What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-04-30 compared with 2020-11-02 · 123 added, 201 removed, 411 unchanged (44% of the section changed)

3 unchanged sentences

(in thousands, except share amounts)

September 30,

2021 December 31, 2020

1 unchanged sentence

Accounts receivable, net 799,673 714,163

Employee deferred compensation trust assets 424,037 406,634

Other current assets 152,280 147,515

8 unchanged sentences

Accrued payroll and benefit costs 407,844 397,877

Employee deferred compensation plan obligations 437,707 435,121

Income taxes payable 29,957 4,015

Notes payable, current 233 218

Notes payable 181 239

Current operating lease liabilities 79,211 78,604

Total current liabilities 1,076,586 1,046,626

Notes payable, less current portion 62 239

Noncurrent operating lease liabilities 208,194 223,869

1 unchanged sentence

Total liabilities 1,367,470 1,352,135

Commitments and Contingencies (Note I)

Commitments and Contingencies (Note J)

STOCKHOLDERS’ EQUITY

15 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

Service revenues $ 1,398,380 $ 1,506,691

3 unchanged sentences

Selling, general and administrative expenses 423,062 442,868

Income from investments held in employee deferred compensation

trusts (which is completely offset by related costs and expenses -Notes A and H)

(Income) loss from investments held in employee deferred compensation trusts

(which is completely offset by related costs and expenses - Notes A & I)

( 11,988 ) 40,376

15 unchanged sentences

(in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Three Months Ended March 31,

COMPREHENSIVE INCOME (LOSS):

2 unchanged sentences

Foreign currency translation adjustments, net of tax ( 8,837 ) ( 13,700 )

Foreign defined benefit plans, net of tax 40 —

Total other comprehensive income (loss) ( 8,797 ) ( 13,700 )

Total comprehensive income (loss) $ 101,801 $ 76,215

9 unchanged sentences

Net income — — — — 110,598 110,598

Adoption of accounting pronouncement — — — — ( 558 ) ( 558 )

Other comprehensive income (loss) — — — ( 8,797 ) — ( 8,797 )

6 unchanged sentences

112,682 $ 113 $ 1,194,153 $ ( 13,529 ) $ 16,962 $ 1,197,699

Net income — — — — 46,196 46,196

Other comprehensive income (loss) — — — 6,534 — 6,534

Dividends declared ($ .34 per share)

— — — — ( 38,975 ) ( 38,975 )

Net issuances of restricted stock 33 — — — — —

Stock-based compensation — — 13,035 — — 13,035

Repurchases of common stock 0 0 — — ( 9 ) ( 9 )

Balance at June 30, 2020

114,635 $ 115 $ 1,154,046 $ ( 27,152 ) $ 29,697 $ 1,156,706

Net income — — — — 75,749 75,749

Other comprehensive income (loss) — — — 11,156 — 11,156

Dividends declared ($ .34 per share)

— — — — ( 38,969 ) ( 38,969 )

Net issuances of restricted stock ( 2 ) — — — — —

Stock-based compensation — — 13,063 — — 13,063

Repurchases of common stock ( 453 ) ( 1 ) — — ( 23,675 ) ( 23,676 )

Balance at September 30, 2020

114,180 $ 114 $ 1,167,109 $ ( 15,996 ) $ 42,802 $ 1,194,029

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

are an integral part of these financial statements.

