What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-20 compared with 2023-02-10 · 103 added, 107 removed, 699 unchanged (23% of the section changed)

Financial Statements and Supplementary Data

ROBERT HALF INTERNATIONAL INC.

ROBERT HALF INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

7 unchanged sentences

Right-of-use assets 209,256 201,998

Other intangible assets, net 5,317 3,334

Goodwill 237,970 237,810

Noncurrent deferred income taxes 140,135 124,564

Other noncurrent assets 17,480 5,317

Total assets $ 3,010,789 $ 2,964,488

6 unchanged sentences

Noncurrent operating lease liabilities 161,440 151,768

Other liabilities 27,960 31,344

Other noncurrent liabilities 25,887 27,960

Total liabilities 1,422,438 1,395,930

Commitments and Contingencies (Note K)

Commitments and Contingencies (Note L)

STOCKHOLDERS’ EQUITY

11 unchanged sentences

are an integral part of these financial statements.

ROBERT HALF INTERNATIONAL INC.

ROBERT HALF INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

15 unchanged sentences

Diluted $ 3.88 $ 6.03 $ 5.36

Weighted average shares:

Basic 105,530 108,214 110,482

3 unchanged sentences

are an integral part of these financial statements.

ROBERT HALF INTERNATIONAL INC.

ROBERT HALF INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

11 unchanged sentences

are an integral part of these financial statements.

ROBERT HALF INTERNATIONAL INC.

ROBERT HALF INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

4 unchanged sentences

Net income — — — — 598,626 598,626

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

Other comprehensive income (loss) — — — ( 17,890 ) — ( 17,890 )

23 unchanged sentences

are an integral part of these financial statements.

ROBERT HALF INTERNATIONAL INC.

ROBERT HALF INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

26 unchanged sentences

Payments for acquisitions, net of cash acquired ( 1,035 ) ( 18,984 ) —

Net cash flows (used in) provided by investing activities ( 116,623 ) ( 87,609 ) 9,461

Net cash flows used in investing activities ( 112,250 ) ( 116,623 ) ( 87,609 )

CASH FLOWS FROM FINANCING ACTIVITIES:

12 unchanged sentences

Non-cash items:

Stock repurchases awaiting settlement $ 3,504 $ 5,593 $ 3,104

Repurchases of common stock awaiting settlement $ 4,394 $ 3,504 $ 5,593

Fund exchanges within employee deferred compensation trusts $ 114,821 $ 103,003 $ 116,815

5 unchanged sentences

Nature of Operations.

Robert Half International Inc.

Robert Half Inc.

(the “Company”) is a specialized talent solutions and business consulting firm that connects opportunities at great companies with highly skilled job seekers.

1 unchanged sentence

Robert Half is also the parent company of Protiviti ® , a global consulting firm that provides internal audit, risk, business, and technology consulting solutions.

During 2022 the Company unified its family of Robert Half brands to focus on its key brand, Robert Half.

This simplifies the Company’s go-to-market brand structure for clients and candidates, provides leverage for greater brand awareness, and allows future flexibility to expand the Company’s existing functional specializations.

In connection with this process, the Company’s current financial statement disclosures reflect new names for its reportable segments, including contract talent solutions (formerly temporary and consultant staffing), permanent placement talent solutions (formerly permanent placement staffing) and Protiviti (formerly risk consulting and internal audit services).

What was previously referred to as staffing operations is now referred to as talent solutions.

The presentation of contract talent solutions includes functional specializations rather than the previously branded divisions.

The functional specializations are:

finance and accounting, which combines the former Accountemps ® and Robert Half ® Management Resources divisions;

administrative and customer support, which consists of the former OfficeTeam ® ;

and technology, which includes the former Robert Half ® Technology .

The Company operates in North America, South America, Europe, Asia, and Australia.

