What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-04-30 compared with 2020-11-02 · 148 added, 234 removed, 113 unchanged (77% of the section changed)

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changes in levels of unemployment and other economic conditions in the United States or foreign countries where the Company does business, or in particular regions or industries;

reduction in the supply of candidates for temporary employment or the Company’s ability to attract candidates;

reduction in the supply of candidates for contract employment or the Company’s ability to attract candidates;

the entry of new competitors into the marketplace or expansion by existing competitors;

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Executive Overview

As COVID-19 continues to impact the global economy, the Company has prioritized the health and safety of its employees, and a majority of global staffing and Protiviti employees continue working remotely.

The Company has maintained full operations even where physical locations have remained closed.

Given the magnitude of the COVID-19 impact on the Company’s business, we have worked to effectively manage our costs and pursue revenue-generation opportunities.

Demand for the Company’s temporary and consulting staffing, permanent placement staffing, and risk consulting and internal audit services is largely dependent upon general economic and labor trends both domestically and abroad.

The extent of the economic disruption on the Company’s operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by the U.S.

government, state and local government officials, and international governments to prevent disease spread, all of which are uncertain and cannot be predicted.

The Company’s financial results for the first three quarters of 2020 were affected by the economic crisis resulting from the COVID-19 pandemic, primarily in the Company’s staffing business.

During the first three quarters of 2020 service revenues were $3.80 billion, a decrease of 16% from the prior year.

Net income for the first three quarters of 2020 was $212 million and diluted net income per share was $1.87.

Risk consulting and internal audit services experienced strong revenue growth increasing by 9%, offset by declines in temporary and consultant staffing of 21% and permanent placement staffing of 32% during the first three quarters of 2020, compared to the first three quarters of 2019.

The Company’s staffing clients, most of whom are small and midsize businesses, are feeling the crisis, however, there are im proving trends in the small business com munity.

Demand for Protiviti’s services was broad-based across its diversified service offerings, including internal audit, technology consulting and regulatory compliance consulting.

Protiviti had a strong first three quarters of 2020 and continues to

benefit fro m multiple solutions offerings and pipeline, including particularly robust growth from the blended solutions with the Company’s temporary and consulting staffing operations.

The United States economic backdrop as we ended the first three quarters of 2020 was showing signs of modest recovery as real gross domestic product (“GDP”) decreased 5.0% and 32.9% for the first and second quarter, respectively, and increased 33.1% for the third quarter, while the unemployment rate increased from 3.5% in December 2019 to 4.4%, 11.1%, and 7.9% at the end of the first, second, and third quarter of 2020, respectively.

The Company’s financial results during the first quarter of 2021 reflect continued early-cycle recovery from the economic crisis resulting from the COVID-19 pandemic, with accelerating growth during the quarter in the Company’s staffing business.

Our investments in advanced AI technologies and retention of our tenured employees has allowed us to adapt quickly to a new marketplace, where remote and hybrid work has become commonplace.

During the first quarter of 2021, service revenues were $1.40 billion, a decrease of 7.2% from the prior year.

Net income for the quarter was $111 million and diluted net income per share was $.98.

The Company's staffing operations significantly outperformed their historical sequential trends, led by small and medium-size businesses and permanent placement, which grew 22% sequentially.

Protiviti's revenues grew 35% year-on-year, reflecting continued momentum across its wide array of service offerings, including very strong demand for managed solutions with staffing.

This is Protiviti's 14th consecutive quarter of year-on-year revenue gains.

The Company’s blended solutions, complementing Protiviti's offerings with contract talent, allow the Company to be extremely nimble and cost effective in response to client needs, and we expect this offering to be an increasing part of our business going forward.

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, which may continue to be impacted by COVID-19.

The United States economic backdrop as we ended the first quarter of 2021 showed early signs of economic recovery as real gross domestic product (“GDP”) increased 6.4%, while the unemployment rate decreased from 6.7% in December 2020 to 6.0% at the end of the first quarter of 2021.

In the United States, the number of job openings exceeded the number of hires at the end of February 2021, creating competition for skilled talent that increases the Company's value to clients.

labor market remains robust, with significant demand due to talent shortages across our professional disciplines.

We monitor various economic indicators and business trends in all of the countries in which we operate to anticipate demand for the Company’s services.

We evaluate these trends to determine the appropriate level of investment, including personnel, which will best position the Company for success in the current and future global macroeconomic environment.

The Company’s investments in headcount are typically structured to proactively support and align with expected revenue growth trends.

The Company’s investments in headcount are typically structured to proactively support and align with expected revenue growth trends and productivity metrics.

We have limited visibility into future revenues not only due to the dependence on macroeconomic conditions noted above, but also because of the relatively short duration of the Company’s client engagements.

Accordingly, we typically assess headcount and oth er investments on at least a quarterly basis.

As such, during the first three quarters of 2020, we took actions to reduce headcount.

We are focused on the productivity levels of tenured staff and believe we have aligned staffing levels to drive profitability.

Capital expenditures, including $26 million for cloud computing arrangements, for the nine months ended September 30, 2020, totaled $55 million, approximately 68% of which represented investments in software initiatives and technology infrastructure, both of which are important to the Company’s sustainability and future growth opportunities.

Accordingly, we typically assess headcount and other investments on at least a quarterly basis.

We continue to focus on the productivity levels of tenured staff and believe we have aligned staffing levels to drive increased profitability.

During the first quarter of 2021, headcount remained relatively flat in all three business segments, when compared to prior year-end levels.

Capital expenditures, including $8.5 million for cloud computing arrangements, for the three months ended March 31, 2021, totaled $18.2 million, approximately 89% of which represented investments in software initiatives and technology infrastructure, both of which are important to the Company’s sustainability and future growth opportunities.

Capital expenditures for cloud computing arrangements are 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 offices.

Capital expenditures included amounts spent on tenant improvements and furniture and equipment in the Company’s leased offices.

