ANNUAL
REPORT
2 0 1 9
Accountemps®
Robert Half®
Finance & Accounting
Robert Half®
Management Resources
Robert Half® Technology
OfficeTeam®
Robert Half® Legal
The Creative Group®
Protiviti®
About Us
Founded in 1948, Robert Half is the world’s first and largest
specialized staffing firm and a recognized leader in professional
consulting and staffing services.
Robert Half is a company with a purpose. We provide job
seekers with meaningful employment, and we assist businesses
in locating the talent they need to succeed and expand. Our
staffing professionals have deep knowledge of the local labor
market and use artificial intelligence that’s trained using the
millions of placements we’ve made over seven decades in
business. This combination of personal service and technology
guides us in finding the right fit for both employers and job
candidates.
Our staffing divisions serve the finance and accounting,
technology, administrative, legal, and creative and marketing
fields. We have more than 300 staffing locations worldwide,
including 87 offices in 17 countries outside the United States.
Robert Half also 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. Protiviti and its independently
and locally owned Member Firms serve clients through a network
of more than 85 locations in over 27 countries.
Selected Financial Data
(in millions, except per share amounts)
YEARS ENDED DEC. 31
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
INCOME
STATEMENT DATA
Service revenues
$ 6,074.4 $ 5,800.3 $ 5,266.8 $ 5,250.4 $ 5,094.9 $ 4,695.0 $ 4,245.9 $ 4,111.2 $ 3,777.0 $ 3,175.1 $ 3,036.5
Operating income
$
621.8
$ 588.9 $
517.3 $ 554.5 $ 580.7 $
497.2 $ 398.3 $ 343.4 $
249.4 $
115.0 $
66.8
Net income
$ 454.4 $ 434.3 $ 290.6 $ 343.4 $
357.8 $ 305.9 $ 252.2 $
209.9 $
149.9 $
66.1 $
37.3
Diluted net income
per share, as reported
Diluted net
income per share,
non-GAAP*
$
3.90
$
3.57 $
2.33 $
2.67 $
2.69 $
2.26 $
1.83 $
1.50 $
1.04 $
0.44 $
0.24
$
3.61 $
2.60
Diluted shares
116.4
121.6
124.9
128.8
132.9
135.5
137.6
139.4
141.8
144.0
146.6
Dividends declared
per share
CASH FLOW DATA
Net cash flows
provided by
operating activities
$
1.24 $
1.12 $
.96 $
.88 $
.80 $
.72 $
.64 $
.60 $
.56 $
.52 $
.48
$
519.6
$ 572.3
$ 453.0 $
442.1 $ 438.2 $ 340.7 $ 309.2 $
289.2 $ 256.3
$
175.9 $ 240.2
Capital expenditures
$
59.5 $
42.5
$
40.8 $
83.0 $
75.1 $
62.8 $
53.7 $
50.1 $
56.5 $
35.1 $
41.2
BALANCE SHEET
DATA AT YEAR-END
Total assets
$ 2,311.4 $ 1,903.1 $ 1,867.5 $ 1,778.0 $ 1,671.0 $ 1,620.8 $ 1,497.7
$ 1,367.0 $ 1,297.4 $ 1,272.6 $ 1,283.5
Debt financing
$
0.5 $
0.7 $
0.8 $
1.0 $
1.2 $
1.3 $
1.4 $
1.5 $
1.7 $
1.8 $
1.9
Stockholders’ equity
$ 1,143.7 $ 1,063.2 $ 1,105.3 $ 1,086.6 $ 1,003.8 $
979.9 $
919.6 $ 842.0 $ 800.5 $ 834.4 $
899.8
* See Appendix A to the Company’s Proxy Statement mailed to stockholders in April 2020 for a reconciliation of the non-GAAP measures to the most comparable GAAP measures:
https://www.roberthalf.com/investor-center/sec-filings/definitive-14a.
1
2019 ANNUAL REPORT | ROBERT HALF
To Our Stockholders
As we write this letter to our shareholders, we are in the midst of a global pandemic
crisis. An increasing number of people are affected each day by the coronavirus,
whether medically or by unprecedented changes in how we all work and live. Most of
what appears on the following pages reflects Robert Half’s performance in 2019. We
are sensitive to the fact that the current environment has greater uncertainty, although
we are confident we are well-positioned to manage through these challenging times.
2019. Protiviti continued to expand its
consulting solutions and strengthen its
client base. Its revenues of $1.1 billion
increased 18 percent over the prior year
and exceeded $1 billion for the first time
in its 18-year history. It now represents
19 percent of total revenues.
2019
Service Revenues
$6.1 Billion
Operating Income
$622 Million
Companywide
operating income
grew to a record $622
million, up 6 percent
from the previous year.
Net income was $454
million, 5 percent
higher than in the year-
ago period. Diluted net
income per share was
$3.90, compared to
$3.57 in 2018, a
9 percent increase. The
net income per share
comparison benefited
from 4 percent fewer shares outstanding
in 2019.
Return on
Invested Capital
41%
Robert Half turned in another solid
performance in 2019. We reported record
levels of revenues, net income, diluted
earnings per share and cash dividends
declared. Full-year global revenues for the
company were $6.1 billion, up 5 percent
from $5.8 billion in 2018. U.S. revenues
increased 6 percent, while
international revenues
were essentially flat.
International revenues
represent 22 percent of
the company total.
Our staffing operations
performed well throughout
the year, particularly in
the United States, where
demand benefited from
unprecedented labor
shortages, especially
in our specialty areas.
Our non-U.S. staffing
operations were challenged by slower
economic growth and global trade
uncertainties. Notwithstanding these
headwinds, we were generally pleased
with how our non-U.S. staffing operations
performed. While the non-U.S. growth rate
moderated in most countries we serve, we
still fared better than our industry, largely
because of our professional sector and
small and midsize client focus.
Protiviti, our internal audit and consulting
subsidiary, enjoyed double-digit percent-
age growth rates in every quarter in
We continue to regard return on invested
capital (ROIC) as a key measure of our
financial performance. 2019 ROIC of
41 percent compared favorably with our
past experience and with levels commonly
achieved in corporate America. We
believe our superior ROIC is rooted in
our ability to generate industry-leading
profitability on a judiciously employed
capital base, including growth achieved
primarily by organic means.
Harold M. Messmer, Jr.
Executive Chairman
M. Keith Waddell
President and Chief Executive Officer
2 2019 ANNUAL REPORT | ROBERT HALF
Record Financial Results in 2019
5-YEAR HISTORY
SERVICE REVENUES (in millions)
NET INCOME (in millions)
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$500
$400
$300
$200
$100
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
DILUTED NET INCOME PER SHARE
DIVIDENDS DECLARED PER SHARE
$4.00
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
2015
2016
2017
(as reported)
2017
(non-GAAP*)
2018
2019
2015
2016
2017
2018
2019
* See Appendix A to the Company’s Proxy Statement mailed to stockholders in April 2020 for a reconciliation of the non-GAAP measures to the most comparable GAAP measures:
https://www.roberthalf.com/investor-center/sec-filings/definitive-14a.
3 2019 ANNUAL REPORT | ROBERT HALF
CONTINUED DEMAND
FOR PROFESSIONAL
STAFFING SERVICES
In 2019, our staffing operations
benefited from global labor shortages
and the resulting high demand for
skilled talent, particularly in the United
States. The hiring environment for U.S.
employers is the most challenging it has
been in decades. In September, the U.S.
unemployment rate fell to 3.5 percent, a
50-year low, and held close to that level
for the remainder of the year. Notably,
2019 was the ninth consecutive year
the United States added more than 2
million jobs. The U.S. jobs growth cycle
in recent years has been unlike any we
have seen before.
Small to midsize businesses (SMBs)
dominate Robert Half’s staffing client
base; we have a long history of serving
these companies. Finding workers is
TRENDS WE SAW DURING 2019
Skill shortages still widespread
— most pronounced in
professional occupations
More positions requiring better
digital skills
Candidates showing
more confidence in salary
negotiations
Interim workers playing larger
role at companies
a serious problem for small-business
owners when unemployment is as low as
it has been. According to a December
2019 report from the National
Federation of Independent Business
(NFIB), 53 percent of business owners
polled said they were hiring or trying to
exclusive to Robert Half. We believe
our matching technology and unique
data insights differentiate us in our
industry. Our ability to rapidly provide
professionals who closely match our
clients’ requirements is invaluable in a
tight labor market.
Small to midsize businesses dominate
Robert Half ’s staffing client base; we
have a long history of serving these
companies.
hire, and 50 percent reported few or
no qualified applicants for the positions
they need to fill.
PROTIVITI CROSSES
BILLION-DOLLAR MARK
SMBs are a key driver of the U.S.
economy. According to the Q4 2019
Vistage CEO Confidence Index, this
sector creates 75 percent of all new jobs,
yet our research tells us the majority of
these companies have never employed
a staffing firm. Our decades-long
experience in identifying and serving
SMBs by understanding how their needs
differ from those of larger companies is
difficult to duplicate. SMBs continue to
constitute a vast, yet largely underserved,
market opportunity.
While the well-documented shortages
of global skills boost demand for
our services, they also constrain the
candidate supply. To increase our own
reserve of talent, we have been focused
on developing a proprietary matching
technology using machine learning. Its
artificial intelligence (AI) is informed by
decades of candidate placement data
Revenues for Protiviti, our global
consulting subsidiary, were $1.1 billion
in 2019. At year-end, Protiviti had
achieved seven straight quarters of
year-over-year double-digit percentage
growth. Its diverse practices range from
internal audit to an array of business,
risk and technology consulting solutions.
Protiviti has grown to be an important
part of our business. It has significantly
expanded its offerings since its launch
in 2002, when the great majority of
Protiviti revenues came from internal
audit and internal controls, to a
diversified range of services. In addition
to internal audit, including IT audit,
Protiviti has developed robust offerings
in areas including:
• Managed solutions (finance/
accounting and technology)
• Artificial intelligence
• Machine learning
4
2019 ANNUAL REPORT | ROBERT HALF • Advanced analytics and model
development/validation
• RPA (robotic process automation)
• Business process and
performance improvement
• IPO (initial public offering)
readiness
• Finance function transformation
• Technology strategy and
applications
• Cybersecurity and privacy
• Cloud solutions
• Risk and regulatory compliance
solutions
• Emerging technologies
As Protiviti continues to service larger,
multinational clients and help companies
solve increasingly complex business
problems, it is often combining a variety
of competencies, such as data, analytics,
controls and process capabilities, to
increase the value provided.
OUR ENTERPRISE-WIDE
SERVICE CONTINUUM
During 2019, we made excellent progress
in two important areas — establishing a
full spectrum of specialized staffing and
consulting solutions and expanding our
digital presence. Both are helping us
further build out our continuum of service.
Our Full Complement of Solutions
The traditional labor model is evolving.
It used to be that the great majority
of labor functions were provided
exclusively by full-time, permanent
employees. Today, full-time staff remain
the core workforce, but they comprise a
smaller part of the whole. The changes
are being driven by companies’ need
to access more skills, many of which
are new and technical in nature. The
broader range of skills comes from
a variety of labor sources suited to
different-size projects deployed on a
scalable basis. The model now includes
contingent and gig workers, the
human cloud, and more. Robert Half is
embracing these changes by combining
our offerings of a uniquely flexible talent
pool and deep consulting capability
through our staffing and Protiviti units,
respectively. Flexibility is a critical
element in the new paradigm.
We have long had the ability to identify
professionals whose skills are tailored
to meet an employer’s specific needs.
We are expanding this core capability
to include entire cross-functional teams
and managed services offerings. We
now offer companies a full complement
of staffing and consulting solutions,
from transactional engagements with
our temporary staffing divisions at one
end of the spectrum to pure consulting
solutions through Protiviti at the other
end. With our blended solutions, we can
offer clients a combination of consultants
from Protiviti along with engagement
professionals from our staffing divisions.
This advantage makes us a formidable
competitor to larger consulting firms that
lack this access to a virtually limitless
talent network. Likewise, no other major
staffing firm can deliver the project
solutions of Protiviti.
The ability for Protiviti and our staffing
businesses to call on each other’s
expertise and resources also provides
us with internal advantages. Protiviti,
for example, routinely draws on Robert
Half’s staffing units to augment its
conventional consulting teams. Protiviti
has access to our entire talent database.
One of the goals
of our technology
and digital
innovation efforts
is to make it
faster and easier
for customers to
hire or be hired.
We believe this provides an important
competitive advantage since it reduces
Protiviti’s need to seek outside labor.
The distinctive synergy between Protiviti
and our staffing units makes us unique
in our industry. We believe we have just
scratched the surface when it comes to
the business potential of this opportunity.
Our Technology
Our investment in technology is
growing. It includes enhancements
to our website, personalized job
and candidate recommendations, a
proprietary matching engine, and our
own mobile app. We are committed
to meeting our customers’ increasing
expectations by offering more choices in
how and when they work with us. These
technical innovations, combined with
the expertise of our staffing specialists,
provide both employers and job seekers
greater flexibility, whether they engage
with us online or in person.
5
2019 ANNUAL REPORT | ROBERT HALF One of the goals of our technology and
digital innovation efforts is to make it
faster and easier for customers to hire or
be hired. A few years ago, we moved the
entire organization onto the Salesforce
customer relationship management
(CRM) system to put all of our global
teams on to one platform. That move
has paid off with increased efficiencies
in managing our vast databases and
improved collaboration among our
global workforce.
Our technology enables us to be
proactive in candidate recruiting. When
we get a job order, we immediately
match it to our candidate database. We
invite all candidates who are identified
to apply in real time, rather than waiting
for a more limited number of candidates
to self-identify opportunities, then apply.
Likewise, we alert clients when a candidate
in our database matches their needs.
We launched our candidate mobile
app in July 2019. In less than a year’s
time, we have received more than
100,000 job applications through this
path. The app has shown itself to be an
effective way to attract and engage job
seekers. The Robert Half mobile app
and our own websites have proven to be
productive sources of talent, making us
far less reliant on third-party sources for
candidates.
There are hiring managers who
traditionally have not used staffing firms.
They prefer to source and hire on their
own. We recently created Robert Half
Direct, a hiring platform meant to serve
this segment. By using this service, which
is now available in all U.S. markets,
clients have immediate access to a short
list of candidates through a direct-hiring
A SUPERIOR MATCHING ENGINE
We have developed
the technology we use
internally to help our
staffing professionals
become even better
at finding the right fit between
job seeker and employer. Our
proprietary AI-based matching
technology incorporates
performance data from our most
successful candidate placements in
professional sectors. No one else
in our industry has this capability
because no one else can draw on
the millions of successful candidate
placements we’ve made over seven
decades in staffing. Using data
only we have, we can evaluate
how well our candidates align with
job openings based on how past
candidates have performed. We
recently compared Robert Half’s
matching technology to that of
several of our competitors in a
head-to-head test of performance.
The matching engine we built
outperformed them all. Our staffing
and recruiting specialists are
already the best in the business, but
these tools extend their ability to
make rapid yet solid matches.
Our Personal Service
No amount of technology can replace
a genuine understanding of a client’s
or candidate’s needs. Robert Half has
developed a level of personal service
that is well-known and highly regarded.
We work with companies on all aspects
of the hiring process. Anyone who has
ever hired for an open position knows the
real work begins after you’ve identified
people who may be a skills-match for that
job. It is time-consuming but critical that
candidates’ interpersonal attributes are
also assessed to ensure a good fit with
the organization’s culture. Further work
must then be done in salary negotiation
and persuading top picks to choose one
employer’s offer over others.
Employers and candidates also need
personal contacts to help them address
the bigger picture — their staffing and
career strategies. Employers increasingly
need a workforce with new skills, fueled
by rapidly changing technology, and
they need advice on how to find these
skills cost-effectively. Candidates
need counsel on how to acquire the
most marketable current and future
skills. They will want more than online
assistance in these cases.
OUR STABILITY
platform. Clients control the process
and interact directly with job candidates
to arrange interviews and make hiring
decisions. This gives them access to
our proprietary technology and data
insights and our extensive candidate
database powered by over 10,000 active
recruiters. Early results show that Robert
Half Direct is reaching a new segment of
the market for us.
Robert Half has an enviable history of
financial and managerial stability. We
have produced decades of mainly organic
growth that has extended a profitable
presence throughout the United States
and select overseas markets. Our asset-
lite business model produces generous
amounts of cash in both good and bad
economic conditions. We operate with
an extremely solid balance sheet, which
6
2019 ANNUAL REPORT | ROBERT HALF
A MESSAGE FROM MAX MESSMER
I have been honored to serve as
Robert Half’s CEO since the business
was acquired from Bob Half in 1986.
In December, I made the decision to
transition from Chairman and CEO to
Executive Chairman. I will, of course, be
involved with the growth strategy of the
company, and I am extremely pleased
to see Keith Waddell, who has been my
partner and collaborator from virtually
the beginning, succeed me as CEO.
Keith provides a sense of continuity, and
with his vision and history of innovation,
he also is absolutely the right person to
lead Robert Half into the future.
— Harold M. Messmer, Jr.
events unfold. Our digital investments
give us the ability to quickly find the right
professionals for companies with rapidly
changing needs. These firms will also
need a talent pipeline when markets
recover, and Robert Half will be there for
them as they rebuild.
Businesses will have many and varied
needs as they face the future. It has
long been our vision to complete the
full spectrum of specialized staffing
and consulting solutions we offer these
customers, and this vision has just recently
become a reality. It gives us access to new
clients beyond our traditional staffing base
of SMBs, especially when you consider our
blended solutions, where Protiviti works
with our staffing business.
Our industry has entered an age of multiple
staffing sources to serve an evolving labor
market. The new model is both beneficial
and more complex for companies and
workers. Clients and job seekers need help
as they enter unfamiliar territory, and we
can provide it.
We would like to thank our board of
directors for the strategic counsel they
provided during 2019, and you, our
stockholders, for your continued support
of our business.
Respectfully submitted,
Harold M. Messmer, Jr.
Executive Chairman
M. Keith Waddell
President and Chief Executive Officer
March 18, 2020
March 18, 2020
is dominated by current assets, most of
which are highly liquid. After allocating
cash to operate and grow the business,
we return much of the cash produced to
stockholders through share buybacks and
cash dividends. We have repurchased
shares yearly since 1997 for a total of
$3.7 billion and 115.5 million shares, all
from internally generated cash flow. Our
initial cash dividend was made in 2004.
Since then, we have paid uninterrupted
quarterly cash dividends. Cash dividends
have grown at a compound average
annual rate of 11.2 percent.
LOOKING AHEAD
We are optimistic about how Robert
Half is positioned right now, but we also
recognize the uncertainty surrounding
the COVID-19 pandemic, which as of
this writing is having a very real impact
on global economies. Like all businesses,
we are watching carefully to see how the
situation evolves and we are responding
accordingly. The labor shortages we have
been seeing have been building for some
time, but the current climate makes it
difficult to assess even near-term trends.
Whether markets improve relatively soon
or take longer to recover, our experience
navigating in uncertain times through
the years should guide us well through
these uncharted waters. Robert Half has
a very strong balance sheet, no debt and
decades of proven business experience.
At times like this, the drive and tenure
of our leadership team become our
greatest asset. And as in the past, there
may be opportunities presented by
major economic shifts. Like perhaps
never before, businesses will need the
ability to staff up and down flexibly as
7
2019 ANNUAL REPORT | ROBERT HALF Corporate Responsibility
From the inside out, we are a people
business. Every day, we find our
candidates rewarding work, giving them
the means to support their families and
a source of dignity and self-respect. We
also connect company leaders with the
skilled talent they need to grow. This
keen focus on people extends to our
impact on society at large. We strive to
deliver value to all of our stakeholders,
including shareholders, customers,
employees, suppliers and communities.
Our environmental, social and
governance (ESG) mission statement
underpins our commitment to
address various aspects of corporate
responsibility. Our ESG approach also
allows us to more effectively assess our
policies, programs and performance
across a wide range of issues, not only
to manage risks but also to help ensure
we have a positive impact.
We prioritize the ESG issues that matter
most to our stakeholders and have a
material impact on our business. For
this reason, we are working to expand
our ESG disclosures in accordance with
the Sustainability Accounting Standards
Board (SASB) recommendations for the
Professional and Commercial Services
industry.
Industry Recognition
ROB ERT HALF
PROTIVITI
World’s Most Admired Companies
FORTUNE
Bloomberg Gender-Equality Index
The Best Employers for Diversity
Forbes
Best Places to Work for
LGBTQ Equality
Human Rights Campaign Foundation
100 Most Sustainable
Companies
Barron’s
CSR Program of the Year
(Silver Stevie Winner)
American Business Awards
Best of the Best Top Supplier
Diversity Programs
Black EOE Journal
HISPANIC Network Magazine
Professional Woman’s Magazine
U.S. Veterans Magazine
100 Best Companies to Work For
FORTUNE
100 Best Companies
Working Mother
Best Workplaces for Diversity
FORTUNE
9
2019 ANNUAL REPORT | ROBERT HALF
Corporate Responsibility Focus Areas
– Our –
WORKFORCE
– Our –
COMMUNITIES
– Our –
ENVIRONMENT
OUR COMMUNITIES
Robert Half’s and Protiviti’s global
volunteer and philanthropy programs,
Leading by Example and iCare,
respectively, are central to our social
responsibility efforts. In addition to
the corporate contributions we make
to our national, global and local
nonprofit partners, our employees
play a key role in our matching gifts
and volunteering programs, as well as
Robert Half’s and Protiviti’s respective
signature outreach programs. In 2019,
employees helped create a record-
breaking year of community impact.
10 2019 ANNUAL REPORT | ROBERT HALF
M ATCH ING GIF TS
3,000 employees participated
in North America, raising $1.4
million for local nonprofits
through employee donations and
the company match.
VOLU NTE E R I NG
1,800 North American employees
collectively volunteered 14,000
hours for 570 nonprofits.
i ON H U NG E R
Protiviti donated a total of 2.7
million meals to communities in
need, reaching a total of over
10.3 million meals since 2014.
WE E K OF SE RV ICE
800 Corporate Services employees
participated, volunteering 2,000
hours for 32 nonprofits.
SU IT DR I V E
48,600 interview-appropriate
clothing items were donated in
North America, bringing our
total to over 400,000 items
since 2002.
HOLIDAY GI V I NG
125 offices in North America
collected more than 5,800 toys
and games, bringing our total to
over 147,000 items since 2006.
OUR WORKFORCE
E M PLOYE E DE V E LOPM E NT
Our employees are our most
valuable asset. We make every
effort to provide a great work
environment that connects them with
opportunities to grow and thrive.
We are committed to supporting
human rights and providing equal
opportunity and advancement to all
employees and stakeholders across
our entire value chain, which includes
our supply chain and customers. In
2019, we strengthened our programs
focused on employee engagement,
professional development, inclusion
and diversity, and health and safety.
• Robert Half and Protiviti employees completed 365,988 skills-based
trainings through our online learning tool.
• 864 Robert Half employees participated in our RH United Leadership
Exchange mentorship program.
E M PLOYE E E NGAG E M E NT
• We expanded both Robert Half’s and Protiviti’s employee experience surveys
globally.
• Senior leaders and our Employee Experience Ambassadors used results to
prioritize focus areas for next year.
I NCLUSION A N D DI V E RSIT Y
• We supported women’s advancement: 58 percent of new hires and 61
percent of employees promoted at Robert Half were women.
• Additionally, 56 percent of Robert Half’s senior managers are women.
H E A LTH A N D SA FE T Y
• We approved a new Global Human Rights Policy.
• We expanded and updated our sexual harassment training.
OUR ENVIRONMENT
E N V I RON M E NTA L COM M IT TE E
We are committed to decreasing our
environmental impact. And in 2019,
we took steps to better quantify,
reduce and report our environmental
footprint. This included submitting our
first Communication on Progress to
the United Nations Global Compact,
which outlined the actions we’ve taken
to work more efficiently and increase
environmental oversight, and our first
public report to CDP.
• We strengthened environmental oversight by launching a committee made
up of key executives and operational leads.
PR I NT CE NTE R R E TROFIT
• Building on our lighting retrofit projects from 2018, we replaced our old
lighting with compact LED fixtures at our printing center in Ankeny, Iowa.
We estimate that this will reduce energy use by 65,877 kWh per year.
M E ASU R I NG E M ISSIONS
• For the first time, we publicly reported emissions data to CDP, an initiative
that helped us increase our capacity to monitor and evaluate our
performance and identify areas for further improvement.
11
2019 ANNUAL REPORT | ROBERT HALF 12 2019 ANNUAL REPORT | ROBERT HALF
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
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
Trading Symbol(s)
Name of each exchange
on which registered
RHI
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 every Interactive Data File required to be submitted
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 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, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒
Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company. ☐ Yes ☒ No
As of June 30, 2019, the aggregate market value of the Common Stock held by non-affiliates of the registrant was approximately
$6,518,872,985 based on the closing sale price on that date. This amount excludes the market value of 3,315,944 shares of Common
Stock directly or indirectly held by registrant’s directors and officers and their affiliates.
As of January 31, 2020, there were 115,120,403 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 2020, 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.
2019 ANNUAL REPORT | ROBERT HALF
This Page Intentionally Left Blank
RHI 10K 2015 FINAL.CG2.indd 64
3/14/16 9:45 AM
2019 ANNUAL REPORT | ROBERT HALF Item 1. Business
Item 1. Business
PART I
PART I
Robert Half International Inc. (the “Company”) provides specialized staffing and risk consulting services through such
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®
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,
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 Finance & Accounting, and Robert Half Management Resources divisions, is the world’s largest specialized
provider of temporary, full-time, and project professionals in the fields of accounting and finance. OfficeTeam specializes in
provider of temporary, full-time, and project professionals in the fields of accounting and finance. OfficeTeam specializes in
highly skilled temporary administrative support personnel. Robert Half Technology provides information technology
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
professionals. Robert Half Legal provides temporary, project, and full-time staffing of attorneys and specialized support
personnel within law firms and corporate legal departments. The Creative Group provides project staffing in the digital,
personnel within law firms and corporate legal departments. The Creative Group provides project staffing in the digital,
marketing, and creative fields. Protiviti, which began operations in 2002, is a global business consulting and internal audit firm.
marketing, and creative fields. Protiviti, which began operations in 2002, is a global business consulting and internal audit firm.
Protiviti, which primarily employs professionals specializing in risk, advisory and transactional services, is a wholly owned
Protiviti, which primarily employs professionals specializing in risk, advisory and transactional services, is a wholly owned
subsidiary of the Company.
subsidiary of the Company.
The Company’s business was originally founded in 1948. Prior to 1986, the Company was primarily a franchisor, under
The Company’s business was originally founded in 1948. Prior to 1986, the Company was primarily a franchisor, under
the names Accountemps and Robert Half (now called Robert Half Finance & Accounting), of offices providing temporary and
the names Accountemps and Robert Half (now called Robert Half Finance & Accounting), of offices providing temporary and
full-time professionals in the fields of accounting and finance. Beginning in 1986, the Company and its current management
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
embarked on a strategy of acquiring franchised locations. All of the franchises have been acquired. The Company believes that
direct ownership of offices allows it to better monitor and protect the image of its trade names, promotes a more consistent and
direct ownership of offices allows it to better monitor and protect the image of its trade names, promotes a more consistent and
higher level of quality and service throughout its network of offices and improves profitability by centralizing many of its
higher level of quality and service throughout its network of offices and improves profitability by centralizing many of its
administrative functions. Since 1986, the Company has significantly expanded operations at many of the acquired locations,
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
opened many new locations and acquired other local or regional providers of specialized temporary service personnel. The
Company has also expanded the scope of its services by launching the new product lines OfficeTeam, Robert Half Technology,
Company has also expanded the scope of its services by launching the new product lines OfficeTeam, Robert Half Technology,
Robert Half Management Resources, Robert Half Legal and The Creative Group.
Robert Half Management Resources, Robert Half Legal and The Creative Group.
In 2002, the Company hired more than 700 professionals who had been affiliated with the internal audit and business and
In 2002, the Company hired more than 700 professionals who had been affiliated with the internal audit and business and
technology risk consulting practice of Arthur Andersen LLP, including more than 50 individuals who had been partners of that
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
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
enter the market for business consulting and internal audit services, which market the Company believes offers synergies with
its traditional lines of business.
its traditional lines of business.
Accountemps
Accountemps
The Accountemps temporary services division offers customers a reliable and economical means of dealing with uneven
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
or peak workloads for accounting, finance, and bookkeeping personnel caused by such predictable events as vacations, taking
inventories, tax work, month-end activities and special projects, and such unpredictable events as illness and emergencies.
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
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
fixed to variable. The cost and inconvenience to clients of hiring and firing regular employees are eliminated by the use of
Accountemps temporaries. The temporary workers are employees of Accountemps and are paid by Accountemps. The customer
Accountemps temporaries. The temporary workers are employees of Accountemps and are paid by Accountemps. The customer
pays a fixed rate only for hours worked.
pays a fixed rate only for hours worked.
Accountemps clients may fill their regular employment needs by using an Accountemps employee on a trial basis and, if
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
so desired, “converting” the temporary position to a regular position. The client typically pays a one-time fee for such
conversions.
conversions.
OfficeTeam
OfficeTeam
The Company’s OfficeTeam division, which commenced operations in 1991, places temporary and full-time office and
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
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.
representatives. OfficeTeam operates in much the same fashion as the Accountemps division.
Robert Half Finance & Accounting
Robert Half Finance & Accounting
Established in 1948, the Company’s first division and specialized recruitment pioneer 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
specializes in the placement of full-time accounting, financial, tax and accounting operations personnel. Fees for successful
placements are paid only by the employer and are generally a percentage of the new employee’s annual compensation. No fee
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.
for placement services is charged to employment candidates.
1
1
2019 ANNUAL REPORT | ROBERT HALF Robert Half Technology
Robert Half Technology
The Company’s Robert Half Technology division, which commenced operations in 1994, specializes in providing
The Company’s Robert Half Technology division, which commenced operations in 1994, specializes in providing
information technology contract consultants, placing full-time employees, and offering managed services in areas ranging from
information technology contract consultants, placing full-time employees, and offering managed services in areas ranging from
multiple platform systems integration to end-user technical and desktop support, including specialists in application
multiple platform systems integration to end-user technical and desktop support, including specialists in application
development (including mobile, cloud and enterprise applications), networking, systems integration and deployment, database
development (including mobile, cloud and enterprise applications), networking, systems integration and deployment, database
design and administration, and security and business continuity.
design and administration, and security and business continuity.
Robert Half Legal
Robert Half Legal
Since 1992, the Company has been placing temporary and full-time employees in attorney, paralegal, legal administrative
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
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
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
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
consulting services to help organizations manage constantly changing workloads and access expertise across in-demand legal
practice areas.
practice areas.
Robert Half Management Resources
Robert Half Management Resources
The Company’s Robert Half Management Resources division, which commenced operations in 1997, specializes in
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,
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,
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
expansion into new markets, business process reengineering, business systems performance improvement, and post-merger
financial consolidation.
financial consolidation.
The Creative Group
The Creative Group
The Creative Group division commenced operations in 1999 and specializes in identifying for its clients creative
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
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
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.
designers, media buyers, brand managers, and public relations specialists.
Protiviti
Protiviti
Protiviti is a global consulting firm that delivers an expanding set of services across its defined solution offerings of
Protiviti is a global consulting firm that delivers an expanding set of services across its defined solution offerings of
Business Performance Improvement, Internal Audit, Managed Solutions, Risk and Compliance and Technology Consulting.
Business Performance Improvement, Internal Audit, Managed Solutions, Risk and Compliance and Technology Consulting.
Protiviti and its independently owned member firms works collaboratively with its clients in over 25 countries to help them
Protiviti and its independently owned member firms works collaboratively with its clients in over 25 countries to help them
achieve their business objectives and delivers confidence in an ever-evolving dynamic business world. Clients range from
achieve their business objectives and delivers confidence in an ever-evolving dynamic business world. Clients range from
high-growth, pre-public/transactional established start-ups to the largest global companies, across seven focused industries.
high-growth, pre-public/transactional established start-ups to the largest global companies, across seven focused industries.
Marketing and Recruiting
Marketing and Recruiting
The Company markets its staffing services to clients and employment candidates via both national and local advertising
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, digital display, search engine
activities. Advertising consists of client- and employment candidate-facing buys in radio, digital display, search engine
marketing, social media, trade publications, job boards and events. The Company also markets its services, as well as hiring and
marketing, social media, trade publications, job boards and events. The Company also markets its services, as well as hiring and
career management advice and thought leadership, via its website, e-mail marketing program, social media and blog. Direct
career management advice and thought leadership, via its website, e-mail marketing program, social media and blog. Direct
marketing via telephone solicitation is a significant portion of the Company’s total marketing efforts. Additionally, the
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 aggregators in all aspects of sales and recruitment. Joint marketing
Company has expanded its use of job boards and 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
arrangements have been entered into with major software manufacturers and typically provide for the development of
proprietary skills tests, cooperative advertising, joint campaigns, and similar promotional activities. The Company also actively
proprietary skills tests, cooperative advertising, joint campaigns, and similar promotional activities. The Company also actively
seeks endorsements and affiliations with professional organizations in the accounting and finance, technology, legal, and
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
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
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
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.
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
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, locally, nationally and globally, including print advertising,
and competency teams conduct targeted marketing efforts, locally, nationally and globally, including print advertising,
production of thought leadership, and branded speaking events. National advertising conducted by Protiviti consists primarily
production of thought leadership, and branded speaking events. National advertising conducted by Protiviti consists primarily
2
2
2019 ANNUAL REPORT | ROBERT HALF of print advertisements in magazines and selected trade journals. Protiviti regularly conducts a variety of programs to share its
of print advertisements in magazines and selected trade journals. Protiviti regularly conducts a variety of programs to share its
insights with clients on current topics such as risk, technology, corporate governance, and industry challenges. It conducts
insights with clients on current topics such as risk, technology, corporate governance, and industry challenges. It conducts
public relations activities, such as distributing press releases, white papers, case studies and newsletters, designed to enhance
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.
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
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
targeted Internet advertising. Local employees are encouraged to be active in relevant social media communities, civic
organizations and industry trade groups.
organizations and industry trade groups.
The Company and its subsidiaries own many trademarks, service marks and tradenames, including the Robert Half®
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
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
Half® Legal, The Creative Group® and Protiviti® marks, which are registered in the United States and in a number of foreign
countries.
countries.
Organization
Organization
Management of the Company’s staffing operations is coordinated from its headquarters facilities in Menlo Park and San
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,
Ramon, California. The Company’s headquarters provides support and centralized services to its offices in the administrative,
marketing, public relations, accounting, information technology, training and legal areas, particularly as it relates to the
marketing, public relations, accounting, information technology, training and legal areas, particularly as it relates to the
standardization of the operating procedures of its offices. As of December 31, 2019, the Company conducted its staffing
standardization of the operating procedures of its offices. As of December 31, 2019, the Company conducted its staffing
services operations through 326 offices in 42 states, the District of Columbia and 17 foreign countries. Office managers are
services operations through 326 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.