22 unchanged sentences

Advertising costs were $ 54.8 million, $ 55.6 million and $ 49.3 million for the years ended December 31, 2023, 2022, and 2021, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

3 unchanged sentences

The Company’s (income) loss from investments held in employee deferred compensation trusts consists primarily of unrealized and realized gains and losses and dividend income from trust investments and is presented separately on the Consolidated Statements of Operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

16 unchanged sentences

unobservable inputs in which there is little or no market data, which requires management’s best estimates and assumptions that market participants would use in pricing the asset or liability

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

The carrying value of cash, net accounts receivable, and 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).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The following table summarizes the Company’s financial instruments by significant category and fair value measurement on a recurring basis (in thousands):

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant Unobservable Inputs

Cash equivalents

Money market funds $ 351,230 $ 351,230 — —

Mutual funds - bond 31,096 31,096 — —

Mutual funds - stock 245,908 245,908 — —

Employee deferred compensation trust assets

Money market funds $ 124,710 $ 124,710 — —

Mutual funds - bonds 35,373 35,373 — —

Mutual funds - stocks 316,764 316,764 — —

Mutual funds - blend 94,199 94,199 — —

$ 432,734 $ 432,734 — —

Total employee deferred compensation trust assets $ 571,046 $ 571,046 — —

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant Unobservable Inputs

Cash equivalents

Money market funds $ 344,745 $ 344,745 — —

Mutual funds - bond 30,750 30,750 — —

Mutual funds - stock 303,277 303,277 — —

Employee deferred compensation trust assets

Money market funds $ 77,730 $ 77,730 — —

Mutual funds - bonds 31,096 31,096 — —

Mutual funds - stocks 245,908 245,908 — —

Mutual funds - blend 78,000 78,000 — —

$ 494,991 $ 494,991 — —

Total employee deferred compensation trust assets $ 432,734 $ 432,734 — —

Certain items, such as goodwill and other intangible assets, are recognized or disclosed at fair value on a non-recurring basis.

3 unchanged sentences

The Company is exposed to credit losses resulting from the inability of its customers to make required payments.

The Company establishes an allowance for these potential credit losses based on its review of customers’ credit profiles, historical loss statistics, prepayments, recoveries, age of customer receivable balances, current business conditions and macro-economic trends.

The Company considers risk characteristics of trade receivables based on asset type and geographical locations to evaluate trade receivables on a collective basis.

23 unchanged sentences

All other preliminary and planning stage costs are expensed as incurred.

Cloud computing implementation costs incurred in hosting arrangements are capitalized and reported as a component of other current assets, while all other capitalized internal-use software development costs are reported as a component of computer software within property and equipment on the Consolidated Statements of Financial Position.

Cloud computing implementation costs incurred in hosting arrangements are capitalized and reported as a component of other current assets and other noncurrent assets, while all other capitalized internal-use software development costs are reported as a component of computer software within property and equipment on the Consolidated Statements of Financial Position.

Capitalized software costs are amortized using the straight-line method over the estimated useful life of the software, ranging from two to five years .

31 unchanged sentences

If such losses are ultimately utilized to offset future segment income, the Company will recognize a tax benefit up to the full amount of the valuation reserve.

The Organization of Economic Cooperation and Development (“OECD”), an international association of many countries including the U.S., has introduced a framework to impose a 15% global minimum corporate tax, referred to as Pillar Two, effective for tax years beginning in 2024.

Currently, there are no laws enacted incorporating Pillar Two in the U.S., however, certain countries in which the Company operates have adopted, or are in the process of adopting legislation to implement Pillar Two.

The OECD continues to release additional guidance and countries are implementing legislation with widespread adoption of the Global Anti-Base Erosion (“GloBE”) Model Rules for Pillar Two.

The Company is continuing to evaluate the GloBE Model Rules for Pillar Two and related legislation, and their potential impact on future periods.

Workers ’ Compensation .

11 unchanged sentences

Medical expenses are presented as a component of selling, general and administrative expenses, or in the case of risk consulting and internal audit services, costs of services in the Consolidated Statements of Operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The reserves for IBNR claims and for the ongoing development of existing claims in each reporting period include estimates.