We currently expect that 2021 capital expenditures will range from $85 million to $95 million, of which $45 million to $55 million relates to software initiatives and technology infrastructure, including capitalized costs related to implementation of cloud computing arrangements.

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The Company’s most critical accounting policies and estimates are those that involve subjective decisions or assessments and are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

There were no material changes to the Company’s critical accounting policies or estimates for the nine months ended September 30, 2020.

There were no material changes to the Company’s critical accounting policies or estimates for the three months ended March 31, 2021.

Recent Accounting Pronouncements

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Results of Operations

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.

Because of the inherent difficulty in predicting economic trends, future demand for the Company’s services cannot be forecast with certainty.

The Company’s investments in technology have allowed its internal staff to remain fully functional during this pandemic.

We have found innovative ways to maintain connections with candidates and clients in a remote environment and we believe the Company is well positioned to meet the demand of our customers.

While uncertainty remains in the overall economic environme nt, we approach the fourth quarter with optimism.

The Company's technology investments have facilitated remote working models internally and, with the Company's advanced AI-driven capabilities, are providing clients with real-time choices of candidates across broader resource pools.

While uncertainty remains in the overall economic environment, we are excited about our current momentum and the Company’s prospects for the balance of 2021 and beyond, buoyed by the strengths of the Company’s brands, people, technology and professional business model.

The Company’s temporary and permanent placement staffing business has 322 offices in 43 states, the District of Columbia and 17 foreign countries, while Protiviti has 63 offices in 24 states and 12 foreign countries.

The Company has changed its Condensed Consolidated Statements of Operations to separately present income 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.

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

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

However, the offsetting changes in the investment trust assets will be presented separately below selling, general and administrative expenses.

This does not change the reported level of pre-tax or after-tax income or cash flow previously provided.

Under the new presentation, we will replace

the discussion of consolidated operating income with the non-GAAP measure of combined segment income.

This will be calculated as consolidated income before income taxes adjusted for net interest income and amortization of intangible assets, and is equal to the sum of segment income.

Non-GAAP Financial Measures

The financial results of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the SEC.

The financial results of Robert Half International Inc.

(the “Company”) are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the U.S.

Securities and Exchange Commission (“SEC”).

To help readers understand the Company’s financial performance, the Company supplements its GAAP financial results with the following non-GAAP measures:

combined segment income and as adjusted revenue growth rates.

Combined segment income is defined as income before income taxes adjusted for net interest income and amortization of intangible assets, and is equal to the sum of segment income.

The Company provides combined segment income because it is how the Company evaluates segment performance.

A reconciliation of combined segment income to reported income before income taxes is provided herein.

Variations in the Company’s financial results include the impact of changes in foreign currency exchange rates and billing days.

as adjusted revenue growth rates;

adjusted gross margin;

adjusted selling, general and administrative expense;

segment income and combined segment income.

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 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.

These calculations show the year-over-year revenue growth rates for the Company’s lines of business on both a reported basis and also on an as-adjusted basis for global, U.S., and international operations.

This information is presented for each of the six most recent quarters.

The Company has 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 the same number of billing days and constant currency exchange rates.

In order to calculate constant currency revenue growth rates, as reported amounts are retranslated using foreign currency exchange rates from the prior year’s comparable period.

Management then calculates a global, weighted-average number of billing days for each reporting period based upon input from all countries and all lines of business.

In order to remove the fluctuations caused by comparable periods having different billing days, the Company calculates same billing day revenue growth rates by dividing each comparative period’s reported revenues by the calculated number of billing days for that period to arrive at a per billing day amount.

Same billing day growth rates are then calculated based upon the per billing day amounts.

The term “as adjusted” means that the impact of different billing days and constant currency fluctuations are removed from the revenue growth rate calculation.

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 following measures:

adjusted gross margin;

adjusted selling, general and administrative expense;

and segment income include gains and losses on investments held to fund the Company’s obligations under employee deferred compensation plans.

The Company provides these measures because they are used by management to review its operational results.

Combined segment income is income before income taxes adjusted for interest income and amortization of intangible assets.

The Company provides combined segment income because it is how the Company evaluates segment performance.

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.

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The Company does not consider these non-GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial results.

A reconciliation of the as adjusted revenue growth rates to the reported revenue growth rates is provided herein.

A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is provided on the following pages.

Refer to Item 3.

“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.

Three Months Ended September 30, 2020 and 2019

The Company’s revenues were $1.19 billion for the three months ended September 30, 2020, decreasing by 23.3% compared to $1.55 billion for the three months ended September 30, 2019.

Revenues from foreign operations represented 22% of total revenues for both the three months ended September 30, 2020 and 2019.

Three Months Ended March 31, 2021 and 2020

The Company’s revenues were $1.40 billion for the three months ended March 31, 2021, decreasing by 7.2% compared to $1.51 billion for the three months ended March 31, 2020.

Revenues from foreign operations represented 23% of total revenues for the three months ended March 31, 2021, up from 22% of total revenues for the three months ended March 31, 2020.

The Company analyzes its revenues for three reportable segments:

temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services.

For the three months ended September 30, 2020, risk consulting and internal audit services continued to post solid growth rates, compared to the same period in 2019.

The Company’s revenues for the three months ended September 30, 2020 continued to be impacted by the global stay-at-home orders, significant travel restrictions, and business closures which resulted in global economic disruptions.

Contributing factors for each reportable segment are discussed below in further detail.

Temporary and consultant staffing revenues were $781 million for the three months ended September 30, 2020, decreasing by 30.1% compared to revenues of $1.12 billion for the three months ended September 30, 2019.

Temporary and consultant staffing revenues were $889 million for the three months ended March 31, 2021, decreasing by 18.6% compared to revenues of $1.09 billion for the three months ended March 31, 2020.

Key drivers of temporary and consultant staffing revenues include average hourly bill rates and the number of hours worked by the Company’s engagement professionals on client engagements.

The Company’s temporary and consultant staffing revenue in the third quarter

of 2020 reflected the economic circumstances present in the quarter.