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
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
operational and administrative support provided by individuals located in San Ramon and Menlo Park, California. As of
December 31, 2019, Protiviti had 62 offices in 23 states and 11 foreign countries.
December 31, 2019, Protiviti had 62 offices in 23 states and 11 foreign countries.
Competition
Competition
The Company’s staffing services face competition in attracting clients as well as skilled specialized employment
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
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
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
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
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.
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, expand relationships with existing clients and win proposal
Protiviti faces competition in its efforts to attract clients, expand relationships with existing clients and win proposal
presentations. The global professional service business is highly competitive with a dynamic regulatory environment, disruptive
presentations. The global professional service business is highly competitive with a dynamic regulatory environment, disruptive
new technologies, security and privacy concerns and high demand for skilled professionals all driving significant opportunities.
new technologies, security and privacy concerns and high demand for skilled professionals all driving significant opportunities.
The principal competitors of Protiviti remain the “big four” accounting firms. Significant competitive factors include
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
reputation, technology, tools, project methodologies, price of services and depth of skills of personnel. Protiviti believes its
competitive strengths lie in the collaborative approach they take to working with clients which drive knowledge transfer,
competitive strengths lie in the collaborative approach they take to working with clients which drive knowledge transfer,
understanding of client issues and value creation. This is coupled with a “configure-to-fit” resourcing model to create blended
understanding of client issues and value creation. This is coupled with a “configure-to-fit” resourcing model to create blended
teams of full-time Protiviti professionals and engagement professionals from Robert Half’s network of specialized talent to
teams of full-time Protiviti professionals and engagement professionals from Robert Half’s network of specialized talent to
precisely match expertise, approach and people to the changing global needs of clients on consulting and managed solutions
precisely match expertise, approach and people to the changing global needs of clients on consulting and managed solutions
projects.
projects.
Employees
Employees
The Company has approximately 16,000 full-time internal staff, including approximately 4,500 employees engaged
The Company has approximately 16,000 full-time internal staff, including approximately 4,500 employees engaged
directly in Protiviti operations. In addition, the Company placed approximately 205,600 engagement professionals on
directly in Protiviti operations. In addition, the Company placed approximately 205,600 engagement professionals on
assignments with clients during 2019. In 2018, the Company had approximately 15,200 full-time internal staff, including
assignments with clients during 2019. In 2018, the Company had approximately 15,200 full-time internal staff, including
approximately 4,000 employees engaged directly in Protiviti operations. In 2018, the Company placed approximately 216,500
approximately 4,000 employees engaged directly in Protiviti operations. In 2018, the Company placed approximately 216,500
engagement professionals on assignments with clients. The substantial majority of engagement professionals placed on
engagement professionals on assignments with clients. The substantial majority of engagement professionals placed on
assignment by the Company are the Company’s legal employees while they are working on assignments. The Company pays
assignment by the Company are the Company’s legal employees 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
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
security and certain fringe benefits. The Company provides access to voluntary health insurance coverage to interested
employees.
employees.
3
3
2019 ANNUAL REPORT | ROBERT HALF Other Information
Other Information
The Company is not dependent upon a single customer or a limited number of customers. The Company’s staffing
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
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
in the third and fourth quarters of a calendar year. Order backlog is not a material aspect of the Company’s staffing services
business. While backlog is of greater importance to Protiviti, the Company does not believe, based upon the length of time of
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
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.
Company’s business is subject to government contracts.
Available Information
Available Information
The Company’s Internet address is www.roberthalf.com. The Company makes available, free of charge, through its
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
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
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
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,
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
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
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
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-
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
K regarding any amendment or waiver relating to its Code of Business Conduct and Ethics by posting such information on its
website.
website.
Item 1A. Risk Factors
Item 1A. Risk Factors
The Company’s business prospects are subject to various risks and uncertainties that impact its business. The most
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:
important of these risks and uncertainties are as follows:
Risks Related to the Company’s Business Environment
Risks Related to the Company’s Business Environment
Any reduction in global economic activity may harm the Company’s business and financial condition. The demand for the
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
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 experienced economic uncertainty
needs of the Company’s clients. Certain of the Company’s markets have recently experienced economic uncertainty
characterized by increasing unemployment, limited availability of credit and decreased consumer and business spending. In
characterized by increasing unemployment, limited availability of credit and decreased consumer and business spending. In
addition, certain geopolitical events, including ongoing trade negotiations and the ongoing negotiation of the United Kingdom’s
addition, certain geopolitical events, including ongoing trade negotiations and the ongoing negotiation of the United Kingdom’s
withdrawal from the European Union (“Brexit”), have caused significant economic, market, political and regulatory uncertainty
withdrawal 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
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
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
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 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.
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
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
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
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
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
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,
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’s ability to maintain or expand its client base may be harmed.
The Company faces risks in operating internationally. The Company depends on operations in international markets for a
The Company faces risks in operating internationally. The Company depends on operations in international markets for a
significant portion of its business. These international operations are subject to a number of risks, including general political
significant portion of its business. 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 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
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
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
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
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
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
decrease. The value of the U.S. dollar has recently strengthened considerably against a number of major foreign currencies, and
4
4
2019 ANNUAL REPORT | ROBERT HALF a continuation or extension of this strength relative to these other currencies could adversely impact the Company’s reported
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.
income from its international markets and cause its revenue in such markets, when translated into U.S. dollars, to decline.
Significant U.K. or European developments stemming from the U.K.’s decision to withdraw from the European Union
Significant U.K. or European developments stemming from the U.K.’s decision to withdraw from the European Union
could have a material adverse effect on the Company. In the past several years, the European market experienced economic
could have a material adverse effect on the Company. In the past several years, the European market experienced economic
uncertainty, which adversely affected, and the return of which may in the future adversely affect, the Company’s operations in
uncertainty, which adversely affected, and the return of which may in the future 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
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
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) worsen, demand for the
extent that adverse economic conditions and uncertainty in Europe (related to Brexit or otherwise) worsen, demand for the
Company’s services may decline, which could significantly harm its business and results of operations.
Company’s services may decline, which could significantly harm its business and results of operations.
Natural disasters and unusual weather conditions, pandemic outbreaks, terrorist acts, global political events and other
Natural disasters and unusual weather conditions, pandemic outbreaks, terrorist acts, global political events and other
serious catastrophic events could disrupt business and otherwise materially adversely affect our business and financial
serious catastrophic events could disrupt business and otherwise materially adversely affect our business and financial
condition. With operations in many states and multiple foreign countries, we are subject to numerous risks outside of our
condition. With operations in many states and multiple foreign countries, we are subject to numerous risks outside of our
control, including risks arising from natural disasters, such as fires, earthquakes, hurricanes, floods, tornadoes, unusual weather
control, including risks arising from natural disasters, such as fires, earthquakes, hurricanes, floods, tornadoes, unusual weather
conditions, pandemic outbreaks and other global health emergencies, terrorist acts or disruptive global political events, or
conditions, pandemic outbreaks and other global health emergencies, terrorist acts or disruptive global political events, or
similar disruptions that could materially adversely affect our business and financial performance. For example, the Company’s
similar disruptions that could materially adversely affect our business and financial performance. For example, the Company’s
operations are heavily dependent on the ability of employees and consultants to travel from business to business and from
operations are heavily dependent on the ability of employees and consultants to travel from business to business and from
location to location. Any public health emergencies, including a real or potential global pandemic such as those caused by the
location to location. Any public health emergencies, including a real or potential global pandemic such as those caused by the
avian flu, SARS, Ebola, Coronavirus, or even a particularly virulent flu, could decrease demand for our services and our ability
avian flu, SARS, Ebola, Coronavirus, or even a particularly virulent flu, could decrease demand for our services and our ability
to offer them. Uncharacteristic or significant weather conditions can affect travel and the ability of businesses to remain open,
to offer them. Uncharacteristic or significant weather conditions can affect travel and the ability of businesses to remain open,
which could lead to decreased ability to offer our services and materially adversely affect our short-term results of operations.
which could lead to decreased ability to offer our services and materially adversely affect our short-term results of operations.
In addition, these events could result in delays in placing employees and consultants, the temporary disruption in the transport
In addition, these events could result in delays in placing employees and consultants, the temporary disruption in the transport
of employees and consultants overseas and domestically, the inability of employees and consultants to reach or have
of employees and consultants overseas and domestically, the inability of employees and consultants to reach or have
transportation to clients directly affected by such events and disruption to our information systems. Although it is not possible
transportation to clients directly affected by such events and disruption to our information systems. Although it is not possible
to predict such events or their consequences, these events could materially adversely affect our reputation, business and
to predict such events or their consequences, these events could materially adversely affect our reputation, business and
financial condition.
financial condition.
Risks Related to the Company’s Operations
Risks Related to the Company’s Operations
The Company may be unable to find sufficient candidates for its staffing business. The Company’s staffing services
The Company may be unable to find sufficient candidates for its staffing business. The Company’s staffing services
business consists of the placement of individuals seeking employment. There can be no assurance that candidates for
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
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. Unemployment in the United States has been low in the
through multiple sources, including the Company and its competitors. Unemployment in the United States has been low in the
past couple of years and has recently decreased further; some economists have speculated that in certain markets, the U.S. could
past couple of years and has recently decreased further; some economists have speculated that in certain markets, the U.S. could
be at or near full employment. This phenomenon has made finding sufficient eligible candidates to meet employers’ demands
be at or near full employment. This phenomenon has made finding sufficient eligible candidates to meet employers’ demands
more challenging and further decreases in the employment rates could compound these difficulties. Any shortage of candidates
more challenging and further decreases in the employment rates could compound these difficulties. Any shortage of candidates
could materially adversely affect the Company.
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
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
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.
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
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 Company will,
the Company will be able to retain clients or market share in the future. Nor can there be any assurance that the Company will,
in light of competitive pressures, be able to remain profitable or, if profitable, maintain its current profit margins.
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
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
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
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,
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
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
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
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.
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
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
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
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
material adverse effect upon the Company or that such claims (whether by reason of the Company not having sufficient
5
5
2019 ANNUAL REPORT | ROBERT HALF insurance or by reason of such claims being outside the scope of the Company’s insurance) will not have a material adverse
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.
effect upon the Company.
The Company is dependent on its management personnel and employees and a failure to attract and retain such
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
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
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
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.
personnel that are essential to its success.
The Company’s results of operations and ability to grow could be materially negatively affected if it cannot successfully
The Company’s results of operations and ability to grow could be materially negatively affected if it cannot successfully
keep pace with technological changes impacting the development and implementation of its services and the evolving needs of
keep pace with technological changes impacting the development and implementation of its services and the evolving needs of
its clients. The Company’s success depends on its ability to keep pace with rapid technological changes affecting both the
its clients. The Company’s success depends on its ability to keep pace with rapid technological changes affecting both the
development and implementation of its services and the staffing needs of its clients. Technological advances such as artificial
development and implementation of its services and the staffing needs of its clients. Technological advances such as artificial
intelligence, machine learning, and automation are impacting industries served by all our lines of business. In addition, the
intelligence, machine learning, and automation are impacting industries served by all our lines of business. In addition, the
Company’s business relies on a variety of technologies, including those that support hiring and tracking, order management,
Company’s business relies on a variety of technologies, including those that support hiring and tracking, order management,
billing, and client data analytics. If the Company does not sufficiently invest in new technology and industry developments,
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
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,
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.
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
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
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
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
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
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
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 U.S. Congress and
requirements of Sarbanes-Oxley for a number of public companies. Further, many analysts are expecting the 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.
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
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.
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
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
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
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
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.
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
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
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.
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
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,
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
the barriers to entry are quite low. There are many competitors, some of which have greater resources than Protiviti and many
of which have been in operation far longer than Protiviti. In particular, Protiviti faces competition from the “big four”
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
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,
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
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.
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
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
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
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.
have a material adverse impact on Protiviti or the Company.
6
6
2019 ANNUAL REPORT | ROBERT HALF Legal and Regulatory Risks
Legal and Regulatory Risks
The Company and certain subsidiaries are defendants in several lawsuits that could cause the Company to incur
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
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
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
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
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
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,
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
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
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
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
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, or to various other claims, disputes, and
subsidiaries may become subject to similar lawsuits in the same or other jurisdictions, or to various other claims, disputes, and
legal or regulatory proceedings that arise in the ordinary course of business. An unfavorable outcome with respect to these
legal or regulatory proceedings that arise in the ordinary course of business. An unfavorable outcome with respect to these
lawsuits and any future lawsuits or regulatory proceedings could, individually or in the aggregate, cause the Company to incur
lawsuits and any future lawsuits or regulatory proceedings could, individually or in the aggregate, cause the Company to incur
substantial liabilities or impact its operations in such a way that may have a material adverse effect upon the Company’s
substantial liabilities or impact its operations in such a way that may have a material adverse effect upon the Company’s
business, financial condition or results of operations. Furthermore, any future lawsuits, claims, disputes, or legal or regulatory
business, financial condition or results of operations. Furthermore, any future lawsuits, claims, disputes, or legal or regulatory
proceedings may also consume substantial amounts of the Company’s financial and managerial resources and might result in
proceedings may also consume substantial amounts of the Company’s financial and managerial resources and might result in
adverse publicity, regardless of the ultimate outcome. In addition, an unfavorable outcome in one or more of these cases could
adverse publicity, regardless of the ultimate outcome. 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
cause the Company to change its compensation plans for its employees, which could have a material adverse effect upon the
Company’s business.
Company’s business.
Government regulations may result in prohibition or restriction of certain types of employment services or the imposition
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
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
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,
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
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
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.
associated with offering or utilizing temporary staffing solutions.
The countries in which we operate may, among other things:
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
create additional regulations that prohibit or restrict the types of employment services that the Company currently
provides;
provides;
require new or additional benefits be paid to the Company’s employees;
require new or additional benefits be paid to the Company’s employees;
require the Company to obtain additional licensing to provide employment services; or
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.
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
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
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
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.
additional restrictions and regulations which may impede its business, increase costs and impact profitability.
The Company’s business is subject to extensive government regulation and a failure to comply with regulations could
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
related to the Company’s compliance with government regulation or licensing requirements could consume substantial amounts
7
7
2019 ANNUAL REPORT | ROBERT HALF of the Company’s financial and managerial resources and might result in adverse publicity, regardless of the ultimate outcome
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
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
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.
adverse effect upon the Company’s business, financial condition or results of operations.
The Company’s compliance policies and controls may not prevent violations that could result in significant fines and
The Company’s compliance policies and controls may not prevent violations that could result in significant fines and
penalties. The Company could also be exposed to fines and penalties under U.S. or local jurisdiction trade sanctions and
penalties. 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 including the Foreign Corrupt Practices Act and
controls as well as laws prohibiting corrupt payments to governmental officials including the Foreign Corrupt Practices Act and
similar laws that prohibit payments to foreign officials. Failure to comply with local laws in a particular market may result in
similar laws that prohibit payments to foreign officials. Failure to comply with local laws in a particular market may result in
substantial liability and could have a significant and negative effect not only on our business in that market but also on our
substantial liability and could have a significant and negative effect not only on our business in that market but also on our
reputation generally. Although the Company has implemented policies and procedures designed to ensure compliance with
reputation generally. 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
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.
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
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
workers, and any negative sentiments towards the United States as a result of such changes, could adversely affect the
Company’s operations.
Company’s operations.
Health care reform could increase the costs of the Company’s temporary staffing operations. In March 2010, the Patient
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
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
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.
temporary candidates in order to meet the requirements of the PPACA’s employer mandate.
President Trump and the U.S. Congress have and likely will continue to seek to modify, repeal, or otherwise invalidate
President Trump and the U.S. Congress have and likely will continue to seek to modify, repeal, or otherwise invalidate
all, or certain provisions of, the PPACA. The U.S. Congress has made several attempts to repeal or modify the PPACA and in
all, or certain provisions of, the PPACA. The U.S. Congress has made several attempts to repeal or modify the PPACA and in
2019, the U.S. Court of Appeals for the Fifth Circuit invalidated significant portions of the PPACA. In 2020, the U.S. House of
2019, the U.S. Court of Appeals for the Fifth Circuit invalidated significant portions of the PPACA. In 2020, the U.S. House of
Representatives petitioned the U.S. Supreme Court to review the Fifth Circuit’s decision. It is unclear at this point what the
Representatives petitioned the U.S. Supreme Court to review the Fifth Circuit’s decision. It is unclear at this point what the
scope of any future such legislation will be and when it will become effective. Because of the uncertainty surrounding this
scope of any future 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
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
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
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.
in the coming months and years and the costs of the Company’s health care expenditures may increase.
U.S. federal tax regulations and interpretations could adversely affect the Company. On December 22, 2017, the Tax
U.S. federal tax regulations and interpretations could adversely affect the Company. On December 22, 2017, the Tax
Cuts and Jobs Act (the “TCJA”) was signed into law. Notwithstanding the reduction in the corporate income tax rate, the
Cuts and Jobs Act (the “TCJA”) was signed into law. Notwithstanding the reduction in the corporate income tax rate, the
overall impact of these changes on the Company’s results of operations will likely evolve as new regulations and interpretations
overall impact of these changes on the Company’s results of operations will likely evolve as new regulations and interpretations
relating to the TCJA are implemented. In addition, various political figures have pledged their support to overturning or
relating to the TCJA are implemented. In addition, various political figures have pledged their support to overturning or
modifying key aspects of the TCJA which could further increase the uncertainty relating to the impact of this or any future tax
modifying key aspects of the TCJA which could further increase the uncertainty relating to the impact of this or any future tax
legislation on the Company’s results of operations.
legislation on the Company’s results of operations.
Risks Related to the Company’s Information Technology, Cybersecurity and Data Protection
Risks Related to the Company’s Information Technology, Cybersecurity and Data Protection
The Company’s computer and communications hardware and software systems are vulnerable to damage and
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
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
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
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
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.
events and errors in usage by the Company’s employees and those of the Company’s vendors.
The Company’s employees or vendors may have access or exposure to personally identifiable or otherwise confidential
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
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
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
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
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
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,
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
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.
Company introduces new service offerings.
8
8
2019 ANNUAL REPORT | ROBERT HALF Changes in data privacy and protection laws and regulations in respect of control of personal information could increase
Changes in data privacy and protection laws and regulations in respect of control of personal information could increase
the Company’s costs or otherwise adversely impact its operations. In the ordinary course of business, the Company collects,
the Company’s costs or otherwise adversely impact its operations. In the ordinary course of business, the Company collects,
uses, and retains personal information from its employees, employment candidates, and contractors, including, without
uses, and retains personal information from its employees, employment candidates, and contractors, including, without
limitation, full names, government-issued identification numbers, addresses, birth dates, and payroll-related information. The
limitation, full names, government-issued identification numbers, addresses, birth dates, and payroll-related information. The
possession and use of personal information in conducting the Company’s business subjects it to a variety of complex and
possession and use of personal information in conducting the Company’s business subjects it to a variety of complex and
evolving domestic and foreign laws and regulations regarding data privacy, protection and security, which, in many cases,
evolving domestic and foreign laws and regulations regarding data privacy, protection and security, which, in many cases,
apply not only to third-party transactions, but also to transfers of information among the Company and its subsidiaries. For
apply not only to third-party transactions, but also to transfers of information among the Company and its subsidiaries. For
example, the European Union’s General Data Protection Regulation (“GDPR”), which became effective in May 2018, imposes
example, the European Union’s General Data Protection Regulation (“GDPR”), which became effective in May 2018, imposes
stringent operational requirements for entities processing personal information, such as strong safeguards for data transfers to
stringent operational requirements for entities processing personal information, such as strong safeguards for data transfers to
countries outside the European Union and strong enforcement authorities and mechanisms. Complying with the enhanced
countries outside the European Union and strong enforcement authorities and mechanisms. Complying with the enhanced
obligations imposed by the GDPR and other current and future laws and regulations relating to data transfer, residency, privacy
obligations imposed by the GDPR and other current and future laws and regulations relating to data transfer, residency, privacy
and protection has increased and may continue to increase the Company’s operating costs and require significant management
and protection has increased and may continue to increase the Company’s operating costs and require significant management
time and attention, while any failure by the Company or its subsidiaries to comply with applicable laws could result in
time and attention, while any failure by the Company or its subsidiaries to comply with applicable laws could result in
governmental enforcement actions, fines, and other penalties that could potentially have an adverse effect on the Company’s
governmental enforcement actions, fines, and other penalties that could potentially have an adverse effect on the Company’s
operations and reputation.
operations and reputation.
Risks Related to the Company’s Internal Controls and Accounting Policies
Risks Related to the Company’s Internal Controls and Accounting Policies
Failure to maintain adequate financial and management processes and controls could lead to errors in the Company’s
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
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
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
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
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
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
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.
basis, which could cause its stock price to fall.
Failure to identify and respond to risk issues in a timely manner could have a material adverse effect on our business.
Failure to identify and respond to risk issues in a timely manner could have a material adverse effect on our business.
Although we have processes in place to attempt to identify and respond to risk issues in a timely manner, our efforts may not be
Although we have processes in place to attempt to identify and respond to risk issues in a timely manner, our efforts may not be
sufficient.
sufficient.
The Company’s culture may not sufficiently encourage timely identification and escalation of significant risk issues. The
The Company’s culture may not sufficiently encourage timely identification and escalation of significant risk issues. The
collective impact of the tone at the top, tone in the middle and tone at the bottom on risk management, compliance and
collective impact of the tone at the top, tone in the middle and tone at the bottom on risk management, compliance and
responsible business behavior has a huge effect on timely escalation of risk issues, particularly those affecting core operations.
responsible business behavior has a huge effect on timely escalation of risk issues, particularly those affecting core operations.
Item 1B. Unresolved Staff Comments.
Item 1B. Unresolved Staff Comments.
Not applicable.
Not applicable.
Item 2. Properties
Item 2. Properties
The Company’s headquarters operations are located in Menlo Park and San Ramon, California. As of December 31,
The Company’s headquarters operations are located in Menlo Park and San Ramon, California. As of December 31,
2019, placement activities were conducted through 326 offices located in the United States, Canada, the United Kingdom,
2019, placement activities were conducted through 326 offices located in the United States, Canada, the United Kingdom,
Belgium, Brazil, France, the Netherlands, Germany, Luxembourg, Switzerland, Japan, China, Singapore, Australia, New
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, 2019, Protiviti had 62 offices in the United States,
Zealand, Austria, the United Arab Emirates, and Chile. As of December 31, 2019, Protiviti had 62 offices in the United States,
Canada, Australia, China, France, Germany, Italy, the Netherlands, Japan, Singapore, India and the United Kingdom. All of the
Canada, Australia, China, France, Germany, Italy, the Netherlands, Japan, Singapore, India and the United Kingdom. All of the
offices are leased.
offices are leased.
Item 3. Legal Proceedings
Item 3. Legal Proceedings
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 alleges that a putative class of current and former employees of
was subsequently amended on October 23, 2015. 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
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
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
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
compensation. Gentry also seeks recovery of an unspecified amount for the alleged failure of the Company to provide her and
9
9
2019 ANNUAL REPORT | ROBERT HALF the putative class with accurate wage statements. Gentry also seeks an unspecified amount of other damages, attorneys’ fees,
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 wages due upon separation to former employees and
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 California’s Labor Code
statutory penalties on behalf of herself and other allegedly “aggrieved employees” as defined by California’s Labor Code
Private Attorneys General Act (“PAGA”). On January 4, 2016, the Court denied a motion by the Company to compel all of
Private Attorneys General Act (“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
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
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
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.
On April 6, 2018, Plaintiff Shari Dorff, on her own behalf and on behalf of a putative class of allegedly similarly situated
On April 6, 2018, Plaintiff Shari Dorff, 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, County of Los Angeles. In addition to
individuals, filed a complaint against the Company in the Superior Court of California, County of Los Angeles. In addition to
certain claims individual to Plaintiff Dorff, the complaint alleges that salaried recruiters based in California have been
certain claims individual to Plaintiff Dorff, the complaint alleges that salaried recruiters based in California have been
misclassified as exempt employees and seeks an unspecified amount for: unpaid wages resulting from such alleged
misclassified as exempt employees and seeks an unspecified amount for: unpaid wages resulting from such alleged
misclassification; alleged failure to provide a reasonable opportunity to take meal periods and rest breaks; alleged failure to pay
misclassification; alleged failure to provide a reasonable opportunity to take meal periods and rest breaks; alleged failure to pay
wages on a timely basis both during employment and upon separation; alleged failure to comply with California requirements
wages on a timely basis both during employment and upon separation; alleged failure to comply with California requirements
regarding wage statements and record-keeping; and alleged improper denial of expense reimbursement. Plaintiff Dorff also
regarding wage statements and record-keeping; and alleged improper denial of expense reimbursement. Plaintiff Dorff also
seeks an unspecified amount of other damages, attorneys’ fees, and penalties, including but not limited to statutory penalties on
seeks an unspecified amount of other damages, attorneys’ fees, and penalties, including but not limited to statutory penalties on
behalf of herself and other allegedly “aggrieved employees” as defined by PAGA. At this stage of the litigation, it is not
behalf of herself and other allegedly “aggrieved employees” as defined by PAGA. 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
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
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.
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
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.
Item 4. Mine Safety Disclosure
Item 4. Mine Safety Disclosure
Not applicable.
Not applicable.
10
10
2019 ANNUAL REPORT | ROBERT HALF Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
PART II
PART II
Securities
Securities
Market Price, Dividends and Related Matters
Market Price, Dividends and Related Matters
The Company’s Common Stock is listed for trading on the New York Stock Exchange under the symbol “RHI”. On
The Company’s Common Stock is listed for trading on the New York Stock Exchange under the symbol “RHI”. On
January 31, 2019, there were 1,210 holders of record of the Common Stock.
January 31, 2019, there were 1,210 holders of record of the Common Stock.
Issuer Purchases of Equity Securities
Issuer Purchases of Equity Securities
October 1, 2019 to October 31, 2019 . . . . . . . . . . . . . . . . . . . .
October 1, 2019 to October 31, 2019 . . . . . . . . . . . . . . . . . . . .
November 1, 2019 to November 30, 2019 . . . . . . . . . . . . . . . .
November 1, 2019 to November 30, 2019 . . . . . . . . . . . . . . . .
December 1, 2019 to December 31, 2019 . . . . . . . . . . . . . . . .
December 1, 2019 to December 31, 2019 . . . . . . . . . . . . . . . .
Total October 1, 2019 to December 31, 2019 . . . . . . . . . . . . .
Total October 1, 2019 to December 31, 2019 . . . . . . . . . . . . .
Total
Total
Number of
Number of
Shares
Shares
Purchased
Purchased
—
—
425,242
425,242
Average
Average
Price Paid
Price Paid
Per Share
Per Share
$
$
$
$
—
—
57.85
57.85
649,526 (a) $
649,526 (a) $
61.39
61.39
1,074,768
1,074,768
Total
Total
Number of
Number of
Shares
Shares
Purchased
Purchased
as Part of
as Part of
Publicly
Publicly
Announced
Announced
Plans
Plans
—
—
425,242
425,242
562,436
562,436
987,678
987,678
Maximum
Maximum
Number of
Number of
Shares that May
Shares that May
Yet Be
Yet Be
Purchased
Purchased
Under Publicly
Under Publicly
Announced
Announced
Plans (b)
Plans (b)
3,441,444
3,441,444
3,016,202
3,016,202
2,453,766
2,453,766
(a)
(a)
(b)
(b)
Includes 87,090 shares repurchased in connection with employee stock plans, whereby Company shares were tendered
Includes 87,090 shares repurchased in connection with employee stock plans, whereby Company shares were tendered
by employees for the payment of applicable withholding taxes.
by employees for the payment of applicable withholding taxes.
Commencing in October 1997, the Company’s Board of Directors has, at various times, authorized the repurchase, from
Commencing in October 1997, the Company’s Board of Directors has, at various times, authorized the repurchase, from
time to time, of the Company’s common stock on the open market or in privately negotiated transactions depending on
time to time, of the Company’s common stock on the open market or in privately negotiated transactions depending on
market conditions. Since plan inception, a total of 118,000,000 shares have been authorized for repurchase of which
market conditions. Since plan inception, a total of 118,000,000 shares have been authorized for repurchase of which
115,546,234 shares have been repurchased as of December 31, 2019.
115,546,234 shares have been repurchased as of December 31, 2019.
Equity Compensation Plan Information
Equity Compensation Plan Information
Plan Category
Plan Category
Equity compensation plans approved by security
Equity compensation plans approved by security
holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity compensation plans not approved by
Equity compensation plans not approved by
security holders . . . . . . . . . . . . . . . . . . . . . . . . . . .
security holders . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of securities
Number of securities
to be issued upon
to be issued upon
exercise of
exercise of
outstanding options,
outstanding options,
warrants and rights
warrants and rights
A
A
Weighted average
Weighted average
exercise price of
exercise price of
outstanding options,
outstanding options,
warrants and rights
warrants and rights
B
B
Number of securities
Number of securities
remaining available for
remaining available for
future issuance under
future issuance under
equity compensation plans
equity compensation plans
(excluding securities
(excluding securities
reflected in column A)
reflected in column A)
C
C
—
—
—
—
—
—
—
—
—
—
—
—
4,823,372
4,823,372
—
—
4,823,372
4,823,372
Since May 2005, all grants have been made pursuant to the Stock Incentive Plan, which was approved by stockholders in
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, May 2014, and May 2019. Such plan authorizes the issuance of
May 2005 and re-approved in May 2008, May 2011, May 2013, May 2014, and May 2019. Such plan authorizes the issuance of
stock options, restricted stock, stock units and stock appreciation rights to directors, executive officers and employees.
stock options, restricted stock, stock units and stock appreciation rights to directors, executive officers and employees.
11
11
2019 ANNUAL REPORT | ROBERT HALF
Stock Performance Graph
Stock Performance Graph
The following graph compares, through December 31, 2019, the cumulative total return of the Company’s Common
The following graph compares, through December 31, 2019, 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
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 peer companies
investment of $100 at the beginning of the period depicted in the chart and reinvestment of all dividends. The peer companies
are weighted by their respective market caps at the beginning of each period. The information presented in the graph was
are weighted by their respective market caps at the beginning of each period. 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
obtained by the Company from outside sources it considers to be reliable but has not been independently verified by the
Company.
Company.
$200
$200
$150
$150
$100
$100
$50
$50
$0
$0
1 / 2
1 / 2
4
4
1
1
0
0
2 / 3
2 / 3
1
1
5
5
1
1
0
0
1 / 2
1 / 2
2 / 3
2 / 3
1
1
6
6
1
1
0
0
1 / 2
1 / 2
2 / 3
2 / 3
1
1
7
7
1
1
0
0
1 / 2
1 / 2
2 / 3
2 / 3
1
1
8
8
1
1
0
0
1 / 2
1 / 2
2 / 3
2 / 3
1
1
9
9
1
1
0
0
1 / 2
1 / 2
2 / 3
2 / 3
1
1
Robert Half International Inc.
Robert Half International Inc.
Peer Group(a)
Peer Group(a)
S&P 500 Index
S&P 500 Index
(a)
(a)
This index represents the cumulative total return of the Company and the following corporations providing temporary
This index represents the cumulative total return of the Company and the following corporations providing temporary
or permanent employment services: Kelly Services, Inc.; Kforce Inc.; ManpowerGroup; and Resources Connection Inc.
or permanent employment services: Kelly Services, Inc.; Kforce Inc.; ManpowerGroup; and Resources Connection Inc.
12
12
2019 ANNUAL REPORT | ROBERT HALF Item 6. Selected Financial Data
Item 6. Selected Financial Data
The selected five-year financial data presented below should be read in conjunction with the information contained in
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
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.
Consolidated Financial Statements and the Notes thereto contained in Item 8. Financial Statements and Supplementary Data.
2019
2019
2018
2018
2017
2017
2016
2016
2015
2015
Years Ended December 31,
Years Ended December 31,
(in thousands)
(in thousands)
Income Statement Data:
Income Statement Data:
Service revenues . . . . . . . . . . . . . . . . . . . . $6,074,432
Service revenues . . . . . . . . . . . . . . . . . . . . $6,074,432
$5,800,271
$5,800,271
$5,266,789
$5,266,789
$5,250,399
$5,250,399
$5,094,933
$5,094,933
Costs of services . . . . . . . . . . . . . . . . . . . .
Costs of services . . . . . . . . . . . . . . . . . . . .
3,543,913
3,543,913
Gross margin . . . . . . . . . . . . . . . . . . . . . . .
Gross margin . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative
Selling, general and administrative
2,530,519
2,530,519
3,390,257
3,390,257
2,410,014
2,410,014
3,102,977
3,102,977
2,163,812
2,163,812
3,089,723
3,089,723
2,160,676
2,160,676
2,980,462
2,980,462
2,114,471
2,114,471
expenses . . . . . . . . . . . . . . . . . . . . . . . . .
expenses . . . . . . . . . . . . . . . . . . . . . . . . .
1,908,768
1,908,768
1,821,089
1,821,089
1,646,532
1,646,532
1,606,217
1,606,217
1,533,799
1,533,799
Amortization of intangible assets . . . . . . .
Amortization of intangible assets . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . .
Income before income taxes . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . .
1,361
1,361
(5,125)
(5,125)
625,515
625,515
171,082
171,082
1,705
1,705
(4,382)
(4,382)
591,602
591,602
157,314
157,314
1,563
1,563
(1,799)
(1,799)
517,516
517,516
226,932
226,932
1,237
1,237
(888)
(888)
554,110
554,110
210,721
210,721
192
192
(550)
(550)
581,030
581,030
223,234
223,234
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 454,433
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 454,433
$ 434,288
$ 434,288
$ 290,584
$ 290,584
$ 343,389
$ 343,389
$ 357,796
$ 357,796
Years Ended December 31,
Years Ended December 31,
2019
2019
2018
2018
2017
2017
2016
2016
2015
2015
(in thousands, except per share amounts)
(in thousands, except per share amounts)
Net Income Per Share:
Net Income Per Share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . $
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . $
3.93
3.93
3.90
3.90
$
$
$
$
3.60
3.60
3.57
3.57
$
$
$
$
2.34
2.34
2.33
2.33
$
$
$
$
2.68
2.68
2.67
2.67
$
$
$
$
2.72
2.72
2.69
2.69
Shares:
Shares:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . .
115,656
115,656
116,411
116,411
120,513
120,513
121,602
121,602
124,152
124,152
124,892
124,892
127,991
127,991
128,766
128,766
131,749
131,749
132,930
132,930
Dividends Declared Per Share . . . . . . . . . $
Dividends Declared Per Share . . . . . . . . . $
1.24
1.24
$
$
1.12
1.12
$
$
.96
.96
$
$
.88
.88
$
$
.80
.80
2019
2019
2018
2018
2017
2017
2016
2016
2015
2015
(in thousands)
(in thousands)
December 31,
December 31,
Balance Sheet Data:
Balance Sheet Data:
Total assets . . . . . . . . . . . . . . . . . . . . . . . . $2,311,408
Total assets . . . . . . . . . . . . . . . . . . . . . . . . $2,311,408
$1,903,097
$1,903,097
$1,867,454
$1,867,454
$1,777,971
$1,777,971
$1,671,044
$1,671,044
Notes payable, less current portion . . . . . . $
Notes payable, less current portion . . . . . . $
239
239
$
$
457
457
$
$
657
657
$
$
840
840
$
$
1,007
1,007
Stockholders’ equity . . . . . . . . . . . . . . . . . $1,143,683
Stockholders’ equity . . . . . . . . . . . . . . . . . $1,143,683
$1,063,198
$1,063,198
$1,105,265
$1,105,265
$1,086,599
$1,086,599
$1,003,781
$1,003,781
13
13
2019 ANNUAL REPORT | ROBERT HALF
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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
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
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”,
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-
“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
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: changes to or new interpretations
in the statements. These risks and uncertainties include, but are not limited to, the following: changes to or new interpretations
of U.S. or international tax regulations; the global financial and economic situation; changes in levels of unemployment and
of U.S. or international tax regulations; 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
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;
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
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
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
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 engagement
its margins; the possibility of the Company incurring liability for its activities, including the activities of its engagement
professionals, or for events impacting its engagement professionals on clients’ premises; the possibility that adverse publicity
professionals, or for events impacting its engagement professionals 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,
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 and in managing the recently announced
training, and retaining qualified management personnel and other staff employees and in managing the recently announced
leadership transition; the Company’s ability to comply with governmental regulations affecting personnel services businesses in
leadership transition; 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
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;
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
litigation relating to prior or current transactions or activities, including litigation that may be disclosed from time to time in the
Company’s Securities and Exchange Commission (“SEC”) filings; the ability of the Company to manage its international
Company’s Securities and Exchange Commission (“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
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
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
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 or the Company could
communications hardware and software systems could be damaged or their service interrupted or the Company could
experience a cybersecurity breach; and the possibility that the Company may fail to maintain adequate financial and
experience a cybersecurity breach; 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
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
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
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
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
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
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.”
regarding these and other risks and uncertainties is contained in Item 1A. “Risk Factors.”
Executive Overview
Executive Overview
Demand for the Company’s temporary and consultant staffing, permanent placement staffing and risk consulting and
Demand for the Company’s temporary and consultant staffing, permanent placement staffing and risk consulting and
internal audit services is largely dependent upon general economic and labor trends both domestically and abroad. Annual
internal audit services is largely dependent upon general economic and labor trends both domestically and abroad. Annual
service revenues reached $6.07 billion in 2019, an increase of 5% from the prior year. Full-year 2019 net income increased to
service revenues reached $6.07 billion in 2019, an increase of 5% from the prior year. Full-year 2019 net income increased to
$454 million and diluted net income per share increased to $3.90. All three of the Company’s reportable segments experienced
$454 million and diluted net income per share increased to $3.90. All three of the Company’s reportable segments experienced
revenue growth, led by risk consulting and internal audit services which increased 18% in 2019 compared to last year.
revenue growth, led by risk consulting and internal audit services which increased 18% in 2019 compared to last year.
We believe that the Company is well positioned in the current macroeconomic environment. The United States economic
We believe that the Company is well positioned in the current macroeconomic environment. The United States economic
backdrop during 2019 was conducive to growth for the Company as real gross domestic product (“GDP”) grew an estimated
backdrop during 2019 was conducive to growth for the Company as real gross domestic product (“GDP”) grew an estimated
2.3%, while the unemployment rate declined from 3.9% in December 2018 to 3.5% in December 2019. In the United States, the
2.3%, while the unemployment rate declined from 3.9% in December 2018 to 3.5% in December 2019. In the United States, the
number of job openings has exceeded the number of hires since February 2015, creating competition for skilled talent that
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. The U.S. labor market remains robust, with significant demand due to talent shortages
increases the Company’s value to clients. The U.S. labor market remains robust, with significant demand due to talent shortages
across our professional disciplines, where unemployment remains near a 50-year low.
across our professional disciplines, where unemployment remains near a 50-year low.
Demand for Protiviti’s services was broad-based across all of its consulting and internal audit solutions. Protiviti
Demand for Protiviti’s services was broad-based across all of its consulting and internal audit solutions. Protiviti
continues to nurture and grow a loyal client base.
continues to nurture and grow a loyal client base.
We monitor various economic indicators and business trends in all of the countries in which we operate to anticipate
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
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
personnel, which will best position the Company for success in the current and future global macroeconomic environment. The
14
14
2019 ANNUAL REPORT | ROBERT HALF Company’s investments in headcount are typically structured to proactively support and align with expected revenue growth
Company’s investments in headcount are typically structured to proactively support and align with expected revenue growth
trends. As such, during 2019, we added headcount in all of our lines of business compared to prior year-end levels.
trends. As such, during 2019, we added headcount in all of our lines of business compared to prior year-end levels.
We have limited visibility into future revenues not only due to the dependence on macroeconomic conditions noted above,
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
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 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
headcount levels for our full-time staff to remain relatively flat for each of our reporting segments throughout the first quarter of
2020.
2020.
Capital expenditures, including $30 million related to cloud computing implementations, in 2019, totaled $90 million,
Capital expenditures, including $30 million related to cloud computing implementations, in 2019, totaled $90 million,
approximately 62% of which represented investments in software initiatives and technology infrastructure, both of which are
approximately 62% of which represented investments in software initiatives and technology infrastructure, both of which are
important to the Company’s future growth opportunities. Capital expenditures for cloud computing implementation costs are
important to the Company’s future growth opportunities. Capital expenditures for cloud computing implementation costs are
included in cash flows from operating activities on the Company’s Condensed Consolidated Statements of Cash Flows. Capital
included in cash flows from operating activities on the Company’s Condensed Consolidated Statements of Cash Flows. Capital
expenditures also included amounts spent on tenant improvements and furniture and equipment in the Company’s leased
expenditures also included amounts spent on tenant improvements and furniture and equipment in the Company’s leased
offices. We currently expect that 2020 capitalized expenditures will range from $100 million to $110 million, of which $50
offices. We currently expect that 2020 capitalized expenditures will range from $100 million to $110 million, of which $50
million to $60 million relates to software initiatives and technology infrastructure, including capitalized costs relating to the
million to $60 million relates to software initiatives and technology infrastructure, including capitalized costs relating to the
implementation of cloud computing arrangements.
implementation of cloud computing arrangements.
Critical Accounting Policies and Estimates
Critical Accounting Policies and Estimates
As described below, the Company’s most critical accounting policies and estimates are those that involve subjective
As described below, the Company’s most critical accounting policies and estimates are those that involve subjective
decisions or assessments.
decisions or assessments.
Service Revenues. The Company derives its revenues from three segments: temporary and consultant staffing,
Service Revenues. The Company derives its revenues from three segments: temporary and consultant staffing,
permanent placement staffing, and risk consulting and internal audit services. Revenues are recognized when promised goods or
permanent placement staffing, and risk consulting and internal audit services. Revenues are recognized when promised goods or
services are delivered to customers, in an amount that reflects the consideration the Company expects to be entitled to in
services are delivered to customers, in an amount that reflects the consideration the Company expects to be entitled to in
exchange for those goods or services. See Note C—“Revenue Recognition” to the Company’s Consolidated Financial
exchange for those goods or services. See Note C—“Revenue Recognition” to the Company’s Consolidated Financial
Statements included under Part II—Item 8 of this report.
Statements included under Part II—Item 8 of this report.
Income Taxes. The Company’s operations are subject to U.S. federal, state and local, and foreign income taxes. In
Income Taxes. The Company’s operations are subject to U.S. federal, state and local, and foreign income taxes. In
establishing its deferred income tax assets and liabilities and its provision for income taxes, the Company makes judgments and
establishing its deferred income tax assets and liabilities and its provision for income taxes, the Company makes judgments and
interpretations based on the enacted tax laws that are applicable to its operations in various jurisdictions. Deferred tax assets and
interpretations based on the enacted tax laws that are applicable to its operations in various jurisdictions. Deferred tax assets and
liabilities are measured and recorded using current enacted tax rates, which the Company expects will apply to taxable income
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
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 its deferred tax assets is dependent on future taxable income and the effectiveness of its tax
Company’s expected realization of its deferred tax assets is dependent on future taxable income and the effectiveness of its tax
planning in the various relevant jurisdictions.
planning 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 $21.6 million and $23.1 million were recorded as of December 31, 2019 and 2018,
not be realized. Valuation allowances of $21.6 million and $23.1 million were recorded as of December 31, 2019 and 2018,
respectively. The valuation allowances recorded relate primarily to net operating losses in certain foreign operations. If such
respectively. The valuation allowances recorded relate 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 related valuation reserve.
of the related valuation reserve.
While management believes that its judgments and interpretations regarding income taxes are appropriate, significant
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.
differences in actual experience may materially affect the future financial results of the Company.
Recent Accounting Pronouncements
Recent Accounting Pronouncements
See Note B—“New Accounting Pronouncements” to the Company’s Consolidated Financial Statements included under
See Note B—“New Accounting Pronouncements” to the Company’s Consolidated Financial Statements included under
Part II—Item 8 of this report.
Part II—Item 8 of this report.
Results of Operations
Results of Operations
Demand for the Company’s temporary and consultant staffing, permanent placement staffing and risk consulting and
Demand for the Company’s temporary and consultant staffing, permanent placement staffing and risk consulting and
internal audit services is largely dependent upon general economic and labor market conditions both domestically and abroad.
internal audit services is largely dependent upon general economic and labor market conditions both domestically and abroad.
Because of the inherent difficulty in predicting economic trends and the absence of material long-term contracts in any of the
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 forecasted with certainty. We believe the
Company’s business units, future demand for the Company’s services cannot be forecasted with certainty. We believe the
Company is well positioned in the current macroeconomic environment.
Company is well positioned in the current macroeconomic environment.
15
15
2019 ANNUAL REPORT | ROBERT HALF The Company’s temporary and permanent staffing business conducts placement activities through 326 offices in
The Company’s temporary and permanent staffing business conducts placement activities through 326 offices in
42 states, the District of Columbia and 17 foreign countries, while Protiviti has 62 offices in 23 states and 11 foreign countries.
42 states, the District of Columbia and 17 foreign countries, while Protiviti has 62 offices in 23 states and 11 foreign countries.
Non-GAAP Financial Measures
Non-GAAP Financial Measures
The financial results of the Company are prepared in conformity with accounting principles generally accepted in the
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
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
performance, the Company supplements its GAAP financial results with revenue growth rates derived from non-GAAP revenue
amounts.
amounts.
Variations in the Company’s financial results include the impact of changes in foreign currency exchange rates, billing
Variations in the Company’s financial results include the impact of changes in foreign currency exchange rates, billing
days, and certain intercompany adjustments. The Company provides “as adjusted” revenue growth calculations to remove the
days, and certain intercompany adjustments. The Company provides “as adjusted” 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
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 an as adjusted basis for global, U.S. and international operations. The Company has
on both a reported basis and also on an as adjusted basis for global, U.S. and international operations. The Company has
provided this data because it focuses on the Company’s revenue growth rates attributable to operating activities and aids in
provided this data because it focuses on the Company’s revenue growth rates attributable to operating activities and aids in
evaluating revenue trends over time. The Company expresses year-over-year revenue changes as calculated percentages using
evaluating revenue trends over time. The Company expresses year-over-year revenue changes as calculated percentages using
the same number of billing days, constant currency exchange rates, and certain intercompany adjustments.
the same number of billing days, constant currency exchange rates, and certain intercompany adjustments.
In order to calculate constant currency revenue growth rates, as reported amounts are retranslated using foreign currency
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
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
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
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
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.
to arrive at a per billing day amount. Same billing day growth rates are then calculated based upon the per billing day amounts.
In order to remove the fluctuations caused by the impact of certain intercompany adjustments, applicable comparative period
In order to remove the fluctuations caused by the impact of certain intercompany adjustments, applicable comparative period
revenues are reclassified to conform with the current period presentation. The term “as adjusted” means that the impact of
revenues are reclassified to conform with the current period presentation. The term “as adjusted” means that the impact of
different billing days, constant currency fluctuations, and certain intercompany adjustments are removed from the revenue
different billing days, constant currency fluctuations, and certain intercompany adjustments are removed from the revenue
growth rate calculation.
growth rate calculation.
The non-GAAP financial measures provided herein may not provide information that is directly comparable to that
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.
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
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
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
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 as adjusted revenue growth rates to the reported revenue growth rates is
by GAAP financial results. A reconciliation of the as adjusted revenue growth rates to the reported revenue growth rates is
provided herein.
provided herein.
Refer to Item 7a. “Quantitative and Qualitative Disclosures About Market Risk” for further discussion of the impact of
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.
foreign currency exchange rates on the Company’s results of operations and financial condition.
Years ended December 31, 2019 and 2018
Years ended December 31, 2019 and 2018
Revenues. The Company’s revenues were $6.07 billion for the year ended December 31, 2019, increasing by 4.7%
Revenues. The Company’s revenues were $6.07 billion for the year ended December 31, 2019, increasing by 4.7%
compared to $5.80 billion for the year ended December 31, 2018. Revenues from foreign operations represented 22% and 24%
compared to $5.80 billion for the year ended December 31, 2018. Revenues from foreign operations represented 22% and 24%
of total revenues for the years ended December 31, 2019 and 2018, respectively. The Company analyzes its revenues for three
of total revenues for the years ended December 31, 2019 and 2018, respectively. The Company analyzes its revenues for three
reportable segments: temporary and consultant staffing, permanent placement staffing and risk consulting and internal audit
reportable segments: temporary and consultant staffing, permanent placement staffing and risk consulting and internal audit
services. In 2019, revenues for all three of the Company’s reportable segments were up compared to 2018. Revenue growth was
services. In 2019, revenues for all three of the Company’s reportable segments were up compared to 2018. Revenue growth was
strongest domestically. Risk consulting and internal audit services continued to post strong growth rates. Contributing factors
strongest domestically. Risk consulting and internal audit services continued to post strong growth rates. Contributing factors
for each reportable segment are discussed below in further detail.
for each reportable segment are discussed below in further detail.
Temporary and consultant staffing revenues were $4.41 billion for the year ended December 31, 2019, increasing by
Temporary and consultant staffing revenues were $4.41 billion for the year ended December 31, 2019, increasing by
1.9% compared to revenues of $4.33 billion for the year ended December 31, 2018. Key drivers of temporary and consultant
1.9% compared to revenues of $4.33 billion for the year ended December 31, 2018. Key drivers of temporary and consultant
staffing revenues include average hourly bill rates and the number of hours worked by the Company’s engagement
staffing revenues include average hourly bill rates and the number of hours worked by the Company’s engagement
professionals on client engagements. On an as adjusted basis, temporary and consultant staffing revenues increased 3.8% for
professionals on client engagements. On an as adjusted basis, temporary and consultant staffing revenues increased 3.8% for
2019, compared to 2018, due primarily to a 5.2% increase in average bill rates, partially offset by fewer hours worked by the
2019, compared to 2018, due primarily to a 5.2% increase in average bill rates, partially offset by fewer hours worked by the
Company’s engagement professionals. In the U.S., 2019 revenues increased 3.9% on an as reported basis and 4.1% on an as
Company’s engagement professionals. In the U.S., 2019 revenues increased 3.9% on an as reported basis and 4.1% on an as
adjusted basis, compared to 2018. For the Company’s international operations, 2019 revenues decreased 4.8% on an as reported
adjusted basis, compared to 2018. For the Company’s international operations, 2019 revenues decreased 4.8% on an as reported
basis and increased 2.8% on an as adjusted basis, compared to 2018.
basis and increased 2.8% on an as adjusted basis, compared to 2018.
Permanent placement staffing revenues were $533 million for the year ended December 31, 2019, increasing by 4.2%
Permanent placement staffing revenues were $533 million for the year ended December 31, 2019, increasing by 4.2%
compared to revenues of $512 million for the year ended December 31, 2018. Key drivers of permanent placement staffing
compared to revenues of $512 million for the year ended December 31, 2018. Key drivers of permanent placement staffing
revenues consist of the number of candidate placements and average fees earned per placement. On an as adjusted basis,
revenues consist of the number of candidate placements and average fees earned per placement. On an as adjusted basis,
16
16
2019 ANNUAL REPORT | ROBERT HALF permanent placement staffing revenues increased 5.6% for 2019 compared to 2018, driven by increases in number of
permanent placement staffing revenues increased 5.6% for 2019 compared to 2018, driven by increases in number of
placements and average fees earned per placement. In the U.S., 2019 revenues increased 6.5% on an as reported basis and 6.7%
placements and average fees earned per placement. In the U.S., 2019 revenues increased 6.5% on an as reported basis and 6.7%
on an as adjusted basis, compared to 2018. For the Company’s international operations, 2019 revenues decreased 0.8% on an as
on an as adjusted basis, compared to 2018. For the Company’s international operations, 2019 revenues decreased 0.8% on an as
reported basis, and increased 2.9% on an as adjusted basis, compared to 2018. Historically, demand for permanent placement
reported basis, and increased 2.9% on an as adjusted basis, compared to 2018. Historically, demand for permanent placement
services is even more sensitive to economic and labor market conditions than demand for temporary and consulting staffing and
services is even more sensitive to economic and labor market conditions than demand for temporary and consulting staffing and
this is expected to continue.
this is expected to continue.
Risk consulting and internal audit services revenues were $1.13 billion for the year ended December 31, 2019, increasing
Risk consulting and internal audit services revenues were $1.13 billion for the year ended December 31, 2019, increasing
by 17.9% compared to revenues of $958 million for the year ended December 31, 2018. Key drivers of risk consulting and
by 17.9% compared to revenues of $958 million for the year ended December 31, 2018. Key drivers of risk consulting and
internal audit services revenues are the billable hours worked by consultants on client engagements and average hourly bill
internal audit services revenues are the billable hours worked by consultants on client engagements and average hourly bill
rates. On an as adjusted basis, risk consulting and internal audit services revenues increased 15.0% for 2019 compared to 2018,
rates. On an as adjusted basis, risk consulting and internal audit services revenues increased 15.0% for 2019 compared to 2018,
driven primarily by an increase in billable hours. In the U.S., 2019 revenues increased 16.2% on an as reported basis, or 16.5%
driven primarily by an increase in billable hours. In the U.S., 2019 revenues increased 16.2% on an as reported basis, or 16.5%
on an as adjusted basis, compared to 2018. For the Company’s international operations, 2019 revenues increased 24.1% on an
on an as adjusted basis, compared to 2018. For the Company’s international operations, 2019 revenues increased 24.1% on an
as reported basis, or 10.1% on an as adjusted basis, compared to 2018.
as reported basis, or 10.1% on an as adjusted basis, compared to 2018.
A reconciliation of the non-GAAP year-over-year revenue growth rates to the as reported year-over-year revenue growth
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, 2019, is presented in the following table:
rates for the year ended December 31, 2019, is presented in the following table:
Global
Global
United States
United States
International
International
Temporary and consultant staffing
Temporary and consultant staffing
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.9%
1.9%
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As Adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As Adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing
Permanent placement staffing
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As Adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As Adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services
Risk consulting and internal audit services
—
—
1.1%
1.1%
0.8%
0.8%
3.8%
3.8%
4.2%
4.2%
0.1%
0.1%
1.3%
1.3%
5.6%
5.6%
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17.9%
17.9%
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billing Days Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As Adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As Adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.0%
1.0%
-3.9%
-3.9%
15.0%
15.0%
3.9%
3.9%
0.2%
0.2%
—
—
—
—
4.1%
4.1%
6.5%
6.5%
0.2%
0.2%
—
—
6.7%
6.7%
16.2%
16.2%
0.3%
0.3%
—
—
—
—
16.5%
16.5%
-4.8%
-4.8%
-0.5%
-0.5%
4.8%
4.8%
3.3%
3.3%
2.8%
2.8%
-0.8%
-0.8%
-0.5%
-0.5%
4.2%
4.2%
2.9%
2.9%
24.1%
24.1%
-0.6%
-0.6%
4.0%
4.0%
-17.4%
-17.4%
10.1%
10.1%
Gross Margin. The Company’s gross margin dollars were $2.53 billion for the year ended December 31, 2019, up 5.0%
Gross Margin. The Company’s gross margin dollars were $2.53 billion for the year ended December 31, 2019, up 5.0%
from $2.41 billion for the year ended December 31, 2018. Contributing factors for each reportable segment are discussed below
from $2.41 billion for the year ended December 31, 2018. Contributing factors for each reportable segment are discussed below
in further detail.
in further detail.
Gross margin dollars for temporary and consultant staffing represent revenues less costs of services, which consist of
Gross margin dollars for temporary and consultant staffing represent revenues less costs of services, which consist of
payroll, payroll taxes and benefit costs for engagement professionals, and reimbursable expenses. The key drivers of gross
payroll, payroll taxes and benefit costs for engagement professionals, and reimbursable expenses. The key drivers of gross
margin are: i) pay-bill spreads, which represent the differential between wages paid to engagement professionals and amounts
margin are: i) pay-bill spreads, which represent the differential between wages paid to engagement professionals and amounts
billed to clients; ii) fringe costs, which are primarily composed of payroll taxes and benefit costs for temporary and consultant
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
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 $1.68
with the Company’s client. Gross margin dollars for the Company’s temporary and consultant staffing division were $1.68
billion for the year ended December 31, 2019, up 2.9% from $1.63 billion for the year ended December 31, 2018. As a
billion for the year ended December 31, 2019, up 2.9% from $1.63 billion for the year ended December 31, 2018. As a
percentage of revenues, gross margin dollars for temporary and consultant staffing were 38.0% in 2019, up from 37.6% in
percentage of revenues, gross margin dollars for temporary and consultant staffing were 38.0% in 2019, up from 37.6% in
2018. This year-over-year improvement in gross margin percentage was primarily attributable to higher pay-bill spreads.
2018. This year-over-year improvement in gross margin percentage was primarily attributable to higher pay-bill spreads.
Gross margin dollars for permanent placement staffing represent revenues less reimbursable expenses. Gross margin
Gross margin dollars for permanent placement staffing represent revenues less reimbursable expenses. Gross margin
dollars for the Company’s permanent placement staffing division were $532 million for the year ended December 31, 2019, up
dollars for the Company’s permanent placement staffing division were $532 million for the year ended December 31, 2019, up
4.2% from $511 million for the year ended December 31, 2018. Because reimbursable expenses for permanent placement
4.2% from $511 million for the year ended December 31, 2018. 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
staffing services are de minimis, the increase in gross margin dollars is substantially explained by the increase in revenues
previously discussed.
previously discussed.
17
17
2019 ANNUAL REPORT | ROBERT HALF Gross margin dollars for risk consulting and internal audit services represent revenues less costs of services, which
Gross margin dollars for risk consulting and internal audit services represent revenues less costs of services, which
consist primarily of professional staff payroll, payroll taxes, benefit costs and reimbursable expenses. The primary drivers of
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
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
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
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 $321 million for the year ended December 31, 2019, up
for the Company’s risk consulting and internal audit division were $321 million for the year ended December 31, 2019, up
19.0% from $269 million for the year ended December 31, 2018. As a percentage of revenues, gross margin dollars for risk
19.0% from $269 million for the year ended December 31, 2018. As a percentage of revenues, gross margin dollars for risk
consulting and internal audit services were 28.4% in 2019, up from 28.1% in 2018. The year-over-year improvement in gross
consulting and internal audit services were 28.4% in 2019, up from 28.1% in 2018. The year-over-year improvement in gross
margin percentage was due primarily to improved staff utilization.
margin percentage was due primarily to improved staff utilization.
Selling, General and Administrative Expenses. The Company’s selling, general and administrative expenses consist
Selling, General and Administrative Expenses. The Company’s selling, general and administrative expenses consist
primarily of staff compensation, advertising, variable overhead, depreciation and occupancy costs. The Company’s selling,
primarily of staff compensation, advertising, variable overhead, depreciation and occupancy costs. The Company’s selling,
general and administrative expenses were $1.91 billion for the year ended December 31, 2019, up 4.8% from $1.82 billion for
general and administrative expenses were $1.91 billion for the year ended December 31, 2019, up 4.8% from $1.82 billion for
the year ended December 31, 2018. As a percentage of revenues, the Company’s selling, general and administrative expenses
the year ended December 31, 2018. As a percentage of revenues, the Company’s selling, general and administrative expenses
were 31.4% for both the years ended December 31, 2019, and 2018. Contributing factors for each reportable segment are
were 31.4% for both the years ended December 31, 2019, and 2018. Contributing factors for each reportable segment are
discussed below in further detail.
discussed below in further detail.
Selling, general and administrative expenses for the Company’s temporary and consultant staffing division were $1.27
Selling, general and administrative expenses for the Company’s temporary and consultant staffing division were $1.27
billion for the year ended December 31, 2019, increasing by 3.5% from $1.22 billion for the year ended December 31, 2018. As
billion for the year ended December 31, 2019, increasing by 3.5% from $1.22 billion for the year ended December 31, 2018. As
a percentage of revenues, selling, general and administrative expenses for temporary and consultant staffing were 28.7% in
a percentage of revenues, selling, general and administrative expenses for temporary and consultant staffing were 28.7% in
2019, up from 28.3% in 2018 due primarily to negative leverage resulting from the Company’s international operations.
2019, up from 28.3% in 2018 due primarily to negative leverage resulting from the Company’s international operations.
Selling, general and administrative expenses for the Company’s permanent placement staffing division were $449 million
Selling, general and administrative expenses for the Company’s permanent placement staffing division were $449 million
for the year ended December 31, 2019, increasing by 6.7% from $420 million for the year ended December 31, 2018. As a
for the year ended December 31, 2019, increasing by 6.7% from $420 million for the year ended December 31, 2018. As a
percentage of revenues, selling, general and administrative expenses for permanent placement staffing services were 84.1% in
percentage of revenues, selling, general and administrative expenses for permanent placement staffing services were 84.1% in
2019, up from 82.1% in 2018 due primarily to negative leverage resulting from the Company’s international operations.
2019, up from 82.1% in 2018 due primarily to negative leverage resulting from the Company’s international operations.
Selling, general and administrative expenses for the Company’s risk consulting and internal audit services division were
Selling, general and administrative expenses for the Company’s risk consulting and internal audit services division were
$193 million for the year ended December 31, 2019, increasing by 9.6% from $176 million for the year ended December 31,
$193 million for the year ended December 31, 2019, increasing by 9.6% from $176 million for the year ended December 31,
2018. As a percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services
2018. As a percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services
were 17.1% in 2019, down from 18.4% in 2018. The decrease in selling, general and administrative expenses as a percentage of
were 17.1% in 2019, down from 18.4% in 2018. The decrease in selling, general and administrative expenses as a percentage of
revenue is primarily due to positive operating leverage resulting from increased revenue.
revenue is primarily due to positive operating leverage resulting from increased revenue.
Operating Income. The Company’s total operating income was $622 million, or 10.2% of revenues, for the year ended
Operating Income. The Company’s total operating income was $622 million, or 10.2% of revenues, for the year ended
December 31, 2019, up 5.6% from $589 million, or 10.2% of revenues, for the year ended December 31, 2018. For the
December 31, 2019, up 5.6% from $589 million, or 10.2% of revenues, for the year ended December 31, 2018. For the
Company’s temporary and consultant staffing division, operating income was $410 million, or 9.3% of applicable revenues, up
Company’s temporary and consultant staffing division, operating income was $410 million, or 9.3% of applicable revenues, up
1.3% from $405 million, or 9.3% of applicable revenues, in 2018. For the Company’s permanent placement staffing division,
1.3% from $405 million, or 9.3% of applicable revenues, in 2018. For the Company’s permanent placement staffing division,
operating income was $84 million, or 15.7% of applicable revenues, down 7.6% from operating income of $91 million, or
operating income was $84 million, or 15.7% of applicable revenues, down 7.6% from operating income of $91 million, or
17.7% of applicable revenues, in 2018. For the Company’s risk consulting and internal audit services division, operating
17.7% of applicable revenues, in 2018. For the Company’s risk consulting and internal audit services division, operating
income was $128 million, or 11.3% of applicable revenues, up 36.8% from operating income of $93 million, or 9.7% of
income was $128 million, or 11.3% of applicable revenues, up 36.8% from operating income of $93 million, or 9.7% of
applicable revenues, in 2018.
applicable revenues, in 2018.
Provision for income taxes. The provision for income taxes was 27.4% and 26.6% for the years ended December 31,
Provision for income taxes. The provision for income taxes was 27.4% and 26.6% for the years ended December 31,
2019 and 2018, respectively. The higher tax rate in 2019 is primarily due to an increase in permanent non-deductible expenses
2019 and 2018, respectively. The higher tax rate in 2019 is primarily due to an increase in permanent non-deductible expenses
and a return-to-provision tax rate benefit from changes the Company made in connection with the Tax Cuts and Jobs Act in
and a return-to-provision tax rate benefit from changes the Company made in connection with the Tax Cuts and Jobs Act in
2018.
2018.
Years ended December 31, 2018 and 2017
Years ended December 31, 2018 and 2017
A discussion of changes regarding our financial condition and results of operations for the year ended December 31,
A discussion of changes regarding our financial condition and results of operations for the year ended December 31,
2018, compared to the year ended December 31, 2017, can be found in “Management’s Discussion and Analysis of Financial
2018, compared to the year ended December 31, 2017, can be found in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year
Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2018, filed with the SEC on February 15, 2019, which is available free of charge on the SEC’s website at
ended December 31, 2018, filed with the SEC on February 15, 2019, which is available free of charge on the SEC’s website at
www.sec.gov and at www.roberthalf.com/investor-center.
www.sec.gov and at www.roberthalf.com/investor-center.
Liquidity and Capital Resources
Liquidity and Capital Resources
The change in the Company’s liquidity during the years ended December 31, 2019 and 2018, is primarily the net effect of
The change in the Company’s liquidity during the years ended December 31, 2019 and 2018, is primarily the net effect of
funds generated by operations and the funds used for capital expenditures, payments for employee deferred compensation plans,
funds generated by operations and the funds used for capital expenditures, payments for employee deferred compensation plans,
repurchases of common stock, and payment of dividends.
repurchases of common stock, and payment of dividends.
18
18
2019 ANNUAL REPORT | ROBERT HALF Cash and cash equivalents were $270 million and $277 million at December 31, 2019 and 2018, respectively. Operating
Cash and cash equivalents were $270 million and $277 million at December 31, 2019 and 2018, respectively. Operating
activities provided $520 million during the year ended December 31, 2019, offset by $102 million and $423 million of net cash
activities provided $520 million during the year ended December 31, 2019, offset by $102 million and $423 million of net cash
used in investing activities and financing activities, respectively. Operating activities provided $572 million during the year
used in investing activities and financing activities, respectively. Operating activities provided $572 million during the year
ended December 31, 2018, offset by $89 million and $490 million of net cash used in investing activities and financing
ended December 31, 2018, offset by $89 million and $490 million of net cash used in investing activities and financing
activities, respectively.
activities, respectively.
Operating activities—Net cash provided by operating activities for the year ended December 31, 2019, was $520 million.
Operating activities—Net cash provided by operating activities for the year ended December 31, 2019, was $520 million.
This was composed of net income of $454 million adjusted upward for non-cash items of $118 million, offset by changes in
This was composed of net income of $454 million adjusted upward for non-cash items of $118 million, offset by changes in
working capital of $52 million. Net cash provided by operating activities for the year ended December 31, 2018, was $572
working capital of $52 million. Net cash provided by operating activities for the year ended December 31, 2018, was $572
million. This was composed of net income of $434 million adjusted upward for non-cash items of $107 million and net cash
million. This was composed of net income of $434 million adjusted upward for non-cash items of $107 million and net cash
provided by changes in working capital of $31 million.
provided by changes in working capital of $31 million.
Investing activities—Cash used in investing activities for the year ended December 31, 2019, was $102 million. This was
Investing activities—Cash used in investing activities for the year ended December 31, 2019, was $102 million. This was
composed of capital expenditures of $59 million and net payments for employee deferred compensation plans of $43 million.
composed of capital expenditures of $59 million and net payments for employee deferred compensation plans of $43 million.
Cash used in investing activities for the year ended December 31, 2018, was $89 million. This was primarily composed of
Cash used in investing activities for the year ended December 31, 2018, was $89 million. This was primarily composed of
capital expenditures of $43 million and net payments for employee deferred compensation plans of $46 million.
capital expenditures of $43 million and net payments for employee deferred compensation plans of $46 million.
Financing activities—Cash used in financing activities for the year ended December 31, 2019, was $423 million. This
Financing activities—Cash used in financing activities for the year ended December 31, 2019, was $423 million. This
included repurchases of $277 million in common stock and $146 million in dividends paid to stockholders. Cash used in
included repurchases of $277 million in common stock and $146 million in dividends paid to stockholders. Cash used in
financing activities for the year ended December 31, 2018, was $490 million. This included repurchases of $354 million in
financing activities for the year ended December 31, 2018, was $490 million. This included repurchases of $354 million in
common stock and $136 million in dividends paid to stockholders.
common stock and $136 million in dividends paid to stockholders.
As of December 31, 2019, the Company is authorized to repurchase, from time to time, up to 2.5 million additional shares
As of December 31, 2019, the Company is authorized to repurchase, from time to time, up to 2.5 million additional shares
of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions.
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, 2019 and 2018, the Company repurchased approximately 4.3 million shares and
During the years ended December 31, 2019 and 2018, the Company repurchased approximately 4.3 million shares and
5.6 million shares of common stock on the open market for a total cost of $250 million and $351 million, respectively.
5.6 million shares of common stock on the open market for a total cost of $250 million and $351 million, respectively.
Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were tendered by
Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were tendered by
employees for the payment of applicable statutory withholding taxes. During the years ended December 31, 2019 and 2018,
employees for the payment of applicable statutory withholding taxes. During the years ended December 31, 2019 and 2018,
such repurchases totaled approximately 0.4 million shares and 0.2 million shares at a cost of $22 million and $14 million,
such repurchases totaled approximately 0.4 million shares and 0.2 million shares at a cost of $22 million and $14 million,
respectively. Repurchases of shares have been funded with cash generated from operations.
respectively. Repurchases of shares have been funded with cash generated from operations.
The Company’s working capital at December 31, 2019, included $270 million in cash and cash equivalents. The
The Company’s working capital at December 31, 2019, included $270 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 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.
Company’s fixed payments, dividends, and other obligations on both a short-term and long-term basis.
In March 2019, the Company entered into an uncommitted credit facility (the “Credit Agreement”) of up to $100 million.
In March 2019, the Company entered into an uncommitted credit facility (the “Credit Agreement”) of up to $100 million.
The Company may request borrowings under the Credit Agreement that are denominated in U.S. dollars and each request is
The Company may request borrowings under the Credit Agreement that are denominated in U.S. dollars and each request is
subject to approval by the lender. The Company must repay the aggregate principal amount of loans outstanding under the
subject to approval by the lender. The Company must repay the aggregate principal amount of loans outstanding under the
Credit Agreement on the termination date of each borrowing. Borrowings under the Credit Agreement will bear interest in
Credit Agreement on the termination date of each borrowing. Borrowings under the Credit Agreement will bear interest in
accordance with the terms of the borrowing, which typically will be calculated according to the London Interbank Offered Rate
accordance with the terms of the borrowing, which typically will be calculated according to the London Interbank Offered Rate
plus an applicable margin. There were no borrowings under the Credit Agreement as of December 31, 2019. The Company
plus an applicable margin. There were no borrowings under the Credit Agreement as of December 31, 2019. The Company
intends to renew this facility prior to its March 19, 2020, expiration.
intends to renew this facility prior to its March 19, 2020, expiration.
On February 12, 2020, the Company announced a quarterly dividend of $.34 per share to be paid to all shareholders of
On February 12, 2020, the Company announced a quarterly dividend of $.34 per share to be paid to all shareholders of
record on February 25, 2020. The dividend will be paid on March 16, 2020.
record on February 25, 2020. The dividend will be paid on March 16, 2020.
The Company’s cash flows generated from operations are also the primary source for funding various contractual
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, 2019 (in thousands):
obligations. The table below summarizes the Company’s major commitments as of December 31, 2019 (in thousands):
Contractual Obligations
Contractual Obligations
Long-term debt obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments due by period
Payments due by period
2020
2020
2021 and
2021 and
2022
2022
2023 and
2023 and
2024
2024
Thereafter
Thereafter
Total
Total
$
$
252
252
$
$
252
252
$
$
— $
— $
— $
— $
504
504
Operating lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
82,025
82,025
76,783
76,783
1,528
1,528
125,715
125,715
86,046
86,046
45,458
45,458
339,244
339,244
54,942
54,942
1,461
1,461
6,643
6,643
1,212
1,212
7,659
7,659
5,535
5,535
146,027
146,027
9,736
9,736
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$160,588
$160,588
$182,370
$182,370
$ 93,901
$ 93,901
$ 58,652
$ 58,652
$495,511
$495,511
19
19
2019 ANNUAL REPORT | ROBERT HALF
Long-term debt obligations consist of promissory notes and related interest as well as other forms of indebtedness issued
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 undiscounted
in connection with certain acquisitions and other payment obligations. Operating lease obligations consist of undiscounted
minimum rental commitments for 2020 and thereafter under non-cancelable lease contracts executed as of December 31, 2019.
minimum rental commitments for 2020 and thereafter under non-cancelable lease contracts executed as of December 31, 2019.
Purchase obligations consist of purchase commitments primarily related to telecom service agreements, software subscriptions,
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
and computer hardware and software maintenance agreements. Other liabilities consist of asset retirement and deferred
compensation obligations.
compensation obligations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
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
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
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
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.
the Company’s reported revenues, expenses, earnings, assets and liabilities.
For the year ended December 31, 2019, approximately 22% of the Company’s revenues were generated outside of the
For the year ended December 31, 2019, approximately 22% 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
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,
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
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
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
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.
Company’s reported results vary.
During 2019, the U.S. dollar fluctuated, but generally strengthened, against the primary currencies in which the Company
During 2019, the U.S. dollar fluctuated, but generally strengthened, against the primary currencies in which the Company
conducts business, compared to one year ago. Currency exchange rates had the effect of decreasing reported service revenues
conducts business, compared to one year ago. Currency exchange rates had the effect of decreasing reported service revenues
by $62.8 million, or 1.1%, in 2019 compared to prior year. The general strengthening of the U.S. dollar also affected the
by $62.8 million, or 1.1%, in 2019 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
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 effect of lower reported
operations generated revenues and incurred expenses within the same country and currency, the effect of lower reported
revenues is largely offset by the decrease in reported operating expenses. Reported net income was $2.5 million, or 0.6%, lower
revenues is largely offset by the decrease in reported operating expenses. Reported net income was $2.5 million, or 0.6%, lower
in the year ended December 31, 2019, compared to prior year due to the effect of currency exchange rates.
in the year ended December 31, 2019, compared to prior year due to the effect of currency exchange rates.
For the one month ended January 31, 2020, the U.S. dollar has strengthened against the Euro, British pound, Canadian
For the one month ended January 31, 2020, the U.S. dollar has strengthened against the Euro, British pound, Canadian
dollar, and Australian dollar since December 31, 2019. If currency exchange rates were to remain at January 2020 levels
dollar, and Australian dollar since December 31, 2019. If currency exchange rates were to remain at January 2020 levels
throughout 2020, the Company’s 2020 full-year reported revenues would be impacted unfavorably, mostly offset by a favorable
throughout 2020, the Company’s 2020 full-year reported revenues would be impacted unfavorably, mostly offset by a favorable
impact to operating expenses. Thus, the impact to reported net income would likely be immaterial.
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
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
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
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
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
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
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.
between the U.S. and the Company’s foreign subsidiaries, and dividends from the Company’s foreign subsidiaries.
20
20
2019 ANNUAL REPORT | ROBERT HALF Item 8. Financial Statements and Supplementary Data
Item 8. Financial Statements and Supplementary Data
ROBERT HALF INTERNATIONAL INC.
ROBERT HALF INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands, except share amounts)
(in thousands, except share amounts)
December 31,
December 31,
2018
2018
2019
2019
ASSETS
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 270,478
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 270,478
832,797
Accounts receivable, less allowances of $28,756 and $27,678 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
832,797
Accounts receivable, less allowances of $28,756 and $27,678 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
525,574
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
525,574
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,628,849
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,628,849
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
128,385
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
128,385
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
241,029
Right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
241,029
Right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,752
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,752
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
210,364
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
210,364
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
101,029
Noncurrent deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
101,029
Noncurrent deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,311,408
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,311,408
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 123,841
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 123,841
743,602
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
743,602
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,623
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,623
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
218
Notes payable, current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
218
Notes payable, current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71,408
Current operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71,408
Current operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
940,692
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
940,692
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
239
Notes payable, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
239
Notes payable, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
201,961
Noncurrent operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
201,961
Noncurrent operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,833
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,833
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,167,725
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,167,725
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and Contingencies (Note K)
Commitments and Contingencies (Note K)
LIABILITIES
LIABILITIES
$ 276,579
$ 276,579
794,446
794,446
402,585
402,585
1,473,610
1,473,610
125,176
125,176
—
—
3,149
3,149
209,958
209,958
91,204
91,204
$1,903,097
$1,903,097
$ 168,031
$ 168,031
638,769
638,769
12,536
12,536
200
200
—
—
819,536
819,536
457
457
—
—
19,906
19,906
839,899
839,899
STOCKHOLDERS’ EQUITY
STOCKHOLDERS’ EQUITY
Preferred stock, $.001 par value; authorized 5,000,000 shares; none issued . . . . . . . . . . . . . . . . . . .
Preferred stock, $.001 par value; authorized 5,000,000 shares; none issued . . . . . . . . . . . . . . . . . . .
Common stock, $.001 par value; authorized 260,000,000 shares; issued and
outstanding 115,120,404 and 119,078,491 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock, $.001 par value; authorized 260,000,000 shares; issued and
outstanding 115,120,404 and 119,078,491 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
115
115
1,127,487
1,127,487
(19,986)
(19,986)
36,067
36,067
1,143,683
1,143,683
$2,311,408
$2,311,408
—
—
119
119
1,079,188
1,079,188
(16,109)
(16,109)
—
—
1,063,198
1,063,198
$1,903,097
$1,903,097
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.
21
21
2019 ANNUAL REPORT | ROBERT HALF
ROBERT HALF INTERNATIONAL INC.
ROBERT HALF INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(in thousands, except per share amounts)
2019
2019
$6,074,432
Service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$6,074,432
Service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,543,913
Costs of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,543,913
Costs of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,530,519
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,530,519
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,908,768
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,908,768
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,361
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,361
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,125)
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,125)
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
625,515
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
625,515
171,082
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
171,082
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 454,433
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 454,433
Net income per share:
Net income per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.93
3.93
3.90
3.90
$
$
$
$
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
115,656
115,656
116,411
116,411
1.24
1.24
$
$
Shares:
Shares:
Years Ended December 31,
Years Ended December 31,
2018
2018
$5,800,271
$5,800,271
3,390,257
3,390,257
2,410,014
2,410,014
1,821,089
1,821,089
1,705
1,705
(4,382)
(4,382)
591,602
591,602
157,314
157,314
$ 434,288
$ 434,288
2017
2017
$5,266,789
$5,266,789
3,102,977
3,102,977
2,163,812
2,163,812
1,646,532
1,646,532
1,563
1,563
(1,799)
(1,799)
517,516
517,516
226,932
226,932
$ 290,584
$ 290,584
$
$
$
$
$
$
3.60
3.60
3.57
3.57
120,513
120,513
121,602
121,602
1.12
1.12
$
$
$
$
$
$
2.34
2.34
2.33
2.33
124,152
124,152
124,892
124,892
.96
.96
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.
22
22
2019 ANNUAL REPORT | ROBERT HALF
ROBERT HALF INTERNATIONAL INC.
ROBERT HALF INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(in thousands)
COMPREHENSIVE INCOME (LOSS):
COMPREHENSIVE INCOME (LOSS):
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss):
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . . .
Foreign defined benefit plans, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign defined benefit plans, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,553)
(1,553)
(2,324)
(2,324)
(3,877)
(3,877)
Total comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $450,556
Total comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $450,556
(19,616)
(19,616)
—
—
(19,616)
(19,616)
$414,672
$414,672
24,009
24,009
—
—
24,009
24,009
$314,593
$314,593
Years Ended December 31,
Years Ended December 31,
2018
2018
2017
2017
2019
2019
$454,433
$454,433
$434,288
$434,288
$290,584
$290,584
The accompanying Notes to Consolidated Financial Statements
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
are an integral part of these financial statements.
23
23
2019 ANNUAL REPORT | ROBERT HALF
ROBERT HALF INTERNATIONAL INC.
ROBERT HALF INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except per share amounts)
(in thousands, except per share amounts)
Common Stock
Common Stock
Par Value
Par Value
Additional
Paid-In
Additional
Capital
Paid-In
Capital
Accumulated Other
Comprehensive
Accumulated Other
Income (Loss)
Comprehensive
Income (Loss)
Retained
Earnings
Retained
Earnings
Balance at December 31, 2016 . . . . . . .
Balance at December 31, 2016 . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . .
Other comprehensive income (loss) . . .
Dividends declared ($.96 per share) . . .
Dividends declared ($.96 per share) . . .
Net issuances of restricted stock . . . . . .
Net issuances of restricted stock . . . . . .
Stock-based compensation . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . .
Repurchases of common stock . . . . . . .
Repurchases of common stock . . . . . . .
Balance at December 31, 2017 . . . . . . .
Balance at December 31, 2017 . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . .
Other comprehensive income (loss) . . .
Dividends declared ($1.12 per share) . .
Dividends declared ($1.12 per share) . .
Net issuances of restricted stock . . . . . .
Net issuances of restricted stock . . . . . .
Stock-based compensation . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . .
Repurchases of common stock . . . . . . .
Repurchases of common stock . . . . . . .
Balance at December 31, 2018 . . . . . . .
Balance at December 31, 2018 . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . .
Other comprehensive income (loss) . . .
Dividends declared ($1.24 per share) . .
Dividends declared ($1.24 per share) . .
Net issuances of restricted stock . . . . . .
Net issuances of restricted stock . . . . . .
Stock-based compensation . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . .
Repurchases of common stock . . . . . . .
Repurchases of common stock . . . . . . .
Balance at December 31, 2019 . . . . . . .
Balance at December 31, 2019 . . . . . . .
Shares
Shares
127,797 $
127,797 $
—
—
—
—
—
—
918
918
—
—
(4,454)
(4,454)
124,261 $
124,261 $
—
—
—
—
—
—
666
666
—
—
(5,849)
(5,849)
119,078 $
119,078 $
—
—
—
—
—
—
647
647
—
—
(4,605)
(4,605)
115,120 $
115,120 $
128 $ 1,022,411 $
128 $ 1,022,411 $
—
—
—
—
—
—
1
1
—
—
(5)
(5)
124 $ 1,064,601 $
124 $ 1,064,601 $
—
—
—
—
—
—
(1)
(1)
42,191
42,191
—
—
—
—
—
—
(30,365)
(30,365)
(1)
(1)
44,953
44,953
—
—
—
—
—
—
—
—
1
1
—
—
(6)
(6)
119 $ 1,079,188 $
119 $ 1,079,188 $
—
—
—
—
—
—
1
1
—
—
(5)
(5)
115 $ 1,127,487 $
115 $ 1,127,487 $
—
—
—
—
—
—
(1)
(1)
48,300
48,300
—
—
3,507 $
3,507 $
—
—
(19,616)
(19,616)
(20,502) $
(20,502) $
—
—
24,009
24,009
Total
Total
84,562 $ 1,086,599
84,562 $ 1,086,599
290,584
290,584
290,584
290,584
24,009
—
24,009
—
(121,082)
— (121,082)
(121,082)
— (121,082)
—
—
—
—
—
—
42,191
—
—
42,191
—
—
(217,036)
— (217,031)
(217,036)
— (217,031)
37,033 $ 1,105,265
37,033 $ 1,105,265
434,288
434,288
434,288
434,288
(19,616)
—
(19,616)
—
(136,824)
— (106,459)
(136,824)
— (106,459)
—
—
—
—
—
—
44,953
—
—
44,953
—
—
(364,868)
— (364,862)
(364,868)
— (364,862)
— $ 1,063,198
— $ 1,063,198
454,433
454,433
(3,877)
(3,877)
(145,726)
(145,726)
—
—
48,300
48,300
(272,645)
(272,645)
36,067 $ 1,143,683
36,067 $ 1,143,683
454,433
454,433
—
—
— (145,726)
— (145,726)
—
—
—
—
—
—
—
—
— (272,640)
— (272,640)
(16,109) $
(16,109) $
—
—
(3,877)
(3,877)
(19,986) $
(19,986) $
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.
24
24
2019 ANNUAL REPORT | ROBERT HALF ROBERT HALF INTERNATIONAL INC.
ROBERT HALF INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(in thousands)
Years Ended December 31,
Years Ended December 31,
2018
2018
2017
2017
2019
2019
$454,433
$454,433
$434,288
$434,288
$290,584
$290,584
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:
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of cloud computing implementation costs . . . . . . . . . . . . . . . . . . . .
Amortization of cloud computing implementation costs . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, net of effects of acquisitions:
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized cloud computing implementation costs . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized cloud computing implementation costs . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued payroll and benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued payroll and benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets and liabilities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets and liabilities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash flows provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash flows provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CASH FLOWS FROM INVESTING ACTIVITIES:
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . .
Payments for employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . .
Redemptions from employee deferred compensation plans . . . . . . . . . . . . . . . . . .
Redemptions from employee deferred compensation plans . . . . . . . . . . . . . . . . . .
Payments for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash flows used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash flows used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CASH FLOWS FROM FINANCING ACTIVITIES:
CASH FLOWS FROM FINANCING ACTIVITIES:
9,868
9,868
64,264
64,264
3,624
3,624
1,361
1,361
48,300
48,300
(9,473)
(9,473)
(48,461)
(48,461)
(30,338)
(30,338)
(9,204)
(9,204)
60,883
60,883
(18,798)
(18,798)
(6,830)
(6,830)
519,629
519,629
(59,464)
(59,464)
(71,432)
(71,432)
28,758
28,758
—
—
(102,138)
(102,138)
(200)
Repayment of notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(200)
Repayment of notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(277,535)
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(277,535)
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(145,631)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(145,631)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(423,366)
Net cash flows used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(423,366)
Net cash flows used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(226)
Effect of exchange rate fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(226)
Effect of exchange rate fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,101)
Change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,101)
276,579
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
276,579
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $270,478
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $270,478
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
232
$
$
232
$191,522
$191,522
Non-cash items:
Non-cash items:
11,914
11,914
64,244
64,244
—
—
1,705
1,705
44,953
44,953
(15,885)
(15,885)
(86,217)
(86,217)
—
—
32,428
32,428
57,287
57,287
28,900
28,900
(1,295)
(1,295)
572,322
572,322
(42,484)
(42,484)
(69,716)
(69,716)
23,691
23,691
—
—
(88,509)
(88,509)
8,022
8,022
63,930
63,930
—
—
1,563
1,563
42,191
42,191
44,091
44,091
(17,039)
(17,039)
—
—
1,328
1,328
46,504
46,504
(9,655)
(9,655)
(18,528)
(18,528)
452,991
452,991
(40,753)
(40,753)
(56,924)
(56,924)
20,340
20,340
(1,160)
(1,160)
(78,497)
(78,497)
(183)
(183)
(353,509)
(353,509)
(136,423)
(136,423)
(490,115)
(490,115)
(11,872)
(11,872)
(18,174)
(18,174)
294,753
294,753
$276,579
$276,579
(167)
(167)
(231,724)
(231,724)
(121,000)
(121,000)
(352,891)
(352,891)
12,949
12,949
34,552
34,552
260,201
260,201
$294,753
$294,753
233
$
$
233
$137,147
$137,147
278
$
$
278
$190,954
$190,954
Stock repurchases awaiting settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock repurchases awaiting settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
6,469
6,469
$ 11,359
$ 11,359
$
$
—
—
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.
25
25
2019 ANNUAL REPORT | ROBERT HALF
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A—Summary of Significant Accounting Policies
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Nature of Operations. Robert Half International Inc. (the “Company”) provides specialized staffing and risk consulting
Nature of Operations. Robert Half International Inc. (the “Company”) provides specialized staffing and risk consulting
Note A—Summary of Significant Accounting Policies
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,
services through such divisions as Accountemps®, Robert Half® Finance & Accounting, OfficeTeam®, Robert Half®
through its Accountemps, Robert Half Finance & Accounting, and Robert Half Management Resources divisions, is a
Technology, Robert Half® Management Resources, Robert Half® Legal, The Creative Group®, and Protiviti®. The Company,
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
through its Accountemps, Robert Half Finance & Accounting, and Robert Half Management Resources divisions, is a
project and full-time technology professionals. Robert Half Legal provides temporary, project, and full-time staffing of lawyers,
specialized provider of temporary, full-time, and senior-level project professionals in the fields of accounting and finance.
paralegals and legal support personnel. The Creative Group provides interactive, design, marketing, advertising and public
OfficeTeam specializes in highly skilled temporary administrative support professionals. Robert Half Technology provides
relations professionals. Protiviti is a global consulting firm that helps companies solve problems in finance, technology,
project and full-time technology professionals. Robert Half Legal provides temporary, project, and full-time staffing of lawyers,
operations, data, analytics, governance, risk and internal audit. Revenues are predominantly derived from specialized staffing
paralegals and legal support personnel. The Creative Group provides interactive, design, marketing, advertising and public
services. The Company operates in North America, South America, Europe, Asia and Australia. The Company is a Delaware
relations professionals. Protiviti is a global consulting firm that helps companies solve problems in finance, technology,
corporation.
operations, data, analytics, governance, risk and internal audit. 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.
conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the
Securities and Exchange Commission (“SEC”). Certain reclassifications have been made to prior years’ consolidated financial
statements to conform to the 2019 presentation.
conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the
Securities and Exchange Commission (“SEC”). Certain reclassifications have been made to prior years’ consolidated financial
Principles of Consolidation. The Financial Statements include the accounts of the Company and its subsidiaries, all of
statements to conform to the 2019 presentation.
which are wholly owned. All intercompany balances and transactions have been eliminated in consolidation.
Basis of Presentation. The Consolidated Financial Statements (“Financial Statements”) of the Company are prepared in
Basis of Presentation. The Consolidated Financial Statements (“Financial Statements”) of the Company are prepared in
Principles of Consolidation. The Financial Statements include the accounts of the Company and its subsidiaries, all of
Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make
which are wholly owned. All intercompany balances and transactions have been eliminated in consolidation.
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.
Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make
Such estimates include allowances for uncollectible accounts receivable, variable consideration, workers’ compensation losses,
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
income and other taxes, and assumptions used in the Company’s goodwill impairment assessment and in the valuation of stock
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
grants subject to market conditions. Actual results and outcomes may differ from management’s estimates and assumptions.
Such estimates include allowances for uncollectible accounts receivable, variable consideration, workers’ compensation losses,
income and other taxes, and assumptions used in the Company’s goodwill impairment assessment and in the valuation of stock
Service Revenues. The Company derives its revenues from three segments: temporary and consultant staffing,
grants subject to market conditions. Actual results and outcomes may differ from management’s estimates and assumptions.
permanent placement staffing, and risk consulting and internal audit services. Revenues are recognized when promised goods or
services are delivered to customers, in an amount that reflects the consideration the Company expects to be entitled to in
Service Revenues. The Company derives its revenues from three segments: temporary and consultant staffing,
exchange for those goods or services. See Note C for further discussion of the revenue recognition accounting policy.
permanent placement staffing, and risk consulting and internal audit services. Revenues are recognized when promised goods or
services are delivered to customers, in an amount that reflects the consideration the Company expects to be entitled to in
exchange for those goods or services. See Note C for further discussion of the revenue recognition accounting policy.
the Company’s engagement professionals, as well as reimbursable expenses. Direct costs of permanent placement staffing
services consist of reimbursable expenses. Risk consulting and internal audit direct costs of services include professional staff
payroll, payroll taxes and benefit costs, as well as reimbursable expenses.
the Company’s engagement professionals, as well as reimbursable expenses. Direct costs of permanent placement staffing
services consist of reimbursable expenses. Risk consulting and internal audit direct costs of services include professional staff
Advertising Costs. The Company expenses all advertising costs as incurred. Advertising costs were $54.3 million,
payroll, payroll taxes and benefit costs, as well as reimbursable expenses.
$52.5 million, and $49.4 million for the years ended December 31, 2019, 2018 and 2017, respectively.
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
Advertising Costs. The Company expenses all advertising costs as incurred. Advertising costs were $54.3 million,
Comprehensive Income. Comprehensive income includes net income and certain other items that are recorded directly
$52.5 million, and $49.4 million for the years ended December 31, 2019, 2018 and 2017, respectively.
to stockholders’ equity. The Company’s only sources of other comprehensive income are foreign currency translation and
defined benefit plan adjustments.
to stockholders’ equity. The Company’s only sources of other comprehensive income are foreign currency translation and
defined benefit plan adjustments.
Comprehensive Income. Comprehensive income includes net income and certain other items that are recorded directly
26
26
2019 ANNUAL REPORT | ROBERT HALF NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses
Fair Value of Financial Instruments. Assets and liabilities recorded at fair value are measured and classified in
accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market to measure fair
Fair Value of Financial Instruments. Assets and liabilities recorded at fair value are measured and classified in
value, summarized as follows:
accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market to measure fair
value, summarized as follows:
Level 1: observable inputs for identical assets or liabilities, such as quoted prices in active markets
Level 2: inputs other than the quoted prices in active markets that are observable either directly or indirectly
Level 1: observable inputs for identical assets or liabilities, such as quoted prices in active markets
Level 3: unobservable inputs in which there is little or no market data, which requires management’s best
Level 2: inputs other than the quoted prices in active markets that are observable either directly or indirectly
estimates and assumptions that market participants would use in pricing the asset or liability
Level 3: unobservable inputs in which there is little or no market data, which requires management’s best
estimates and assumptions that market participants would use in pricing the asset or liability
approximates fair value because of their short-term nature. The Company holds mutual funds and other securities classified as
The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses
trading to support its deferred compensation plans, which are carried at fair value based on quoted market prices in active
approximates fair value because of their short-term nature. The Company holds mutual funds and other securities classified as
markets for identical assets (level 1).
trading to support its deferred compensation plans, which are carried at fair value based on quoted market prices in active
markets for identical assets (level 1).
basis. The Company determines the fair value of these items using level 3 inputs. There are inherent limitations when
estimating the fair value of financial instruments, and the fair values reported are not necessarily indicative of the amounts that
basis. The Company determines the fair value of these items using level 3 inputs. There are inherent limitations when
would be realized in current market transactions.
estimating the fair value of financial instruments, and the fair values reported are not necessarily indicative of the amounts that
Cash and Cash Equivalents. The Company considers all highly liquid investments with a maturity at the date of
would be realized in current market transactions.
purchase of three months or less as cash equivalents.
Certain items such as goodwill and other intangible assets are recognized or disclosed at fair value on a non-recurring
Certain items such as goodwill and other intangible assets are recognized or disclosed at fair value on a non-recurring
Cash and Cash Equivalents. The Company considers all highly liquid investments with a maturity at the date of
Accounts Receivable Allowances. The Company maintains allowances for estimated losses resulting from the inability
purchase of three months or less as cash equivalents.
of its customers to make required payments. The Company establishes these allowances based on its review of customers’
Accounts Receivable Allowances. The Company maintains allowances for estimated losses resulting from the inability
credit profiles, historical loss statistics and current trends. The adequacy of these allowances is reviewed each reporting period.
of its customers to make required payments. The Company establishes these allowances based on its review of customers’
Historically, the Company’s actual losses have been consistent with these allowances.
credit profiles, historical loss statistics and current trends. The adequacy of these allowances is reviewed each reporting period.
Leases. The Company determines if a contractual arrangement is a lease at inception. Operating leases are included in
Historically, the Company’s actual losses have been consistent with these allowances.
operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities on the
Leases. The Company determines if a contractual arrangement is a lease at inception. Operating leases are included in
Company’s Condensed Consolidated Statement of Financial Position. The Company does not currently have finance leases.
operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities on the
Company’s Condensed Consolidated Statement of Financial Position. The Company does not currently have finance leases.
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent
the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent
recognized at the commencement date of the lease based on the present value of lease payments over the lease term. The lease
the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are
payments included in the present value are fixed lease payments and index-based variable lease payments. As most of the
recognized at the commencement date of the lease based on the present value of lease payments over the lease term. The lease
Company’s leases do not provide an implicit rate, the Company estimates its collateralized incremental borrowing rate, based
payments included in the present value are fixed lease payments and index-based variable lease payments. As most of the
on information available at the commencement date, in determining the present value of lease payments. The Company applies
Company’s leases do not provide an implicit rate, the Company estimates its collateralized incremental borrowing rate, based
the portfolio approach in applying discount rates to its classes of leases. The operating lease ROU assets include any payments
on information available at the commencement date, in determining the present value of lease payments. The Company applies
made before the commencement date and exclude lease incentives. Lease expense for lease payments is recognized on a
the portfolio approach in applying discount rates to its classes of leases. The operating lease ROU assets include any payments
straight-line basis over the lease term. The Company does not currently have subleases. The Company does not currently have
made before the commencement date and exclude lease incentives. Lease expense for lease payments is recognized on a
residual value guarantees or restrictive covenants in its leases. The Company has contracts with lease and non-lease
straight-line basis over the lease term. The Company does not currently have subleases. The Company does not currently have
components, which are accounted for on a combined basis.
residual value guarantees or restrictive covenants in its leases. The Company has contracts with lease and non-lease
components, which are accounted for on a combined basis.
in excess of the fair market value of their net tangible assets at the date of acquisition. Identifiable intangible assets are
amortized over their lives, typically ranging from two to five years. Goodwill is not amortized, but is tested at least annually for
in excess of the fair market value of their net tangible assets at the date of acquisition. Identifiable intangible assets are
impairment. The Company completed its annual goodwill impairment assessment as of June 30 in each of the years ended
amortized over their lives, typically ranging from two to five years. Goodwill is not amortized, but is tested at least annually for
December 31, 2019, 2018, and 2017, and determined that no adjustment to the carrying value of goodwill was required. There
impairment. The Company completed its annual goodwill impairment assessment as of June 30 in each of the years ended
were no events or changes in circumstances during the six months ended December 31, 2019, that caused the Company to
December 31, 2019, 2018, and 2017, and determined that no adjustment to the carrying value of goodwill was required. There
perform an interim impairment assessment.
were no events or changes in circumstances during the six months ended December 31, 2019, that caused the Company to
Income Taxes. The Company’s operations are subject to U.S. federal, state and local, and foreign income taxes. In
perform an interim impairment assessment.
establishing its deferred income tax assets and liabilities and its provision for income taxes, the Company makes judgments and
Income Taxes. The Company’s operations are subject to U.S. federal, state and local, and foreign income taxes. In
interpretations based on the enacted tax laws that are applicable to its operations in various jurisdictions. Deferred tax assets and
establishing its deferred income tax assets and liabilities and its provision for income taxes, the Company makes judgments and
liabilities are measured and recorded using current enacted tax rates, which the Company expects will apply to taxable income
interpretations based on the enacted tax laws that are applicable to its operations in various jurisdictions. Deferred tax assets and
in the years in which those temporary differences are recovered or settled. The likelihood of a material change in the
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
Goodwill and Intangible Assets. Goodwill and intangible assets primarily consist of the cost of acquired companies
Goodwill and Intangible Assets. Goodwill and intangible assets primarily consist of the cost of acquired companies
27
27
2019 ANNUAL REPORT | ROBERT HALF NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Company’s expected realization of its deferred tax assets is dependent on future taxable income and the effectiveness of its tax
planning strategies in the various relevant jurisdictions.
Company’s expected realization of its deferred tax assets is dependent on future taxable income and the effectiveness of its tax
planning strategies in the various relevant jurisdictions.
Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including
The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts.
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
Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including
realized. When appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may
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
not be realized. Valuation allowances of $21.6 million and $23.1 million were recorded as of December 31, 2019 and 2018,
realized. When appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may
respectively. The valuation allowances recorded related primarily to net operating losses in certain foreign operations. If such
not be realized. Valuation allowances of $21.6 million and $23.1 million were recorded as of December 31, 2019 and 2018,
losses are ultimately utilized to offset future operating income, the Company will recognize a tax benefit up to the full amount
respectively. The valuation allowances recorded related primarily to net operating losses in certain foreign operations. If such
of the valuation reserve.
losses are ultimately utilized to offset future operating income, the Company will recognize a tax benefit up to the full amount
Workers’ Compensation. Except for states which require participation in state-operated insurance funds, the Company
of the valuation reserve.
retains the economic burden for the first $0.5 million per occurrence in workers’ compensation claims. Workers’ compensation
Workers’ Compensation. Except for states which require participation in state-operated insurance funds, the Company
includes ongoing healthcare and indemnity coverage for claims and may be paid over numerous years following the date of
retains the economic burden for the first $0.5 million per occurrence in workers’ compensation claims. Workers’ compensation
injury. Claims in excess of $0.5 million are insured. Workers’ compensation expense includes the insurance premiums for
includes ongoing healthcare and indemnity coverage for claims and may be paid over numerous years following the date of
claims in excess of $0.5 million, claims administration fees charged by the Company’s workers’ compensation administrator,
injury. Claims in excess of $0.5 million are insured. Workers’ compensation expense includes the insurance premiums for
premiums paid to state-operated insurance funds, and an estimate for the Company’s liability for Incurred But Not Reported
claims in excess of $0.5 million, claims administration fees charged by the Company’s workers’ compensation administrator,
(“IBNR”) claims and for the ongoing development of existing claims.
premiums paid to state-operated insurance funds, and an estimate for the Company’s liability for Incurred But Not Reported
(“IBNR”) claims and for the ongoing development of existing claims.
estimates. The Company has established reserves for workers’ compensation claims using loss development rates which are
The reserves for IBNR claims and for the ongoing development of existing claims in each reporting period includes
estimated using periodic third party actuarial valuations based upon historical loss statistics which include the Company’s
estimates. The Company has established reserves for workers’ compensation claims using loss development rates which are
historical frequency and severity of workers’ compensation claims, and an estimate of future cost trends. While management
estimated using periodic third party actuarial valuations based upon historical loss statistics which include the Company’s
believes that its assumptions and estimates are appropriate, significant differences in actual experience or significant changes in
historical frequency and severity of workers’ compensation claims, and an estimate of future cost trends. While management
assumptions may materially affect the Company’s future results.
believes that its assumptions and estimates are appropriate, significant differences in actual experience or significant changes in
Foreign Currency Translation. The reporting currency of the Company and its subsidiaries is the U.S. dollar. The
assumptions may materially affect the Company’s future results.
functional currency of the Company’s foreign subsidiaries is their local currency. The results of operations of the Company’s
Foreign Currency Translation. The reporting currency of the Company and its subsidiaries is the U.S. dollar. The
foreign subsidiaries are translated at the monthly average exchange rates prevailing during the period. The financial position of
functional currency of the Company’s foreign subsidiaries is their local currency. The results of operations of the Company’s
the Company’s foreign subsidiaries is translated at the current exchange rates at the end of the period, and the related translation
foreign subsidiaries are translated at the monthly average exchange rates prevailing during the period. The financial position of
adjustments are recorded as a component of accumulated other comprehensive income within Stockholders’ Equity. Gains and
the Company’s foreign subsidiaries is translated at the current exchange rates at the end of the period, and the related translation
losses resulting from foreign currency transactions are included as a component of selling, general and administrative expenses
adjustments are recorded as a component of accumulated other comprehensive income within Stockholders’ Equity. Gains and
in the Consolidated Statements of Operations, and have not been material for all periods presented.
losses resulting from foreign currency transactions are included as a component of selling, general and administrative expenses
Stock-based Compensation. Under various stock plans, officers, employees and outside directors have received or may
in the Consolidated Statements of Operations, and have not been material for all periods presented.
receive grants of restricted stock, stock units, stock appreciation rights or options to purchase common stock.
The reserves for IBNR claims and for the ongoing development of existing claims in each reporting period includes
Stock-based Compensation. Under various stock plans, officers, employees and outside directors have received or may
The Company recognizes compensation expense equal to the grant-date fair value for all stock-based payment awards
receive grants of restricted stock, stock units, stock appreciation rights or options to purchase common stock.
that are expected to vest. This expense is recorded on a straight-line basis over the requisite service period of the entire award,
The Company recognizes compensation expense equal to the grant-date fair value for all stock-based payment awards
unless the awards are subject to performance conditions, in which case the Company recognizes compensation expense over the
that are expected to vest. This expense is recorded on a straight-line basis over the requisite service period of the entire award,
requisite service period of each separate vesting tranche. The Company determines the grant-date fair value of its restricted
unless the awards are subject to performance conditions, in which case the Company recognizes compensation expense over the
stock and stock unit awards using the fair market value of its stock on the grant date, unless the awards are subject to market
requisite service period of each separate vesting tranche. The Company determines the grant-date fair value of its restricted
conditions, in which case the Company utilizes a binomial-lattice model (i.e., Monte Carlo simulation model). The Monte Carlo
stock and stock unit awards using the fair market value of its stock on the grant date, unless the awards are subject to market
simulation model utilizes multiple input variables to determine the stock-based compensation expense.
conditions, in which case the Company utilizes a binomial-lattice model (i.e., Monte Carlo simulation model). The Monte Carlo
No stock appreciation rights have been granted under the Company’s existing stock plans. The Company has not granted
simulation model utilizes multiple input variables to determine the stock-based compensation expense.
any options to purchase common stock since 2006.
No stock appreciation rights have been granted under the Company’s existing stock plans. The Company has not granted
Property and Equipment. Property and equipment are recorded at cost. Depreciation is computed using the straight-line
any options to purchase common stock since 2006.
method over the following useful lives:
Property and Equipment. Property and equipment are recorded at cost. Depreciation is computed using the straight-line
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years
method over the following useful lives:
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 5 years
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 5 years
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 5 years
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Term of lease
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 5 years
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Term of lease
28
28
2019 ANNUAL REPORT | ROBERT HALF NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Internal-use Software. The Company capitalizes direct costs incurred in the development of internal-use software.
Cloud computing implementation costs incurred in hosting arrangements are capitalized and reported as a component of other
Internal-use Software. The Company capitalizes direct costs incurred in the development of internal-use software.
assets. All other internal-use software development costs are capitalized and reported as a component of computer software
Cloud computing implementation costs incurred in hosting arrangements are capitalized and reported as a component of other
within property and equipment on the Condensed Consolidated Statements of Financial Position. Capitalized internal-use
assets. All other internal-use software development costs are capitalized and reported as a component of computer software
software development costs were $35.6 million, $3.3 million, and $9.0 million for the years ended December 31, 2019, 2018
within property and equipment on the Condensed Consolidated Statements of Financial Position. Capitalized internal-use
and 2017, respectively.
software development costs were $35.6 million, $3.3 million, and $9.0 million for the years ended December 31, 2019, 2018
and 2017, respectively.
Note B—New Accounting Pronouncements
Recently Adopted Accounting Pronouncements
Note B—New Accounting Pronouncements
Recently Adopted Accounting Pronouncements
Lease Accounting. In February 2016, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance
Internal-use Software—Cloud Computing. In August 2018, the FASB issued authoritative guidance which aligns the
Lease Accounting. In February 2016, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance
which changes financial reporting as it relates to leasing transactions. Under the new guidance, lessees are required to recognize
a lease liability, measured on a discounted basis; and a right-of-use asset, for the lease term. The Company adopted this
which changes financial reporting as it relates to leasing transactions. Under the new guidance, lessees are required to recognize
guidance as of January 1, 2019, using the transition method that allowed it to initially apply the guidance as of the adoption
a lease liability, measured on a discounted basis; and a right-of-use asset, for the lease term. The Company adopted this
date. The Company elected the package of practical expedients available under the new standard, which allowed the Company
guidance as of January 1, 2019, using the transition method that allowed it to initially apply the guidance as of the adoption
to forgo a reassessment of (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any
date. The Company elected the package of practical expedients available under the new standard, which allowed the Company
expired or existing leases, and (3) the initial direct costs for any existing leases. The adoption of this guidance had a material
to forgo a reassessment of (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any
impact on the Company’s Condensed Consolidated Statement of Financial Position beginning January 1, 2019. Prior periods
expired or existing leases, and (3) the initial direct costs for any existing leases. The adoption of this guidance had a material
were not restated. See Note F for further discussion of leases.
impact on the Company’s Condensed Consolidated Statement of Financial Position beginning January 1, 2019. Prior periods
were not restated. See Note F for further discussion of leases.
requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the
Internal-use Software—Cloud Computing. In August 2018, the FASB issued authoritative guidance which aligns the
requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Entities are required to
requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the
present the expense related to capitalized implementation costs in the same line item in the statement of operations as the fees
requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Entities are required to
associated with the hosting elements of the arrangement and classify the payments for the capitalized implementation costs in
present the expense related to capitalized implementation costs in the same line item in the statement of operations as the fees
the statement of cash flows in the same manner as payments made for fees associated with the hosting element. Entities are also
associated with the hosting elements of the arrangement and classify the payments for the capitalized implementation costs in
required to present the capitalized implementation costs in the statement of financial position in the same line item that a
the statement of cash flows in the same manner as payments made for fees associated with the hosting element. Entities are also
prepayment of the fees of the associated hosting arrangement would be presented. The new guidance is effective for annual and
required to present the capitalized implementation costs in the statement of financial position in the same line item that a
interim periods beginning after December 15, 2019, although early adoption is permitted. The Company adopted the new
prepayment of the fees of the associated hosting arrangement would be presented. The new guidance is effective for annual and
guidance prospectively as of January 1, 2019.
interim periods beginning after December 15, 2019, although early adoption is permitted. The Company adopted the new
guidance prospectively as of January 1, 2019.
Recently Issued Accounting Pronouncements Not Yet Adopted
Current Expected Credit Losses Model. In June 2016, the FASB issued authoritative guidance amending how entities will
Recently Issued Accounting Pronouncements Not Yet Adopted
Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued authoritative guidance to simplify the
measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net
Current Expected Credit Losses Model. In June 2016, the FASB issued authoritative guidance amending how entities will
income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based
measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net
on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2019,
income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based
with early adoption permitted. The Company believes the adoption of this guidance will not have a material impact on its
on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2019,
financial statements.
with early adoption permitted. The Company believes the adoption of this guidance will not have a material impact on its
financial statements.
goodwill impairment testing process. The new standard eliminates Step 2 of the goodwill impairment test. If a company
Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued authoritative guidance to simplify the
determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is greater than the fair value, an
goodwill impairment testing process. The new standard eliminates Step 2 of the goodwill impairment test. If a company
impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. The new guidance is
determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is greater than the fair value, an
effective for the Company for fiscal years beginning after December 15, 2019, although early adoption is permitted. The
impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. The new guidance is
Company believes the adoption of this guidance will not have a material impact on its financial statements.
effective for the Company for fiscal years beginning after December 15, 2019, although early adoption is permitted. The
Company believes the adoption of this guidance will not have a material impact on its financial statements.
29
29
2019 ANNUAL REPORT | ROBERT HALF NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note C—Revenue Recognition
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note C—Revenue Recognition
The Company derives its revenues from three segments: temporary and consultant staffing, permanent placement
staffing, and risk consulting and internal audit services. Revenues are recognized when promised goods or services are
The Company derives its revenues from three segments: temporary and consultant staffing, permanent placement
delivered to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those
staffing, and risk consulting and internal audit services. Revenues are recognized when promised goods or services are
goods or services. Service revenues as presented on the Consolidated Statements of Operations represent services rendered to
delivered to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those
customers less variable consideration, such as sales adjustments and allowances. Reimbursements, including those related to
goods or services. Service revenues as presented on the Consolidated Statements of Operations represent services rendered to
travel and out-of-pocket expenses, are also included in service revenues, and equivalent amounts of reimbursable expenses are
customers less variable consideration, such as sales adjustments and allowances. Reimbursements, including those related to
included in costs of services.
travel and out-of-pocket expenses, are also included in service revenues, and equivalent amounts of reimbursable expenses are
included in costs of services.
Temporary and consultant staffing revenues. Temporary and consultant staffing revenues from contracts with customers
are recognized in the amount to which the Company has a right to invoice, when the services are rendered by the Company’s
Temporary and consultant staffing revenues. Temporary and consultant staffing revenues from contracts with customers
engagement professionals. The substantial majority of engagement professionals placed on assignment by the Company are the
are recognized in the amount to which the Company has a right to invoice, when the services are rendered by the Company’s
Company’s legal employees while they are working on assignments. The Company pays all related costs of employment,
engagement professionals. The substantial majority of engagement professionals placed on assignment by the Company are the
including workers’ compensation insurance, state and federal unemployment taxes, social security and certain fringe benefits.
Company’s legal employees while they are working on assignments. The Company pays all related costs of employment,
The Company assumes the risk of acceptability of its employees to its customers.
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.
The Company records temporary and consultant staffing 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 records temporary and consultant staffing revenue on a gross basis as a principal versus on a net basis as
the Company (i) has the risk of identifying and hiring qualified employees, (ii) has the discretion to select the employees and
an agent in the presentation of revenues and expenses. The Company has concluded that gross reporting is appropriate because
establish their price and duties and (iii) bears the risk for services that are not fully paid for by customers. Fees paid to Time
the Company (i) has the risk of identifying and hiring qualified employees, (ii) has the discretion to select the employees and
Management or Vendor Management service providers selected by clients are recorded as a reduction of revenues, as the
establish their price and duties and (iii) bears the risk for services that are not fully paid for by customers. Fees paid to Time
Company is not the primary obligor with respect to those services.
Management or Vendor Management service providers selected by clients are recorded as a reduction of revenues, as the
Company is not the primary obligor with respect to those services.
Permanent placement staffing revenues. Permanent placement staffing revenues from contracts with customers are
primarily recognized when employment candidates accept offers of permanent employment. The Company has a substantial
Permanent placement staffing revenues. Permanent placement staffing revenues from contracts with customers are
history of estimating the financial impact of permanent placement candidates who do not remain with its clients through the 90-
primarily recognized when employment candidates accept offers of permanent employment. The Company has a substantial
day guarantee period. These amounts are established based primarily on historical data and are recorded as contract liabilities.
history of estimating the financial impact of permanent placement candidates who do not remain with its clients through the 90-
Fees to clients are generally calculated as a percentage of the new employee’s annual compensation. No fees for permanent
day guarantee period. These amounts are established based primarily on historical data and are recorded as contract liabilities.
placement services are charged to employment candidates.
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.
a time-and-material basis or fixed-fee basis. Revenues earned under time-and-material arrangements and fixed-fee
arrangements are recognized using a proportional performance method. Revenue is measured using cost incurred relative to
a time-and-material basis or fixed-fee basis. Revenues earned under time-and-material arrangements and fixed-fee
total estimated cost for the engagement to measure progress towards satisfying the Company’s performance obligations. Cost
arrangements are recognized using a proportional performance method. Revenue is measured using cost incurred relative to
incurred represents work performed and thereby best depicts the transfer of control to the customer. Risk consulting and
total estimated cost for the engagement to measure progress towards satisfying the Company’s performance obligations. Cost
internal audit services generally contain one or more performance obligation(s) which are satisfied over a period of time.
incurred represents work performed and thereby best depicts the transfer of control to the customer. Risk consulting and
Revenues are recognized over time as the performance obligations are satisfied, because the services provided do not have any
internal audit services generally contain one or more performance obligation(s) which are satisfied over a period of time.
alternative use to the Company, and contracts generally include language giving the Company an enforceable right to payment
Revenues are recognized over time as the performance obligations are satisfied, because the services provided do not have any
for services provided to date.
alternative use to the Company, and contracts generally include language giving the Company an enforceable right to payment
The Company periodically evaluates the need to provide for any losses on these projects, and losses are recognized when
for services provided to date.
it is probable that a loss will be incurred.
Risk consulting and internal audit services revenues. Risk consulting and internal audit services are generally provided on
Risk consulting and internal audit services revenues. Risk consulting and internal audit services are generally provided on
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.
30
30
2019 ANNUAL REPORT | ROBERT HALF NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table presents the Company’s revenues disaggregated by line of business (in thousands):
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years Ended December 31,
2019
Accountemps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The following table presents the Company’s revenues disaggregated by line of business (in thousands):
2018
Years Ended December 31,
$1,915,054
2018
1,063,238
$1,915,054
682,889
1,063,238
669,385
682,889
4,330,566
669,385
511,989
4,330,566
957,716
511,989
$5,800,271
957,716
OfficeTeam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accountemps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Robert Half Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OfficeTeam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Robert Half Management Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Robert Half Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consulting staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Robert Half Management Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consulting staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,946,404
2019
1,037,341
$1,946,404
722,535
1,037,341
705,845
722,535
4,412,125
705,845
533,432
4,412,125
1,128,875
533,432
$6,074,432
1,128,875
$1,765,666
2017
984,873
$1,765,666
629,278
984,873
631,225
629,278
4,011,042
631,225
439,214
4,011,042
816,533
439,214
$5,266,789
816,533
2017
Service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,266,789
Payment terms in our contracts vary by the type and location of our customer and the services offered. The term between
$6,074,432
$5,800,271
invoicing and when payment is due is not significant.
Payment terms in our contracts vary by the type and location of our customer and the services offered. The term between
Contracts with multiple performance obligations are recognized as performance obligations are delivered, and contract
Contracts with multiple performance obligations are recognized as performance obligations are delivered, and contract
invoicing and when payment is due is not significant.
value is allocated based on relative stand-alone selling values of the services and products in the arrangement. As of
December 31, 2019, aggregate transaction price allocated to the performance obligations that were unsatisfied for contracts with
value is allocated based on relative stand-alone selling values of the services and products in the arrangement. As of
an expected duration of greater than one year was $81.7 million. Of this amount, $77.1 million is expected to be recognized
December 31, 2019, aggregate transaction price allocated to the performance obligations that were unsatisfied for contracts with
within the next twelve months. As of December 31, 2018, aggregate transaction price allocated to the performance obligations
an expected duration of greater than one year was $81.7 million. Of this amount, $77.1 million is expected to be recognized
that were unsatisfied for contracts with an expected duration of greater than one year was $58.8 million.
within the next twelve months. As of December 31, 2018, aggregate transaction price allocated to the performance obligations
that were unsatisfied for contracts with an expected duration of greater than one year was $58.8 million.
Contract liabilities are recorded when cash payments are received or due in advance of performance and are reflected in
accounts payable and accrued expenses on the Consolidated Statements of Financial Position. The following table sets forth the
activity in contract liabilities from January 1, 2018 through December 31, 2019 (in thousands):
accounts payable and accrued expenses on the Consolidated Statements of Financial Position. The following table sets forth the
activity in contract liabilities from January 1, 2018 through December 31, 2019 (in thousands):
Contract liabilities are recorded when cash payments are received or due in advance of performance and are reflected in
Contract
Balance as of January 1, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Payments in advance of satisfaction of performance obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of January 1, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Revenue recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments in advance of satisfaction of performance obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, including translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenue recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other, including translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments in advance of satisfaction of performance obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Revenue recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments in advance of satisfaction of performance obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, including translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenue recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other, including translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities
12,170
9,003
(10,542)
12,170
2,366
(10,542)
12,997
2,366
13,030
12,997
(12,072)
13,030
(1,007)
(12,072)
12,948
(1,007)
Balance as of December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
12,948
Note D—Other Current Assets
Other current assets consisted of the following (in thousands):
Note D—Other Current Assets
Other current assets consisted of the following (in thousands):
December 31,
2019
2018
Deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$398,442
2019
84,364
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$398,442
Deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42,768
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84,364
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $525,574
42,768
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $525,574
$311,708
2018
52,887
$311,708
37,990
52,887
$402,585
37,990
$402,585
December 31,
31
31
Liabilities
Contract
9,003
2019 ANNUAL REPORT | ROBERT HALF
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note E—Property and Equipment, Net
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Property and equipment consisted of the following (in thousands):
Note E—Property and Equipment, Net
Property and equipment consisted of the following (in thousands):
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2019
2018
December 31,
$164,547
2019
291,681
$164,547
88,136
291,681
150,644
88,136
695,008
150,644
(566,623)
695,008
$128,385
(566,623)
$177,237
2018
378,734
$177,237
117,740
378,734
160,521
117,740
834,232
160,521
(709,056)
834,232
$125,176
(709,056)
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$128,385
$125,176
Note F—Leases
The Company has operating leases for corporate and field offices, and certain equipment. The Company’s leases have
Note F—Leases
remaining lease terms of 1 year to 10 years, some of which include options to extend the leases for up to 7 years, and some of
The Company has operating leases for corporate and field offices, and certain equipment. The Company’s leases have
which include options to terminate the leases within 1 year. Operating lease expense for the year ended December 31, 2019,
remaining lease terms of 1 year to 10 years, some of which include options to extend the leases for up to 7 years, and some of
was $77.7 million. Rental expense, primarily for offices premises, was $89.4 million and $87.5 million for the years ended
which include options to terminate the leases within 1 year. Operating lease expense for the year ended December 31, 2019,
December 31, 2018 and 2017, respectively.
was $77.7 million. Rental expense, primarily for offices premises, was $89.4 million and $87.5 million for the years ended
December 31, 2018 and 2017, respectively.
Supplemental cash flow information related to leases consisted of the following (in thousands):
Supplemental cash flow information related to leases consisted of the following (in thousands):
Cash paid for operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Right-of-use assets obtained in exchange for new operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cash paid for operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Right-of-use assets obtained in exchange for new operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Supplemental balance sheet information related to leases consisted of the following:
Supplemental balance sheet information related to leases consisted of the following:
Year Ended
December 31,
2019
Year Ended
78,152
December 31,
2019
32,170
78,152
32,170
December 31,
2019
Weighted average remaining lease term for operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average discount rate for operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average remaining lease term for operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.8 years
December 31,
2019
3.0%
4.8 years
3.0%
Future minimum lease payments under non-cancellable leases as of December 31, 2019, were as follows (in thousands):
Weighted average discount rate for operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Future minimum lease payments under non-cancellable leases as of December 31, 2019, were as follows (in thousands):
77,813
63,534
77,813
49,737
63,534
40,811
49,737
31,178
40,811
30,674
31,178
(20,378)
30,674
273,369
(20,378)
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Present value of operating lease liabilities (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Less: Imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(a) Includes current portion of $71.4 million for operating leases.
Present value of operating lease liabilities (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
273,369
(a) Includes current portion of $71.4 million for operating leases.
32
32
2019 ANNUAL REPORT | ROBERT HALF
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of December 31, 2019, the Company had additional future minimum lease obligations totaling $45.5 million under
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of December 31, 2019, the Company had additional future minimum lease obligations totaling $45.5 million under
executed operating lease contracts that had not yet commenced. These operating leases include agreements for corporate and
field office facilities with lease terms of 1 to 8 years.
executed operating lease contracts that had not yet commenced. These operating leases include agreements for corporate and
field office facilities with lease terms of 1 to 8 years.
Note G—Goodwill
The following table sets forth the activity in goodwill from December 31, 2017, through December 31, 2019 (in
Note G—Goodwill
thousands):
The following table sets forth the activity in goodwill from December 31, 2017, through December 31, 2019 (in
thousands):
Goodwill
Temporary
and
consultant
Temporary
staffing
and
Balance as of December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $134,488
consultant
staffing
(421)
Balance as of December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $134,488
Balance as of December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $134,067
(421)
143
Balance as of December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $134,067
Balance as of December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $134,210
143
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent
placement
staffing
Permanent
$ 26,159
placement
staffing
(101)
$ 26,159
$ 26,058
(101)
39
$ 26,058
$ 26,097
39
Goodwill
Risk
consulting
and
Risk
internal
consulting
audit
and
services
internal
$ 50,238
audit
services
(405)
$ 50,238
$ 49,833
(405)
224
$ 49,833
$ 50,057
224
Total
$210,885
Total
(927)
$210,885
$209,958
(927)
406
$209,958
$210,364
406
Balance as of December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $134,210
$ 26,097
$ 50,057
$210,364
Note H—Accrued Payroll and Benefit Costs
Note H—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,
2019
2018
December 31,
Employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$333,528
2018
263,072
$333,528
23,918
263,072
18,251
23,918
$638,769
18,251
The Company provides various qualified defined contribution 401(k) plans covering eligible employees. The plans offer
$638,769
$421,198
2019
Payroll and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
280,918
Employee deferred compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$421,198
Payroll taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,831
Payroll and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
280,918
Workers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,655
Payroll taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,831
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $743,602
Workers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,655
Accrued payroll and benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $743,602
a savings feature with the Company matching employee contributions. Assets of this plan are held by an independent trustee for
The Company provides various qualified defined contribution 401(k) plans covering eligible employees. The plans offer
the sole benefit of participating employees. Nonqualified plans are provided for employees not eligible for the qualified plans.
a savings feature with the Company matching employee contributions. Assets of this plan are held by an independent trustee for
These plans include provisions for salary deferrals and Company matching and discretionary contributions. The asset value of
the sole benefit of participating employees. Nonqualified plans are provided for employees not eligible for the qualified plans.
the nonqualified plans was $398.4 million and $311.7 million as of December 31, 2019 and 2018, respectively, and is included
These plans include provisions for salary deferrals and Company matching and discretionary contributions. The asset value of
in other current assets in the Consolidated Statements of Financial Position. The liability value for the nonqualified plans was
the nonqualified plans was $398.4 million and $311.7 million as of December 31, 2019 and 2018, respectively, and is included
$421.2 million and $333.5 million as of December 31, 2019 and 2018, respectively, and is included in current accrued payroll
in other current assets in the Consolidated Statements of Financial Position. The liability value for the nonqualified plans was
and benefit costs in the Consolidated Statements of Financial Position. Deferred compensation plan and other benefits related to
$421.2 million and $333.5 million as of December 31, 2019 and 2018, respectively, and is included in current accrued payroll
the Company’s executive chairman were $91.8 million and $89.2 million as of December 31, 2019 and 2018, respectively, and
and benefit costs in the Consolidated Statements of Financial Position. Deferred compensation plan and other benefits related to
are included in the liability value for the nonqualified plans. Net unrealized gains and (losses) on these nonqualified plan assets
the Company’s executive chairman were $91.8 million and $89.2 million as of December 31, 2019 and 2018, respectively, and
and liabilities were $44.2 million, ($26.6) million, and $19.4 million for the years ended December 31, 2019, 2018 and 2017,
are included in the liability value for the nonqualified plans. Net unrealized gains and (losses) on these nonqualified plan assets
respectively.
and liabilities were $44.2 million, ($26.6) million, and $19.4 million for the years ended December 31, 2019, 2018 and 2017,
The Company’s contribution expense for its qualified defined contribution plans and nonqualified benefits plans totaled
respectively.
$26.1 million, $24.2 million, and $21.1 million for the years ended December 31, 2019, 2018 and 2017, respectively.
The Company’s contribution expense for its qualified defined contribution plans and nonqualified benefits plans totaled
The Company has statutory defined contribution plans and defined benefit plans outside the U.S., which are not material.
$26.1 million, $24.2 million, and $21.1 million for the years ended December 31, 2019, 2018 and 2017, respectively.
The Company has statutory defined contribution plans and defined benefit plans outside the U.S., which are not material.
33
33
2019 ANNUAL REPORT | ROBERT HALF
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note I—Notes Payable
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company issued promissory notes in connection with certain acquisitions and other payment obligations. These
Note I—Notes Payable
notes are due in varying installments and, in aggregate, amounted to $0.5 million at December 31, 2019, and $0.7 million at
The Company issued promissory notes in connection with certain acquisitions and other payment obligations. These
December 31, 2018. At December 31, 2019, $0.5 million of the notes were collateralized by a standby letter of credit. The
notes are due in varying installments and, in aggregate, amounted to $0.5 million at December 31, 2019, and $0.7 million at
following table shows the schedule of maturities for notes payable at December 31, 2019 (in thousands):
December 31, 2018. At December 31, 2019, $0.5 million of the notes were collateralized by a standby letter of credit. The
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
following table shows the schedule of maturities for notes payable at December 31, 2019 (in thousands):
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
$
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
218
239
218
457
239
At December 31, 2019, the notes carried fixed rates and the weighted average interest rate for the above was 9.0% for
$
457
each of the years ended December 31, 2019, 2018 and 2017.
At December 31, 2019, the notes carried fixed rates and the weighted average interest rate for the above was 9.0% for
The Company has an uncommitted letter of credit facility (the “facility”) of up to $35.0 million, which is available to
each of the years ended December 31, 2019, 2018 and 2017.
cover the issuance of debt support standby letters of credit. The Company had used $16.8 million in debt support standby letters
The Company has an uncommitted letter of credit facility (the “facility”) of up to $35.0 million, which is available to
of credit as of December 31, 2019, and $14.4 million as of December 31, 2018. Of the debt support standby letters of credit
cover the issuance of debt support standby letters of credit. The Company had used $16.8 million in debt support standby letters
outstanding, $16.3 million as of December 31, 2019, and $13.7 million as of December 31, 2018, satisfies workers’
of credit as of December 31, 2019, and $14.4 million as of December 31, 2018. Of the debt support standby letters of credit
compensation insurer’s collateral requirements. There is a service fee of 1.125% on the used portion of the facility. The facility
outstanding, $16.3 million as of December 31, 2019, and $13.7 million as of December 31, 2018, satisfies workers’
is subject to certain financial covenants and expires on August 31, 2020. The Company was in compliance with these covenants
compensation insurer’s collateral requirements. There is a service fee of 1.125% on the used portion of the facility. The facility
as of December 31, 2019. The Company intends to renew this facility prior to its August 31, 2020 expiration.
is subject to certain financial covenants and expires on August 31, 2020. The Company was in compliance with these covenants
In March 2019, the Company entered into an uncommitted credit facility (the “Credit Agreement”) of up to $100 million.
as of December 31, 2019. The Company intends to renew this facility prior to its August 31, 2020 expiration.
The Company may request borrowings under the Credit Agreement that are denominated in U.S. dollars and each request is
subject to approval by the lender. The Company must repay the aggregate principal amount of loans outstanding under the
The Company may request borrowings under the Credit Agreement that are denominated in U.S. dollars and each request is
Credit Agreement on the termination date of each borrowing. Borrowings under the Credit Agreement will bear interest in
subject to approval by the lender. The Company must repay the aggregate principal amount of loans outstanding under the
accordance with the terms of the borrowing, which typically will be calculated according to the London Interbank Offered Rate
Credit Agreement on the termination date of each borrowing. Borrowings under the Credit Agreement will bear interest in
plus an applicable margin. There were no borrowings under the Credit Agreement as of December 31, 2019. The Company
accordance with the terms of the borrowing, which typically will be calculated according to the London Interbank Offered Rate
intends to renew this facility prior to its March 19, 2020, expiration.
plus an applicable margin. There were no borrowings under the Credit Agreement as of December 31, 2019. The Company
intends to renew this facility prior to its March 19, 2020, expiration.
Note J—Income Taxes
In March 2019, the Company entered into an uncommitted credit facility (the “Credit Agreement”) of up to $100 million.
The provision (benefit) for income taxes for the years ended December 31, 2019, 2018 and 2017, consisted of the
Note J—Income Taxes
following (in thousands):
The provision (benefit) for income taxes for the years ended December 31, 2019, 2018 and 2017, consisted of the
Years Ended December 31,
following (in thousands):
Current:
Current:
Deferred:
Deferred:
2019
2018
Years Ended December 31,
2017
2019
2018
$ 99,830
2017
$133,097
38,356
$ 99,830
35,007
38,356
24,944
$133,097
27,079
24,944
95
1,087
(9,959) $ (15,849) $ 41,717
$226,932
95
$157,314
(30)
$171,082
1,087
(30)
$171,082
$157,314
$226,932
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $107,699
39,028
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $107,699
33,227
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39,028
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal and state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,227
27,079
35,007
(9,959) $ (15,849) $ 41,717
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal and state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before the provision for income taxes for the years ended December 31, 2019, 2018 and 2017, consisted of the
following (in thousands):
Income before the provision for income taxes for the years ended December 31, 2019, 2018 and 2017, consisted of the
Years Ended December 31,
following (in thousands):
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017
2019
2018
Years Ended December 31,
$485,489
2018
106,113
$485,489
$591,602
106,113
$445,418
2017
72,098
$445,418
$517,516
72,098
$545,695
2019
79,820
$545,695
$625,515
79,820
$625,515
$591,602
$517,516
34
34
2019 ANNUAL REPORT | ROBERT HALF
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The income taxes shown above varied from the statutory federal income tax rates for these periods as follows:
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years Ended December 31,
2019
2018
Years Ended December 31,
2017
The income taxes shown above varied from the statutory federal income tax rates for these periods as follows:
Federal U.S. income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of federal tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal U.S. income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent book/tax differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of federal tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. income taxed at different rates, net of foreign tax credits . . . . . . . . . . . . . . . . . . .
Permanent book/tax differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. income taxed at different rates, net of foreign tax credits . . . . . . . . . . . . . . . . . . .
Tax impact of uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax effects of TCJA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact of uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax effects of TCJA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21.0%
2019
4.9
21.0%
1.1
4.9
2.1
1.1
(1.4)
2.1
0.2
(1.4)
—
0.2
(0.5)
—
27.4%
(0.5)
21.0%
2018
4.7
21.0%
0.6
4.7
2.0
0.6
(1.7)
2.0
0.8
(1.7)
0.4
0.8
(1.2)
0.4
26.6%
(1.2)
35.0%
2017
3.7
35.0%
0.4
3.7
—
0.4
(1.3)
—
0.2
(1.3)
6.5
0.2
(0.6)
6.5
43.9%
(0.6)
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27.4%
26.6%
43.9%
The deferred portion of the tax (benefit) provision consisted of the following (in thousands):
The deferred portion of the tax (benefit) provision consisted of the following (in thousands):
Years Ended December 31,
Accrued expenses, deducted for tax when paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized costs for books, deducted for tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses, deducted for tax when paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized costs for books, deducted for tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax effects of TCJA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax effects of TCJA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017
2019
2019
3,246
2018
Years Ended December 31,
$ (17,797) $ (21,884) $ 15,213
2018
(4,832)
2017
(5,790)
$ (17,797) $ (21,884) $ 15,213
(4,079)
(5,790)
34,633
(4,079)
1,835
34,633
$ (8,872) $ (15,879) $ 41,812
1,835
10,071
(4,832)
—
10,071
766
—
3,526
3,246
—
3,526
2,153
—
2,153
766
$ (8,872) $ (15,879) $ 41,812
35
35
2019 ANNUAL REPORT | ROBERT HALF
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The components of the deferred income tax amounts at December 31, 2019 and 2018, were as follows (in thousands):
The components of the deferred income tax amounts at December 31, 2019 and 2018, were as follows (in thousands):
December 31,
Deferred Income Tax Assets
2019
2018
December 31,
Deferred compensation and other benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $105,096
2019
Deferred Income Tax Assets
25,130
Credits and net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred compensation and other benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $105,096
7,805
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,130
Credits and net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,944
Provision for bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,805
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,929
Workers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,944
Provision for bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51,932
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,929
Workers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,256
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51,932
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
212,092
Total deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,256
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018
$ 87,513
31,169
$ 87,513
9,535
31,169
7,891
9,535
3,580
7,891
—
3,580
14,959
—
154,647
14,959
Deferred Income Tax Liabilities
Deferred Income Tax Liabilities
Total deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
212,092
(22,009)
154,647
(21,210)
Property and equipment basis differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment basis differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(16,981)
(22,009)
(44,448)
(16,981)
(7,278)
(44,448)
(90,716)
(7,278)
(21,618)
(90,716)
Total deferred income tax assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 99,758
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(21,618)
(9,761)
(21,210)
—
(9,761)
(10,319)
—
(41,290)
(10,319)
(23,072)
(41,290)
$ 90,285
(23,072)
Credits and net operating loss carryforwards primarily include net operating losses in foreign countries of $21.7 million
$ 90,285
Total deferred income tax assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 99,758
that expire in 2020 and later; and California enterprise zone tax credits of $3.0 million that expire in 2023. Of the $3.0 million
Credits and net operating loss carryforwards primarily include net operating losses in foreign countries of $21.7 million
of California enterprise zone tax credits, the Company expects that it will utilize $1.2 million of these credits prior to expiration.
that expire in 2020 and later; and California enterprise zone tax credits of $3.0 million that expire in 2023. Of the $3.0 million
Valuation allowances of $19.9 million have been maintained against net operating loss carryforwards and other deferred items
of California enterprise zone tax credits, the Company expects that it will utilize $1.2 million of these credits prior to expiration.
in foreign countries. In addition, a valuation allowance of $1.8 million has been maintained against California enterprise zone
Valuation allowances of $19.9 million have been maintained against net operating loss carryforwards and other deferred items
tax credits.
in foreign countries. In addition, a valuation allowance of $1.8 million has been maintained against California enterprise zone
As of December 31, 2019, the Company’s consolidated financial statements provide for any related U.S. tax liability on
tax credits.
earnings of foreign subsidiaries that may be repatriated.
As of December 31, 2019, the Company’s consolidated financial statements provide for any related U.S. tax liability on
The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2017 to
earnings of foreign subsidiaries that may be repatriated.
December 31, 2019 (in thousands):
The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2017 to
December 31, 2019 (in thousands):
2019
8,418
2019
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2017
1,503
Gross increases—tax positions in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
731
(257)
Gross decreases—tax positions in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,503
Gross increases—tax positions in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
956
Gross increases—tax positions in current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(257)
Gross decreases—tax positions in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(40)
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
956
Gross increases—tax positions in current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7)
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(40)
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,886
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7)
The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $9.3 million, $8.3
2,886
—
8,418
(760)
—
1,703
(760)
(4)
1,703
(3)
(4)
9,354
(3)
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
million and $2.8 million for 2019, 2018 and 2017, respectively.
9,354
8,418
$
$
$
$
The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $9.3 million, $8.3
The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax
million and $2.8 million for 2019, 2018 and 2017, respectively.
expense. The total amount of interest and penalties accrued as of December 31, 2019 is $0.5 million, including a $0.2 million
The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax
increase recorded in income tax expense during the year. The total amount of interest and penalties accrued as of December 31,
expense. The total amount of interest and penalties accrued as of December 31, 2019 is $0.5 million, including a $0.2 million
36
increase recorded in income tax expense during the year. The total amount of interest and penalties accrued as of December 31,
36
December 31,
$
2018
December 31,
2,886
$
2018
3,259
2,886
(8)
3,259
2,284
(8)
—
2,284
(3)
—
8,418
(3)
$
2017
$
731
2019 ANNUAL REPORT | ROBERT HALF
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2018 was $0.3 million, including a $0.2 million increase recorded in income tax expense during the year. The total amount of
interest and penalties accrued as of December 31, 2017, was $0.1 million.
2018 was $0.3 million, including a $0.2 million increase recorded in income tax expense during the year. The total amount of
interest and penalties accrued as of December 31, 2017, was $0.1 million.
twelve months.
The Company does not believe it is reasonably possible that the settlement of tax uncertainties will occur within the next
The Company does not believe it is reasonably possible that the settlement of tax uncertainties will occur within the next
The Company’s major income tax jurisdictions are the United States, Australia, Belgium, Canada, France, Germany and
twelve months.
the United Kingdom. For U.S. federal income tax, the Company remains subject to examination for 2016 and subsequent years.
The Company’s major income tax jurisdictions are the United States, Australia, Belgium, Canada, France, Germany and
For major U.S. states, with few exceptions, the Company remains subject to examination for 2015 and subsequent years.
the United Kingdom. For U.S. federal income tax, the Company remains subject to examination for 2016 and subsequent years.
Generally, for foreign countries, 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 2015 and subsequent years.
Generally, for foreign countries, the Company remains subject to examination for 2012 and subsequent years.
Note K—Commitments and Contingencies
On April 6, 2018, Plaintiff Shari Dorff, on her own behalf and on behalf of a putative class of allegedly similarly situated
On March 23, 2015, Plaintiff Jessica Gentry, on her own behalf and on behalf of a putative class of allegedly similarly
Note K—Commitments and Contingencies
situated individuals, filed a complaint against the Company in the Superior Court of California, San Francisco County, which
On March 23, 2015, Plaintiff Jessica Gentry, on her own behalf and on behalf of a putative class of allegedly similarly
was subsequently amended on October 23, 2015. The complaint alleges that a putative class of current and former employees of
situated individuals, filed a complaint against the Company in the Superior Court of California, San Francisco County, which
the Company working in California since March 13, 2010 were denied compensation for the time they spent interviewing “for
was subsequently amended on October 23, 2015. The complaint alleges that a putative class of current and former employees of
temporary and permanent employment opportunities” as well as performing activities related to the interview process. Gentry
the Company working in California since March 13, 2010 were denied compensation for the time they spent interviewing “for
seeks recovery on her own behalf and on behalf of the putative class in an unspecified amount for this allegedly unpaid
temporary and permanent employment opportunities” as well as performing activities related to the interview process. Gentry
compensation. Gentry also seeks recovery of an unspecified amount for the alleged failure of the Company to provide her and
seeks recovery on her own behalf and on behalf of the putative class in an unspecified amount for this allegedly unpaid
the putative class with accurate wage statements. Gentry also seeks an unspecified amount of other damages, attorneys’ fees,
compensation. Gentry also seeks recovery of an unspecified amount for the alleged failure of the Company to provide her and
and statutory penalties, including penalties for allegedly not paying all wages due upon separation to former employees and
the putative class with accurate wage statements. Gentry also seeks an unspecified amount of other damages, attorneys’ fees,
statutory penalties on behalf of herself and other allegedly “aggrieved employees” as defined by California’s Labor Code
and statutory penalties, including penalties for allegedly not paying all wages due upon separation to former employees and
Private Attorney General Act (“PAGA”). On January 4, 2016, the Court denied a motion by the Company to compel all of
statutory penalties on behalf of herself and other allegedly “aggrieved employees” as defined by California’s Labor Code
Gentry’s claims, except the PAGA claim, to individual arbitration. At this stage of the litigation, it is not feasible to predict the
Private Attorney General Act (“PAGA”). On January 4, 2016, the Court denied a motion by the Company to compel all of
outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the
Gentry’s claims, except the PAGA claim, to individual arbitration. At this stage of the litigation, it is not feasible to predict the
Company’s Financial Statements. The Company believes it has meritorious defenses to the allegations and the Company
outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the
intends to continue to vigorously defend against the litigation.
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.
individuals, filed a complaint against the Company in the Superior Court of California, County of Los Angeles. In addition to
certain claims individual to Plaintiff Dorff, the complaint alleges that salaried recruiters based in California have been
individuals, filed a complaint against the Company in the Superior Court of California, County of Los Angeles. In addition to
misclassified as exempt employees and seeks an unspecified amount for: unpaid wages resulting from such alleged
certain claims individual to Plaintiff Dorff, the complaint alleges that salaried recruiters based in California have been
misclassification; alleged failure to provide a reasonable opportunity to take meal periods and rest breaks; alleged failure to pay
misclassified as exempt employees and seeks an unspecified amount for: unpaid wages resulting from such alleged
wages on a timely basis both during employment and upon separation; alleged failure to comply with California requirements
misclassification; alleged failure to provide a reasonable opportunity to take meal periods and rest breaks; alleged failure to pay
regarding wage statements and record-keeping; and alleged improper denial of expense reimbursement. Plaintiff Dorff also
wages on a timely basis both during employment and upon separation; alleged failure to comply with California requirements
seeks an unspecified amount of other damages, attorneys’ fees, and penalties, including but not limited to statutory penalties on
regarding wage statements and record-keeping; and alleged improper denial of expense reimbursement. Plaintiff Dorff also
behalf of herself and other allegedly “aggrieved employees” as defined by PAGA. At this stage of the litigation, it is not
seeks an unspecified amount of other damages, attorneys’ fees, and penalties, including but not limited to statutory penalties on
feasible to predict the outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts
behalf of herself and other allegedly “aggrieved employees” as defined by PAGA. At this stage of the litigation, it is not
have been provided in the Company’s Financial Statements. The Company believes it has meritorious defenses to the
feasible to predict the outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts
allegations and the Company intends to continue to vigorously defend against the litigation.
have been provided in the Company’s Financial Statements. The Company believes it has meritorious defenses to the
The Company is involved in a number of other lawsuits arising in the ordinary course of business. While management
allegations and the Company intends to continue to vigorously defend against the litigation.
does not expect any of these other matters to have a material adverse effect on the Company’s results of operations, financial
The Company is involved in a number of other lawsuits arising in the ordinary course of business. While management
position or cash flows, litigation is subject to certain inherent uncertainties.
does not expect any of these other matters to have a material adverse effect on the Company’s results of operations, financial
Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred.
position or cash flows, litigation is subject to certain inherent uncertainties.
On April 6, 2018, Plaintiff Shari Dorff, on her own behalf and on behalf of a putative class of allegedly similarly situated
Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred.
37
37
2019 ANNUAL REPORT | ROBERT HALF NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note L—Stockholders’ Equity
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Stock Repurchase Program. As of December 31, 2019, the Company is authorized to repurchase, from time to time, up
Stock Repurchase Program. As of December 31, 2019, the Company is authorized to repurchase, from time to time, up
Note L—Stockholders’ Equity
to 2.5 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
to 2.5 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions,
December 31, 2019, 2018 and 2017, are reflected in the following table (in thousands):
depending on market conditions. The number and the cost of common stock shares repurchased during the years ended
December 31, 2019, 2018 and 2017, are reflected in the following table (in thousands):
Years Ended December 31,
Common stock repurchased (in shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock repurchased (in shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019
2018
Years Ended December 31,
2017
4,253
2019
$250,154
4,253
5,614
2018
$351,194
5,614
4,046
2017
$196,645
4,046
Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were
$196,645
Common stock repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
tendered by employees for the payment of applicable statutory withholding taxes. The number and the cost of employee stock
Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were
plan repurchases made during the years ended December 31, 2019, 2018 and 2017, are reflected in the following table (in
tendered by employees for the payment of applicable statutory withholding taxes. The number and the cost of employee stock
thousands):
plan repurchases made during the years ended December 31, 2019, 2018 and 2017, are reflected in the following table (in
thousands):
Years Ended December 31,
$250,154
$351,194
Repurchases related to employee stock plans (in shares) . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019
2018
Years Ended December 31,
352
235
2017
408
Repurchases related to employee stock plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases related to employee stock plans (in shares) . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017
$ 20,391
408
The repurchased shares are held in treasury and are presented as if constructively retired. Treasury stock is accounted for
$ 20,391
Repurchases related to employee stock plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
using the cost method. Treasury stock activity for each of the three years ended December 31, 2019, 2018 and 2017 (consisting
The repurchased shares are held in treasury and are presented as if constructively retired. Treasury stock is accounted for
of purchase of shares for the treasury) is presented in the Consolidated Statements of Stockholders’ Equity.
using the cost method. Treasury stock activity for each of the three years ended December 31, 2019, 2018 and 2017 (consisting
Dividends. The Company’s Board of Directors may at their discretion declare and pay cash dividends upon the shares of
of purchase of shares for the treasury) is presented in the Consolidated Statements of Stockholders’ Equity.
the Company’s stock either out of the Company’s retained earnings or additional paid-in capital. The dividends declared per
share were $1.24, $1.12, and $.96 during the years ended December 31, 2019, 2018 and 2017, respectively.
the Company’s stock either out of the Company’s retained earnings or additional paid-in capital. The dividends declared per
Repurchases of shares and issuances of dividends are applied first to the extent of retained earnings and any remaining
share were $1.24, $1.12, and $.96 during the years ended December 31, 2019, 2018 and 2017, respectively.
amounts are applied to additional paid-in capital.
Dividends. The Company’s Board of Directors may at their discretion declare and pay cash dividends upon the shares of
2019
$ 22,491
352
2018
$ 13,674
235
$ 22,491
$ 13,674
Repurchases of shares and issuances of dividends are applied first to the extent of retained earnings and any remaining
amounts are applied to additional paid-in capital.
Note M—Stock Plans
Under various stock plans, officers, employees, and outside directors have received or may receive grants of restricted
Note M—Stock Plans
stock, stock units, stock appreciation rights or options to purchase common stock. Grants have been made at the discretion of
Under various stock plans, officers, employees, and outside directors have received or may receive grants of restricted
the Committees of the Board of Directors. Grants generally vest either on a straight-line basis over four years or on a cliff basis
stock, stock units, stock appreciation rights or options to purchase common stock. Grants have been made at the discretion of
over three years. Shares offered under the plan are authorized but unissued shares.
the Committees of the Board of Directors. Grants generally vest either on a straight-line basis over four years or on a cliff basis
Recipients of restricted stock do not pay any cash consideration to the Company for the shares and have the right to vote
over three years. Shares offered under the plan are authorized but unissued shares.
all shares subject to such grant. Restricted stock grants contain forfeitable rights to dividends. Dividends for these grants are
Recipients of restricted stock do not pay any cash consideration to the Company for the shares and have the right to vote
accrued on the dividend payment dates but are not paid until the shares vest, and dividends accrued for shares that ultimately do
all shares subject to such grant. Restricted stock grants contain forfeitable rights to dividends. Dividends for these grants are
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
accrued on the dividend payment dates but are not paid until the shares vest, and dividends accrued for shares that ultimately do
do not receive dividends with respect to such units.
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
During the year ended December 31, 2019, the Company granted performance shares to its executives in the form of
do not receive dividends with respect to such units.
restricted stock. The shares granted contain (1) a performance condition based on Return on Invested Capital (“ROIC”), and
During the year ended December 31, 2019, the Company granted performance shares to its executives in the form of
(2) a market condition based on Total Shareholder Return (“TSR”). The ROIC performance condition and the TSR market
restricted stock. The shares granted contain (1) a performance condition based on Return on Invested Capital (“ROIC”), and
condition measure the Company’s performance against a peer group. Shares will be delivered at the end of a three year vesting,
(2) a market condition based on Total Shareholder Return (“TSR”). The ROIC performance condition and the TSR market
TSR and ROIC performance period based on the Company’s actual performance compared to the peer group. The ROIC
condition measure the Company’s performance against a peer group. Shares will be delivered at the end of a three year vesting,
performance condition is calculated first and has a range of possible outcomes of zero percent (0%) to one hundred fifty percent
TSR and ROIC performance period based on the Company’s actual performance compared to the peer group. The ROIC
(150%). The TSR condition is considered a modifier of the ROIC performance condition. The range for the TSR condition is
performance condition is calculated first and has a range of possible outcomes of zero percent (0%) to one hundred fifty percent
seventy-five percent (75%) to one hundred twenty-five percent (125%). The result calculated by multiplying the ROIC
(150%). The TSR condition is considered a modifier of the ROIC performance condition. The range for the TSR condition is
percentage by the TSR percentage is used to calculate the actual number of shares earned. The fair value of this award was
seventy-five percent (75%) to one hundred twenty-five percent (125%). The result calculated by multiplying the ROIC
determined using a Monte Carlo simulation with the following assumptions: a historical volatility of 26.20%, a 0% dividend
percentage by the TSR percentage is used to calculate the actual number of shares earned. The fair value of this award was
yield, and a risk-free interest rate of 2.36%. The historical volatility was based on the most recent 2.71-year period for the
determined using a Monte Carlo simulation with the following assumptions: a historical volatility of 26.20%, a 0% dividend
yield, and a risk-free interest rate of 2.36%. The historical volatility was based on the most recent 2.71-year period for the
38
38
2019 ANNUAL REPORT | ROBERT HALF
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Company and the components of the peer group. The stock price movements have been modeled such that the dividends are
incorporated in the returns of each company’s stock, therefore the Monte Carlo simulation reflects a 0% dividend yield for each
Company and the components of the peer group. The stock price movements have been modeled such that the dividends are
stock. The use of a 0% dividend yield is mathematically equivalent to including the dividends in the calculation of TSR. The
incorporated in the returns of each company’s stock, therefore the Monte Carlo simulation reflects a 0% dividend yield for each
risk-free interest rate is equal to the yield, as of the valuation date, of the zero-coupon U.S. Treasury bill that is commensurate
stock. The use of a 0% dividend yield is mathematically equivalent to including the dividends in the calculation of TSR. The
with the remaining performance period.
risk-free interest rate is equal to the yield, as of the valuation date, of the zero-coupon U.S. Treasury bill that is commensurate
Unrecognized compensation cost is expected to be recognized over the next four years. Total unrecognized compensation
with the remaining performance period.
cost, net of estimated forfeitures, for restricted stock and stock units was $71.6 million, $65.6 million, and $62.7 million for the
Unrecognized compensation cost is expected to be recognized over the next four years. Total unrecognized compensation
years ended December 31, 2019, 2018 and 2017, respectively.
cost, net of estimated forfeitures, for restricted stock and stock units was $71.6 million, $65.6 million, and $62.7 million for the
The following table reflects activity under all stock plans from December 31, 2016 through December 31, 2019, and the
years ended December 31, 2019, 2018 and 2017, respectively.
weighted average exercise prices (in thousands, except per share amounts):
The following table reflects activity under all stock plans from December 31, 2016 through December 31, 2019, and the
weighted average exercise prices (in thousands, except per share amounts):
Time Based Awards
Weighted
Number
Time Based Awards
Average
of
Grant Date
Shares/
Weighted
Number
Fair Value
Units
Average
of
$43.78
1,243
Shares/
Grant Date
Fair Value
Units
$48.10
574
$43.78
1,243
$44.09
(616)
$48.10
574
$43.68
(41)
$44.09
(616)
$45.75
1,160
(41)
$43.68
$57.16
533
$45.75
1,160
$47.62
(568)
$57.16
533
$49.10
(40)
(568)
$47.62
$50.24
1,085
$49.10
(40)
$66.66
434
$50.24
1,085
$50.29
(557)
434
$66.66
$53.85
(15)
$50.29
(557)
$57.67
947
(15)
$53.85
Performance Based
Awards with Market
Conditions
Performance Based
Awards with Market
Weighted
Number
Conditions
Average
of
Grant Date
Shares/
Weighted
Number
Fair Value
Units
Average
of
$54.42
950
Shares/
Grant Date
Fair Value
Units
$50.09
50
$54.42
950
$50.09
(384)
$50.09
50
—
—
$50.09
(384)
$56.76
616
—
—
—
—
$56.76
616
$71.86
(129)
—
—
$71.86
(129)
(129)
$71.86
$45.93
358
$71.86
(129)
$74.01
236
$45.93
358
$45.93
(338)
236
$74.01
$45.93
(20)
$45.93
(338)
$74.01
236
(20)
$45.93
Performance Based
Awards without
Market Conditions
Performance Based
Awards without
Weighted
Number
Market Conditions
Average
of
Grant Date
Shares/
Weighted
Number
Fair Value
Units
Average
of
—
—
Shares/
Grant Date
Fair Value
Units
$47.45
330
—
—
—
—
$47.45
330
—
—
—
—
$47.45
330
—
—
$56.83
278
$47.45
330
—
—
$56.83
278
—
—
—
—
$51.74
608
—
—
—
—
$51.74
608
—
—
—
—
—
—
—
—
$51.74
608
—
—
Total Awards with
Performance
Condition
Total Awards with
Performance
Weighted
Condition
Average
Grant Date
Weighted
Fair Value
Average
$54.42
Grant Date
Fair Value
$47.80
$54.42
$50.09
$47.80
—
$50.09
$53.51
—
$56.83
$53.51
$71.86
$56.83
$71.86
$71.86
$49.58
$71.86
$74.01
$49.58
$45.93
$74.01
$45.93
$45.93
$57.97
$45.93
Number
of
Shares/
Number
Units
of
950
Shares/
Units
380
950
(384)
380
—
(384)
946
—
278
946
(129)
278
(129)
(129)
966
(129)
236
966
(338)
236
(20)
(338)
844
(20)
Outstanding, December 31, 2016 . . . .
Granted . . . . . . . . . . . . . . . . . . . . . .
Outstanding, December 31, 2016 . . . .
Restrictions lapsed . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . .
Outstanding, December 31, 2017 . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . .
Outstanding, December 31, 2017 . . . .
Restrictions lapsed . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . .
Outstanding, December 31, 2018 . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . .
Outstanding, December 31, 2018 . . . .
Restrictions lapsed . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . .
Restrictions lapsed . . . . . . . . . . . . .
Outstanding, December 31, 2019 . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . .
The total fair value of shares vested was $57.0 million, $40.6 million, and $50.4 million for the years ended
844
$57.67
$74.01
$51.74
236
608
947
Outstanding, December 31, 2019 . . . .
December 31, 2019, 2018 and 2017, respectively.
$57.97
The total fair value of shares vested was $57.0 million, $40.6 million, and $50.4 million for the years ended
At December 31, 2019, the total number of available shares to grant under the plans (consisting of either restricted stock,
December 31, 2019, 2018 and 2017, respectively.
stock units, stock appreciation rights or options to purchase common stock) was approximately 4.8 million.
At December 31, 2019, 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 4.8 million.
39
39
2019 ANNUAL REPORT | ROBERT HALF
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note N—Net Income Per Share
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The calculation of net income per share for the three years ended December 31, 2019, 2018 and 2017, are reflected in the
Note N—Net Income Per Share
following table (in thousands, except per share amounts):
The calculation of net income per share for the three years ended December 31, 2019, 2018 and 2017, are reflected in the
following table (in thousands, except per share amounts):
Years Ended December 31,
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019
$454,433
2018
$434,288
2017
$290,584
2019
2018
Years Ended December 31,
2017
Diluted:
Diluted:
Basic:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic:
Weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$454,433
115,656
$434,288
120,513
$290,584
124,152
115,656
115,656
120,513
120,513
124,152
124,152
Dilutive effect of potential common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of potential common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income per share:
Diluted weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net income per share:
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Potential common shares include the dilutive effect of unvested performance-based restricted stock, restricted stock
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,089
120,513
121,602
1,089
755
115,656
116,411
755
121,602
3.60
116,411
3.93
3.90
3.93
3.57
3.60
3.90
3.57
$
$
$
$
$
$
$
$
740
124,152
124,892
740
124,892
2.34
2.33
2.34
2.33
which contains forfeitable rights to dividends, and stock units.
Potential common shares include the dilutive effect of unvested performance-based restricted stock, restricted stock
which contains forfeitable rights to dividends, and stock units.
Note O—Business Segments
The Company has three reportable segments: temporary and consultant staffing, permanent placement staffing, and risk
The Company has three reportable segments: temporary and consultant staffing, permanent placement staffing, and risk
consulting and internal audit services. Operating segments are defined as components of the Company for which separate
Note O—Business Segments
financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and
assess performance. The temporary and consultant staffing segment provides specialized staffing in the accounting and finance,
consulting and internal audit services. Operating segments are defined as components of the Company for which separate
administrative and office, information technology, legal, advertising, marketing and web design fields. The permanent
financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and
placement staffing segment provides full-time personnel in the accounting, finance, administrative and office, and information
assess performance. The temporary and consultant staffing segment provides specialized staffing in the accounting and finance,
technology fields. The risk consulting and internal audit services segment provides business and technology risk consulting and
administrative and office, information technology, legal, advertising, marketing and web design fields. The permanent
internal audit services.
placement staffing segment provides full-time personnel in the accounting, finance, administrative and office, and information
technology fields. The risk consulting and internal audit services segment provides business and technology risk consulting and
The accounting policies of the segments are set forth in Note A—Summary of Significant Accounting Policies. The
internal audit services.
Company evaluates performance based on income from operations before net interest income, intangible amortization expense,
The accounting policies of the segments are set forth in Note A—Summary of Significant Accounting Policies. The
and income taxes.
Company evaluates performance based on income from operations before net interest income, intangible amortization expense,
and income taxes.
40
40
2019 ANNUAL REPORT | ROBERT HALF
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
results (in thousands):
The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated
Years Ended December 31,
results (in thousands):
Service revenues
Service revenues
Temporary and consultant staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consultant staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income
Temporary and consultant staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income
2019
2018
Years Ended December 31,
2017
2019
$4,412,125
2018
$4,330,566
2017
$4,011,042
533,432
$4,412,125
1,128,875
533,432
$6,074,432
1,128,875
511,989
$4,330,566
957,716
511,989
$5,800,271
957,716
439,214
$4,011,042
816,533
439,214
$5,266,789
816,533
$6,074,432
$ 410,153
$5,800,271
$ 404,800
$5,266,789
$ 355,700
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary and consultant staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk consulting and internal audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent placement staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77,673
$ 355,700
83,907
77,673
517,280
83,907
1,563
517,280
(1,799)
1,563
$ 517,516
(1,799)
Assets by reportable segment are not presented as the Company does not allocate assets to its reportable segments, nor is
$ 517,516
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
90,801
$ 404,800
93,324
90,801
588,925
93,324
1,705
588,925
(4,382)
1,705
$ 591,602
(4,382)
83,885
$ 410,153
127,713
83,885
621,751
127,713
1,361
621,751
(5,125)
1,361
$ 625,515
(5,125)
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
such information used by management for purposes of assessing performance or allocating resources.
$ 625,515
$ 591,602
Assets by reportable segment are not presented as the Company does not allocate assets to its reportable segments, nor is
The Company operates internationally, with operations in North America, South America, Europe, Asia and Australia.
such information used by management for purposes of assessing performance or allocating resources.
The following tables represent revenues and long-lived assets by geographic location (in thousands):
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):
Years Ended December 31,
Service revenues (a)
2019
2018
Years Ended December 31,
2017
Service revenues (a)
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,708,715
2019
1,365,717
Foreign (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,708,715
$6,074,432
1,365,717
Foreign (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net
$6,074,432
2019
2018
$4,433,767
2017
$4,121,701
1,366,504
$4,433,767
$5,800,271
1,366,504
$5,800,271
December 31,
2018
December 31,
1,145,088
$4,121,701
$5,266,789
1,145,088
$5,266,789
2017
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Property and equipment, net
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019
99,365
$
2018
96,169
2017
$ 113,069
29,020
99,365
$ 128,385
29,020
29,007
$
96,169
$ 125,176
29,007
31,818
$ 113,069
$ 144,887
31,818
$ 144,887
(a) There were no customers that accounted for more than 10% of the Company’s total service revenues in any year presented.
(b) No individual country represented more than 10% of revenues in any year presented.
(a) There were no customers that accounted for more than 10% of the Company’s total service revenues in any year presented.
(b) No individual country represented more than 10% of revenues in any year presented.
$ 128,385
$ 125,176
41
41
2019 ANNUAL REPORT | ROBERT HALF
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note P—Quarterly Financial Data (Unaudited)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following tabulation shows certain quarterly financial data for 2019 and 2018 (in thousands, except per share
Note P—Quarterly Financial Data (Unaudited)
amounts):
The following tabulation shows certain quarterly financial data for 2019 and 2018 (in thousands, except per share
amounts):
2019
Quarter
1
2
3
4
Service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,468,530
2019
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 607,588
Service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,468,530
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 147,383
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 607,588
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 109,798
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 147,383
.94
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 109,798
.93
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.94
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1
Quarter
$1,516,385
2
$ 637,541
$1,516,385
$ 160,103
$ 637,541
$ 114,612
$ 160,103
.98
$
$ 114,612
.98
$
.98
$
$1,552,132
3
$ 646,446
$1,552,132
$ 163,782
$ 646,446
$ 117,181
$ 163,782
1.02
$
$ 117,181
1.01
$
1.02
$
$1,537,385
4
$ 638,944
$1,537,385
$ 154,247
$ 638,944
$ 112,842
$ 154,247
.99
$
$ 112,842
.98
$
.99
$
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.93
$
$
.98
Quarter
1.01
$
.98
2018
1
2
3
4
Service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,395,333
2018
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 572,366
Service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,395,333
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 134,639
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 572,366
96,167
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 134,639
.79
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
96,167
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.78
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.79
Basic net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1
Quarter
$1,457,054
2
$ 607,118
$1,457,054
$ 150,075
$ 607,118
$ 109,315
$ 150,075
.90
$
$ 109,315
.89
$
.90
$
$1,466,226
3
$ 610,468
$1,466,226
$ 151,905
$ 610,468
$ 115,242
$ 151,905
.96
$
$ 115,242
.95
$
.96
$
$1,481,658
4
$ 620,062
$1,481,658
$ 154,983
$ 620,062
$ 113,564
$ 154,983
.96
$
$ 113,564
.95
$
.96
$
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
.78
$
.89
$
.95
$
.95
Note Q—Subsequent Events
On February 12, 2020, the Company announced the following:
Note Q—Subsequent Events
Quarterly dividend per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
On February 12, 2020, the Company announced the following:
Declaration date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Quarterly dividend per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Declaration date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$.34
February 12, 2020
$.34
February 25, 2020
February 12, 2020
March 16, 2020
February 25, 2020
March 16, 2020
42
42
2019 ANNUAL REPORT | ROBERT HALF
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
To the Board of Directors and Stockholders of Robert Half International Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the consolidated financial statements, including the related notes as listed in the index appearing under Item
15(a)(1) and the financial statement schedule listed in the index appearing under Item 15(a)(2), of Robert Half International
We have audited the consolidated financial statements, including the related notes as listed in the index appearing under Item
Inc. and its subsidiaries (the “Company”) (collectively referred to as the “consolidated financial statements”). We also have
15(a)(1) and the financial statement schedule listed in the index appearing under Item 15(a)(2), of Robert Half International
audited the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in
Inc. and its subsidiaries (the “Company”) (collectively referred to as the “consolidated financial statements”). We also have
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
audited the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in
Commission (COSO).
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
three years in the period ended December 31, 2019 in conformity with accounting principles generally accepted in the United
position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the
States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over
three years in the period ended December 31, 2019 in conformity with accounting principles generally accepted in the United
financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013)
States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over
issued by the COSO.
financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the COSO.
Basis for Opinions
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal
in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting
in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
respects.
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
circumstances. We believe that our audits provide a reasonable basis for our opinions.
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
43
43
2019 ANNUAL REPORT | ROBERT HALF 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
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
disposition of the company’s assets that could have a material effect on the financial statements.
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,
disposition of the company’s assets that could have a material effect on the financial statements.
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
Income taxes
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
As described in Notes A and J to the consolidated financial statements, the Company’s operations are subject to U.S. federal,
Income taxes
state and local, and foreign income taxes. In establishing its deferred income tax assets and liabilities and its provision for
income taxes, management makes judgments and interpretations based on the enacted tax laws that are applicable to its
As described in Notes A and J to the consolidated financial statements, the Company’s operations are subject to U.S. federal,
operations in various jurisdictions. Deferred tax assets and liabilities are measured and recorded using current enacted tax rates,
state and local, and foreign income taxes. In establishing its deferred income tax assets and liabilities and its provision for
which management expects will apply to taxable income in the years in which those temporary differences are recovered or
income taxes, management makes judgments and interpretations based on the enacted tax laws that are applicable to its
settled. Management also evaluates the need for valuation allowances to reduce deferred tax assets to realizable amounts. In
operations in various jurisdictions. Deferred tax assets and liabilities are measured and recorded using current enacted tax rates,
determining the realizability of its deferred tax assets, management evaluates all positive and negative evidence and uses
which management expects will apply to taxable income in the years in which those temporary differences are recovered or
judgment regarding past and future events, including operating results, to help determine when it is more likely than not that all
settled. Management also evaluates the need for valuation allowances to reduce deferred tax assets to realizable amounts. In
or some portion of the deferred tax assets may not be realized. As disclosed by management, the likelihood of a material change
determining the realizability of its deferred tax assets, management evaluates all positive and negative evidence and uses
in the Company’s expected realization of its deferred tax assets is dependent on future taxable income and the effectiveness of
judgment regarding past and future events, including operating results, to help determine when it is more likely than not that all
its tax planning strategies in the various relevant jurisdictions. The Company recorded a provision for income taxes of $171
or some portion of the deferred tax assets may not be realized. As disclosed by management, the likelihood of a material change
million for the year ended December 31, 2019 and net deferred income tax assets of $100 million including a valuation
in the Company’s expected realization of its deferred tax assets is dependent on future taxable income and the effectiveness of
allowance of $22 million as of December 31, 2019.
its tax planning strategies in the various relevant jurisdictions. The Company recorded a provision for income taxes of $171
million for the year ended December 31, 2019 and net deferred income tax assets of $100 million including a valuation
The principal considerations for our determination that performing procedures relating to income taxes is a critical audit matter
allowance of $22 million as of December 31, 2019.
are there was significant judgment and estimation by management when assessing current enacted tax laws and published tax
guidance as it relates to determining the provision for income taxes as well as in assessing the realizability of its deferred
The principal considerations for our determination that performing procedures relating to income taxes is a critical audit matter
income tax assets, specifically related to evaluating positive and negative evidence regarding past and future events, including
are there was significant judgment and estimation by management when assessing current enacted tax laws and published tax
operating results. This resulted in significant audit effort, judgment, and subjectivity in performing procedures and evaluating
guidance as it relates to determining the provision for income taxes as well as in assessing the realizability of its deferred
audit evidence over income taxes. The audit effort involved the use of professionals with specialized skill and knowledge to
income tax assets, specifically related to evaluating positive and negative evidence regarding past and future events, including
assist in performing procedures and evaluating the audit evidence obtained from these procedures.
operating results. This resulted in significant audit effort, judgment, and subjectivity in performing procedures and evaluating
audit evidence over income taxes. The audit effort involved the use of professionals with specialized skill and knowledge to
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
assist in performing procedures and evaluating the audit evidence obtained from these procedures.
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
income taxes, including management’s controls over the application of current enacted tax laws and published tax guidance and
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
their impact to the current year provision, the establishment of deferred tax assets and liabilities, and the evaluation of the
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
realizability of deferred tax assets. These procedures also included, among others, (i) testing the provision for income taxes and
income taxes, including management’s controls over the application of current enacted tax laws and published tax guidance and
the application of current enacted tax laws and published tax guidance, including the effective tax rate reconciliation, return to
their impact to the current year provision, the establishment of deferred tax assets and liabilities, and the evaluation of the
provision adjustments, and permanent and temporary differences, (ii) testing the underlying data used in establishing and
realizability of deferred tax assets. These procedures also included, among others, (i) testing the provision for income taxes and
measuring deferred tax assets and liabilities, and (iii) evaluating management’s assessment of the realizability of deferred tax
the application of current enacted tax laws and published tax guidance, including the effective tax rate reconciliation, return to
assets by evaluating factors used in management’s assessment of positive and negative evidence regarding past and future
provision adjustments, and permanent and temporary differences, (ii) testing the underlying data used in establishing and
events, including operating results and the related expected utilization of deferred tax assets. Professionals with specialized skill
measuring deferred tax assets and liabilities, and (iii) evaluating management’s assessment of the realizability of deferred tax
assets by evaluating factors used in management’s assessment of positive and negative evidence regarding past and future
events, including operating results and the related expected utilization of deferred tax assets. Professionals with specialized skill
44
44
2019 ANNUAL REPORT | ROBERT HALF and knowledge were used to assist in the evaluation of the calculations, including application of relevant tax laws and published
tax guidance.
and knowledge were used to assist in the evaluation of the calculations, including application of relevant tax laws and published
tax guidance.
/s/ PricewaterhouseCoopers LLP
San Francisco, California
/s/ PricewaterhouseCoopers LLP
February 14, 2020
San Francisco, California
February 14, 2020
We have served as the Company’s auditor since 2002.
We have served as the Company’s auditor since 2002.
45
45
2019 ANNUAL REPORT | ROBERT HALF Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
46
46
2019 ANNUAL REPORT | ROBERT HALF Item 9A. Controls and Procedures
Disclosure Controls and Procedures. Management, including the Company’s President 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
Item 9A. Controls and Procedures
the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and
Disclosure Controls and Procedures. Management, including the Company’s President and Chief Executive Officer and
procedures as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the
the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and
Chief Financial Officer concluded that the disclosure controls and procedures were effective to ensure that information required
procedures as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the
to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and
Chief Financial Officer concluded that the disclosure controls and procedures were effective to ensure that information required
reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that
to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and
information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is
reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that
accumulated and communicated to the Company’s management, including its principal executive and principal financial
information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is
officers, as appropriate to allow timely decisions regarding required disclosure.
accumulated and communicated to the Company’s management, including its principal executive and principal financial
officers, as appropriate to allow timely decisions regarding required disclosure.
over financial reporting identified in connection with the evaluation required by Rule 13a-15 of the Securities Exchange Act of
1934 that occurred during the Company’s fourth quarter that has materially affected, or is reasonably likely to materially affect,
over financial reporting identified in connection with the evaluation required by Rule 13a-15 of the Securities Exchange Act of
the Company’s internal control over financial reporting.
1934 that occurred during the Company’s fourth quarter that has materially affected, or is reasonably likely to materially affect,
Management’s Report on Internal Control over Financial Reporting. Management is responsible for establishing and
the Company’s internal control over financial reporting.
maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act
Management’s Report on Internal Control over Financial Reporting. Management is responsible for establishing and
of 1934, as amended). Management assessed the effectiveness of the Company’s internal control over financial reporting as of
maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act
December 31, 2019, using criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of
of 1934, as amended). Management assessed the effectiveness of the Company’s internal control over financial reporting as of
Sponsoring Organizations of the Treadway Commission (COSO) and concluded that the Company maintained effective internal
December 31, 2019, using criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of
control over financial reporting as of December 31, 2019.
Sponsoring Organizations of the Treadway Commission (COSO) and concluded that the Company maintained effective internal
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
control over financial reporting as of December 31, 2019.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2019, has been audited
inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2019, has been audited
herein.
by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included
herein.
Item 9B. Other Information
None.
Item 9B. Other Information
None.
47
47
2019 ANNUAL REPORT | ROBERT HALF PART III
Except as provided below in this Part III, the information required by Items 10 through 14 of Part III is incorporated by
PART III
reference from Item 1 of this Report and from the registrant’s Proxy Statement, under the captions “Nomination and Election of
Except as provided below in this Part III, the information required by Items 10 through 14 of Part III is incorporated by
Directors,” “Beneficial Stock Ownership,” “Compensation Discussion and Analysis,” “Compensation Tables,” “Corporate
reference from Item 1 of this Report and from the registrant’s Proxy Statement, under the captions “Nomination and Election of
Governance,” “The Board and Committees” and “Independent Registered Public Accounting Firm” which Proxy Statement
Directors,” “Beneficial Stock Ownership,” “Compensation Discussion and Analysis,” “Compensation Tables,” “Corporate
will be mailed to stockholders in connection with the registrant’s annual meeting of stockholders which is scheduled to be held
Governance,” “The Board and Committees” and “Independent Registered Public Accounting Firm” which Proxy Statement
in May 2020.
will be mailed to stockholders in connection with the registrant’s annual meeting of stockholders which is scheduled to be held
in May 2020.
48
48
2019 ANNUAL REPORT | ROBERT HALF Item 15. Exhibits and Financial Statement Schedules
Item 15. Exhibits and Financial Statement Schedules
(a) 1. Financial Statements
PART IV
(a) 1. Financial Statements
The following consolidated financial statements of the Company and its subsidiaries are included in Item 8 of this
report:
The following consolidated financial statements of the Company and its subsidiaries are included in Item 8 of this
report:
Consolidated statements of financial position at December 31, 2019 and 2018..............................................
Page(s)
21
Page(s)
Consolidated statements of operations for the years ended December 31, 2019, 2018, and 2017..................
Consolidated statements of financial position at December 31, 2019 and 2018..............................................
Consolidated statements of comprehensive income (loss) for the years ended December 31, 2019, 2018,
Consolidated statements of operations for the years ended December 31, 2019, 2018, and 2017..................
and 2017...........................................................................................................................................................
Consolidated statements of comprehensive income (loss) for the years ended December 31, 2019, 2018,
Consolidated statements of stockholders’ equity for the years ended December 31, 2019, 2018, and 2017..
and 2017...........................................................................................................................................................
Consolidated statements of cash flows for the years ended December 31, 2019, 2018, and 2017.................
Consolidated statements of stockholders’ equity for the years ended December 31, 2019, 2018, and 2017..
Notes to consolidated financial statements......................................................................................................
Consolidated statements of cash flows for the years ended December 31, 2019, 2018, and 2017.................
Report of independent registered public accounting firm................................................................................
Notes to consolidated financial statements......................................................................................................
Selected quarterly financial data for the years ended December 31, 2019 and 2018 are set forth in Note P
Report of independent registered public accounting firm................................................................................
—Quarterly Financial Data (Unaudited) included in Item 8 of this report......................................................
Selected quarterly financial data for the years ended December 31, 2019 and 2018 are set forth in Note P
—Quarterly Financial Data (Unaudited) included in Item 8 of this report......................................................
2. Financial Statement Schedules
Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2019, 2018, and 2017
2. Financial Statement Schedules
Schedules I, III, IV and V have been omitted as they are not applicable.........................................................
Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2019, 2018, and 2017
Schedules I, III, IV and V have been omitted as they are not applicable.........................................................
22
21
22
23
24
23
25
24
26-42
25
43-45
26-42
43-45
42
42
54
54
49
49
2019 ANNUAL REPORT | ROBERT HALF
3. Exhibits
3. Exhibits
Exhibit
No.
3.1
Exhibit
No.
3.1
3.2
3.2
4.1
*10.1
4.1
*10.1
*10.2
*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
*10.9
*10.9
*10.10
*10.10
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.
Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to Registrant’s
Amended and Restated By-Laws, incorporated by reference to Exhibit 3.2 to Registrant’s Current
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009.
Report on Form 8-K dated February 13, 2020.
Amended and Restated By-Laws, incorporated by reference to Exhibit 3.2 to Registrant’s Current
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
Report on Form 8-K dated February 13, 2020.
Form of Power of Attorney and Indemnification Agreement, incorporated by reference to Exhibit 10.1
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002.
Form of Power of Attorney and Indemnification Agreement, incorporated by reference to Exhibit 10.1
Employment Agreement between the Registrant and Harold M. Messmer, Jr., incorporated by
to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002.
reference to (i) Exhibit 10.(c) to the Registrant’s Annual Report on Form 10-K for the fiscal year
ended December 31, 1985(P), (ii) Exhibit 10.2(b) to Registrant’s Registration Statement on Form S-1
Employment Agreement between the Registrant and Harold M. Messmer, Jr., incorporated by
(No. 33-15171)(P), (iii) Exhibit 10.2(c) to the Registrant’s Annual Report on Form 10-K for the fiscal
reference to (i) Exhibit 10.(c) to the Registrant’s Annual Report on Form 10-K for the fiscal year
year ended December 31, 1987(P), (iv) Exhibit 10.2(d) to the Registrant’s Annual Report on Form
ended December 31, 1985(P), (ii) Exhibit 10.2(b) to Registrant’s Registration Statement on Form S-1
10-K for the fiscal year ended December 31, 1988(P), (v) Exhibit 28.1 to the Registrant’s Quarterly
(No. 33-15171)(P), (iii) Exhibit 10.2(c) to the Registrant’s Annual Report on Form 10-K for the fiscal
Report on Form 10-Q for the fiscal quarter ended March 31, 1990(P), (vi) Exhibit 10.8 to the
year ended December 31, 1987(P), (iv) Exhibit 10.2(d) to the Registrant’s Annual Report on Form
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1991(P), (vii)
10-K for the fiscal year ended December 31, 1988(P), (v) Exhibit 28.1 to the Registrant’s Quarterly
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
Report on Form 10-Q for the fiscal quarter ended March 31, 1990(P), (vi) Exhibit 10.8 to the
1993(P), (viii) Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1991(P), (vii)
December 31, 1993, (ix) Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
quarter ended March 31, 1995, (x) Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for
1993(P), (viii) Exhibit 10.7 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 Report on Form
December 31, 1993, (ix) Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
10-K for the fiscal year ended December 31, 1996, (xii) Exhibit 10.2 to the Registrant’s Annual
quarter ended March 31, 1995, (x) Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for
Report on Form 10-K for the fiscal year ended December 31, 1997, (xiii) Exhibit 10.2 to the
the fiscal year ended December 31, 1995, (xi) Exhibit 10.2 to the Registrant’s Annual Report on Form
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, (xiv) Exhibit
10-K for the fiscal year ended December 31, 1996, (xii) Exhibit 10.2 to the Registrant’s Annual
10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999,
Report on Form 10-K for the fiscal year ended December 31, 1997, (xiii) Exhibit 10.2 to the
(xv) Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, (xiv) Exhibit
March 31, 2004, (xvi) Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999,
quarter ended June 30, 2008, (xvii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for
(xv) Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
the fiscal year ended December 31, 2010, and (xviii) Exhibit 10.1 to the Registrant's Current Report
March 31, 2004, (xvi) Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal
on Form 8-K dated November 7, 2019.
quarter ended June 30, 2008, (xvii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2010, and (xviii) Exhibit 10.1 to the Registrant's Current Report
Amended and Restated Deferred Compensation Plan, incorporated by reference to Exhibit 10.4 to the
on Form 8-K dated November 7, 2019.
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2008.
Amended and Restated Deferred Compensation Plan, incorporated by reference to Exhibit 10.4 to the
Amended and Restated Severance Agreement dated as of February 9, 2011, between Registrant and
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2008.
Paul F. Gentzkow, incorporated by reference to Exhibit 10.8 to Registrant’s Annual Report on Form
10-K for the fiscal year ended December 31, 2010.
Amended and Restated Severance Agreement dated as of February 9, 2011, between Registrant and
Paul F. Gentzkow, incorporated by reference to Exhibit 10.8 to Registrant’s Annual Report on Form
Agreement dated as of July 31, 1995, between Registrant and Paul F. Gentzkow, incorporated by
10-K for the fiscal year ended December 31, 2010.
reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2000.
Agreement dated as of July 31, 1995, between Registrant and Paul F. Gentzkow, incorporated by
reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
Form of Amended and Restated Severance Agreement, incorporated by reference to Exhibit 10.10 to
September 30, 2000.
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
Form of Amended and Restated Severance Agreement, incorporated by reference to Exhibit 10.10 to
Form of Indemnification Agreement for Directors of the Registrant, incorporated by reference to
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31,
1989(P).
Form of Indemnification Agreement for Directors of the Registrant, incorporated by reference to
Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31,
Form of Indemnification Agreement for Executive Officers of Registrant, incorporated by reference
1989(P).
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 reference
to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
Senior Executive Retirement Plan, as amended and restated December 15, 2019.
September 30, 2000.
Senior Executive Retirement Plan, as amended and restated December 15, 2019.
Form of Part-Time Employment Agreement, as amended and restated, incorporated by reference to
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2014.
Form of Part-Time Employment Agreement, as amended and restated, incorporated by reference to
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2014.
50
50
2019 ANNUAL REPORT | ROBERT HALF
Exhibit
No.
*10.11
Exhibit
No.
*10.11
*10.12
*10.12
*10.13
*10.13
*10.14
*10.14
*10.15
*10.15
*10.16
*10.16
*10.17
*10.17
*10.18
*10.18
21.1
23.1
21.1
31.1
23.1
31.2
31.1
32.1
31.2
32.2
32.1
101.INS
32.2
101.SCH
101.INS
101.CAL
101.SCH
101.DEF
101.CAL
101.LAB
101.DEF
101.PRE
101.LAB
104
101.PRE
Exhibit
Exhibit
Annual Performance Bonus Plan, as amended and restated, incorporated by reference to Exhibit 99.1
to Registrant’s Current Report on Form 8-K dated May 23, 2013.
Annual Performance Bonus Plan, as amended and restated, incorporated by reference to Exhibit 99.1
Summary of Outside Director Cash Remuneration, incorporated by reference to Exhibit 10.2 to the
to Registrant’s Current Report on Form 8-K dated May 23, 2013.
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2010.
Summary of Outside Director Cash Remuneration, incorporated by reference to Exhibit 10.2 to the
Stock Incentive Plan, as amended and restated, incorporated by reference to Exhibit 99.1 to the
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2010.
Registrant’s Current RepStock Incentive Plan, as amended and restated, incorporated by reference to
Exhibit 99.1 to the Registrant’s Current Report on Form 8-K dated May 22, 2019rt on Form 8-K
Stock Incentive Plan, as amended and restated, incorporated by reference to Exhibit 99.1 to the
dated May 22, 2019.
Registrant’s Current RepStock Incentive Plan, as amended and restated, incorporated by reference to
Exhibit 99.1 to the Registrant’s Current Report on Form 8-K dated May 22, 2019rt on Form 8-K
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective through
dated May 22, 2019.
February 11, 2020, incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31, 2013.
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective through
February 11, 2020, incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on
Stock Incentive Plan—Form of Stock Option Agreement for Executive Officers, incorporated by
Form 10-Q for the fiscal quarter ended March 31, 2013.
reference to Exhibit 99.4 to Registrant’s Current Report on Form 8-K dated May 3, 2005.
Stock Incentive Plan—Form of Stock Option Agreement for Executive Officers, incorporated by
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 May 3, 2005.
reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 2006.
Stock Incentive Plan—Form of Restricted Share Agreement for Outside Directors, incorporated by
reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended
Stock Incentive Plan—Form of Stock Option Agreement for Outside Directors, incorporated by
March 31, 2006.
reference to Exhibit 99.6 to Registrant’s Current Report on Form 8-K dated May 3, 2005.
Stock Incentive Plan—Form of Stock Option Agreement for Outside Directors, incorporated by
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective February
reference to Exhibit 99.6 to Registrant’s Current Report on Form 8-K dated May 3, 2005.
12, 2020.
Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective February
Subsidiaries of the Registrant
12, 2020.
Independent Registered Public Accounting Firm’s Consent.
Subsidiaries of the Registrant
Rule 13a-14(a) Certification of Chief Rule 13a-14(a) Certification of Chief Executive Officer.
Independent Registered Public Accounting Firm’s Consent.
Rule 13a-14(a) Certification of Chief Financial Officer.
Rule 13a-14(a) Certification of Chief Rule 13a-14(a) Certification of Chief Executive Officer.
Rule 1350 Certification of Chief Executive Officer.
Rule 13a-14(a) Certification of Chief Financial Officer.
Rule 1350 Certification of Chief Rule 1350 Certification of Chief Financial Officer.
Rule 1350 Certification of Chief Executive Officer.
Inline XBRL Instance Document
Rule 1350 Certification of Chief Rule 1350 Certification of Chief Financial Officer.
Inline XBRL Taxonomy Extension Schema Document
Inline XBRL Instance Document
Inline XBRL Taxonomy Extension Calculation Linkbase Document
Inline XBRL Taxonomy Extension Schema Document
Inline XBRL Taxonomy Extension Definition Linkbase Document
Inline XBRL Taxonomy Extension Calculation Linkbase Document
Inline XBRL Taxonomy Extension Label Linkbase Document
Inline XBRL Taxonomy Extension Definition Linkbase Document
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Inline XBRL Taxonomy Extension Label Linkbase Document
Cover Page Interactive Data File (embedded within the Inline XBRL document)
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Management contract or compensatory plan.
(P) This Exhibit was originally filed in paper format. Accordingly, a hyperlink has not been provided.
* Management contract or compensatory plan.
(P) This Exhibit was originally filed in paper format. Accordingly, a hyperlink has not been provided.
51
51
2019 ANNUAL REPORT | ROBERT HALF
Item 16. Form 10-K Summary
None.
Item 16. Form 10-K Summary
None.
52
52
2019 ANNUAL REPORT | ROBERT HALF SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
SIGNATURES
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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.
ROBERT HALF INTERNATIONAL INC.
(Registrant)
Date: February 14, 2020
Date: February 14, 2020
ROBERT HALF INTERNATIONAL INC.
By:
By:
/s/ MICHAEL C. BUCKLEY
(Registrant)
Michael C. Buckley
/s/ MICHAEL C. BUCKLEY
Executive Vice President,
Chief Financial Officer
Michael C. Buckley
(Principal Financial Officer)
Executive Vice President,
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.
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 14, 2020
By:
/s/ HAROLD M. MESSMER, JR.
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
Date: February 14, 2020
/s/ HAROLD M. MESSMER, JR.
Harold M. Messmer, Jr.
Executive Chairman of the Board,
and a Director
Harold M. Messmer, Jr.
Executive Chairman of the Board,
and a Director
/s/ M. KEITH WADDELL
M. Keith Waddell
/s/ M. KEITH WADDELL
President
M. Keith Waddell
Chief Executive Officer and a Director
President
(Principal Executive Officer)
Chief Executive Officer and a Director
(Principal Executive Officer)
/s/ JULIA L. CORONADO
Julia L. Coronado, Director
/s/ JULIA L. CORONADO
Julia L. Coronado, Director
/s/ DIRK A. KEMPTHORNE
Dirk A. Kempthorne, Director
/s/ DIRK A. KEMPTHORNE
/s/ MARC H. MORIAL
Dirk A. Kempthorne, Director
Marc H. Morial, Director
/s/ MARC H. MORIAL
/s/ BARBARA J. NOVOGRADAC
Marc H. Morial, Director
Barbara J. Novogradac, Director
/s/ BARBARA J. NOVOGRADAC
/s/ ROBERT J. PACE
Barbara J. Novogradac, Director
Robert J. Pace, Director
/s/ ROBERT J. PACE
/s/ FREDERICK A. RICHMAN
Robert J. Pace, Director
Frederick A. Richman, Director
/s/ FREDERICK A. RICHMAN
/s/ MICHAEL C. BUCKLEY
Frederick A. Richman, Director
Michael C. Buckley
/s/ MICHAEL C. BUCKLEY
Executive Vice President, Chief Financial Officer
(Principal Financial Officer and Principal Accounting
Michael C. Buckley
Officer)
Executive Vice President, Chief Financial Officer
(Principal Financial Officer and Principal Accounting
Officer)
By:
By:
By:
By:
By:
By:
By:
By:
By:
By:
By:
By:
By:
By:
By:
By:
By:
53
53
2019 ANNUAL REPORT | ROBERT HALF
Schedule II—Valuation and Qualifying Accounts
(in thousands)
Schedule II—Valuation and Qualifying Accounts
(in thousands)
Balance at
Beginning of
Period
Balance at
Beginning of
Period
Charged to
Expenses
Deductions
Translation
Adjustments
Balance at
End of Period
Charged to
Expenses
Deductions
Translation
Adjustments
Balance at
End of Period
$
$
$
$
$
$
$
$
$
33,133
18,907
33,133
18,907
23,682 (a)
20,178
23,682 (a)
20,178
27,678
8,022
1,411
8,022
1,411
11,914
5,683
11,914
5,683
9,868
(8,751)
(1,275)
(8,751)
(1,275)
(8,690)
(2,599)
(8,690)
(2,599)
(8,687)
777
1,135
777
1,135
772
$
$
$
$
$
(190) $
772
$
(190) $
(103) $
33,181
20,178
33,181
20,178
27,678
23,072
27,678
23,072
28,756
Year Ended December 31, 2017
Year Ended December 31, 2018
Year Ended December 31, 2018
Year Ended December 31, 2017
Allowance for doubtful accounts
receivable
Allowance for doubtful accounts
Deferred tax valuation allowance
receivable
Deferred tax valuation allowance
Allowance for doubtful accounts
receivable
Allowance for doubtful accounts
Deferred tax valuation allowance
receivable
Deferred tax valuation allowance
Allowance for doubtful accounts
receivable
Allowance for doubtful accounts
Deferred tax valuation allowance
receivable
Year Ended December 31, 2019
Year Ended December 31, 2019
Deferred tax valuation allowance
21,618
28,756
21,618
In accordance with its adoption of ASC 606 Revenue from Contracts with Customers, on January 1, 2018, the Company
reclassified certain allowances that are now reflected as liabilities in the amount of $9.5 million.
In accordance with its adoption of ASC 606 Revenue from Contracts with Customers, on January 1, 2018, the Company
reclassified certain allowances that are now reflected as liabilities in the amount of $9.5 million.
(19) $
(103) $
(19) $
(2,154)
(8,687)
(2,154)
23,072
27,678
23,072
719
9,868
719
$
$
$
(a)
(a)
54
54
2019 ANNUAL REPORT | ROBERT HALF
EXHIBIT 4.1
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
Description of Capital Stock
As of December 31, 2019, Robert Half International Inc., a Delaware corporation (the “Company”), had
one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: Common
Stock, par value $.001 per share (the “Common Stock”). The following summary includes a brief description of the
Common Stock, as well as certain related additional information. The summary is not complete and is qualified in its
entirety by reference to the Company’s Restated Certificate of Incorporation (the “Certificate of Incorporation”) and
By-Laws, as amended and restated (the “By-Laws”), which are filed as exhibits to this Annual Report on Form 10-
K.
Authorized Shares
Pursuant to the Certificate of Incorporation, the total number of shares of stock that the Company has
authority to issue is 265,000,000 shares, consisting of 260,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock, par value $.001 per share (the “Preferred Stock”).
The Company’s Board of Directors is authorized to issue Preferred Stock in one or more series, with such
voting powers, or without voting powers, and with such designations, preferences, rights, and qualifications,
limitations or restrictions thereon as the Board of Directors may determine, and as are not stated and expressed in the
Certificate of Incorporation, or any amendment thereto, which could affect the relative voting power or other rights
of the holders of Common Stock.
Voting Rights
Each share of Common Stock entitles the holder to one vote on each matter voted on by stockholders.
Under Section 5 of Article II of the Company’s By-Laws, except where other provision is made by law, by the
Certificate of Incorporation or by the By-Laws, all matters shall be decided by the vote of a majority in voting
interest of the stockholders present in person or by proxy and entitled to vote on that matter. Except as provided in
Section 5 of Article III of the Company’s By-Laws or as otherwise required by law or by the Certificate of
Incorporation, each director shall be elected by the vote of the majority of the votes cast with respect to the director
at any meeting for the election of directors at which a quorum is present, provided that if on the record date for such
meeting or the advance notice date for nominations at such meeting, the number of nominees exceeds the number of
directors to be elected, the directors shall be elected by the vote of a plurality of the shares represented in person or
by proxy at any such meeting and entitled to vote on the election of directors. There is no cumulative voting.
Dividend Rights
The holders of shares of Common Stock shall be entitled to receive such dividends as may be declared by
the Board of Directors.
Liquidation Rights
In the event of voluntary or involuntary liquidation of the Company, the holders of shares of Common
Stock shall be entitled to receive pro rata all of the remaining assets of the Company available for distribution to its
stockholders after all amounts to which the holders of shares of Preferred Stock are entitled have been paid or set
aside in cash for payment.
Other Rights
2019 ANNUAL REPORT | ROBERT HALF The Company’s Common Stock has no conversion rights, sinking fund provisions, redemption provisions
or preemptive rights.
Stock Exchange Listing
The Company’s Common Stock is listed on the New York Stock Exchange under the ticker symbol “RHI.”
Transfer Agent and Registrar
The transfer agent and registrar for the Company’s Common Stock is Computershare Investor Services.
Potential Anti-Takeover Effects of the Preferred Stock
Certain provisions of the Delaware General Corporation Law (“DGCL”), the Certificate of Incorporation
and the By-Laws summarized in the paragraphs above and in the following paragraphs may have an anti-takeover
effect. In other words, they could delay, defer or prevent a tender offer or takeover attempt that a stockholder might
consider in its best interests, including those attempts that might result in a premium over the market price for the
shares held by such stockholder.
Certain Provisions of the Certificate of Incorporation and the By-Laws
Under the By-Laws, a special meeting of the stockholders for any purpose or purposes, unless otherwise
prescribed by statute, may only be called by the Chairman of the Board, the Vice Chairman of the Board or the
Chief Executive Officer or by order of the Board of Directors.
The By-Laws sets forth advance notice procedures with respect to stockholder proposals and the
nomination of candidates for election as directors, other than nominations made by or at the direction of the Board of
Directors or a committee of the Board of Directors.
Under the Certificate of Incorporation, the Board of Directors has the ability to authorize undesignated
preferred stock which make it possible for the Board of Directors to issue preferred stock with voting or other rights
or preferences that could impede the success of any attempt to change control of the Company. These and other
provisions may have the effect of deterring hostile takeovers or delaying changes in control or management of the
Company.
Certain Provisions of Delaware Law
The Company is subject to Section 203 of the DGCL. Section 203 of the DGCL prohibits persons deemed
“interested stockholders” from engaging in a “business combination” with a publicly-held Delaware corporation for
three years following the date these persons become interested stockholders unless the business combination is, or
the transaction in which the person became an interested stockholder was, approved in a prescribed manner or
another prescribed exception applies. Generally, an “interested stockholder” is a person who, together with affiliates
and associates, owns, or within three years prior to the determination of interested stockholder status did own, 15%
or more of a corporation’s voting stock and a “business combination” includes a merger, asset or stock sale, or other
transaction resulting in a financial benefit to the interested stockholder. The existence of this provision may have an
anti-takeover effect with respect to transactions not approved in advance by the Company’s Board of Directors, such
as discouraging takeover attempts that might result in a premium over the market price of the Company’s Common
Stock.
2019 ANNUAL REPORT | ROBERT HALF EXHIBIT 10.9
EXHIBIT 10.9
ROBERT HALF INTERNATIONAL INC.
SENIOR EXECUTIVE RETIREMENT PLAN
ROBERT HALF INTERNATIONAL INC.
(As Amended and Restated Effective December 15, 2019)
SENIOR EXECUTIVE RETIREMENT PLAN
(As Amended and Restated Effective December 15, 2019)
1. INTRODUCTION. This Plan was adopted by the Company to provide retirement
benefits to those individuals, other than any individual holding the office of Chief Executive
1. INTRODUCTION. This Plan was adopted by the Company to provide retirement
Officer prior to December 15, 2019, who participated in the Company’s Deferred Compensation
benefits to those individuals, other than any individual holding the office of Chief Executive
Plan and, with respect to those individuals, this Plan shall supersede the Deferred Compensation
Officer prior to December 15, 2019, who participated in the Company’s Deferred Compensation
Plan. The Administrator or the Chief Executive Officer may also select other Participants to be
Plan and, with respect to those individuals, this Plan shall supersede the Deferred Compensation
eligible for benefits hereunder in accordance with the other provisions of the Plan. It is amended
Plan. The Administrator or the Chief Executive Officer may also select other Participants to be
and restated effective December 15, 2019.
eligible for benefits hereunder in accordance with the other provisions of the Plan. It is amended
and restated effective December 15, 2019.
2. DEFINITIONS. As used in this Plan, the following terms have the meanings set forth
2. DEFINITIONS. As used in this Plan, the following terms have the meanings set forth
below:
below:
ADMINISTRATOR means the Compensation Committee of the Board.
ADMINISTRATOR means the Compensation Committee of the Board.
BOARD means the Board of Directors of the Company.
BOARD means the Board of Directors of the Company.
CHANGE IN CONTROL shall have the meaning specified in the Company’s Stock
CHANGE IN CONTROL shall have the meaning specified in the Company’s Stock
Incentive Plan as in effect on the date hereof and as such plan may be subsequently amended.
Incentive Plan as in effect on the date hereof and as such plan may be subsequently amended.
COMPANY means Robert Half International Inc., a Delaware corporation.
COMPANY means Robert Half International Inc., a Delaware corporation.
EARLIEST PAYMENT DATE shall mean six months following Separation from Service
or such alternate date as future modifications or amendments to Section 409A and the rules and
EARLIEST PAYMENT DATE shall mean six months following Separation from Service
regulations thereunder may specify as the earliest permitted date for a payment to be made, or, if
or such alternate date as future modifications or amendments to Section 409A and the rules and
earlier the date of Employee’s death.
regulations thereunder may specify as the earliest permitted date for a payment to be made, or, if
earlier the date of Employee’s death.
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
OFFER means a tender offer or an exchange offer for shares of the Company’s Stock.
OFFER means a tender offer or an exchange offer for shares of the Company’s Stock.
PARTICIPANT means any elected executive officer or any key executive, other than any
individual who held the office of Chief Executive Officer prior to December 15, 2019 (hereafter
PARTICIPANT means any elected executive officer or any key executive, other than any
“Predecessor CEO”), approved by the Administrator or the Chief Executive Officer for
individual who held the office of Chief Executive Officer prior to December 15, 2019 (hereafter
participation in the Plan. Notwithstanding for foregoing, the participation by any individual who
“Predecessor CEO”), approved by the Administrator or the Chief Executive Officer for
holds the office of Chief Executive Officer on or after December 15, 2019 must be approved
participation in the Plan. Notwithstanding for foregoing, the participation by any individual who
solely by the Administrator. The benefits of individuals (other than any Predecessor CEO ) who
holds the office of Chief Executive Officer on or after December 15, 2019 must be approved
had accounts (whether or not vested) under the Deferred Compensation Plan shall be transferred
solely by the Administrator. The benefits of individuals (other than any Predecessor CEO ) who
to this Plan, effective December 31, 1995, with interest for 1995 credited at the rate and as
had accounts (whether or not vested) under the Deferred Compensation Plan shall be transferred
provided in Section 7 hereof instead of at the rate and as provided in the Deferred Compensation
to this Plan, effective December 31, 1995, with interest for 1995 credited at the rate and as
Plan. With respect to the year ended December 31, 1995 those individuals will thereafter be
provided in Section 7 hereof instead of at the rate and as provided in the Deferred Compensation
Participants hereunder and will no longer participate in the Deferred Compensation Plan.
Plan. With respect to the year ended December 31, 1995 those individuals will thereafter be
Participants hereunder and will no longer participate in the Deferred Compensation Plan.
1
1
2019 ANNUAL REPORT | ROBERT HALF PLAN means the Senior Executive Retirement Plan.
PLAN means the Senior Executive Retirement Plan.
SECTION 409A means Section 409A of the Internal Revenue Code.
SECTION 409A means Section 409A of the Internal Revenue Code.
SEPARATION FROM SERVICE shall have the meaning specified by Section 409A and
the rules and regulations thereunder, as such meaning may be modified or amended from time to
SEPARATION FROM SERVICE shall have the meaning specified by Section 409A and
time.
the rules and regulations thereunder, as such meaning may be modified or amended from time to
time.
SPECIFIED EMPLOYEE shall have the meaning specified by Section 409A and the
rules and regulations thereunder, as such meaning may be modified or amended from time to
SPECIFIED EMPLOYEE shall have the meaning specified by Section 409A and the
time.
rules and regulations thereunder, as such meaning may be modified or amended from time to
time.
VOTING SHARES means the outstanding shares of the Company entitled to vote for the
VOTING SHARES means the outstanding shares of the Company entitled to vote for the
election of directors.
election of directors.
3. PURPOSE OF THE PLAN. The purpose of the Plan is to attract, retain and reward
3. PURPOSE OF THE PLAN. The purpose of the Plan is to attract, retain and reward
Participants by providing them with supplemental income for use after their retirement. The Plan
is designed to qualify as an unfunded ERISA “top-hat” plan for a select group of management or
Participants by providing them with supplemental income for use after their retirement. The Plan
highly compensated employees of the Company and its subsidiaries designated by the
is designed to qualify as an unfunded ERISA “top-hat” plan for a select group of management or
Administrator. The Plan is intended to satisfy the requirements of, and shall be implemented and
highly compensated employees of the Company and its subsidiaries designated by the
administered in a manner consistent with, Section 409A of the Internal Revenue Code of 1986,
Administrator. The Plan is intended to satisfy the requirements of, and shall be implemented and
as amended (the “Section 409A”).
administered in a manner consistent with, Section 409A of the Internal Revenue Code of 1986,
as amended (the “Section 409A”).
4. ADMINISTRATION. The Administrator shall have full power to interpret, construe
and administer the Plan, except as otherwise provided in the Plan. The expense of administering
4. ADMINISTRATION. The Administrator shall have full power to interpret, construe
the Plan shall be borne by the Company and shall not be charged against benefits payable
and administer the Plan, except as otherwise provided in the Plan. The expense of administering
hereunder.
the Plan shall be borne by the Company and shall not be charged against benefits payable
hereunder.
5. DEFERRED COMPENSATION FORMULA. Each Participant shall receive the base
salary and annual cash bonus payable to that Participant for services rendered in his capacity as
5. DEFERRED COMPENSATION FORMULA. Each Participant shall receive the base
an employee of the Company or a designated subsidiary during the calendar year of participation,
salary and annual cash bonus payable to that Participant for services rendered in his capacity as
plus fifteen percent (15%) of such base salary and annual cash bonus as deferred compensation
an employee of the Company or a designated subsidiary during the calendar year of participation,
pursuant to this Plan, provided he is employed by the Company on the last day of such calendar
plus fifteen percent (15%) of such base salary and annual cash bonus as deferred compensation
year (December 31, 1995 for the first year). A Participant’s allocation of deferred compensation
pursuant to this Plan, provided he is employed by the Company on the last day of such calendar
hereunder shall be deemed to have been made, for all purposes relating to this Plan, as of the first
year (December 31, 1995 for the first year). A Participant’s allocation of deferred compensation
business day of the year following the year with respect to which the deferred compensation has
hereunder shall be deemed to have been made, for all purposes relating to this Plan, as of the first
been earned.
business day of the year following the year with respect to which the deferred compensation has
been earned.
The Administrator or the Chief Executive Officer may at any time designate any
Participant as entitled to receive a Change in Control Allocation. Notwithstanding the foregoing,
The Administrator or the Chief Executive Officer may at any time designate any
in the event that a Participant who holds the office of Chief Executive Officer on or after
Participant as entitled to receive a Change in Control Allocation. Notwithstanding the foregoing,
December 15, 2019 has not previously been designated as entitled to receive a Change in Control
in the event that a Participant who holds the office of Chief Executive Officer on or after
Allocation, such a designation may be made only by the Administrator. Once a Participant is so
December 15, 2019 has not previously been designated as entitled to receive a Change in Control
designated, such designation may not be rescinded. With respect to any Participant who has been
Allocation, such a designation may be made only by the Administrator. Once a Participant is so
designated, such designation may not be rescinded. With respect to any Participant who has been
2
2
2019 ANNUAL REPORT | ROBERT HALF designated as entitled to receive a Change in Control Allocation, there shall be allocated to such
Participant’s account promptly following a Change in Control (if such Participant is employed by
designated as entitled to receive a Change in Control Allocation, there shall be allocated to such
the Company on the date of the Change in Control) an amount equal to the product of (a) the
Participant’s account promptly following a Change in Control (if such Participant is employed by
number of whole years remaining until the Participant attains age 62 and (b) the last annual
the Company on the date of the Change in Control) an amount equal to the product of (a) the
allocation made under the Plan. After such Change in Control Allocation has been made, each
number of whole years remaining until the Participant attains age 62 and (b) the last annual
subsequent annual allocation under the Plan for such Participant following the Change in Control
allocation made under the Plan. After such Change in Control Allocation has been made, each
and prior to such Participant’s 62nd birthday shall be reduced by an amount equal to the last
subsequent annual allocation under the Plan for such Participant following the Change in Control
annual allocation made to such Participant prior to the Change in Control.
and prior to such Participant’s 62nd birthday shall be reduced by an amount equal to the last
annual allocation made to such Participant prior to the Change in Control.
6. SEPARATE ACCOUNTS. The Administrator shall maintain two individual accounts
under the name of each Participant entitled to allocations pursuant to the Plan. Each such account
6. SEPARATE ACCOUNTS. The Administrator shall maintain two individual accounts
shall be adjusted, as described in the next paragraph, to reflect any amounts transferred from the
under the name of each Participant entitled to allocations pursuant to the Plan. Each such account
Deferred Compensation Plan, deferred compensation credited hereunder, interest credited on
shall be adjusted, as described in the next paragraph, to reflect any amounts transferred from the
such amounts and any distribution of such amounts hereunder. The establishment and
Deferred Compensation Plan, deferred compensation credited hereunder, interest credited on
maintenance of separate accounts for each Participant shall not be construed as giving any person
such amounts and any distribution of such amounts hereunder. The establishment and
any interest in any assets of the Company or any right to payment other than as provided
maintenance of separate accounts for each Participant shall not be construed as giving any person
hereunder or any right to participate hereunder or in future years of employment. Such accounts
any interest in any assets of the Company or any right to payment other than as provided
shall be unfunded and maintained only for bookkeeping convenience; provided, however, the
hereunder or any right to participate hereunder or in future years of employment. Such accounts
Company may establish an irrevocable grantor trust and contribute amounts to such trust to
shall be unfunded and maintained only for bookkeeping convenience; provided, however, the
support its obligations hereunder.
Company may establish an irrevocable grantor trust and contribute amounts to such trust to
support its obligations hereunder.
