reference to Exhibit 10.2 to
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective
the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
April 15, 2013, incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report
2014.
on Form 10-Q for the fiscal quarter ended March 31, 2013.
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective
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
through April 14, 2013, incorporated by reference to Exhibit 99.3 to Registrant’s Current
on Form 10-Q for the fiscal quarter ended March 31, 2013.
Report on Form 8-K dated May 3, 2005.
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective
Amendment to Restricted Share Agreement dated as of May 9, 2012, between Registrant
through April 14, 2013, incorporated by reference to Exhibit 99.3 to Registrant’s Current
and Harold M. Messmer, Jr., incorporated by reference to Exhibit 10.1 to Registrant’s
Report on Form 8-K dated May 3, 2005.
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012.
Amendment to Restricted Share Agreement dated as of May 9, 2012, between Registrant
Form of Amendment to Restricted Share Agreement dated as of May 9, 2012, incorporated
and Harold M. Messmer, Jr., incorporated by reference to Exhibit 10.1 to Registrant’s
by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the fiscal
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012.
quarter ended June 30, 2012.
Form of Amendment to Restricted Share Agreement dated as of May 9, 2012, incorporated
Form of Amendment to Restricted Share Agreement dated as of November 8, 2012,
by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the fiscal
incorporated by reference to Exhibit 10.27 to Registrant’s Annual Report on Form 10-K for
quarter ended June 30, 2012.
the fiscal year ended December 31, 2012.
Form of Amendment to Restricted Share Agreement dated as of November 8, 2012,
Stock Incentive Plan—Form of Stock Option Agreement for Executive Officers,
incorporated by reference to Exhibit 10.27 to Registrant’s Annual Report on Form 10-K for
incorporated by reference to Exhibit 99.4 to Registrant’s Current Report on Form 8-K dated
the fiscal year ended December 31, 2012.
May 3, 2005.
Stock Incentive Plan—Form of Stock Option Agreement for Executive Officers,
Stock Incentive Plan—Form of Restricted Share Agreement for Outside Directors,
incorporated by reference to Exhibit 99.4 to Registrant’s Current Report on Form 8-K dated
incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q
May 3, 2005.
for the fiscal quarter ended March 31, 2006.
Stock Incentive Plan—Form of Restricted Share Agreement for Outside Directors,
Stock Incentive Plan—Form of Stock Option Agreement for Outside Directors,
incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q
incorporated by reference to Exhibit 99.6 to Registrant’s Current Report on Form 8-K dated
for the fiscal quarter ended March 31, 2006.
May 3, 2005.
Stock Incentive Plan—Form of Stock Option Agreement for Outside Directors,
Subsidiaries of the Registrant.
incorporated by reference to Exhibit 99.6 to Registrant’s Current Report on Form 8-K dated
May 3, 2005.
Independent Registered Public Accounting Firm’s Consent.
Subsidiaries of the Registrant.
Rule 13a-14(a) Certification of Chief Executive Officer.
Independent Registered Public Accounting Firm’s Consent.
Rule 13a-14(a) Certification of Chief Executive Officer.
52
52
138808_RHI_A/R_10K.indd 52
2/17/17 1:30 AM
Rule 13a-14(a) Certification of Chief Financial Officer.
Rule 1350 Certification of Chief Executive Officer.
Rule 1350 Certification of Chief Financial Officer.
Rule 13a-14(a) Certification of Chief Financial Officer.
Part II, Item 8 of this Form 10-K formatted in XBRL.
Rule 1350 Certification of Chief Executive Officer.
Exhibit
Exhibit
* Management contract or compensatory plan.
Part II, Item 8 of this Form 10-K formatted in XBRL.
Rule 1350 Certification of Chief Financial Officer.
* Management contract or compensatory plan.
Item 16. Form 10-K Summary
Item 16. Form 10-K Summary
Exhibit
No.
31.2
Exhibit
32.1
No.
32.2
31.2
101.1
32.1
32.2
101.1
None.
None.
53
53
ROBERT HALF | 2016 ANNUAL REPORT
Exhibit
No.
*10.9
Exhibit
No.
*10.9
*10.10
*10.11
*10.10
*10.11
*10.12
*10.12
*10.13
*10.14
*10.13
*10.14
*10.15
*10.15
*10.16
*10.16
*10.17
*10.17
*10.18
*10.18
*10.19
*10.19
*10.20
*10.20
*10.21
*10.21
*10.22
*10.22
*10.23
*10.23
21.1
23.1
31.1
21.1
23.1
31.1
Exhibit
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.