On an as adjusted basis, temporary and consultant staffing revenues decreased 30.7% for the third quarter of 2020 compared to the third quarter of 2019, due primarily to fewer hours worked by the Company’s engagement professionals on client engagements.

In the U.S., revenues in the third quarter of 2020 decreased 31.0% on an as reported basis and 31.3% on an as adjusted basis, compared to the third quarter of 2019.

For the Company’s international operations, 2020 third quarter revenues decreased 27.0% on an as reported basis and decreased 28.4% on an as adjusted basis, compared to the third quarter of 2019.

Permanent placement staffing revenues were $87 million for the three months ended September 30, 2020, decreasing by 35.2% compared to revenues of $135 million for the three months ended September 30, 2019.

On an as adjusted basis, temporary and consultant staffing revenues decreased 18.9% for the first quarter of 2021, compared to the first quarter of 2020, due primarily to fewer hours worked by the Company’s engagement professionals on client engagements.

In the U.S., revenues in the first quarter of 2021 decreased 20.3% on an as reported basis and 19.4% on an as adjusted basis, compared to the first quarter of 2020.

For the Company’s international operations, revenues for the first quarter of 2021 decreased 12.3% on an as reported basis and decreased 17.0% on an as adjusted basis, compared to the first quarter of 2020.

Permanent placement staffing revenues were $112 million for the three months ended March 31, 2021, decreasing by 7.3% compared to revenues of $120 million for the three months ended March 31, 2020.

Key drivers of permanent placement staffing revenues consist of the number of candidate placements and average fees earned per placement.

Permanent placement staffing revenues in the third quarter of 2020 reflected the economic circumstances present in the quarter.

On an as adjusted basis, permanent placement staffing revenues decreased 35.7% for the third quarter of 2020 compared to the third quarter of 2019, driven by a decrease in number of placements, partially offset by an increase in average fees earned per placement.

In the U.S., revenues for the third quarter of 2020 decreased 37.1% on an as reported basis and 37.3% on an as adjusted basis, compared to the third quarter of 2019.

For the Company’s international operations, revenues for the third quarter of 2020 decreased 30.9% on an as reported basis and decreased 31.7% on an as adjusted basis, compared to the third quarter of 2019.

Demand for permanent placement staffing is even more sensitive to economic and labor market conditions than demand for temporary and consultant staffing as demonstrated by the results in the current economic environment.

Risk consulting and internal audit services revenues were $321 million for the three months ended September 30, 2020, increasing by 7.4% compared to revenues of $299 million for the three months ended September 30, 2019.

On an as adjusted basis, permanent placement staffing revenues decreased 8.1% for the first quarter of 2021, compared to the first quarter of 2020, driven by a decrease in number of placements.

In the U.S., revenues for the first quarter of 2021 decreased 12.4% on an as reported basis and 11.4% on an as adjusted basis, compared to the first quarter of 2020.

For the Company’s international operations, revenues for the first quarter of 2021 increased 5.2% on an as reported basis and 0.3% on an as adjusted basis, compared to the first quarter of 2020.

Historically, demand for permanent placement staffing is even more sensitive to economic and labor market conditions than demand for temporary and consultant staffing and this is expected to continue.

Risk consulting and internal audit services revenues were $397 million for the three months ended March 31, 2021, increasing by 35.1% compared to revenues of $294 million for the three months ended March 31, 2020.

Key drivers of risk consulting and internal audit services revenues are the billable hours worked by consultants on client engagements and average hourly bill rates.

On an as adjusted basis, risk consulting and internal audit services revenues increased 6.4% for the third quarter of 2020 compared to the third quarter of 2019, primarily due to an increase in billable hours.

In the U.S., revenues in the third quarter of 2020 increased 10.8% on an as reported basis and 10.3% on an as adjusted basis, compared to the third quarter of 2019.

Contributing to the U.S.

increase were services related to risk and compliance and technology consulting practice areas including blended solutions with the Company's temporary and consulting staffing operations.

The Company’s risk consulting and internal audit services revenues from international operations decreased 5.0% on an as reported basis and 8.0% on an as adjusted basis for the third quarter of 2020 compared to the third quarter of 2019.

A reconciliation of the non-GAAP year-over-year revenue growth rates to the as reported year-over-year revenue growth rates for the three months ended September 30, 2020, is presented in the following table:

On an as adjusted basis, risk consulting and internal audit services revenues increased 34.7% for the first quarter of 2021, compared to the first quarter of 2020, due primarily to an increase in billable hours.

In the U.S., revenues in the first quarter of 2021 increased 35.5% on an as reported basis and 37.1% on an as adjusted basis, compared to the first quarter of 2020.

The Company’s risk consulting and internal audit services revenues for the first quarter of 2021 from international operations increased 33.8% on an as reported basis and 26.1% on an as adjusted basis, compared to the first quarter of 2020.

A reconciliation of the non-GAAP year-over-year revenue growth rates to the as reported year-over-year revenue growth rates for the three months ended March 31, 2021, is presented in the following table:

Global United States International

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Gross Margin.

The Company’s gross margin dollars were $467 million for the three months ended September 30, 2020, decreasing by 27.7% compared to $646 million for the three months ended September 30, 2019.

The Company’s gross margin dollars were $562 million for the three months ended March 31, 2021, decreasing by 8.6% compared to $614 million for the three months ended March 31, 2020.

Contributing factors for each reportable segment are discussed below in further detail.

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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 $293 million for the three months ended September 30, 2020, decreasing 30.8% compared to $424 million for the three months ended September 30, 2019.

As a percentage of revenues, gross margin for temporary and consultant staffing was 37.5% in the third quarter of 2020, down from 37.9% in the third quarter of 2019.

This year-over-year decline in gross margin percentage was primarily attributable to lower conversion revenues.

Gross margin dollars for the Company’s temporary and consultant staffing division were $345 million for the three months ended March 31, 2021, decreasing 16.5% compared to $413 million for the three months ended March 31, 2020.