ROBERT HALF INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)-(Continued)

(in thousands, except per share amounts)

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total

1 unchanged sentence

Balance at December 31, 2019 115,120 $ 115 $ 1,127,487 $ ( 19,986 ) $ 36,067 $ 1,143,683

119,078 $ 119 $ 1,079,188 $ ( 16,109 ) $ — $ 1,063,198

Net income — — — — 89,915 89,915

Adoption of accounting pronouncement — — — — ( 558 ) ( 558 )

Other comprehensive income (loss) — — — ( 13,700 ) — ( 13,700 )

5 unchanged sentences

Balance at March 31, 2020 114,602 $ 115 $ 1,141,011 $ ( 33,686 ) $ 22,485 $ 1,129,925

118,321 $ 118 $ 1,090,432 $ ( 18,006 ) $ 4,485 $ 1,077,029

Net income — — — — 114,612 114,612

Other comprehensive income (loss) — — — 2,146 — 2,146

Dividends declared ($ .31 per share)

— — — — ( 36,597 ) ( 36,597 )

Net issuances of restricted stock 271 1 ( 1 ) — — —

Stock-based compensation — — 11,670 — — 11,670

Repurchases of common stock ( 1,031 ) ( 1 ) — — ( 59,632 ) ( 59,633 )

Balance at June 30, 2019

117,561 $ 118 $ 1,102,101 $ ( 15,860 ) $ 22,868 $ 1,109,227

Net income — — — — 117,181 117,181

Other comprehensive income (loss) — — — ( 10,011 ) — ( 10,011 )

Dividends declared ($ .31 per share)

— — — — ( 36,235 ) ( 36,235 )

Net issuances of restricted stock ( 3 ) — — — — —

Stock-based compensation — — 11,889 — — 11,889

Repurchases of common stock ( 1,461 ) ( 2 ) — — ( 80,219 ) ( 80,221 )

Balance at September 30, 2019

116,097 $ 116 $ 1,113,990 $ ( 25,871 ) $ 23,595 $ 1,111,830

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

3 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

5 unchanged sentences

Amortization of intangible assets 576 338

Realized and unrealized gain from investments held in employee deferred

Realized and unrealized (gains) losses from investments held in employee deferred

compensation trusts

7 unchanged sentences

Accrued payroll and benefit cost 13,009 2,978

Employee deferred compensation plan obligations 2,586 ( 48,155 )

Income taxes payable 25,409 20,124

23 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2020

March 31, 2021

Note A— Summary of Significant Accounting Policies

2 unchanged sentences

(the “Company”) provides specialized staffing and risk consulting services through such divisions as Accountemps ® , Robert Half ® Finance & Accounting , OfficeTeam ® , Robert Half ® Technology , Robert Half ® Management Resources , Robert Half ® Legal , The Creative Group ® , and Protiviti ® .

The Company, through its Accountemps , Robert Half Finance & Accounting , and Robert Half Management Resources divisions, is a specialized provider of temporary, full-time, and senior-level project professionals in the fields of accounting and finance.

OfficeTeam specializes in highly skilled temporary administrative support professionals.

The Company, through its Accountemps , Robert Half Finance & Accounting , and Robert Half Management Resources divisions, is a specialized provider of contract, full-time, and senior-level project professionals in the fields of accounting and finance.

OfficeTeam specializes in highly skilled contract, administrative support professionals.

Robert Half Technology provides project and full-time technology professionals.

Robert Half Legal provides temporary, project, and full-time staffing of lawyers, paralegals and legal support personnel.

Robert Half Legal provides contract, project, and full-time staffing of lawyers, paralegals and legal support personnel.

The Creative Group provides creative, digital, marketing, advertising and public relations professionals.

15 unchanged sentences

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

As of September 30, 2020, such estimates include allowances for credit losses, 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 grants subject to market conditions.

We are continuing to monitor the efforts to mitigate the spread of coronavirus (“COVID-19”), including uncertainty around the duration and extent of the stay-at-home orders and the effect on the Company’s results of operations, financial condition, and liquidity.

As of March 31, 2021, such estimates include allowances for credit losses, 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 grants subject to market conditions.

We continue to monitor the significant global economic uncertainty as a result of coronavirus (“COVID-19”) to assess the impact on the Company’s results of operations, financial condition, and liquidity.

In light of the ongoing economic disruption, we continue to face a greater degree of uncertainty than normal in making the judgments and estimates needed to apply the Company’s significant accounting policies.