1 unchanged sentence

While management believes that its assumptions and estimates are appropriate, significant differences in actual experience or significant changes in assumptions may materially affect the Company’s future results.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Foreign Currency Translation.

14 unchanged sentences

Recently Adopted Accounting Pronouncements

Government Assistance.

In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-10, “Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance” to increase the transparency of government assistance, including the disclosure of the types of assistance an entity receives, an entity’s method of accounting for government assistance and the effect of the assistance on an entity’s financial statements.

This standard is effective for annual periods beginning after December 15, 2021.

The amendments should be applied either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions.

The Company adopted this ASU in January 2022.

The adoption of this guidance did not have a material impact on its financial statements.

Business Combinations.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This guidance requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers, as if it had originated the contracts.

After the amendments are adopted, it is expected that an acquirer will generally recognize and measure acquired contract assets and contract liabilities in a manner consistent with how the acquiree recognized and measured them in its pre-acquisition financial statements.

The ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years.

Early adoption is permitted.

The Company adopted this ASU during the fourth quarter of 2022.

The adoption of this guidance did not have a material impact on its financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

Segment Reporting.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The amendments in the ASU are intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

This ASU is effective for public filers for fiscal periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, however early adoption is permitted.

The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.

Income Tax Disclosures .

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

Under this ASU, public filers must disclose annually (1) specific categories in the rate reconciliation, and (2) provide additional information for reconciling items that meet a quantitative threshold, if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income by the applicable statutory income tax rate.

The new guidance is effective for public filers for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

75 unchanged sentences

Property and equipment, net $ 108,809 $ 109,687

Note F—Leases

Note F—Other Noncurrent Assets

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

Unamortized cloud computing implementation costs $ 15,047 $ —

Other intangible assets, net 2,433 5,317

Other noncurrent assets $ 17,480 $ 5,317

Note G—Leases

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

6 unchanged sentences

Right-of-use assets obtained in exchange for new operating lease liabilities $ 91,762 $ 63,622 $ 51,471

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

3 unchanged sentences

Weighted average discount rate for operating leases 3.2 % 2.2 % 2.3 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Future minimum lease payments under non-cancelable leases as of December 31, 2023, were as follows (in thousands):

5 unchanged sentences

As of December 31, 2023, the Company had additional future minimum lease obligations totaling $ 9.4 million under executed operating lease contracts that had not yet commenced.

These operating leases include agreements for corporate and field office facilities with lease terms of 1 to 6 years.

Note G—Goodwill

These operating leases include agreements for corporate and field office facilities with lease terms of less than 1 year to 7 years.

Note H—Goodwill

The following table sets forth the activity in goodwill from December 31, 2021, through December 31, 2023 (in thousands):

2 unchanged sentences

$ 134,584 $ 26,189 $ 62,082 $ 222,855

Foreign currency translation adjustments 73 9 ( 282 ) ( 200 )

Acquisitions (a) — — 15,892 15,892

Foreign currency translation and other adjustments ( 466 ) ( 91 ) ( 380 ) ( 937 )

Balance as of December 31, 2022

$ 134,118 $ 26,098 $ 77,594 $ 237,810

Acquisition (a) — — 15,892 15,892

Foreign currency translation adjustments ( 466 ) ( 91 ) ( 380 ) ( 937 )

Foreign currency translation and other adjustments 169 33 ( 42 ) 160

Balance as of December 31, 2023

2 unchanged sentences

In connection with the acquisition, the Company recorded goodwill of $ 15.9 million within its Protiviti segment.

Note H—Accrued Payroll and Benefit Costs

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note I—Accrued Payroll and Benefit Costs

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

3 unchanged sentences

Accrued payroll and benefit costs $ 413,933 $ 472,310

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note I—Employee Deferred Compensation Plans

Note J—Employee Deferred Compensation Plans

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 this plan 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 benefit of participating employees.

Nonqualified plans are provided for employees on a discretionary basis, including those not eligible for the qualified plans.