As a percentage of revenues, gross margin for temporary and consultant staffing was 38.8% for the three months ended March 31, 2021, up from 37.8% for the three months ended March 31, 2020.

Gross margin dollars for permanent placement staffing represent revenues less reimbursable expenses.

Gross margin dollars for the Company’s permanent placement staffing division were $87 million for the three months ended September 30, 2020, decreasing 35.2% from $134 million for the three months ended September 30, 2019.

Gross margin dollars for the Company’s permanent placement staffing division were $111 million for the three months ended March 31, 2021, decreasing 7.3% from $120 million for the three months ended March 31, 2020.

Because reimbursable expenses for permanent placement staffing are de minimis, gross margin dollars are substantially explained by revenues previously discussed.

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and ii) staff utilization, which is the relationship of time spent on client engagements in proportion to the total time available for the Company’s risk consulting and internal audit services staff.

Gross margin dollars for the Company’s risk consulting and internal audit division were $87 million for the three months ended September 30, 2020, decreasing 1.1% compared to $88 million for the three months ended September 30, 2019.

Impacting gross margin is deferred compensation expense related to changes in the fair value of participants’ accounts of $3 million and less than a million for the three months ended September 30, 2020 and 2019, respectively.

Equal and offsetting amounts are included in income from investments held in employee deferred compensation trusts.

As a percentage of revenues, gross margin for risk consulting and internal audit services in the third quarter of 2020 was 27.1%, down from 29.4% in the third quarter of 2019.

The year-over-year decline in gross margin percentage was due primarily to lower staff utilization rates.

Gross margin dollars for the Company’s risk consulting and internal audit division were $105 million for the three months ended March 31, 2021, increasing 29.8% compared to $81 million for the three months ended March 31, 2020.

As a percentage of revenues, reported gross margin for risk consulting and internal audit services in the first quarter of 2021 was 26.5%, down from 27.6% in the first quarter of 2020.

As a percentage of revenues, adjusted gross margin dollars for risk consulting and internal audit services were 26.9% the first quarter of 2021, up from 26.3% in the first quarter of 2020.

The year-over-year increase in adjusted gross margin percentage was due primarily to higher staff utilization rates.

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, general and administrative expenses were $391 million for the three months ended September 30, 2020, decreasing 19.4% from $485 million for the three months ended September 30, 2019.

As a percentage of revenues, the Company’s selling, general and administrative expenses were 32.8% for the third quarter of 2020, up from 31.2% in the third quarter of 2019.

The increase in selling, general and administrative expenses as a percentage of revenues was primarily impacted by negative leverage as revenues decreased.

Contributing factors for each reportable segment are discussed below in further detail.

Selling, general and administrative expenses for the Company’s temporary and consultant staffing division were $270 million for the three months ended September 30, 2020, decreasing 16.6% from $324 million for the three months ended September 30, 2019.

This includes deferred compensation expense related to changes in the fair value of participants’ accounts of $20 million and $1 million for the three months ended September 30, 2020 and 2019, respectively.

Equal and offsetting amounts are included in income from investments held in employee deferred compensation trusts.

As a percentage of revenues, selling, general and administrative expenses for temporary and consultant staffing were 34.5% in the third quarter of 2020, up from 28.9% in the third quarter of 2019 due primarily to negative leverage as revenues decreased as a result of financial conditions during the quarter and an increase in deferred compensation expense related to changes in the fair value of

participants’ accounts.

Selling, general and administrative expenses for the Company’s permanent placement staffing division were $79 million for the three months ended September 30, 2020, decreasing by 29.7% compared to $113 million for the three months ended September 30, 2019.

This includes deferred compensation expense related to changes in the fair value of participants’ accounts of $2 million and less than a million for the three months ended September 30, 2020 and 2019, respectively.

Equal and offsetting amounts are included in income from investments held in employee deferred compensation trusts.

As a percentage of revenues, selling, general and administrative expenses for permanent placement staffing were 90.8% in the third quarter of 2020, up from 83.7% in the third quarter of 2019 due primarily to an increase in deferred compensation expense related to changes in the fair value of participants’ accounts and negative leverage as revenues decreased as a result of financial conditions during the quarter.

Selling, general and administrative expenses for the Company’s risk consulting and internal audit services division were $42 million for the three months ended September 30, 2020, decreasing by 14.2% compared to $48 million for the three months ended September 30, 2019.

As a percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services were 13.0% in the third quarter of 2020, down from 16.2% in the third quarter of 2019 due primarily to a decrease in variable overhead costs and positive leverage on revenues.

Income from Investments Held in Employee Deferred Compensation Trusts .

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 noted above are included in selling, general and administrative or in the case of the Company’s risk consulting and internal audit services division, direct cost.

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

The Company’s income from investments held in employee deferred compensation trusts was $26 million for the three months ended September 30, 2020, and $1 million for the three months ended September 30, 2019.

The increase in income from trust investments was due to positive market returns in 2020.

Incom e before income taxe s and Segment Income.

The Company’s total income before income taxes was $103 million, or 8.6% of revenues, for the three months ended September 30, 2020, down from $164 million, or 10.6% of revenues, for the three months ended September 30, 2019.

Combined segment income was $103 million, or 8.6% of revenues, for the three months ended September 30, 2020, down from $163 million, or 10.5% of revenues, for the three months ended September 30, 2019.

The following table provides a reconciliation of the non-GAAP combined segment income to reported income before income taxes for the three months ended September 30, 2020 and 2019 (in thousands):

Quarter Ended

September 30,

Income before income taxes $ 102,510 $ 163,782

Interest income, net (202) (1,230)

Amortization of intangible assets 334 339

Combined segment income $ 102,642 $ 162,891

For the Company’s temporary and consultant staffing division, segment income was $44 million, or 5.6% of applicable revenues, down from $101 million, or 9.1% of applicable revenues, in the third quarter of 2019.