6 unchanged sentences

See Note C for further discussion of the revenue recognition accounting policy.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2020

Costs of Services.

Direct costs of temporary and consultant staffing consist of payroll, payroll taxes and benefit costs for the Company’s engagement professionals, as well as reimbursable expenses.

Direct costs of permanent placement staffing services consist of reimbursable expenses.

Direct costs of permanent placement staffing

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2021

services consist of reimbursable expenses.

Risk consulting and internal audit direct costs of services include professional staff payroll, contract labor payroll, payroll taxes and benefit costs, as well as reimbursable expenses.

1 unchanged sentence

The Company expenses all advertising costs as incurred .

Advertising costs were $ 7.7 million and $ 28.9 million for the three and nine months ended September 30, 2020, respectively, and $ 13.6 million and $ 41.4 million for the three and nine months ended September 30, 2019, respectively.

Income from investments held in employee deferred compensation trusts .

The Company has changed its Condensed Consolidated Statements of Operations to separately present income from investments held in employee deferred compensation trusts.

Advertising costs were $ 8.4 million and $ 14.5 million for the three months ended March 31, 2021 and 2020, respectively.

(Income) Loss from Investments Held in Employee Deferred Compensation Trusts .

Under the Company’s employee deferred compensation plans, employees direct the investment of their account balances, and the Company invests amounts held in the associated investment trusts consistent with these directions.

As realized and unrealized investment gains and losses occur, the Company’s deferred compensation obligation to employees changes accordingly.

Changes in the Company’s deferred compensation obligations will continue to be included in selling, general and administrative expenses or, in the case of risk consulting and internal audit services, direct cost.

Changes in the Company’s deferred compensation obligations remain in selling, general and administrative expenses or, in the case of risk consulting and internal audit services, costs of services.

The value of the related investment trust assets also changes by an equal and offsetting amount, leaving no net cost to the Company.

The Company’s income from investments held in employee deferred compensation trusts consists primarily of unrealized and realized gains and losses and dividend income from trust investments.

Such amounts were previously presented as a component of selling, general and administrative expenses, or, in the case of risk consulting and internal audit services, direct cost.

Reclassifications have been made to prior year’s condensed consolidated financial statements to conform to the 2020 presentation.

The following table presents the Company’s income from investments held in employee deferred compensation trusts (in thousands):

Three Months Ended September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

The following table presents the Company’s (income) loss from investments held in employee deferred compensation trusts (in thousands):

Three Months Ended

Dividend income $ ( 294 ) $ ( 405 )

Realized and unrealized gain 25,652 718 32,743 31,034

$ 26,095 $ 1,450 $ 34,630 $ 34,628

Cash and Cash Equivalents .

The Company considers all highly liquid investments with a maturity at the date of purchase of three months or less as cash equivalents.

This includes money market funds that meet the requirements to be treated as cash equivalents.

However, money market funds held in investment trusts that are being used as investments to satisfy the Company’s obligations under its deferred compensation plans are treated as investments and recorded within other current assets on the unaudited Condensed Consolidated Statement of Financial Position.

Realized and unrealized (gains) losses ( 11,694 ) 40,781

(Income) loss from investments held in employee deferred compensation trusts $ ( 11,988 ) $ 40,376

Comprehensive Income (Loss).

Comprehensive income (loss) includes net income and certain other items that are recorded directly to stockholders’ equity.

The Company’s only sources of other comprehensive income (loss) are foreign currency translation and foreign defined benefit plan adjustments.

Fair Value of Financial Instruments.

4 unchanged sentences

estimates and assumptions that market participants would use in pricing the asset or liability

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximates fair value because of their short-term nature.

The Company holds mutual funds and money market funds to

satisfy its obligations under its employee deferred compensation plans, which are carried at fair value based on quoted market prices in active markets for identical assets (level 1).

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2020

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates fair value because of their short-term nature.