10 unchanged sentences

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

Note J—Income Taxes

Note K—Income Taxes

The provision for income taxes for the years ended December 31, 2023, 2022 and 2021, consisted of the following (in thousands):

7 unchanged sentences

$ 165,437 $ 239,036 $ 205,154

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Income before the provision for income taxes for the years ended December 31, 2023, 2022 and 2021, consisted of the following (in thousands):

4 unchanged sentences

$ 576,583 $ 896,955 $ 803,780

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The income taxes shown above varied from the statutory federal income tax rates for these periods as follows:

24 unchanged sentences

Deferred revenues, foreign royalties and management fees 375 3,528

Deferred payroll taxes (CARES Act) — 13,355

Credits and net operating loss carryforwards 28,137 24,782

14 unchanged sentences

Total deferred income tax assets, net $ 139,794 $ 123,226

Credits and net operating loss carryforwards primarily include tax-effected net operating losses in foreign countries of $ 23.1 million that expire in 2023 and later, and California enterprise zone tax credits of $ 1.6 million that expire in 2023.

Of the $ 1.6 million of California enterprise zone tax credits, the Company expects that it will utilize $ 0.2 million of these credits prior to expiration.

Credits and net operating loss carryforwards include tax-effected net operating losses in foreign countries of $ 26.5 million that expire in 2024 and later, and foreign tax credits of $ 1.6 million that expire in 2029 and later.

Valuation allowances of $ 24.1 million have been maintained against net operating loss carryforwards and other deferred items in foreign countries.

In addition, a valuation allowance of $ 1.4 million has been maintained against California enterprise zone tax credits.

In addition, a valuation allowance of $ 1.6 million has been maintained against the foreign tax credits.

As of December 31, 2023, the Company’s consolidated financial statements provide for any related U.S.

tax liability on earnings of international subsidiaries that may be repatriated.

The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2020 to December 31, 2022 (in thousands):

The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2021, through December 31, 2023 (in thousands):

2023 2022 2021

6 unchanged sentences

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $ 11.1 million, $ 12.3 million and $ 11.3 million for 2023, 2022 and 2021, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax expense.

The total amount of interest and penalties accrued as of December 31, 2023, is $ 1.0 million, including a $ 0.4 million increase recorded in income tax expense during the year.

The total amount of interest and penalties accrued as of December 31, 2021, was $ 0.4 million, including a $ 0.1 million decrease recorded in income tax expense during the year.

The total amount of interest and penalties accrued as of December 31, 2020, was $ 0.5 million, including less than a $ 0.1 million increase recorded in income tax expense during the year.

The total amount of interest and penalties accrued as of December 31, 2022, was $ 0.6 million, including a $ 0.2 million increase recorded in income tax expense during the year.

The total amount of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

interest and penalties accrued as of December 31, 2021, was $ 0.4 million, including a $ 0.1 million decrease recorded in income tax expense during the year.

The Company does not believe it is reasonably possible that the settlement of tax uncertainties will occur within the next twelve months.

The Company’s major income tax jurisdictions are the United States, Australia, Belgium, Canada, France, Germany and the United Kingdom.

The Company’s major income tax jurisdictions are the United States, Australia, Belgium, Brazil, Canada, Germany and the United Kingdom.

federal income tax, the Company remains subject to examination for 2020 and subsequent years.

2 unchanged sentences

Generally, for foreign countries, the Company remains subject to examination for 2016 and subsequent years.

Note K—Commitments and Contingencies

Note L—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.

19 unchanged sentences

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company has an uncommitted letter of credit facility (the “facility”) of up to $ 35.0 million, which is available to cover the issuance of debt support standby letters of credit.

1 unchanged sentence

Of the debt support standby letters of credit outstanding, as of December 31, 2023 and 2022, $ 14.3 million and $ 14.1 million, respectively, satisfied workers’ compensation insurer’s collateral requirements.

There is a service fee of 1.2 % on the used portion of the facility.

There is a service fee of 1.1 % to 1.2 % on the used portion of the facility.