For the Company’s permanent placement staffing division, segment income was $10 million, or 11.6% of applicable revenues, compared to segment income of $22 million, or 16.2% of applicable revenues, in the third quarter of 2019.

For the Company’s risk consulting and internal audit services division, segment income was $49 million, or 15.2% of applicable revenues, compared to an segment income of $40 million, or 13.3% of applicable revenues, in the third quarter of 2019.

Provision for income taxes .

The provision for income taxes was 26.1% and 28.5% for the three months ended September 30, 2020 and 2019, respectively.

The lower third-quarter tax rate is primarily due to actual non-deductible expenses and other items in our federal tax return coming in more favorably than originally estimated.

Nine Months Ended September 30, 2020 and 2019

The Company’s revenues were $3.80 billion for the nine months ended September 30, 2020, decreasing by 16.1% compared to $4.54 billion for the nine months ended September 30, 2019.

Revenues from foreign operations represented 22% of total revenues for the nine months ended September 30, 2020, down from 23% of total revenues for the nine months ended September 30, 2019.

The Company analyzes its revenues for three reportable segments:

temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services.

Risk consulting and internal audit services increased, offset by decreases in temporary and consulting staffing and permanent placement staffing.

The Company’s selling, general and administrative expenses were $423 million for the three months ended March 31, 2021, decreasing 4.5% from $443 million for the three months ended March 31, 2020.

As a percentage of revenues, the Company’s reported selling, general and administrative expenses were 30.3% for the first quarter of 2021, up from 29.4% the first quarter of 2020.

As a percentage of revenues, the Company’s adjusted selling, general and administrative expenses were 29.5% in the first quarter of 2021 compared to 31.8% in the first quarter of 2020.

Contributing factors for each reportable segment are discussed below in further detail.

Temporary and consultant staffing revenues were $2.63 billion for the nine months ended September 30, 2020, decreasing by 20.5% compared to revenues of $3.31 billion for the nine months ended September 30, 2019.

Key drivers of temporary and consultant 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 decreased 20.7% for the first three quarters of 2020 compared to the first three quarters of 2019, due primarily to fewer hours worked by the Company’s engagement professionals on client engagements.

In the U.S., revenues in the first three quarters of 2020 decreased 20.5% on an as reported basis and 21.0% on an as adjusted basis, compared to the first three quarters of 2019.

For the Company’s international operations, revenues for the first three quarters of 2020 decreased 20.7% on an as reported basis and decreased 19.6% on an as adjusted basis, compared to the first three quarters of 2019.

Permanent placement staffing revenues were $279 million for the nine months ended September 30, 2020, decreasing by 31.5% compared to revenues of $407 million for the nine months ended September 30, 2019.

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, permanent placement staffing revenues decreased 31.6% for the first three quarters of 2020 compared to the first three quarters of 2019, driven by a decrease in number of placements, partially offset by an increase in average fees earned per placement.

In the U.S., revenues for the first three quarters of 2020 decreased 31.9% on an as reported basis and 32.3% on an as adjusted basis, compared to the first three quarters of 2019.

For the Company’s international operations, revenues for the first three quarters of 2020 decreased 30.7% on an as reported basis and 29.9% on an as adjusted basis, compared to the first three quarters of 2019.

Risk consulting and internal audit services revenues were $899 million for the nine months ended September 30, 2020, increasing by 9.1% compared to revenues of $824 million for the nine months ended September 30, 2019.

Key drivers of risk consulting and internal audit services revenues are the billable hours worked by consultants on client engagements and average hourly bill rates.

For the nine months ended September 30, 2020, risk consulting and internal audit services continued to post strong growth rates, compared to the same period in 2019.

On an as adjusted basis, risk consulting and internal audit services revenues increased 8.6% for the first three quarters of 2020 compared to the first three quarters of 2019, due primarily to an increase in billable hours.

In the U.S., revenues in the first three quarters of 2020 increased 12.5% on an as reported basis and 11.8% on an as adjusted basis, compared to the first three quarters of 2019.

The Company’s risk consulting and internal audit services revenues for the first three quarters of 2020 from international operations decreased 2.6% on an as reported basis and 2.5% on an as adjusted basis, compared to the first three quarters of 2019.

A reconciliation of the non-GAAP year-over-year revenue growth rates to the as reported year-over-year revenue growth rates for the nine months ended September 30, 2020, is presented in the following table:

Global United States International

Selling, general and administrative expenses for the Company’s temporary and consultant staffing division were $279 million for the three months ended March 31, 2021, decreasing 2.7% from $286 million for the three months ended March 31, 2020.

As a percentage of revenues, reported selling, general and administrative expenses for temporary and consultant staffing were 31.3% in the first quarter of 2021, up from 26.2% in the first quarter of 2020.

As a percentage of revenues, adjusted selling, general and administrative expenses for temporary and consultant staffing were 30.3% in the first quarter of 2021, up from 29.2% in the first quarter of 2020 due primarily to negative leverage as revenues decreased in response to the COVID-19 pandemic.

Selling, general and administrative expenses for the Company’s permanent placement staffing division were $95 million for the three months ended March 31, 2021, decreasing by 10.3% compared to $106 million for the three months ended March 31, 2020.

As a percentage of revenues, reported selling, general and administrative expenses for permanent placement staffing were 84.9% in the first quarter of 2021, down from 87.7% in the first quarter of 2020.

As a percentage of revenues, adjusted selling, general and administrative expenses for permanent placement staffing was 83.9% in the first quarter of 2021, down from 90.8% in the first quarter of 2020 due primarily to positive leverage as the decrease in expenses exceeded the decrease in revenues as a result of cost curtailing initiatives implemented during 2020.

Selling, general and administrative expenses for the Company’s risk consulting and internal audit services division were $50 million for the three months ended March 31, 2021, decreasing by 2.6% compared to $51 million for the three months ended March 31, 2020.

As a percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services were 12.5% in the first quarter of 2021, down from 17.3% in the first quarter of 2020 due primarily to positive leverage from an increase in revenues.