The Company holds mutual funds and money market funds to help satisfy its obligations under its deferred compensation plans, which are carried at fair value based on quoted market prices in active markets for identical assets (level 1) and recorded within other current assets on the unaudited Condensed Consolidated Statement of Financial Position.

March 31, 2021

The following table sets forth the composition of the underlying assets which comprise the Company’s deferred compensation trust assets (in thousands):

Fair Value Measurements Using

Balance at September 30, 2020

Balance at March 31, 2021

Quoted Prices

26 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2020

The following table sets forth the activity in the allowance for credit losses from December 31, 2019, through September 30, 2020 (in thousands):

March 31, 2021

The following table sets forth the activity in the allowance for credit losses from December 31, 2019, through March 31, 2021 (in thousands):

Allowance for Credit Losses

5 unchanged sentences

Other, including translation adjustments ( 120 )

Balance as of September 30, 2020

Balance as of December 31, 2020

Charges to expense 3,157

Deductions ( 1,482 )

Other, including translation adjustments ( 973 )

Balance as of March 31, 2021

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 assets.

All other internal-use software development costs are capitalized and reported as a component of computer software within property and equipment on the unaudited Condensed Consolidated Statements of Financial Position.

Capitalized internal-use software development costs were $ 10.4 million a nd $ 13.0 million for the three months ended March 31, 2021 and 2020, respectively.

Goodwill and Intangible Assets .

2 unchanged sentences

Goodwill is not amortized, but is tested at least annually for impairment, or on an as needed interim basis.

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 current assets.

Capitalized internal-use software development costs were $ 8.8 million and $ 31.7 million for the three and nine months ended September 30, 2020, respectively, and $ 11.4 million and $ 24.3 million for the three and nine months ended September 30, 2019, respectively.

Note B— New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Current Expected Credit Losses Model.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses.

The new guidance is effective for interim and annual reporting periods beginning after December 15, 2019.

The Company has adopted the new guidance prospectively as of January 1, 2020, and the impact of adoption was not material to its financial statements.

Simplifying the Test for Goodwill Impairment.

In January 2017, the FASB issued authoritative guidance to simplify the goodwill impairment testing process.

The new standard eliminates Step 2 of the goodwill impairment test.

If a company determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is greater than the fair value, an impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2.

The new guidance is effective for the Company for fiscal years beginning after December 15, 2019, although early adoption is permitted.

The Company has adopted the new guidance prospectively as of January 1, 2020, and the impact of adoption was not material to its financial statements.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2020

Recently Issued Accounting Pronouncements Not Yet Adopted

Reference Rate Reform.

3 unchanged sentences

GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.

The amendments apply only to contracts and hedging relationships that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform.

The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform.

These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022.

The Company believes this guidance will not have a material impact on its financial statements.

The application of this guidance did not have a material impact on the Company's financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2021

Note C— Revenue Recognition

15 unchanged sentences

The Company has a substantial history of estimating the financial impact of permanent placement candidates who do not remain with its clients through the 90 -day guarantee period.

These amounts are established based primarily on historical data and are recorded as liabilities.

These amounts are established based primarily on historical data and are recorded as contract liabilities.

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.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2020

Risk consulting and internal audit services revenues.

6 unchanged sentences

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.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2021

The following table presents the Company’s service revenues disaggregated by line of business (in thousands):

Three Months Ended September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

Three Months Ended

Accountemps $ 417,116 $ 489,884

3 unchanged sentences

Elimination of intersegment revenues (a) ( 103,818 ) ( 46,273 )

Temporary and consulting staffing 781,391 1,118,461 2,626,897 3,305,800

Temporary and consultant staffing 889,275 1,092,120

Permanent placement staffing 111,703 120,489

6 unchanged sentences

Contracts with multiple performance obligations are recognized as performance obligations are delivered, and contract value is allocated based on relative stand-alone selling values of the services and products in the arrangement.

As of September 30, 2020, aggregate transaction price allocated to the performance obligations that are unsatisfied for contracts with an expected duration of greater than one year was $ 108.2 million.