The facility is subject to certain financial covenants and expires on August 31, 2024.

1 unchanged sentence

The Company intends to renew this facility prior to its August 31, 2024 expiration.

The Company has an unsecured revolving credit facility (the “Credit Agreement”) of $ 100 million, which matures in May 2024.

Borrowings under the Credit Agreement will bear interest in accordance with the terms of the borrowing, which typically will be calculated according to the LIBOR, or an alternative base rate, plus an applicable margin.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In May 2023, the Company entered into an amendment to extend the maturity of its $ 100 million unsecured revolving credit facility (the “Credit Agreement”) to May 2026.

Borrowings under the Credit Agreement will bear interest in accordance with the terms of the borrowing which, effective May 2023, will be calculated according to the Adjusted Term Secured Overnight Financing Rate (“SOFR”), or an alternative base rate, plus an applicable margin.

The Credit Agreement is subject to certain financial covenants and the Company was in compliance with these covenants as of December 31, 2023.

There were no borrowings under the Credit Agreement as of December 31, 2023 or December 31, 2022.

Note L—Stockholders' Equity

Note M—Stockholders’ Equity

Stock Repurchase Program.

17 unchanged sentences

Repurchases of shares and issuances of dividends are applied first to the extent of retained earnings and any remaining amounts are applied to additional paid-in capital.

Note M—Stock Plans

Note N—Stock Plans

Under various stock plans, officers, employees, and outside directors have received or may receive grants of restricted stock, stock units, stock appreciation rights or options to purchase common stock.

4 unchanged sentences

Restricted stock grants contain forfeitable rights to dividends.

Dividends for these grants are accrued on the dividend payment dates but are not paid until the shares vest, and dividends accrued for shares that ultimately do

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

not vest are forfeited.

Dividends for these grants are accrued on the dividend payment dates but are not paid until the shares vest, and dividends accrued for shares that ultimately do not vest are forfeited.

Recipients of stock units do not pay any cash consideration for the units, do not have the right to vote and do not receive dividends with respect to such units.

2 unchanged sentences

The ROIC performance condition and the TSR market condition measure the Company’s performance against a peer group.

Shares will be delivered at the end of a three-year vesting, TSR and ROIC performance period based on the Company’s actual performance compared to the peer group.

Shares will be delivered at the end of a three-year vesting,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TSR and ROIC performance period based on the Company’s actual performance compared to the peer group.

The ROIC performance condition is calculated first and has a range of possible outcomes of zero percent ( 0 %) to one-hundred fifty percent ( 150 %).

2 unchanged sentences

The result calculated by multiplying the ROIC percentage by the TSR percentage is used to calculate the actual number of shares earned.

The fair value of this award was determined using a Monte Carlo simulation with the following assumptions:

The fair value of this award was determined using a Monte Carlo simulation with the following weighted average assumptions:

a historical volatility of 33.2 %, a 0 % dividend yield, and a risk-free interest rate of 3.8 %.

32 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note N—Net Income Per Share

The calculation of net income per share for the three years ended December 31, 2022, 2021 and 2020, are reflected in the following table (in thousands, except per share amounts):

Note O—Net Income Per Share

The calculation of net income per share for the years ended December 31, 2023, 2022 and 2021, are reflected in the following table (in thousands, except per share amounts):

Year Ended December 31,

9 unchanged sentences

Potential common shares include the dilutive effect of unvested performance-based restricted stock, restricted stock which contains forfeitable rights to dividends, and stock units.

Note O—Business Segments

Note P—Business Segments

The Company has three reportable segments:

27 unchanged sentences

The Company operates internationally, with operations in North America, South America, Europe, Asia, and Australia.

The following tables represent revenues and long-lived assets by geographic location (in thousands):

The following tables represent service revenues and long-lived assets by geographic location (in thousands):

Year Ended December 31,

11 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note P—Subsequent Events

On February 9, 2023, the Company authorized the repurchase, from time to time, of up to an additional 10.0 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 3.8 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.