A reconciliation of the non-GAAP adjusted summary of operations to the reported summary of operations, for the three months ended March 31, 2021 and 2020 is presented in the following table (in thousands):

Quarter Ended March 31, Relationships

2021 2020 2021 2020 2021 2020

Reported Adjustments Adjusted (1) Reported Adjustments Adjusted (1) Reported Adjusted

SERVICE REVENUES:

Accountemps $ 417,116 $ 417,116 $ 489,884 $ 489,884 29.8 % 32.5 % 29.8 % 32.5 %

OfficeTeam 220,467 220,467 239,979 239,979 15.8 % 15.9 % 15.8 % 15.9 %

Robert Half Technology 172,239 172,239 196,652 196,652 12.3 % 13.1 % 12.3 % 13.1 %

Robert Half Management

183,271 183,271 211,878 211,878 13.1 % 14.1 % 13.1 % 14.1 %

Elimination of intersegment

(103,818) (103,818) (46,273) (46,273) (7.4 %) (3.1 %) (7.4 %) (3.1 %)

Temporary and consultant staffing 889,275 889,275 1,092,120 1,092,120 63.6 % 72.5 % 63.6 % 72.5 %

As Reported -20.5 % -20.5 % -20.7 %

Billing Days Impact -0.5 % -0.5 % -0.4 %

Currency Impact 0.3 % — 1.5 %

As Adjusted -20.7 % -21.0 % -19.6 %

Permanent placement staffing 111,703 111,703 120,489 120,489 8.0 % 8.0 % 8.0 % 8.0 %

As Reported -31.5 % -31.9 % -30.7 %

Billing Days Impact -0.4 % -0.4 % -0.3 %

Currency Impact 0.3 % — 1.1 %

As Adjusted -31.6 % -32.3 % -29.9 %

Risk consulting and internal audit services

As Reported 9.1 % 12.5 % -2.6 %

Billing Days Impact -0.6 % -0.7 % -0.5 %

Currency Impact 0.1 % — 0.6 %

As Adjusted 8.6 % 11.8 % -2.5 %

Protiviti 397,402 397,402 294,082 294,082 28.4 % 19.5 % 28.4 % 19.5 %

Total $ 1,398,380 $ 1,398,380 $ 1,506,691 $ 1,506,691 100.0 % 100.0 % 100.0 % 100.0 %

GROSS MARGIN:

The Company’s gross margin dollars were $1.50 billion for the nine months ended September 30, 2020, decreasing by 20.7% compared to $1.89 billion for the nine months ended September 30, 2019.

Contributing factors for each reportable segment are discussed below in further detail.

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 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 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 $986 million for the nine months ended September 30, 2020, decreasing 21.6% compared to $1.26 billion for the nine months ended September 30, 2019.

As a percentage of revenues, gross margin for temporary and consultant staffing was 37.5% for the nine months ended September 30, 2020, down from 38.0% for the nine months ended September 30, 2019.

This year-over-year decline in gross margin percentage was primarily attributable to lower conversion revenues.

Gross margin dollars for permanent placement staffing represent revenues less reimbursable expenses.

Gross margin dollars for the Company’s permanent placement staffing division were $278 million for the nine months ended September 30, 2020, decreasing 31.5% from $406 million for the nine months ended September 30, 2019.

Because reimbursable expenses for permanent placement staffing are de minimis, gross margin dollars are substantially explained by revenues previously discussed.

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 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;

Gross margin dollars for the Company’s risk consulting and internal audit division were $234 million for the nine months ended September 30, 2020, increasing 4.3% compared to $225 million for the nine months ended September 30, 2019.

Impacting gross margin is deferred compensation expense related to changes in the fair value of participants’ accounts of $6 million and $3 million for the nine months ended September 30, 2020 and 2019, respectively.

As a percentage of revenues, gross margin for risk consulting and internal audit services in the first three quarters of 2020 was 26.1%, down from 27.3% in the first three quarters of 2019.

The year-over-year decline in gross margin percentage was due primarily to lower staff utilization rates.

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, general and administrative expenses were $1.24 billion for the nine months ended September 30, 2020, decreasing 14.7% from $1.45 billion for the nine months ended September 30, 2019.

As a percentage of revenues, the Company’s selling, general and administrative expenses were 32.6% for the first three quarters of 2020, up from 32.1% the first three quarters of 2019.

Contributing factors for each reportable segment are discussed below in further detail.

Selling, general and administrative expenses for the Company’s temporary and consultant staffing division were $845 million for the nine months ended September 30, 2020, decreasing 13.1% from $972 million for the nine months ended September 30, 2019.

This includes deferred compensation expense related to changes in the fair value of participants’ accounts of $26 million and $28 million for the nine months ended September 30, 2020 and 2019, respectively.

Equal and offsetting amounts are included in income from investments held in employee deferred compensation trusts.

As a percentage of revenues, selling, general and administrative expenses for temporary and consultant staffing were 32.2% in the first three quarters of 2020, up from 29.4% in the first three quarters of 2019 due primarily to negative leverage as revenues decreased in response to financial conditions during the first three quarters of 2020.

Selling, general and administrative expenses for the Company’s permanent placement staffing division were $260 million for the nine months ended September 30, 2020, decreasing by 23.7% compared to $341 million for the nine months ended September 30, 2019.

This includes deferred compensation expense related to changes in the fair value of participants’ accounts of $3 million for both the nine months ended September 30, 2020 and 2019.

Equal and offsetting amounts are included in income from investments held in employee deferred compensation trusts.

As a percentage of revenues, selling, general and administrative expenses for permanent placement staffing were 93.3% in the first three quarters of 2020, up from 83.8% in the first three quarters of 2019 due primarily to negative leverage as revenues decreased in response to financial conditions during the first three quarters of 2020.

Selling, general and administrative expenses for the Company’s risk consulting and internal audit services division were $135 million for the nine months ended September 30, 2020, decreasing by 3.9% compared to $141 million for the nine months ended September 30, 2019.