As of March 31, 2021, aggregate transaction price allocated to the performance obligations that are unsatisfied for contracts with an expected duration of greater than one year was $ 170.0 million.

Of this amount, $ 157.3 million is expected to be recognized within the next twelve months .

As of September 30, 2019, aggregate transaction price allocated to the performance obligations that are unsatisfied for contracts with an expected duration of greater than one year was $ 76.9 million.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2020

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 unaudited Condensed Consolidated Statement of Financial Position.

The following table sets forth the activity in contract liabilities from December 31, 2018, through September 30, 2020 (in thousands):

As of March 31, 2020, aggregate transaction price allocated to the performance obligations that are unsatisfied for contracts with an expected duration of greater than one year was $ 112.0 million.

The following table sets forth the activity in contract liabilities from December 31, 2019, through March 31, 2021 (in thousands):

Contract Liabilities

7 unchanged sentences

Other, including translation adjustments 717

Balance as of September 30, 2020

Balance as of March 31, 2021 $ 15,347

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2021

Note D— Other Current Assets

Other current assets consisted of the following (in thousands):

September 30,

2021 December 31, 2020

Deferred compensation trust assets $ 445,739 $ 398,442

Prepaid expenses 101,846 97,674

1 unchanged sentence

Other current assets $ 152,280 $ 147,515

Deferred compensation trust assets were $ 445.7 million and $ 398.4 million as of September 30, 2020, and December 31, 2019, respectively.

These assets include publicly traded mutual funds and money market funds used to satisfy the Company’s liabilities under its deferred compensation plans.

Note E— Property and Equipment, Net

Property and equipment consisted of the following (in thousands):

September 30,

2021 December 31, 2020

6 unchanged sentences

Property and equipment, net $ 103,701 $ 109,817

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2020

Note F— Leases

The Company has operating leases for corporate and field offices, and certain equipment.

The Company’s leases have remaining lease terms of less than 1 year to 10 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year.

Operating lease expenses were $ 20.6 million and $ 60.5 million for the three and nine months ended September 30, 2020, respectively, $ 19.7 million and $ 57.3 million for the three and nine months ended September 30, 2019, respectively.

The Company’s leases have remaining lease terms of 1 month to 9 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year.

Operating lease expenses for the three months ended March 31, 2021 and 2020, were $ 21.5 million and $ 19.9 million, respectively.

Supplemental cash flow information related to leases consisted of the following (in thousands):

Nine Months Ended

September 30,

Three Months Ended

Cash paid for operating lease liabilities $ 22,225 $ 20,554

1 unchanged sentence

Supplemental balance sheet information related to leases consisted of the following:

September 30,

2021 December 31,

1 unchanged sentence

Weighted average discount rate for operating leases 2.6 % 2.6 %

Future minimum lease payments under non-cancellable leases as of September 30, 2020, were as follows (in thousands):

2020 (excluding the nine months ended September 30, 2020)

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2021

Future minimum lease payments under non-cancellable leases as of March 31, 2021, were as follows (in thousands):

2021 (excluding the three months ended March 31, 2021)

Thereafter 29,371

2 unchanged sentences

(a) Includes current portion of $ 79.2 million for operating leases.

As of September 30, 2020, the Company had no material future minimum lease obligations that had not yet commenced.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2020

As of March 31, 2021, the Company had additional future minimum lease obligations totaling $ 4.0 million under operating leases 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, 2019, through September 30, 2020 (in thousands):

The following table sets forth the activity in goodwill from December 31, 2020, through March 31, 2021 (in thousands):

Temporary and consultant staffing Permanent placement staffing Risk consulting and internal audit services Total

2 unchanged sentences

Foreign currency translation adjustments ( 46 ) ( 14 ) 51 ( 9 )

Balance as of September 30, 2020

Balance as of March 31, 2021

$ 134,465 $ 26,166 $ 62,415 $ 223,046

1 unchanged sentence

Accrued payroll and benefit costs consisted of the following (in thousands):

September 30,

2021 December 31, 2020

Employee deferred compensation plans $ 465,299 $ 421,198

Payroll and benefits 306,178 311,169

2 unchanged sentences

Accrued payroll and benefit costs $ 407,844 $ 397,877

The Company, under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, deferred paying $ 68.3 million of applicable payroll taxes as of September 30, 2020, which is included in other liabilities in the unaudited Condensed Consolidated Statements of Financial Position.