Note Q—Subsequent Events

On February 13, 2024, the Company announced the following:

4 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Robert Half International Inc.

To the Board of Directors and Stockholders of Robert Half Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the consolidated financial statements, including the related notes, as listed in the index appearing under Item 15(a)(1), and the financial statement schedule listed in the index appearing under Item 15(a)(2), of Robert Half International Inc.

and its subsidiaries (the “Company”) (collectively referred to as the “consolidated financial statements”).

25 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

As described in Notes A and J to the consolidated financial statements, the Company’s operations are subject to U.S.

federal, state and local, and foreign income taxes.

In establishing its deferred income tax assets and liabilities and its provision for income taxes, management makes judgments and interpretations based on the enacted tax laws that are applicable to its operations in various jurisdictions.

Deferred tax assets and liabilities are measured and recorded using current enacted tax rates, which management expects will apply to taxable income in the years in which those temporary differences are recovered or settled.

Management also evaluates the need for valuation allowances to reduce deferred tax assets to realizable amounts.

In determining the realizability of its deferred tax assets, management evaluates all positive and negative evidence and uses judgment regarding past and future events, including operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be realized.

As disclosed by management, the likelihood of a material change in the Company’s expected realization of its deferred tax assets is dependent on future taxable income and the effectiveness of its tax planning strategies in the various relevant jurisdictions.

The Company recorded a provision for income taxes of $239.0 million for the year ended December 31, 2022 and net deferred income tax assets of $123.2 million including a valuation allowance of $23.6 million as of December 31, 2022.

The principal considerations for our determination that performing procedures relating to income taxes is a critical audit matter are the significant judgment and estimation by management when assessing current enacted tax laws and published tax guidance as it relates to determining the provision for income taxes as well as in assessing the realizability of its deferred income tax assets, specifically related to evaluating positive and negative evidence regarding past and future events, including operating results.

This resulted in significant audit effort, judgment, and subjectivity in performing procedures and evaluating audit evidence over income taxes.

The audit effort involved the use of professionals with specialized skill and knowledge to assist in performing procedures and evaluating the audit evidence obtained from these procedures.

Revenue Recognition –Protiviti Revenue

As described in Note C to the consolidated financial statements, the Company recorded service revenue related to Protiviti of $1.93 billion for the year ended December 31, 2023.

The Protiviti consulting services are generally provided on a time-and-material basis or fixed-fee basis.

Revenues earned under time-and-material and fixed-fee arrangements are recognized using a proportional performance method.

Revenue is measured using cost incurred relative to the total estimated cost for the engagement to measure progress towards satisfying the Company’s performance obligations.

Protiviti’s consulting services generally contain one or more performance obligations which are satisfied over a period of time.

The principal consideration for our determination that performing procedures relating to Protiviti revenue is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to income taxes, including management’s controls over the application of current enacted tax laws and published tax guidance and their impact to the current year provision, the establishment of deferred tax assets and liabilities, and the evaluation of the realizability of deferred tax assets.

These procedures also included, among others, (i) testing the provision for income taxes and the application of current enacted tax laws and published tax guidance, including the effective tax rate reconciliation, return to

provision adjustments, and permanent and temporary differences, (ii) testing the underlying data used in establishing and measuring deferred tax assets and liabilities, and (iii) evaluating management’s assessment of the realizability of deferred tax assets by evaluating factors used in management’s assessment of positive and negative evidence regarding past and future events, including operating results and the related expected utilization of deferred tax assets.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the calculations, including application of relevant tax laws and published tax guidance.

These procedures included testing the effectiveness of controls relating to the revenue recognition process.

These procedures also included, among others (i) testing the Protiviti revenue recognized for a sample of revenue transactions by obtaining and inspecting the contracts, reporting related to actual costs incurred, and support related to expected costs incurred and (ii) on a sample basis, recomputing the revenue recognized based on the proportional performance method.

/s/ PricewaterhouseCoopers LLP

4 unchanged sentences

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-K

Item 8. Financial Statements and Supplementary Data