As a percentage of revenues, selling, general and administrative expenses for risk consulting and internal audit services were 15.1% in the first three quarters of 2020, down from 17.1% in the first three quarters of 2019 due primarily to a decrease in variable overhead costs.

Temporary and consultant staffing $ 344,931 $ 344,931 $ 412,996 $ 412,996 38.8 % 37.8 % 38.8 % 37.8 %

Permanent placement staffing 111,498 111,498 120,280 120,280 99.8 % 99.8 % 99.8 % 99.8 %

Protiviti 105,282 1,688 106,970 81,112 (3,671) 77,441 26.5 % 27.6 % 26.9 % 26.3 %

Total $ 561,711 $ 1,688 $ 563,399 $ 614,388 $ (3,671) $ 610,717 40.2 % 40.8 % 40.3 % 40.5 %

SELLING GENERAL AND

ADMINISTRATIVE EXPENSE:

Temporary and consultant staffing $ 278,547 $ (9,151) $ 269,396 $ 286,174 $ 33,058 $ 319,232 31.3 % 26.2 % 30.3 % 29.2 %

Permanent placement staffing 94,867 (1,149) 93,718 105,722 3,647 109,369 84.9 % 87.7 % 83.9 % 90.8 %

Protiviti 49,648 — 49,648 50,972 — 50,972 12.5 % 17.3 % 12.5 % 17.3 %

Total $ 423,062 $ (10,300) $ 412,762 $ 442,868 $ 36,705 $ 479,573 30.3 % 29.4 % 29.5 % 31.8 %

OPERATING/SEGMENT INCOME:

Temporary and consultant staffing $ 66,384 $ 9,151 $ 75,535 $ 126,822 $ (33,058) $ 93,764 7.5 % 11.6 % 8.5 % 8.6 %

Permanent placement staffing 16,631 1,149 17,780 14,558 (3,647) 10,911 14.9 % 12.1 % 15.9 % 9.1 %

Protiviti 55,634 1,688 57,322 30,140 (3,671) 26,469 14.0 % 10.2 % 14.4 % 9.0 %

Total $ 138,649 $ 11,988 $ 150,637 $ 171,520 $ (40,376) $ 131,144 9.9 % 11.4 % 10.8 % 8.7 %

Amortization of intangible assets 576 — 576 338 — 338 0.1 % 0.1 % 0.1 % 0.1 %

(Income) loss from investments held in

employee deferred compensation trusts

(11,988) 11,988 — 40,376 (40,376) — 0.9 % (2.7 %) 0.0 % 0.0 %

Interest income, net (45) — (45) (957) — (957) 0.0 % 0.1 % 0.0 % 0.1 %

Income before income taxes $ 150,106 $ — $ 150,106 $ 131,763 $ — $ 131,763 10.7 % 8.7 % 10.7 % 8.7 %

(1) Changes in the Company’s deferred compensation obligations are included in selling, general and administrative expense or, in the case of Protiviti, costs of services, while the related investment income is presented separately.

The non-GAAP financial measures shown in the table above are adjusted to reclassify investment income from investments held in employee deferred compensation trusts to the same line item which includes the corresponding change in obligation.

These adjustments have no impact to income before income taxes.

Income from Investments Held in Employee Deferred Compensation Trusts .

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

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

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

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

The Company’s income from investments held in employee deferred compensation trusts was $35 million for both nine months ended September 30, 2020 and September 30, 2019.

The Company’s income/loss from investments held in employee deferred compensation trusts was an income of $12 million for the three months ended March 31, 2021 whereas it had a loss of $40 million for the three months ended March 31, 2020.

The increase in income from trust investments was due to positive market returns in 2021.

Income Before Income Taxes and Segment Income.

The Company’s total income before income taxes was $292 million, or 7.7% of revenues, for the nine months ended September 30, 2020, down from $471 million or 10.4% of revenues, for the nine months ended September 30, 2019.

Combined segment income was $292 million, or 7.7% of revenues, for the nine months ended September 30, 2020, down from $469 million or 10.3% of revenues, for the nine months ended September 30, 2019.

The following table provides a reconciliation of the non-GAAP combined segment income to reported income before income taxes for the nine months ended September 30, 2020 and 2019 (in thousands):

Nine Months Ended

September 30,

The Company’s total income before income taxes was $150 million, or 10.7% of revenues, for the three months ended March 31, 2021, up from $132 million or 8.7% of revenues, for the three months ended March 31, 2020.

Combined segment income was $151 million, or 10.8% of revenues, for the three months ended March 31, 2021, up from $131 million or 8.7% of revenues, for the three months ended March 31, 2020.

The following table provides a reconciliation of the non-GAAP combined segment income to reported income before income taxes for the three months ended March 31, 2021 and 2020 (in thousands):

Three Months Ended

Income before income taxes $ 150,106 $ 131,763

2 unchanged sentences

Combined segment income $ 150,637 $ 131,144

For the Company’s temporary and consultant staffing division, segment income was $166 million, or 6.3% of applicable revenues, down from $313 million, or 9.5% of applicable revenues, in the first three quarters of 2019.

For the Company’s permanent placement staffing division, segment income was $21 million, or 7.5% of applicable revenues, down from segment income of $69 million, or 16.9% of applicable revenues, in the first three quarters of 2019.

For the Company’s risk consulting and internal audit services division, segment income was $105 million, or 11.7% of applicable revenues, compared to segment income of $87 million or 10.6% of applicable revenues, in the first three quarters of 2019.

For the Company’s temporary and consultant staffing division, segment income was $76 million, or 8.5% of applicable revenues, down from $94 million, or 8.6% of applicable revenues, in the first quarter of 2020.

For the Company’s permanent placement staffing division, segment income was $18 million, or 15.9% of applicable revenues, up from segment income of $11 million, or 9.1% of applicable revenues, in the first quarter of 2020.

For the Company’s risk consulting and internal audit services division, segment income was $57 million, or 14.4% of applicable revenues, compared to segment income of $26 million or 9.0% of applicable revenues, in the first quarter of 2020.

Provision for income taxes .

The provision for income taxes was 27.5% for both the nine months ended September 30, 2020 and 2019, respectively.

The provision for income taxes was 26.3% and 31.8% for the three months ended March 31, 2021 and 2020, respectively.

The 2020 rate was elevated based on the estimated lower coverage of non-deductible tax items due to lower pandemic-impacted revenues.

Liquidity and Capital Resources

The change in the Company’s liquidity during the nine months ended September 30, 2020 and 2019, is primarily the net effect of funds generated by operations and the funds used for capital expenditures, investment in employee deferred compensation trusts, net of redemptions from employee deferred compensation trusts, repurchases of common stock, and payment of dividends.

Cash and cash equivalents were $587 million and $313 million at September 30, 2020 and 2019, respectively.

Operating activities provided $565 million during the nine months ended September 30, 2020, offset by $43 million and $208 million of net cash used in investing activities and financing activities, respectively.

Operating activities provided $439 million during the nine months ended September 30, 2019, offset by $73 million and $324 million of net cash used in investing activities and financing activities, respectively.

Operating activities—Net cash provided by operating activities for the nine months ended September 30, 2020, was composed of net income of $212 million adjusted upward for non-cash items of $52 million and net cash provided by changes in working capital of $301 million.

Net cash provided by operating activities for the nine months ended September 30, 2019, was composed of net income of $342 million adjusted upward for non-cash items of $52 million and net cash provided by changes in working capital of $45 million.

Investing activities—Cash used in investing activities for the nine months ended September 30, 2020, was $43 million.

The change in the Company’s liquidity during the three months ended March 31, 2021 and 2020, is primarily the net effect of funds generated by operations and the funds used for capital expenditures, investment in employee deferred compensation trusts, net of redemptions from employee deferred compensation trusts, repurchases of common stock, and payment of dividends.

Cash and cash equivalents were $498 million and $250 million at March 31, 2021 and 2020, respectively.

Operating activities provided $68 million during the three months ended March 31, 2021, offset by $15 million and $124 million of net cash used in investing activities and financing activities, respectively.

Operating activities provided $125 million during the three months ended March 31, 2020, offset by $28 million and $110 million of net cash used in investing activities and financing activities, respectively.

Operating activities—Net cash provided by operating activities for the three months ended March 31, 2021, was composed of net income of $111 million adjusted upward for non-cash items of $33 million, offset by net cash used in changes in working capital of $76 million.

Net cash provided by operating activities for the three months ended March 31, 2020, was composed of net income of $90 million adjusted upward for non-cash items of $91 million, offset by net cash used in changes in working capital of $56 million.

Investing activities—Cash used in investing activities for the three months ended March 31, 2021, was $15 million.

This was composed of capital expenditures of $10 million and investment in employee deferred compensation trusts of $28 million, offset by proceeds from employee deferred compensation trusts redemptions of $23 million.

Cash used in investing activities for the nine months ended September 30, 2019, was $73 million.

Cash used in investing activities for the three months ended March 31, 2020, was $28 million.

This was composed of capital expenditures of $14 million and investment in employee deferred compensation trusts of $37 million, offset by proceeds from employee deferred compensation trusts redemptions of $23 million.

Financing activities—Cash used in financing activities for the nine months ended September 30, 2020, was $208 million.

Financing activities—Cash used in financing activities for the three months ended March 31, 2021, was $124 million.

This included repurchases of $80 million in common stock and $44 million in dividends paid to stockholders.

Cash used in financing activities for the nine months ended September 30, 2019, was $324 million.

Cash used in financing activities for the three months ended March 31, 2020, was $110 million.

This included repurchases of $70 million in common stock and $40 million in dividends paid to stockholders.

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

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.

During the nine months ended September 30, 2020 and 2019, the Company repurchased 1.4 million shares, at a cost of $75 million, and 3.3 million shares, at a cost of $191 million, on the open market, respectively.

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.

During the three months ended March 31, 2021 and 2020, the Company repurchased 0.8 million shares, at a cost of $61 million, and 1.0 million shares, at a cost of $51 million, on the open market, respectively.

Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of exercise price and applicable statutory withholding taxes.

During the nine months ended September 30, 2020 and 2019, such repurchases totaled 0.3 million shares, at a cost of $12 million, and 0.3 million shares, at a cost of $17 million, respectively.

During the three months ended March 31, 2021 and 2020, such repurchases totaled 0.3 million shares, at a cost of $19 million, and 0.3 million shares, at a cost of $12 million, respectively.

Repurchases of shares have been funded with cash generated from operations.

The Company’s working capital at September 30, 2020, included $587 million in cash and cash equivalents and $690 million in accounts receivable, both of which will be a significant source of ongoing liquidity and financial resilience.

The Company’s working capital at March 31, 2021, included $498 million in cash and cash equivalents and $800 million in accounts receivable, both of which will be a significant source of ongoing liquidity and financial resilience.

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.

We have limited visibility into future cash flows as the Company’s revenues are dependent on macroeconomic conditions.

As a result of continued economic disruptions, we have continued cost cutting actions during the quarte r.

These actions have been focused on maintaining low travel and events costs, as well as managing headcount.

This cost management, coupled with a talented and driven team that is backed by our industry-leading technology, positions us to fully participate in the economic recovery.

In addition, the Company’s variable direct costs related to its temporary and consultant staffing business will largely fluctuate in relation to its revenues.

The Company’s variable direct costs related to its temporary and consultant staffing business will largely fluctuate in relation to its revenues.

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.

On October 29, 2020, the Company announced a quarterly dividend of $.34 per share to be paid to all shareholders of record as of November 25, 2020.

The dividend will be paid on December 15, 2020.

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.

On April 29, 2021, the Company announced a quarterly dividend of $.38 per share to be paid to all shareholders of record as of May 25, 2021.

The dividend will be paid on 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 2. Management’s Discussion and Analysis