The Company, under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, deferred paying $ 102.2 million of applicable payroll taxes as of March 31, 2021, of which $ 51.1 million is expected to be paid during the next 12 months and is included in accrued payroll and benefit costs and the remaining $ 51.1 million is included in other liabilities on the unaudited Condensed Consolidated Statements of Financial Position .

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2021

Note I— Employee Deferred Compensation Plan Obligations

The Company provides various qualified defined contribution 401(k) plans covering eligible employees.

The plans offer a savings feature with the Company matching employee contributions.

Assets of these plans are held by an independent trustee for the sole benefit of participating employees.

Assets of this plan are held by an independent trustee for the sole benefit of participating employees.

Nonqualified plans are provided for employees not eligible for the qualified plans.

These plans include provisions for salary deferrals and Company matching and discretionary contributions.

The asset value of the nonqualified plans was $ 445.7 million and $ 398.4 million as of September 30, 2020, and December 31, 2019, respectively, and are included in other current assets in the unaudited Condensed Consolidated Statements of Financial Position.

The asset value of the nonqualified plans was $ 424.0 million and $ 406.6 million as of March 31, 2021, and December 31, 2020, respectively.

The Company holds these assets to satisfy the Company’s liabilities under its deferred compensation plans.

The liability value for the nonqualified plans was $ 465.3 million and $ 421.2 million as of September 30, 2020, and December 31, 2019, respectively, and is included in accrued payroll and benefit costs in the unaudited Condensed Consolidated Statements of Financial Position.

Deferred compensation plan and other benefits related to the Company’s executive chairman were $ 88.6 million and $ 91.8 million as of September 30, 2020, and December 31, 2019, respectively, and are included in the liability value for the nonqualified plans.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2020

The liability value for the nonqualified plans was $ 437.7 million and $ 435.1 million as of March 31, 2021, and December 31, 2020, respectively.

The following table presents the Company’s compensation expense related to its qualified defined contribution plans and nonqualified plans (in thousands):

Three Months Ended September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

Three Months Ended

Contribution expense $ 9,554 $ 8,485

Deferred compensation expense related to changes in the fair value of

26,095 1,450 34,630 34,628

Increase (decrease) in employee deferred compensation expense related to changes in the fair

value of trust assets 11,988 ( 40,376 )

$ 21,542 $ ( 31,891 )

The Company has statutory defined contribution plans and defined benefit plans outside the U.S., which are not material.

Note I— Commitments and Contingencies

Note J— Commitments and Contingencies

On March 23, 2015, Plaintiff Jessica Gentry, on her own behalf and on behalf of a putative class of allegedly similarly situated individuals, filed a complaint against the Company in the Superior Court of California, San Francisco County, which was subsequently amended on October 23, 2015.

14 unchanged sentences

Plaintiff Dorff also 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 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.

At this stage of the litigation, it is not

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2021

feasible to predict the outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the Company’s Financial Statements.

The Company believes it has meritorious defenses to the allegations and the Company intends to continue to vigorously defend against the litigation.

2 unchanged sentences

Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2020

In May 2020, the Company entered into a new $ 100 million unsecured revolving credit facility (the “ 364 -Day Credit Agreement”).

Borrowings under the 364 -Day Credit Agreement will bear interest in accordance with the terms of the borrowing, which typically will be calculated according to the LIBOR plus an applicable margin.