One account for each individual (the “First Account”) shall consist of (a) all vested
allocations for the individual as of December 31, 2004, and (b) all interest on such allocations,
One account for each individual (the “First Account”) shall consist of (a) all vested
regardless of when credited. The other account for each individual (the “Second Account”) shall
allocations for the individual as of December 31, 2004, and (b) all interest on such allocations,
consist of (a) all allocations earned after December 31, 2004, (b) all allocations that become
regardless of when credited. The other account for each individual (the “Second Account”) shall
vested after December 31, 2004, (c) all interest on such amounts and (d) any other amounts that
consist of (a) all allocations earned after December 31, 2004, (b) all allocations that become
may be credited to the individual hereunder from time to time.
vested after December 31, 2004, (c) all interest on such amounts and (d) any other amounts that
may be credited to the individual hereunder from timet ot i me.
7. INVESTMENT PERFORMANCE. Each account shall be credited on the last day of
each calendar year with interest on the balance of such account as of the first day of the calendar
7. INVESTMENT PERFORMANCE. Each account shall be credited on the last day of
year. Interest credited for a calendar year shall be at a rate equal to one hundred (100%) of the
each calendar year with interest on the balance of such account as of the first day of the calendar
Moody’s Corporate bond Yield Average reported in THE WALL STREET JOURNAL on the
year. Interest credited for a calendar year shall be at a rate equal to one hundred (100%) of the
last business day of the calendar year (or the valuation date selected by the Administrator
Moody’s Corporate bond Yield Average reported in THE WALL STREET JOURNAL on the
preceding a distribution).
last business day of the calendar year (or the valuation date selected by the Administrator
preceding a distribution).
8. VESTING. Each Participant’s interest under the Plan shall be forfeitable upon such
Participant’s termination of employment for any reason, except to the extent it becomes vested
8. VESTING. Each Participant’s interest under the Plan shall be forfeitable upon such
hereunder. Each Participant’s interest, regardless of when allocated, will be deemed unvested
Participant’s termination of employment for any reason, except to the extent it becomes vested
unless and until such Participant has completed ten years of service with the Company. “Years of
hereunder. Each Participant’s interest, regardless of when allocated, will be deemed unvested
Service” shall be based on the anniversary of the later of the Participant’s date of hire or his or
unless and until such Participant has completed ten years of service with the Company. “Years of
her transfer to Company headquarters. At such time as the Participant has completed ten years
Service” shall be based on the anniversary of the later of the Participant’s date of hire or his or
service with the Company, the amount vested at any given time shall be (a) 50%, if Participant is
her transfer to Company headquarters. At such time as the Participant has completed ten years
age 50 or younger, (b) the sum of (i) 50% and (ii) 4 1/6% times the difference between
service with the Company, the amount vested at any given time shall be (a) 50%, if Participant is
Participant’s age and 50, if Participant is between age 51 and age 62, or (c) 100%, if Participant
age 50 or younger, (b) the sum of (i) 50% and (ii) 4 1/6% times the difference between
is age 62 or older. In the event of a Change in Control, all amounts credited under the Plan to
Participant’s age and 50, if Participant is between age 51 and age 62, or (c) 100%, if Participant
is age 62 or older. In the event of a Change in Control, all amounts credited under the Plan to
3
3
2019 ANNUAL REPORT | ROBERT HALF each affected Participant shall become fully vested and nonforfeitable as a result of such event.
Notwithstanding the foregoing, amounts shall vest hereunder in accordance with the terms of any
each affected Participant shall become fully vested and nonforfeitable as a result of such event.
severance agreement or other written arrangement between the Participant and the Company. In
Notwithstanding the foregoing, amounts shall vest hereunder in accordance with the terms of any
addition, and notwithstanding the foregoing, the accounts transferred to this Plan from the
severance agreement or other written arrangement between the Participant and the Company. In
Company’s Deferred Compensation Plan, including any and all investment performance
addition, and notwithstanding the foregoing, the accounts transferred to this Plan from the
hereunder, shall continue to vest under the terms of the Deferred Compensation Plan.
Company’s Deferred Compensation Plan, including any and all investment performance
hereunder, shall continue to vest under the terms of the Deferred Compensation Plan.
9. TIME OF DISTRIBUTION. No vested amounts shall be payable hereunder until the
9. TIME OF DISTRIBUTION. No vested amounts shall be payable hereunder until the
first to occur of the following events, the first date on which any such event occurs being
hereinafter referred to as the “Termination Date”:
first to occur of the following events, the first date on which any such event occurs being
hereinafter referred to as the “Termination Date”:
(a) The date of the Participant’s complete and total disability, as determined by
(a) The date of the Participant’s complete and total disability, as determined by
the Administrator in its sole discretion (without regard to eligibility for benefits under any
disability plan or program of the Company and/or its subsidiaries);
the Administrator in its sole discretion (without regard to eligibility for benefits under any
disability plan or program of the Company and/or its subsidiaries);
(b) The Participant’s death; or
(b) The Participant’s death; or
(c) The date of the Participant’s Separation from Service with the Company and/
(c) The date of the Participant’s Separation from Service with the Company and/
or its subsidiaries for any reason.
or its subsidiaries for any reason.
Notwithstanding anything to the contrary, the date of a Participant’s “complete and total
disability” shall be determined by the Administrator in a manner consistent with any applicable
Notwithstanding anything to the contrary, the date of a Participant’s “complete and total
provisions of Section 409A and the rules and regulations promulgated thereunder.
disability” shall be determined by the Administrator in a manner consistent with any applicable
provisions of Section 409A and the rules and regulations promulgated thereunder.
Notwithstanding the foregoing, distribution may occur at an earlier date as provided in
Notwithstanding the foregoing, distribution may occur at an earlier date as provided in
Section 10 hereunder.
Section 10 hereunder.
If distribution occurs before the end of a year a Participant shall receive a pro rata amount
If distribution occurs before the end of a year a Participant shall receive a pro rata amount
of deferred compensation under Section 5 hereof.
of deferred compensation under Section 5 hereof.
All vested amounts in a Participant’s First Account shall be valued and paid within 90
All vested amounts in a Participant’s First Account shall be valued and paid within 90
days following the occurrence of any of the events referred to above in clauses (a) through (c) of
this Section 9.
days following the occurrence of any of the events referred to above in clauses (a) through (c) of
this Section 9.
In the event of a Participant’s death, all vested amounts in the Participant’s Second
Account shall be valued and paid within 90 days thereafter. In the event of a Participant’s
In the event of a Participant’s death, all vested amounts in the Participant’s Second
Separation from Service pursuant to clauses (a) or (c) above, all vested amounts in the
Account shall be valued and paid within 90 days thereafter. In the event of a Participant’s
Participant’s Second Account shall be valued and paid within 90 days thereafter, provided,
Separation from Service pursuant to clauses (a) or (c) above, all vested amounts in the
however, that if Participant is a Specified Employee, vested amounts in the Second Account shall
Participant’s Second Account shall be valued and paid within 90 days thereafter, provided,
be paid no earlier than the Earliest Payment Date and no later than ten business days thereafter.
however, that if Participant is a Specified Employee, vested amounts in the Second Account shall
be paid no earlier than the Earliest Payment Date and no later than ten business days thereafter.
10. WITHDRAWALS. Notwithstanding Section 9, the Administrator may direct
10. WITHDRAWALS. Notwithstanding Section 9, the Administrator may direct
payment of all or any portion of a Participant’s First Account, after application by the
Participant. Any such application must show demonstrable financial need for distribution in
payment of all or any portion of a Participant’s First Account, after application by the
order to meet extraordinary medical or medically related expenses, substantial costs related to
Participant. Any such application must show demonstrable financial need for distribution in
order to meet extraordinary medical or medically related expenses, substantial costs related to
4
4
2019 ANNUAL REPORT | ROBERT HALF
residential requirements of the Participant, family educational expenses in an amount considered
by the Administrator burdensome in relation to the Participant’s other available financial
residential requirements of the Participant, family educational expenses in an amount considered
resources for meeting such expenses, extraordinary expenses related to an unanticipated casualty,
by the Administrator burdensome in relation to the Participant’s other available financial
accident or other misfortune or any other similar need approved by the Administrator.
resources for meeting such expenses, extraordinary expenses related to an unanticipated casualty,
accident or other misfortune or any other similar need approved by the Administrator.
Any such distribution shall be made in the sole discretion of the Administrator.
Any such distribution shall be made in the sole discretion of the Administrator.
11. METHOD OF DISTRIBUTION. Upon a Separation from Service, the Participant
11. METHOD OF DISTRIBUTION. Upon a Separation from Service, the Participant
shall receive a lump-sum distribution of all amounts payable hereunder.
shall receive a lump-sum distribution of all amounts payable hereunder.
12. DEATH OF PLAN PARTICIPANT. In the event that a Participant shall die at any
12. DEATH OF PLAN PARTICIPANT. In the event that a Participant shall die at any
time prior to complete distribution of all amounts payable to him hereunder, the remaining
unpaid amounts shall be paid in a lump-sum to the beneficiary or beneficiaries designated by the
time prior to complete distribution of all amounts payable to him hereunder, the remaining
Participant, or in the absence of any such designation, to his estate. Each Participant shall have
unpaid amounts shall be paid in a lump-sum to the beneficiary or beneficiaries designated by the
the right to designate a beneficiary (or beneficiaries) in the event of his death; provided that in
Participant, or in the absence of any such designation, to his estate. Each Participant shall have
the event that the Participant is married and designates a beneficiary other than his spouse, his
the right to designate a beneficiary (or beneficiaries) in the event of his death; provided that in
spouse must consent to such designation.
the event that the Participant is married and designates a beneficiary other than his spouse, his
spouse must consent to such designation.
13. PAYMENT IN THE EVENT OF DISABILITY. If a person entitled to any payment
hereunder shall be under a legal disability, or in the sole judgment of the Administrator shall
13. PAYMENT IN THE EVENT OF DISABILITY. If a person entitled to any payment
otherwise be unable to apply such payment to his own interest and advantage, the Administrator
hereunder shall be under a legal disability, or in the sole judgment of the Administrator shall
in the exercise of its discretion may direct the Company to make any such payment in any one
otherwise be unable to apply such payment to his own interest and advantage, the Administrator
(1) or more of the following ways:
in the exercise of its discretion may direct the Company to make any such payment in any one
(1) or more of the following ways:
(a) Directly to such person;
(a) Directly to such person;
(b) To his legal guardian or conservator; or
(b) To his legal guardian or conservator; or
(c) To his spouse or to any person charged with his support;
(c) To his spouse or to any person charged with his support;
to be expended for the benefit of Participant. The decision of the Administrator shall in each case
be final and binding upon all persons in interest. Any such payment shall completely discharge
to be expended for the benefit of Participant. The decision of the Administrator shall in each case
the obligations of the Administrator and Company with regard to such payment.
be final and binding upon all persons in interest. Any such payment shall completely discharge
the obligations of the Administrator and Company with regard to such payment.
14. ASSIGNMENT. No Participant or beneficiary of a Participant shall have any right
to assign, pledge, hypothecate, anticipate or in any way create a lien upon any amounts payable
14. ASSIGNMENT. No Participant or beneficiary of a Participant shall have any right
hereunder. No amounts payable hereunder shall be subject to assignment or transfer or otherwise
to assign, pledge, hypothecate, anticipate or in any way create a lien upon any amounts payable
be alienable, either by voluntary or involuntary act or by operation of law, or subject to
hereunder. No amounts payable hereunder shall be subject to assignment or transfer or otherwise
attachment, execution, garnishment, sequestration or other seizure under any legal, equitable or
be alienable, either by voluntary or involuntary act or by operation of law, or subject to
other process, or be liable in any way for the debts or defaults of Participants and their
attachment, execution, garnishment, sequestration or other seizure under any legal, equitable or
beneficiaries, except to the extent permitted by applicable law and pursuant to the
other process, or be liable in any way for the debts or defaults of Participants and their
Administrator’s receipt and approval of a “qualified domestic relations order.”
beneficiaries, except to the extent permitted by applicable law and pursuant to the
Administrator’s receipt and approval of a “qualified domestic relations order.”
15. WITHHOLDING. Any taxes required to be withheld from deferrals or payments to
15. WITHHOLDING. Any taxes required to be withheld from deferrals or payments to
Participants hereunder shall be deducted and withheld by the Company.
Participants hereunder shall be deducted and withheld by the Company.
5
5
2019 ANNUAL REPORT | ROBERT HALF 16. AMENDMENT AND TERMINATION. This Plan may be amended in whole or in
16. AMENDMENT AND TERMINATION. This Plan may be amended in whole or in
part by action of the Administrator and may be terminated at any time by action of the
Administrator; provided, however, that no such amendment or termination shall reduce any
part by action of the Administrator and may be terminated at any time by action of the
amount credited hereunder to the extent such amount was credited prior to the date of
Administrator; provided, however, that no such amendment or termination shall reduce any
amendment or termination; and provided, further, that the duties and liabilities of the members of
amount credited hereunder to the extent such amount was credited prior to the date of
the Administrator hereunder shall not be increased without their consent.
amendment or termination; and provided, further, that the duties and liabilities of the members of
the Administrator hereunder shall not be increased without their consent.
17. RIGHTS OF PARTICIPANTS. The Company’s sole obligation to Participants and
their beneficiaries shall be to make payment as provided hereunder. All payments shall be made
17. RIGHTS OF PARTICIPANTS. The Company’s sole obligation to Participants and
from the general assets of the Company, and no Participant shall have any right hereunder to any
their beneficiaries shall be to make payment as provided hereunder. All payments shall be made
specific assets of the Company or to be retained in the employment of the Company. All amounts
from the general assets of the Company, and no Participant shall have any right hereunder to any
of compensation allocated under this Plan, any property purchased therewith and all income
specific assets of the Company or to be retained in the employment of the Company. All amounts
attributable thereto shall remain the property and rights of the Company subject to the claims of
of compensation allocated under this Plan, any property purchased therewith and all income
the Company’s general creditors.
attributable thereto shall remain the property and rights of the Company subject to the claims of
the Company’s general creditors.
18. BINDING PROVISIONS. All of the provisions of this Plan shall be binding upon
18. BINDING PROVISIONS. All of the provisions of this Plan shall be binding upon
all persons who shall be entitled to any benefits hereunder, and their heirs, and personal
representatives.
all persons who shall be entitled to any benefits hereunder, and their heirs, and personal
representatives.
19. EFFECTIVE DATE. This Plan shall be effective December 31, 1995, as amended
19. EFFECTIVE DATE. This Plan shall be effective December 31, 1995, as amended
and restated effective July 29, 2008.
and restated effective July 29, 2008.
20. GOVERNING LAW. This Plan and all determinations made and actions taken
pursuant hereto shall, to the extent not preempted by ERISA, be governed by the law of the State
20. GOVERNING LAW. This Plan and all determinations made and actions taken
of California and construed accordingly.
pursuant hereto shall, to the extent not preempted by ERISA, be governed by the law of the State
of California and construed accordingly.
21. SEVERABILITY. If any provision of this Plan is held to be unenforceable for any
21. SEVERABILITY. If any provision of this Plan is held to be unenforceable for any
reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the
parties to the extent possible. In any event, all other provisions of this Plan shall be deemed valid
reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the
and enforceable to the full extent possible.
parties to the extent possible. In any event, all other provisions of this Plan shall be deemed valid
and enforceable to the full extent possible.
END OF DOCUMENT
END OF DOCUMENT
6
6
2019 ANNUAL REPORT | ROBERT HALF EXHIBIT 10.18
ROBERT HALF INTERNATIONAL INC.
STOCK INCENTIVE PLAN
RESTRICTED SHARE AGREEMENT
This restricted share agreement (“Agreement”) is made and entered into as of
__________, (the “Grant Date”), between Robert Half International Inc., a Delaware
corporation (the “Company”), and ________. (“Participant”). Capitalized terms not
defined herein shall have the meanings assigned to them in the Company’s Stock
Incentive Plan (the “Plan”), a copy of which Participant represents, warrants, and
acknowledges having received and reviewed. Participant also represents, warrants, and
acknowledges having received and reviewed a copy of the Plan prospectus and the
documents incorporated therein by reference. The Plan is incorporated by reference into
this Agreement.
THE PARTIES AGREE AS FOLLOWS:
1.
Shares. Pursuant to the Plan, the Company hereby transfers to Participant,
and Participant hereby accepts from the Company, an award initially consisting of
_____________ Restricted Shares on the terms and conditions set forth herein and in the
Plan (the “Restricted Share Award”).
2.
Vesting. The Restricted Share Award shall vest based on the completion
of continued Service as follows: _____________________, unless otherwise provided by
the Plan or Section 3 hereof. The Restricted Shares are subject to Section 6(e) of the Plan
to the extent they have not vested and shall be held in escrow by the Company until they
have vested and the Participant has satisfied all applicable tax withholding obligations as
provided in Section 6 below. In addition, any dividends paid in Shares with respect to
unvested Restricted Shares by reason of Section 6(d) of the Plan or any Shares to which
the Participant may be entitled by reason of application of Section 16 of the Plan to the
unvested Restricted Shares shall, in each case, be subject to the same terms and
conditions as are applicable to the unvested Restricted Shares under this Agreement and
the Plan.
3.
Accelerated Vesting. Notwithstanding Section 2 hereof, the Restricted
Share Award shall vest as provided from time to time by any other agreement between
Participant and the Company or as provided by Section 3(b)(xv), Section 14 or Section
15 of the Plan, and in such case, the vesting date for any portion of the Restricted Share
Award that vests under such circumstances shall be the date such portion of the award
vests.
4.
Performance Condition. The Restricted Share Award shall be subject to
the Performance Condition(s), including the adjustment provisions thereof, as determined
2019 ANNUAL REPORT | ROBERT HALF by the Compensation Committee (the “Committee”) in accordance with the Plan and
by the Compensation Committee (the “Committee”) in accordance with the Plan and
pursuant to the resolutions adopted by the Committee at its meetings on________.
pursuant to the resolutions adopted by the Committee at its meetings on________.
5.
5.
Understanding of Participant Regarding Withholding Taxes. Participant
Understanding of Participant Regarding Withholding Taxes. Participant
hereby represents and acknowledges that (i) on each date that the Restricted Share Award
hereby represents and acknowledges that (i) on each date that the Restricted Share Award
vests, minimum withholding taxes become due, (ii) payment of such minimum
vests, minimum withholding taxes become due, (ii) payment of such minimum
withholding taxes to the Company is the responsibility of Participant and (iii) payment of
withholding taxes to the Company is the responsibility of Participant and (iii) payment of
such withholding taxes may require a significant cash outlay by Participant.
such withholding taxes may require a significant cash outlay by Participant.
6.
6.
Payment of Taxes. The Company shall notify the Participant or, if
Payment of Taxes. The Company shall notify the Participant or, if
applicable, Participant’s estate, as to the amount of minimum withholding taxes required
applicable, Participant’s estate, as to the amount of minimum withholding taxes required
to be withheld by the Company as a result of the vesting of the Restricted Share Award.
to be withheld by the Company as a result of the vesting of the Restricted Share Award.
Participant shall make full payment of such minimum withholding taxes to the Company
Participant shall make full payment of such minimum withholding taxes to the Company
by check or in a manner permitted by Section 19(b) of the Plan. In the event that such
by check or in a manner permitted by Section 19(b) of the Plan. In the event that such
payment is not made, the Company shall have the right to cause such Participant’s
payment is not made, the Company shall have the right to cause such Participant’s
minimum withholding taxes obligation to be satisfied as specified in Section 19(a) of the
minimum withholding taxes obligation to be satisfied as specified in Section 19(a) of the
Plan.
Plan.
7.
7.
Election to Recognize Gross Income in the Year of Grant. If
Election to Recognize Gross Income in the Year of Grant. If
Participant properly elects within thirty (30) days of the Grant Date to include in gross
Participant properly elects within thirty (30) days of the Grant Date to include in gross
income for federal income tax purposes an amount equal to the fair market value
income for federal income tax purposes an amount equal to the fair market value
of the Restricted Share Award on the Grant Date, such Participant shall pay in cash to the
of the Restricted Share Award on the Grant Date, such Participant shall pay in cash to the
Company in the calendar month of such Grant Date, or make arrangements
Company in the calendar month of such Grant Date, or make arrangements
satisfactory to the Committee to pay to the Company, any minimum withholding
satisfactory to the Committee to pay to the Company, any minimum withholding
taxes required to be withheld with respect to such shares.
taxes required to be withheld with respect to such shares.
8.
8.
Restriction on Issuance of Shares.
Restriction on Issuance of Shares.
8.1
8.1
Legality of Issuance. The Company shall not be obligated to
Legality of Issuance. The Company shall not be obligated to
transfer or issue any Restricted Shares pursuant to this Agreement if such transfer or
transfer or issue any Restricted Shares pursuant to this Agreement if such transfer or
issuance, in the opinion of the Company and the Company’s counsel, would constitute a
issuance, in the opinion of the Company and the Company’s counsel, would constitute a
violation by the Company of any provision of law, including without limitation the
violation by the Company of any provision of law, including without limitation the
provisions of the Securities Act.
provisions of the Securities Act.
8.2
8.2
Registration or Qualification of Securities. The Company may, but
Registration or Qualification of Securities. The Company may, but
shall not be required to, register or qualify the transfer or issuance of the Restricted
shall not be required to, register or qualify the transfer or issuance of the Restricted
Shares under the Securities Act or any other applicable law. The Company shall not be
Shares under the Securities Act or any other applicable law. The Company shall not be
obligated to take any affirmative action in order to cause the transfer or issuance of the
obligated to take any affirmative action in order to cause the transfer or issuance of the
Restricted Shares pursuant hereto to comply with any law.
Restricted Shares pursuant hereto to comply with any law.
9.
9.
Restriction on Transfer. Regardless of whether the transfer or issuance of
Restriction on Transfer. Regardless of whether the transfer or issuance of
the Restricted Shares has been registered under the Securities Act or has been registered
the Restricted Shares has been registered under the Securities Act or has been registered
or qualified under the securities laws of any state, the Company may impose additional
or qualified under the securities laws of any state, the Company may impose additional
restrictions upon the sale, pledge, or other transfer of the Restricted Shares (including the
restrictions upon the sale, pledge, or other transfer of the Restricted Shares (including the
placement of appropriate legends on stock certificates and the issuance of stop-transfer
placement of appropriate legends on stock certificates and the issuance of stop-transfer
2
2
2019 ANNUAL REPORT | ROBERT HALF instructions to the Company’s transfer agent) if, in the judgment of the Company and the
instructions to the Company’s transfer agent) if, in the judgment of the Company and the
Company’s counsel, such restrictions are necessary in order to achieve compliance with
Company’s counsel, such restrictions are necessary in order to achieve compliance with
the provisions of the Securities Act, the securities laws of any state, or any other law.
the provisions of the Securities Act, the securities laws of any state, or any other law.
10.
10.
Stock Certificate Restrictive Legends. Stock certificates (which may be in
Stock Certificate Restrictive Legends. Stock certificates (which may be in
electronic form) evidencing the Restricted Shares may bear such restrictive legends as the
electronic form) evidencing the Restricted Shares may bear such restrictive legends as the
Company and the Company’s counsel deem necessary under applicable law or pursuant
Company and the Company’s counsel deem necessary under applicable law or pursuant
to this Agreement.
to this Agreement.
11.
11.
Representations, Warranties, Covenants, and Acknowledgments of
Representations, Warranties, Covenants, and Acknowledgments of
Participant. Participant hereby agrees that in the event the Company and the Company’s
Participant. Participant hereby agrees that in the event the Company and the Company’s
counsel deem it necessary or advisable in the exercise of their discretion, the transfer or
counsel deem it necessary or advisable in the exercise of their discretion, the transfer or
issuance of the Restricted Shares may be conditioned upon the person receiving
issuance of the Restricted Shares may be conditioned upon the person receiving
Restricted Shares making certain representations, warranties, and acknowledgments
Restricted Shares making certain representations, warranties, and acknowledgments
relating to compliance with applicable securities laws.
relating to compliance with applicable securities laws.
12.
12.
Tax Advice. Participant represents, warrants, and acknowledges that the
Tax Advice. Participant represents, warrants, and acknowledges that the
Company has made no warranties or representations to Participant with respect to the
Company has made no warranties or representations to Participant with respect to the
income tax consequences of the transactions contemplated by this Agreement, and
income tax consequences of the transactions contemplated by this Agreement, and
Participant is in no manner relying on the Company or the Company’s representatives for
Participant is in no manner relying on the Company or the Company’s representatives for
an assessment of such tax consequences.
an assessment of such tax consequences.
13.
13.
Governing Law. This Agreement shall be governed by and construed in
Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts entered into
accordance with the laws of the State of California applicable to contracts entered into
and wholly to be performed within the State of California by California residents. The
and wholly to be performed within the State of California by California residents. The
parties agree that the exclusive jurisdiction and venue of any action with respect to this
parties agree that the exclusive jurisdiction and venue of any action with respect to this
Agreement shall be in the Superior Court for the county in which the principal executive
Agreement shall be in the Superior Court for the county in which the principal executive
offices of the Company are located, or the United States District Court for the district in
offices of the Company are located, or the United States District Court for the district in
which the principal executive offices of the Company are located, and each of the parties
which the principal executive offices of the Company are located, and each of the parties
hereby submits itself to the exclusive jurisdiction and venue of such courts for the
hereby submits itself to the exclusive jurisdiction and venue of such courts for the
purpose of such action. The parties agree that service of process in any such action may
purpose of such action. The parties agree that service of process in any such action may
be effected by delivery of the summons and complaint in a manner provided for delivery
be effected by delivery of the summons and complaint in a manner provided for delivery
of notices set forth herein.
of notices set forth herein.
14.
14.
Notices. All notices, communications and documents under this
Notices. All notices, communications and documents under this
Agreement shall be in writing. All notices, communications, and documents directed to
Agreement shall be in writing. All notices, communications, and documents directed to
the Company and related to the Agreement, if not delivered by hand, shall be mailed to
the Company and related to the Agreement, if not delivered by hand, shall be mailed to
the Company’s principal executive office, Attention: Secretary. The current address of
the Company’s principal executive office, Attention: Secretary. The current address of
the Company’s principal executive office is:
the Company’s principal executive office is:
Robert Half International Inc.
Robert Half International Inc.
2884 Sand Hill Road
2884 Sand Hill Road
Menlo Park, CA 94025
Menlo Park, CA 94025
3
3
2019 ANNUAL REPORT | ROBERT HALF Unless and until the Company is notified in writing to the contrary, all notices,
Unless and until the Company is notified in writing to the contrary, all notices,
communications, and documents intended for Participant and related to this Agreement, if
communications, and documents intended for Participant and related to this Agreement, if
not delivered by hand, shall be mailed to Participant’s last known address as shown on
not delivered by hand, shall be mailed to Participant’s last known address as shown on
the Company’s books or such other address as Participant may specify by notice
the Company’s books or such other address as Participant may specify by notice
complying with this section. Notices, communications, and documents not delivered by
complying with this section. Notices, communications, and documents not delivered by
hand shall be mailed by registered or certified mail, return receipt requested, postage
hand shall be mailed by registered or certified mail, return receipt requested, postage
prepaid. All mailings and deliveries related to this Agreement shall be deemed received
prepaid. All mailings and deliveries related to this Agreement shall be deemed received
only when actually received.
only when actually received.
15.
15.
Binding Effect. Subject to the limitations set forth in this Agreement, this
Binding Effect. Subject to the limitations set forth in this Agreement, this
Agreement shall be binding upon, and inure to the benefit of, the executors,
Agreement shall be binding upon, and inure to the benefit of, the executors,
administrators, heirs, legal representatives, successors, and assigns of the parties hereto.
administrators, heirs, legal representatives, successors, and assigns of the parties hereto.
16.
16.
Damages. Participant shall be liable to the Company for all costs and
Damages. Participant shall be liable to the Company for all costs and
damages, including incidental and consequential damages and attorneys’ fees, resulting
damages, including incidental and consequential damages and attorneys’ fees, resulting
from Participant’s breach of this Agreement. If any party to this Agreement seeks to
from Participant’s breach of this Agreement. If any party to this Agreement seeks to
enforce its rights under this Agreement by legal proceedings, each party shall pay its own
enforce its rights under this Agreement by legal proceedings, each party shall pay its own
costs and expenses including, without limitation, all attorneys’ fees.
costs and expenses including, without limitation, all attorneys’ fees.
17.
17.
Counterparts. This Agreement may be signed in any number of
Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each such counterpart were upon
counterparts with the same effect as if the signatures to each such counterpart were upon
a single instrument, and all counterparts shall be deemed an original of this Agreement.
a single instrument, and all counterparts shall be deemed an original of this Agreement.
18.
18.
Severability. If any provision of this Agreement is held to be
Severability. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order
unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order
to achieve the intent of the parties to the extent possible. In any event, all other
to achieve the intent of the parties to the extent possible. In any event, all other
provisions of this Agreement shall be deemed valid and enforceable to the full extent
provisions of this Agreement shall be deemed valid and enforceable to the full extent
possible.
possible.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
the date first written above.
ROBERT HALF INTERNATIONAL INC.
ROBERT HALF INTERNATIONAL INC.
By_________________________________
By_________________________________
Participant hereby accepts and agrees to be bound by all of the terms and
Participant hereby accepts and agrees to be bound by all of the terms and
conditions of this Agreement and the Plan.
conditions of this Agreement and the Plan.
_________________________________
_________________________________
4
4
2019 ANNUAL REPORT | ROBERT HALF
SUBSIDIARIES OF ROBERT HALF INTERNATIONAL INC.
Name of Subsidiary
Protiviti Inc.
Protiviti Holdings Inc.
RHHC LLC
RH-TM Resources, Inc.
Protiviti Government Services, Inc.
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 Chile Sociedad por Acciones
Robert Half Internacional Empresa De Servicios Transitorios Limitada
Protiviti Shanghai Co. Ltd.
Robert Half Human Resources Shanghai Company Limited
Robert Half Hong Kong Limited
Protiviti Hong Kong Co. Limited
Protiviti SAS
Robert Half International France SAS
Robert Half SAS
Protiviti GmbH
Robert Half Deutschland Beteiligungsgesellschaft mbH
EXHIBIT 21.1
Jurisdiction of
Incorporation
Delaware
Delaware
Delaware
Delaware
Maryland
Nevada
Pennsylvania
Australia
Australia
Austria
Belgium
Brazil
Bulgaria
Canada
Chile
Chile
China
China
China, Hong Kong SAR
China, Hong Kong SAR
France
France
France
Germany
Germany
2019 ANNUAL REPORT | ROBERT HALF
Name of Subsidiary
Robert Half Deutschland GmbH & Co. KG
Protiviti Consulting Private Limited
Protiviti Government Services S.r.l.
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.
Protiviti Switzerland GmbH
Robert Half GmbH
Robert Half International (Dubai) Ltd.
Protiviti Limited
Robert Half Holdings Limited
Robert Half Limited
Jurisdiction of
Incorporation
Germany
India
Italy
Italy
Italy
Japan
Japan
Luxembourg
Luxembourg
Netherlands
Netherlands
Netherlands
New Zealand
Singapore
Singapore
Switzerland
Switzerland
United Arab Emirates
United Kingdom
United Kingdom
United Kingdom
2019 ANNUAL REPORT | ROBERT HALF
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
EXHIBIT 23.1
We hereby consent to the incorporation by reference in the Registration 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, 333-196291, and
333-231788) of Robert Half International Inc., of our report dated February 14, 2020, relating to the consolidated financial
statements and 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 14, 2020
2019 ANNUAL REPORT | ROBERT HALF
EXHIBIT 31.1
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 the 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 14, 2020
/s/ M. KEITH WADDELL
M. Keith Waddell
President and Chief Executive Officer
2019 ANNUAL REPORT | ROBERT HALF
EXHIBIT 31.2
Certification Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934
I, Michael C. Buckley, 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 the 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 14, 2020
/s/ MICHAEL C. BUCKLEY
Michael C. Buckley
Executive Vice President,
Chief Financial Officer
2019 ANNUAL REPORT | ROBERT HALF
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 of Robert Half
International Inc. (the “Form 10-K”), I, M. Keith Waddell, 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 14, 2020
/s/ M. Keith Waddell
M. Keith Waddell
Chief Executive Officer
Robert Half International Inc.
2019 ANNUAL REPORT | ROBERT HALF
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 of Robert Half
International Inc. (the “Form 10-K”), I, Michael C. Buckley, 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 14, 2020
/s/ Michael C. Buckley
Michael C. Buckley
Chief Financial Officer
Robert Half International Inc.
2019 ANNUAL REPORT | ROBERT HALF
CORPORATE DIRECTORY
Robert Half Board of Directors (from left): Dirk A. Kempthorne; Robert J. Pace; Barbara J. Novogradac; M. Keith Waddell; Harold M. Messmer, Jr.;
Frederick A. Richman; Julia L. Coronado; and Marc H. Morial
Board of Directors
Management
E XEC UTIVE OFFIC E RS
OFFIC E RS
Harold M. Messmer, Jr.
Executive Chairman of Robert Half International
M. Keith Waddell
President and Chief Executive Officer of Robert
Half International
Julia L. Coronado, Ph.D.
President and Founder, MacroPolicy
Perspectives LLC, an economic research
consulting firm
Harold M. Messmer, Jr.
Executive Chairman
M. Keith Waddell
President and Chief Executive Officer
Paul F. Gentzkow
President and Chief Executive Officer —
Staffing Services
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 Treasurer
Christopher M. Hoffmann
Senior Vice President, Commercial Transactions
and Law
James C. Johnson
Senior Vice President and Chief Technology
Officer
Tami A. Munns
Senior Vice President, Corporate Services —
Staffing
Lynne C. Smith
Senior Vice President, Human Resources
and Compensation
Reesa M. Staten
Senior Vice President, Corporate
Communications
Michelle M. Whitman
Senior Vice President and Chief
Marketing Officer
Dirk A. Kempthorne
President of The Kempthorne Group, a private
consulting firm
Robert W. Glass
Executive Vice President, Corporate
Development
Marc H. Morial
President and Chief Executive Officer of the
National Urban League
Michael C. Buckley
Executive Vice President, Chief
Financial Officer
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
Corporate Headquarters
2884 Sand Hill Road
Menlo Park, CA 94025
1.650.234.6000
www.roberthalf.com
Registrar and Stock Transfer Agent
Computershare Investor Services
P.O. Box 505005
Louisville, KY 40233-5005
Private Couriers/Registered Mail:
Computershare Investor Services
462 South 4th Street, Suite 1600
Louisville, KY 40202
1.800.676.0894
1.800.952.9245 (TDD for Hearing Impaired)
1.781.575.2879 (Foreign Shareholders)
www.computershare.com/investor
Accountemps®
Robert Half® Finance & Accounting
Robert Half® Management Resources
Robert Half® Technology
OfficeTeam®
Robert Half® Legal
The Creative Group®
Protiviti®
roberthalf.com
© 2020 Robert Half International Inc. An Equal Opportunity Employer M/F/Disability/Veterans. RHI-0320
All referenced trademarks are the property of their respective owners.