Form of Indemnification Agreement for Executive Officers of Registrant, incorporated by
Senior Executive Retirement Plan, incorporated by reference to Exhibit 10.13 to
reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
quarter ended September 30, 2000.
Collateral Assignment of Split Dollar Insurance Agreement, incorporated by reference to
Senior Executive Retirement Plan, incorporated by reference to Exhibit 10.13 to
(i) Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
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.
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
Form of Part-Time Employment Agreement, as amended and restated, incorporated by
ended September 30, 2000, and (ii) Exhibit 10.18 to the Registrant’s Annual Report on
reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
Form 10-K for the fiscal year ended December 31, 2003.
quarter ended September 30, 2014.
Form of Part-Time Employment Agreement, as amended and restated, incorporated by
Annual Performance Bonus Plan, as amended and restated, incorporated by reference to
reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
Exhibit 99.1 to Registrant’s Current Report on Form 8-K dated May 23, 2013.
quarter ended September 30, 2014.
Summary of Outside Director Cash Remuneration, incorporated by reference to Exhibit
Annual Performance Bonus Plan, as amended and restated, incorporated by reference to
10.2 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March
Exhibit 99.1 to Registrant’s Current Report on Form 8-K dated May 23, 2013.
31, 2010.
Summary of Outside Director Cash Remuneration, incorporated by reference to Exhibit
Stock Incentive Plan, as amended and restated, incorporated by reference to Exhibit 10.2 to
10.2 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March
the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
31, 2010.
2014.
Stock Incentive Plan, as amended and restated, incorporated by reference to Exhibit 10.2 to
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective
the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
April 15, 2013, incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report
2014.
on Form 10-Q for the fiscal quarter ended March 31, 2013.
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective
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
through April 14, 2013, incorporated by reference to Exhibit 99.3 to Registrant’s Current
on Form 10-Q for the fiscal quarter ended March 31, 2013.
Report on Form 8-K dated May 3, 2005.
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective
Amendment to Restricted Share Agreement dated as of May 9, 2012, between Registrant
through April 14, 2013, incorporated by reference to Exhibit 99.3 to Registrant’s Current
and Harold M. Messmer, Jr., incorporated by reference to Exhibit 10.1 to Registrant’s
Report on Form 8-K dated May 3, 2005.
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012.
Amendment to Restricted Share Agreement dated as of May 9, 2012, between Registrant
Form of Amendment to Restricted Share Agreement dated as of May 9, 2012, incorporated
and Harold M. Messmer, Jr., incorporated by reference to Exhibit 10.1 to Registrant’s
by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the fiscal
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012.
quarter ended June 30, 2012.
Form of Amendment to Restricted Share Agreement dated as of May 9, 2012, incorporated
Form of Amendment to Restricted Share Agreement dated as of November 8, 2012,
by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the fiscal
incorporated by reference to Exhibit 10.27 to Registrant’s Annual Report on Form 10-K for
quarter ended June 30, 2012.
the fiscal year ended December 31, 2012.
Form of Amendment to Restricted Share Agreement dated as of November 8, 2012,
Stock Incentive Plan—Form of Stock Option Agreement for Executive Officers,
incorporated by reference to Exhibit 10.27 to Registrant’s Annual Report on Form 10-K for
incorporated by reference to Exhibit 99.4 to Registrant’s Current Report on Form 8-K dated
the fiscal year ended December 31, 2012.
May 3, 2005.
Stock Incentive Plan—Form of Stock Option Agreement for Executive Officers,
Stock Incentive Plan—Form of Restricted Share Agreement for Outside Directors,
incorporated by reference to Exhibit 99.4 to Registrant’s Current Report on Form 8-K dated
incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q
May 3, 2005.
for the fiscal quarter ended March 31, 2006.
Stock Incentive Plan—Form of Restricted Share Agreement for Outside Directors,
Stock Incentive Plan—Form of Stock Option Agreement for Outside Directors,
incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q
incorporated by reference to Exhibit 99.6 to Registrant’s Current Report on Form 8-K dated
for the fiscal quarter ended March 31, 2006.
May 3, 2005.
Stock Incentive Plan—Form of Stock Option Agreement for Outside Directors,
Subsidiaries of the Registrant.
incorporated by reference to Exhibit 99.6 to Registrant’s Current Report on Form 8-K dated
Independent Registered Public Accounting Firm’s Consent.
May 3, 2005.
Rule 13a-14(a) Certification of Chief Executive Officer.
Subsidiaries of the Registrant.
Independent Registered Public Accounting Firm’s Consent.
Rule 13a-14(a) Certification of Chief Executive Officer.
52
52
Exhibit
No.
31.2
Exhibit
32.1
No.
31.2
32.2
32.1
101.1
32.2
Exhibit
Rule 13a-14(a) Certification of Chief Financial Officer.
Rule 1350 Certification of Chief Executive Officer.
Exhibit
Rule 13a-14(a) Certification of Chief Financial Officer.
Rule 1350 Certification of Chief Financial Officer.
Rule 1350 Certification of Chief Executive Officer.
Part II, Item 8 of this Form 10-K formatted in XBRL.
Rule 1350 Certification of Chief Financial Officer.
* Management contract or compensatory plan.
101.1
Part II, Item 8 of this Form 10-K formatted in XBRL.
* Management contract or compensatory plan.
Item 16. Form 10-K Summary
None.
Item 16. Form 10-K Summary
None.
53
53
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ROBERT HALF | 2016 ANNUAL REPORT
Schedule II—Valuation and Qualifying Accounts
(in thousands)
Schedule II—Valuation and Qualifying Accounts
Beginning of
Charged to
Balance at
Period
(in thousands)
Expenses
Deductions
Translation
Adjustments
Balance at
End of Period
Balance at
Beginning of
27,261
Period
37,044
Charged to
9,825
Expenses
1,742
(3,670)
Deductions
(6,056)
Translation
(2,872) $
Adjustments
Balance at
30,544
End of Period
(3,169) $
29,561
27,261
30,544
37,044
29,561
30,544
35,087
29,561
26,329
35,087
26,329
9,825
12,005
1,742
6,283
12,005
9,192
6,283
2,160
9,192
2,160
(3,670)
(5,353)
(6,056)
(8,068)
(5,353)
(9,907)
(8,068)
(9,517)
(9,907)
(9,517)
(2,872) $
(2,109) $
(3,169) $
(1,447) $
(2,109) $
(1,239) $
(1,447) $
(65) $
(1,239) $
(65) $
30,544
35,087
29,561
26,329
35,087
33,133
26,329
18,907
33,133
18,907
Year Ended December 31, 2014
Allowance for doubtful accounts
receivable
Deferred tax valuation allowance
Year Ended December 31, 2014
Year Ended December 31, 2015
Allowance for doubtful accounts
Allowance for doubtful accounts
receivable
receivable
Deferred tax valuation allowance
Deferred tax valuation allowance
Year Ended December 31, 2015
Year Ended December 31, 2016
Allowance for doubtful accounts
Allowance for doubtful accounts
receivable
receivable
Deferred tax valuation allowance
Deferred tax valuation allowance
Year Ended December 31, 2016
Allowance for doubtful accounts
receivable
Deferred tax valuation allowance
$
$
$
$
$
$
$
$
$
$
$
$
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, 2017
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, 2017
Date: February 13, 2017
Date: February 13, 2017
Date: February 13, 2017
Date: February 13, 2017
Date: February 13, 2017
Date: February 13, 2017
Date: February 13, 2017
/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/ MARC H. MORIAL
Marc H. Morial, 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:
54
138808_RHI_A/R_10K.indd 54
2/17/17 1:30 AM
55
55
ROBERT HALF | 2016 ANNUAL REPORT
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.
Date: February 13, 2017
Date: February 13, 2017
Date: February 13, 2017
Date: February 13, 2017
Date: February 13, 2017
Date: February 13, 2017
Date: February 13, 2017
Date: February 13, 2017
Date: February 13, 2017
/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/ MARC H. MORIAL
Marc H. Morial, 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:
By:
54
Schedule II—Valuation and Qualifying Accounts
(in thousands)
Schedule II—Valuation and Qualifying Accounts
(in thousands)
Charged to
Expenses
Deductions
Balance at
Beginning of
Period
Translation
Adjustments
Balance at
End of Period
Year Ended December 31, 2014
Allowance for doubtful accounts
receivable
Deferred tax valuation allowance
Year Ended December 31, 2014
Year Ended December 31, 2015
Allowance for doubtful accounts
Allowance for doubtful accounts
receivable
receivable
Deferred tax valuation allowance
Deferred tax valuation allowance
Year Ended December 31, 2015
Year Ended December 31, 2016
Allowance for doubtful accounts
Allowance for doubtful accounts
receivable
receivable
Deferred tax valuation allowance
Deferred tax valuation allowance
Year Ended December 31, 2016
Allowance for doubtful accounts
receivable
Deferred tax valuation allowance
Balance at
Beginning of
Period
27,261
37,044
$
$
Charged to
Expenses
9,825
1,742
Deductions
(3,670)
(6,056)
Translation
Adjustments
(2,872) $
(3,169) $
Balance at
30,544
End of Period
29,561
$
$
$
$
$
$
$
$
$
$
27,261
30,544
37,044
29,561
30,544
35,087
29,561
26,329
35,087
26,329
9,825
12,005
1,742
6,283
12,005
9,192
6,283
2,160
9,192
2,160
(3,670)
(5,353)
(6,056)
(8,068)
(5,353)
(9,907)
(8,068)
(9,517)
(9,907)
(9,517)
(2,872) $
(2,109) $
(3,169) $
(1,447) $
(2,109) $
(1,239) $
(1,447) $
(65) $
(1,239) $
(65) $
30,544
35,087
29,561
26,329
35,087
33,133
26,329
18,907
33,133
18,907
55
55
138808_RHI_A/R_10K.indd 55
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ROBERT HALF | 2016 ANNUAL REPORT
SUBSIDIARIES OF ROBERT HALF INTERNATIONAL INC.
Name of Subsidiary
RH Holding Company, 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.
Robert Half Corporation
Robert Half Nevada Staff, Inc.
Robert Half of Pennsylvania, Inc.
Protiviti Pty. Limited
Robert Half Australia Pty. Limited
Robert Half Austria GmbH
Robert Half BVBA
Robert Half Trabalho Temporário Ltda.
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
EXHIBIT 21.1
Jurisdiction of
Incorporation
California
California
California
California
Delaware
Delaware
Delaware
Delaware
Maryland
Nevada
Nevada
Pennsylvania
Australia
Australia
Austria
Belgium
Brazil
Bulgaria
Canada
Chile
China
China
China, Hong Kong SAR
China, Hong Kong SAR
France
Robert Half International France SAS
Name of Subsidiary
Robert Half SAS
Protiviti GmbH
Robert Half Deutschland Beteiligungsgesellschaft mbH
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.
Robert Half New Zealand Limited
Protiviti Pte. Ltd.
Robert Half International Pte. Ltd.
Robert Half GmbH
Robert Half International (Dubai) Ltd.
Protiviti Limited
Robert Half Holdings Limited
Robert Half Limited
138808_RHI_A/R_10K.indd 56
2/17/17 1:30 AM
Jurisdiction of
Incorporation
France
France
Germany
Germany
Germany
India
Italy
Italy
Japan
Japan
Luxembourg
Luxembourg
Netherlands
Netherlands
Netherlands
New Zealand
Singapore
Singapore
Switzerland
United Arab Emirates
United Kingdom
United Kingdom
United Kingdom
ROBERT HALF | 2016 ANNUAL REPORT
Name of Subsidiary
RH Holding Company, 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.
Robert Half Corporation
Robert Half Nevada Staff, Inc.
Robert Half of Pennsylvania, Inc.
Protiviti Pty. Limited
Robert Half Australia Pty. Limited
Robert Half Austria GmbH
Robert Half BVBA
Robert Half Trabalho Temporário Ltda.
Protiviti EOOD
Robert Half Canada Inc.
SUBSIDIARIES OF ROBERT HALF INTERNATIONAL INC.
EXHIBIT 21.1
Jurisdiction of
Incorporation
Name of Subsidiary
Robert Half International France SAS
Robert Half SAS
Protiviti GmbH
Robert Half Deutschland Beteiligungsgesellschaft mbH
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.
Robert Half New Zealand Limited
Protiviti Pte. Ltd.
Robert Half International Pte. Ltd.
Robert Half GmbH
Robert Half International (Dubai) Ltd.
Protiviti Limited
Robert Half Holdings Limited
Robert Half Limited
California
California
California
California
Delaware
Delaware
Delaware
Delaware
Maryland
Nevada
Nevada
Australia
Australia
Austria
Belgium
Brazil
Bulgaria
Canada
Chile
China
China
Pennsylvania
Jurisdiction of
Incorporation
France
France
Germany
Germany
Germany
India
Italy
Italy
Japan
Japan
Luxembourg
Luxembourg
Netherlands
Netherlands
Netherlands
New Zealand
Singapore
Singapore
Switzerland
United Arab Emirates
United Kingdom
United Kingdom
United Kingdom
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
China, Hong Kong SAR
China, Hong Kong SAR
France
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ROBERT HALF | 2016 ANNUAL REPORT
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Certification Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934
EXHIBIT 23.1
EXHIBIT 31.1
We hereby consent to the incorporation by reference in the Registration Statements 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, 2017, 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, 2017
I, Harold M. Messmer, Jr., certify that:
I have reviewed this report on Form 10-K of Robert Half International Inc.;
1.
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period
covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth 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)
all significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date: February 13, 2017
/s/ HAROLD M. MESSMER, JR.
Harold M. Messmer, Jr.
Chairman and Chief Executive Officer
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ROBERT HALF | 2016 ANNUAL REPORT
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Certification Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934
EXHIBIT 23.1
EXHIBIT 31.1
We hereby consent to the incorporation by reference in the Registration Statements 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, 2017, 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, 2017
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, 2017
/s/ HAROLD M. MESSMER, JR.
Harold M. Messmer, Jr.
Chairman and Chief Executive Officer
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ROBERT HALF | 2016 ANNUAL REPORT
EXHIBIT 31.2
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, 2016 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, 2017
/s/ Harold M. Messmer, Jr.
Harold M. Messmer, Jr.
Chief Executive Officer
Robert Half International Inc.
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, 2017
/s/ M. KEITH WADDELL
M. Keith Waddell
Vice Chairman, President and
Chief Financial Officer
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ROBERT HALF | 2016 ANNUAL REPORT
EXHIBIT 31.2
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, 2016 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, 2017
/s/ Harold M. Messmer, Jr.
Harold M. Messmer, Jr.
Chief Executive Officer
Robert Half International Inc.
Certification Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934
I, M. Keith Waddell, certify that:
1.
2.
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;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period
covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth 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)
all significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date: February 13, 2017
/s/ M. KEITH WADDELL
M. Keith Waddell
Vice Chairman, President and
Chief Financial Officer
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ROBERT HALF | 2016 ANNUAL REPORT
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, 2016 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, 2017
/s/ M. Keith Waddell
M. Keith Waddell
Chief Financial Officer
Robert Half International Inc.
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ROBERT HALF | 2016 ANNUAL REPORT
CORPORATE DIRECTORY
BOARD OF DIRECTORS
MANAGEMENT
Andrew S. Berwick, Jr.
President and Chief Executive Officer of Berwick-Pacific Corporation,
a real estate development company
Executive Officers
Harold M. Messmer, Jr.
Chairman of the Board and Chief Executive Officer
Harold M. Messmer, Jr.
Chairman of the Board and Chief Executive Officer of Robert Half International
Marc H. Morial
President and Chief Executive Officer of the National Urban League
Barbara J. Novogradac
President of Novogradac Investment Company, a private real estate investment
company
Robert J. Pace
Founder and Chief Executive Officer of HundredX, Inc., a privately held
technology company
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
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, Secretary and General Counsel
Kenneth D. Gitlin
Senior Vice President, Operational Support
Stephen M. Hilton
Senior Vice President, Corporate Controller and Assistant Treasurer
Corporate Headquarters
2884 Sand Hill Road
Menlo Park, California 94025
650.234.6000
www.roberthalf.com
Registrar and Stock Transfer Agent
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
Christopher M. Hoffmann
Senior Vice President, Commercial Transactions and Law
Tami A. Munns
Senior Vice President, Corporate Services — Staffing
M. Sean Perry
Senior Vice President, Chief Information Officer
Lynne C. Smith
Senior Vice President, Human Resources and Compensation
Reesa M. Staten
Senior Vice President, Corporate Communications
Paula M. Streit
Senior Vice President, Corporate Services — Protiviti
Michelle M. Whitman
Senior Vice President, Marketing
ROBERT HALF | 2016 ANNUAL REPORTRobert Half Board of Directors (from left) Andrew S. Berwick, Jr.; Barbara J. Novogradac; M. Keith Waddell; Harold M. Messmer, Jr.; Frederick A. Richman; Marc H. Morial; and Robert J. Pace. ACCOUNTEMPS®
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