The 364 -Day Credit Agreement is subject to certain financial covenants and the Company was in compliance with these covenants as of September 30, 2020.

There were no borrowings under the 364 -Day Credit Agreement as of September 30, 2020.

Note J— Stockholders’ Equity

The 364 -Day Credit Agreement is subject to certain financial covenants and the Company was in compliance with these covenants as of March 31, 2021.

There were no borrowings under the 364 -Day Credit Agreement as of March 31, 2021.

Note K— Stockholders’ Equity

Stock Repurchase Program.

As of September 30, 2020, the Company is authorized to repurchase, from time to time, up to 1.0 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 nine months ended September 30, 2020 and 2019, are reflected in the following table (in thousands):

Nine Months Ended

September 30,

As of March 31, 2021, the Company is authorized to repurchase, from time to time, up to 9.2 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 three months ended March 31, 2021 and 2020, are reflected in the following table (in thousands):

Three Months Ended

Common stock repurchased (in shares) 797 983

1 unchanged sentence

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.

The number and the cost of repurchases related to employee stock plans made during the nine months ended September 30, 2020 and 2019, are reflected in the following table (in thousands):

Nine Months Ended

September 30,

The number and the cost of repurchases related to employee stock plans made during the three months ended March 31, 2021 and 2020, are reflected in the following table (in thousands):

Three Months Ended

Repurchases related to employee stock plans (in shares) 251 280

2 unchanged sentences

Treasury stock is accounted for using the cost method.

Repurchase activity for the three and nine months ended September 30, 2020 and 2019, is presented in the unaudited Condensed Consolidated Statements of Stockholders’ Equity.

Repurchase activity for the three months ended March 31, 2021 and 2020, is presented in the unaudited Condensed Consolidated Statements of Stockholders’ Equity.

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.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2020

Note K— Net Income Per Share

The calculation of net income per share for the three and nine months ended September 30, 2020 and 2019, is reflected in the following table (in thousands, except per share amounts):

March 31, 2021

Note L— Net Income Per Share

The calculation of net income per share for the three months ended March 31, 2021 and 2020, is reflected in the following table (in thousands, except per share amounts):

Three Months Ended

September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Net income $ 110,598 $ 89,915

8 unchanged sentences

Diluted $ .98 $ .79

Note L— Business Segments

Note M— Business Segments

The Company has three reportable segments:

8 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2020

The following table provides a reconciliation of service revenues and segment income by reportable segment to consolidated results for the three and nine months ended September 30, 2020 and 2019 (in thousands):

March 31, 2021

The following table provides a reconciliation of service revenues and segment income by reportable segment to consolidated results for the three months ended March 31, 2021 and 2020 (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

Service revenues

12 unchanged sentences

Service revenues presented above are shown net of eliminations of intersegment revenues.

Intersegment revenues between temporary and consulting staffing segment and risk consulting and internal audit services segment were $ 59.8 million and $ 147.6 million for the three and nine months ended September 30, 2020, respectively, and $ 46.5 million and $ 121.6 million for the three and nine months ended September 30, 2019, respectively.

Note M— Subsequent Events

On October 29, 2020, the Company authorized the repurchase, from time to time, of up to an additional 10 million shares of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions.

The authorization is in addition to the approximately 1.0 million shares remaining under the existing repurchase program.

There is no guarantee as to whether, when, or how many shares the Company will repurchase, and the Company may discontinue the repurchase program at any time.

On October 29, 2020, the Company announced the following:

Intersegment revenues

between temporary and consultant staffing segment and risk consulting and internal audit services segment were $ 103.8 million

and $ 46.3 million for the three months ended March 31, 2021 and 2020, respectively.

Note N— Subsequent Events

On April 29, 2021, the Company announced the following:

Quarterly dividend per share $ .38

Declaration date October 29, 2020

Record date November 25, 2020

Payment date December 15, 2020

Declaration date April 29, 2021

Record date May 25, 2021

Payment date June 15, 2021

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements