Company Quick10K Filing
Half Robert
Price54.62 EPS4
Shares117 P/E14
MCap6,387 P/FCF15
Net Debt-312 EBIT585
TEV6,075 TEV/EBIT10
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-04
10-K 2019-12-31 Filed 2020-02-14
10-Q 2019-09-30 Filed 2019-11-12
10-Q 2019-06-30 Filed 2019-08-02
10-Q 2019-03-31 Filed 2019-05-06
10-K 2018-12-31 Filed 2019-02-15
10-Q 2018-09-30 Filed 2018-11-01
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-03
10-K 2017-12-31 Filed 2018-02-20
10-Q 2017-09-30 Filed 2017-11-03
10-Q 2017-06-30 Filed 2017-08-03
10-Q 2017-03-31 Filed 2017-05-05
10-K 2016-12-31 Filed 2017-02-13
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-04
10-Q 2016-03-31 Filed 2016-05-06
10-K 2015-12-31 Filed 2016-02-17
10-Q 2015-09-30 Filed 2015-11-02
10-Q 2015-06-30 Filed 2015-08-03
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-02-13
10-Q 2014-09-30 Filed 2014-10-31
10-Q 2014-06-30 Filed 2014-08-01
10-Q 2014-03-31 Filed 2014-05-09
10-K 2013-12-31 Filed 2014-02-14
10-Q 2013-09-30 Filed 2013-11-01
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-05-06
10-K 2012-12-13 Filed 2013-02-15
10-Q 2012-06-30 Filed 2012-08-03
10-Q 2012-03-31 Filed 2012-05-04
10-Q 2011-09-30 Filed 2011-11-04
10-Q 2011-06-30 Filed 2011-07-29
10-Q 2011-03-31 Filed 2011-05-06
10-K 2010-12-31 Filed 2011-02-17
10-Q 2010-09-30 Filed 2010-11-05
10-Q 2010-06-30 Filed 2010-08-02
10-Q 2010-03-31 Filed 2010-05-07
10-K 2009-12-31 Filed 2010-02-19
8-K 2020-07-23 Earnings, Exhibits
8-K 2020-05-20
8-K 2020-05-11
8-K 2020-04-23
8-K 2020-02-12
8-K 2020-01-30
8-K 2019-11-06
8-K 2019-10-23
8-K 2019-07-23
8-K 2019-05-22
8-K 2019-04-23
8-K 2019-03-15
8-K 2019-01-29
8-K 2018-10-30
8-K 2018-10-23
8-K 2018-07-24
8-K 2018-05-23
8-K 2018-04-24
8-K 2018-01-30

RHI 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosure
Item 5. Other Information
Item 6. Exhibits
EX-10.1 rhiex101messmeragreeme.htm
EX-31.1 rhi33120ex311.htm
EX-31.2 rhi33120ex312.htm
EX-32.1 rhi33120ex321.htm
EX-32.2 rhi33120ex322.htm

Half Robert Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
2.41.91.41.00.50.02012201420172020
Assets, Equity
1.61.31.00.60.30.02012201420172020
Rev, G Profit, Net Income
0.20.10.0-0.0-0.1-0.22012201420172020
Ops, Inv, Fin

rhi-20200331
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4-30

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
 FORM 10-Q
______________________
 (Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED March 31, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM                      to                     .
Commission File Number 1-10427
ROBERT HALF INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
Delaware 94-1648752
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
2884 Sand Hill Road 
Suite 200
Menlo Park,California94025
(Address of principal executive offices) (zip-code)
Registrant’s telephone number, including area code: (650234-6000

Securities registered pursuant to Section 12(b) of the Act
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareRHINew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes    No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer   Accelerated filer 
Non-accelerated filer  
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of April 30, 2020:
114,602,242 shares of $.001 par value Common Stock



PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
ROBERT HALF INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
(in thousands, except share amounts)

March 31,
2020
December 31, 2019

ASSETS
Cash and cash equivalents$249,914  $270,478  
Accounts receivable, net853,529  832,797  
Other current assets503,212  525,574  
Total current assets1,606,655  1,628,849  
Property and equipment, net126,602  128,385  
Right-of-use assets241,878  241,029  
Other intangible assets, net1,392  1,752  
Goodwill209,503  210,364  
Noncurrent deferred income taxes88,822  101,029  
Total assets$2,274,852  $2,311,408  
LIABILITIES
Accounts payable and accrued expenses$137,345  $123,841  
Accrued payroll and benefit costs684,729  743,602  
Income taxes payable19,758  1,623  
Notes payable, current223  218  
Current operating lease liabilities 71,299  71,408  
Total current liabilities913,354  940,692  
Notes payable, less current portion181  239  
Noncurrent operating lease liabilities204,587  201,961  
Other liabilities26,805  24,833  
Total liabilities1,144,927  1,167,725  
Commitments and Contingencies (Note I)
STOCKHOLDERS’ EQUITY
Preferred stock, $.001 par value; authorized 5,000,000 shares; none issued
    
Common stock, $.001 par value; authorized 260,000,000 shares; issued and
outstanding 114,602,243 shares and 115,120,404 shares
115  115  
Additional paid-in capital1,141,011  1,127,487  
Accumulated other comprehensive income (loss)(33,686) (19,986) 
Retained earnings22,485  36,067  
Total stockholders’ equity1,129,925  1,143,683  
Total liabilities and stockholders’ equity$2,274,852  $2,311,408  

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)
are an integral part of these financial statements.

2


ROBERT HALF INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share amounts)

 Three Months Ended
March 31,
 20202019
Service revenues$1,506,691  $1,468,530  
Costs of services
895,974  860,942  
Gross margin610,717  607,588  
Selling, general and administrative expenses479,573  461,359  
Amortization of intangible assets338  342  
Interest income, net(957) (1,496) 
Income before income taxes131,763  147,383  
Provision for income taxes41,848  37,585  
Net income$89,915  $109,798  
Net income per share:
Basic$.79  $.94  
Diluted$.79  $.93  
Shares:
Basic113,187  117,068  
Diluted113,858  117,966  
Dividends declared per share$.34  $.31  

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)
are an integral part of these financial statements.

3


ROBERT HALF INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(in thousands)

 Three Months Ended  March 31,
 20202019
COMPREHENSIVE INCOME (LOSS):
Net income$89,915  $109,798  
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax(13,700) (1,897) 
Total comprehensive income (loss)$76,215  $107,901  

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)
are an integral part of these financial statements.

4


ROBERT HALF INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
(in thousands, except per share amounts)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsTotal
SharesPar Value
Balance at December 31, 2019
115,120  $115  $1,127,487  $(19,986) $36,067  $1,143,683  
Net income—  —  —  —  89,915  89,915  
Adoption of accounting pronouncement—  —  —  —  (558) (558) 
Other comprehensive income (loss)—  —  —  (13,700) —  (13,700) 
Dividends declared ($.34 per share)—  —  —  —  (39,441) (39,441) 
Net issuances of restricted stock745  1  (1) —  —    
Stock-based compensation—  —  13,525  —  —  13,525  
Repurchases of common stock(1,263) (1) —  —  (63,498) (63,499) 
Balance at March 31, 2020
114,602  $115  $1,141,011  $(33,686) $22,485  $1,129,925  

Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsTotal
SharesPar Value
Balance at December 31, 2018
119,078  $119  $1,079,188  $(16,109) $  $1,063,198  
Net income—  —  —  —  109,798  109,798  
Other comprehensive income (loss)—  —  —  (1,897) —  (1,897) 
Dividends declared ($.31 per share)—  —  —  —  (36,998) (36,998) 
Net issuances of restricted stock281  —  —  —  —    
Stock-based compensation—  —  11,244  —  —  11,244  
Repurchases of common stock(1,038) (1) —  —  (68,315) (68,316) 
Balance at March 31, 2019
118,321  $118  $1,090,432  $(18,006) $4,485  $1,077,029  

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)
are an integral part of these financial statements.

5


ROBERT HALF INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)

 Three Months Ended
March 31,
 20202019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$89,915  $109,798  
Adjustments to reconcile net income to net cash provided by operating activities:
Allowance for credit losses4,690  2,325  
Depreciation15,913  15,652  
Amortization of cloud computing implementation costs3,288    
Amortization of intangible assets338  342  
Stock-based compensation13,525  11,244  
Deferred income taxes12,022  5,736  
Changes in assets and liabilities:
Accounts receivable(36,700) (35,294) 
Capitalized cloud computing implementation costs(10,379) (4,751) 
Accounts payable and accrued expenses18,193  (11,910) 
Accrued payroll and benefit cost(4,396) 13,308  
Income taxes payable20,124  17,470  
Other assets and liabilities, net(1,607) 3,159  
Net cash flows provided by operating activities124,926  127,079  
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(14,276) (12,670) 
Payments for employee deferred compensation plans(37,061) (27,376) 
Redemptions from employee deferred compensation plans22,987  16,966  
Net cash flows used in investing activities(28,350) (23,080) 
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of notes payable(53) (49) 
Repurchases of common stock(69,968) (72,343) 
Dividends paid(40,476) (37,887) 
Net cash flows used in financing activities(110,497) (110,279) 
Effect of exchange rate fluctuations(6,643) (654) 
Change in cash and cash equivalents(20,564) (6,934) 
Cash and cash equivalents at beginning of period270,478  276,579  
Cash and cash equivalents at end of period$249,914  $269,645  
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Non-cash items:
Stock repurchases awaiting settlement$  $7,332  

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)
are an integral part of these financial statements.

6




ROBERT HALF INTERNATIONAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2020

Note A—Summary of Significant Accounting Policies
Nature of Operations. Robert Half International Inc. (the “Company”) provides specialized staffing and risk consulting services through such divisions as Accountemps®, Robert Half® Finance & Accounting, OfficeTeam®, Robert Half® Technology, Robert Half® Management Resources, Robert Half® Legal, The Creative Group®, and Protiviti®. The Company, through its Accountemps, Robert Half Finance & Accounting, and Robert Half Management Resources divisions, is a specialized provider of temporary, full-time, and senior-level project professionals in the fields of accounting and finance. OfficeTeam specializes in highly skilled temporary administrative support professionals. Robert Half Technology provides project and full-time technology professionals. Robert Half Legal provides temporary, project, and full-time staffing of lawyers, paralegals and legal support personnel. The Creative Group provides creative, digital, marketing, advertising and public relations professionals. Protiviti is a global consulting firm that helps companies solve problems in finance, technology, operations, data, analytics, governance, risk and internal audit, and is a wholly-owned subsidiary of the Company. Revenues are predominantly derived from specialized staffing services. The Company operates in North America, South America, Europe, Asia and Australia. The Company is a Delaware corporation.
Basis of Presentation. The unaudited Condensed Consolidated Financial Statements (“Financial Statements”) of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”). Certain reclassifications have been made to prior year’s condensed consolidated financial statements to conform to the 2020 presentation. The comparative year-end Condensed Consolidated Statement of Financial Position data presented was derived from audited financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary for a fair statement of the financial position and results of operations for the periods presented have been included. These Financial Statements should be read in conjunction with the audited Consolidated Financial Statements of the Company for the year ended December 31, 2019, included in its Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of, nor comparable to, the results of operations for a full year.
Principles of Consolidation. The Financial Statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. As of March 31, 2020, such estimates include allowances for credit losses, variable consideration, workers’ compensation losses, income and other taxes, and assumptions used in the Company’s goodwill impairment assessment and in the valuation of stock grants subject to market conditions.
In March 2020, the World Health Organization announced that a novel strain of coronavirus (“COVID-19”) had become pandemic. The COVID-19 pandemic is already having a significant impact on global economies as a result of stay-at-home orders and business closures designed to stop the spread of the virus. We are continuing to monitor the spread of COVID-19 and related risks, including risks related to efforts to mitigate the disease’s spread, although the rapid development and fluidity of our response to the pandemic, including uncertainty around the duration and extent of COVID-19, precludes any prediction as to its ultimate impact on the Company’s results of operations, financial condition, or liquidity. In light of the currently unknown ultimate duration and severity of COVID-19, we face a greater degree of uncertainty than normal in making the judgments and estimates needed to apply the Company’s significant accounting policies. As COVID-19 continues to develop, we may make changes to these estimates and judgments over time, which could result in meaningful impacts to the Company’s financial statements in future periods. Actual results and outcomes may differ from management’s estimates and assumptions.




7




ROBERT HALF INTERNATIONAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
March 31, 2020
Service Revenues.    The Company derives its revenues from three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. Revenues are recognized when promised goods or services are delivered to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. See Note C for further discussion of the revenue recognition accounting policy.
Costs of Services.    Direct costs of temporary and consultant staffing consist of payroll, payroll taxes and benefit costs for the Company’s engagement professionals, as well as reimbursable expenses. Direct costs of permanent placement staffing services consist of reimbursable expenses. Risk consulting and internal audit direct costs of services include professional staff payroll, contract labor payroll, payroll taxes and benefit costs, as well as reimbursable expenses.
Advertising Costs. The Company expenses all advertising costs as incurred. Advertising costs were $14.5 million and $12.8 million for the three months ended March 31, 2020 and 2019, respectively.
Allowance for Credit Losses.  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, current business conditions and macro-economic trends. The Company considers risk characteristics of trade receivables based on asset type, size, term, and geographical locations to evaluate trade receivables on a collective basis. The Company applies credit loss estimates to these pooled receivables to determine expected credit losses.
The following table sets forth the activity in credit losses from December 31, 2019, through March 31, 2020 (in
thousands):
Credit
Loss
Balance as of December 31, 2019
$22,885  
Adoption of accounting pronouncement558  
Balance as of January 1, 2020
$23,443  
Charges to expense4,690  
Deductions(1,620) 
Other, including translation adjustments(213) 
Balance as of March 31, 2020
$26,300  

Goodwill and Intangible Assets.    Goodwill and intangible assets primarily consist of the cost of acquired companies in excess of the fair market value of their net tangible assets at the date of acquisition. Identifiable intangible assets are amortized over their lives, typically ranging from two to five years. Goodwill is not amortized, but is tested at least annually for impairment, or on an as needed interim basis.
Internal-use Software.    The Company capitalizes direct costs incurred in the development of internal-use software. Cloud computing implementation costs incurred in hosting arrangements are capitalized and reported as a component of other assets. All other internal-use software development costs are capitalized and reported as a component of computer software within property and equipment on the unaudited Condensed Consolidated Statement of Financial Position. Capitalized internal-use software development costs were $13.0 million and $5.0 million for the three months ended March 31, 2020 and 2019, respectively.
Note B—New Accounting Pronouncements

Recently Adopted Accounting Pronouncements
Current Expected Credit Losses Model. In June 2016, the FASB issued authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net

8




ROBERT HALF INTERNATIONAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
March 31, 2020
income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2019. The Company has adopted the new guidance prospectively as of January 1, 2020, and the impact of adoption was not material to its financial statements.
Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued authoritative guidance to simplify the goodwill impairment testing process. The new standard eliminates Step 2 of the goodwill impairment test. If a company determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is greater than the fair value, an impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. The new guidance is effective for the Company for fiscal years beginning after December 15, 2019, although early adoption is permitted. The Company has adopted the new guidance prospectively as of January 1, 2020, and the impact of adoption was not material to its financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted
Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company believes this guidance will not have a material impact on its financial statements.

Note C—Revenue Recognition

The Company derives its revenues from three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. Revenues are recognized when promised goods or services are delivered to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Service revenues as presented in the unaudited Condensed Consolidated Statements of Operations represent services rendered to customers less variable consideration, such as sales adjustments and allowances. Reimbursements, including those related to travel and out-of-pocket expenses, are also included in service revenues and equivalent amounts of reimbursable expenses are included in costs of services.

Temporary and consultant staffing revenues. Temporary and consultant staffing revenues from contracts with customers are recognized in the amount to which the Company has a right to invoice, when the services are rendered by the Company’s engagement professionals. The substantial majority of engagement professionals placed on assignment by the Company are the Company’s legal employees while they are working on assignments. The Company pays all related costs of employment, including workers’ compensation insurance, state and federal unemployment taxes, social security and certain fringe benefits. The Company assumes the risk of acceptability of its employees to its customers.

The Company records temporary and consultant staffing revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses. The Company has concluded that gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified employees, (ii) has the discretion to select the employees and establish their price and duties and (iii) bears the risk for services that are not fully paid for by customers. Fees paid to Time Management or Vendor Management service providers selected by clients are recorded as a reduction of revenues, as the Company is not the primary obligor with respect to those services.

Permanent placement staffing revenues. Permanent placement staffing revenues from contracts with customers are primarily recognized when employment candidates accept offers of permanent employment. The Company has a substantial

9




ROBERT HALF INTERNATIONAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
March 31, 2020
history of estimating the financial impact of permanent placement candidates who do not remain with its clients through the 90-day guarantee period. These amounts are established based primarily on historical data and are recorded as liabilities. Fees to clients are generally calculated as a percentage of the new employee’s annual compensation. No fees for permanent placement services are charged to employment candidates.

Risk consulting and internal audit services revenues. Risk consulting and internal audit services are generally provided on a time-and-material basis or fixed-fee basis. Revenues earned under time-and-material arrangements and fixed-fee arrangements are recognized using a proportional performance method. Revenue is measured using cost incurred relative to total estimated cost for the engagement to measure progress towards satisfying the Company’s performance obligations. Cost incurred represents work performed and thereby best depicts the transfer of control to the customer. Risk consulting and internal audit services generally contain one or more performance obligation(s) which are satisfied over a period of time. Revenues are recognized over time as the performance obligations are satisfied, because the services provided do not have any alternative use to the Company, and contracts generally include language giving the Company an enforceable right to payment for services provided to date.
The Company periodically evaluates the need to provide for any losses on these projects, and losses are recognized when it is probable that a loss will be incurred.

The following table presents the Company’s revenues disaggregated by line of business (in thousands):
Three Months Ended
March 31,
20202019
Accountemps$480,441  $483,473  
OfficeTeam239,036  252,035  
Robert Half Technology183,423  171,928  
Robert Half Management Resources189,220  177,191  
Temporary and consulting staffing1,092,120  1,084,627  
Permanent placement staffing120,489  131,562  
Risk consulting and internal audit services294,082  252,341  
Service revenues$1,506,691  $1,468,530  

Payment terms in the Company’s contracts vary by the type and location of the Company’s customer and the services offered. The term between invoicing and when payment is due is not significant.

Contracts with multiple performance obligations are recognized as performance obligations are delivered, and contract value is allocated based on relative stand-alone selling values of the services and products in the arrangement. As of March 31, 2020, aggregate transaction price allocated to the performance obligations that are unsatisfied for contracts with an expected duration of greater than one year was $112.0 million. Of this amount, $103.7 million is expected to be recognized within the next twelve months. As of March 31, 2019, aggregate transaction price allocated to the performance obligations that are unsatisfied for contracts with an expected duration of greater than one year was $84.8 million.


10




ROBERT HALF INTERNATIONAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
March 31, 2020
Contract liabilities are recorded when cash payments are received or due in advance of performance and are reflected in accounts payable and accrued expenses on the unaudited Condensed Consolidated Statement of Financial Position. The following table sets forth the activity in contract liabilities from December 31, 2018, through March 31, 2020 (in thousands):
Contract Liabilities
Balance as of December 31, 2018
$12,997  
    Payments in advance of satisfaction of performance obligations13,030  
    Revenue recognized(12,072) 
    Other, including translation adjustments(1,007) 
Balance as of December 31, 2019
$12,948  
    Payments in advance of satisfaction of performance obligations12,173  
    Revenue recognized(10,287) 
    Other, including translation adjustments355  
Balance as of March 31, 2020
$15,189  

Note D—Other Current Assets
Other current assets consisted of the following (in thousands):
March 31,
2020
December 31, 2019
Deferred compensation plans$363,727  $398,442  
Prepaid expenses92,299  84,364  
Other47,186  42,768  
Other current assets$503,212  $525,574  

Note E—Property and Equipment, Net
Property and equipment consisted of the following (in thousands):
March 31,
2020
December 31, 2019
Computer hardware$166,657  $164,547  
Computer software292,958  291,681  
Furniture and equipment88,030  88,136  
Leasehold improvements150,274  150,644  
Property and equipment, cost697,919  695,008  
Accumulated depreciation(571,317) (566,623) 
Property and equipment, net$126,602  $128,385  

Note F—Leases

The Company has operating leases for corporate and field offices, and certain equipment. The Company’s leases have remaining lease terms of less than 1 year to 10 years, some of which include options to extend the leases for up to 7 years, and

11




ROBERT HALF INTERNATIONAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
March 31, 2020
some of which include options to terminate the leases within 1 year. Operating lease expenses for the three months ended March 31, 2020 and 2019, were $19.9 million and $16.6 million, respectively.

Supplemental cash flow information related to leases consisted of the following (in thousands):
Three Months Ended
March 31,
20202019
Cash paid for operating lease liabilities$20,554  $16,728  
Right-of-use assets obtained in exchange for new operating lease liabilities$14,547  $10,517  

Supplemental balance sheet information related to leases consisted of the following:
March 31,
2020
December 31,
2019
Weighted average remaining lease term for operating leases4.8 years4.8 years
Weighted average discount rate for operating leases2.9 %3.0 %

Future minimum lease payments under non-cancellable leases as of March 31, 2020, were as follows (in thousands):
2020 (excluding the three months ended March 31, 2020)
$59,247  
202167,151  
202253,833  
202344,610  
202434,645  
Thereafter35,863  
Less: Imputed interest(19,463) 
Present value of operating lease liabilities (a)$275,886  
(a) Includes current portion of $71.3 million for operating leases.

As of March 31, 2020, the Company had additional future minimum lease obligations totaling $33.2 million under operating leases that had not yet commenced. These operating leases include agreements for corporate and field office facilities with lease terms of less than 1 year to 8 years.
Note G—Goodwill
The following table sets forth the activity in goodwill from December 31, 2019, through March 31, 2020 (in thousands):
Goodwill
  
Temporary and consultant staffingPermanent placement staffingRisk consulting and internal audit services Total
Balance as of December 31, 2019
$134,210  $26,097  $50,057  $210,364  
Foreign currency translation adjustments(364) (99) (398) (861) 
Balance as of March 31, 2020
$133,846  $25,998  $49,659  $209,503  



12




ROBERT HALF INTERNATIONAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
March 31, 2020
Due to the recent significant decline in global economic and labor market conditions caused by the global outbreak of the COVID-19 pandemic, the Company considered the recoverability of its goodwill and determined, during the three months ended March 31, 2020, there were no events or circumstances that have changed since the last annual test that could more likely than not reduce the fair value of the Company’s reporting units below its carrying values.

Note H—Accrued Payroll and Benefit Costs
Accrued payroll and benefit costs consisted of the following (in thousands):
March 31,
2020
December 31, 2019
Employee deferred compensation plans$373,043  $421,198  
Payroll and benefits254,888  280,918  
Payroll taxes36,146  21,831  
Workers’ compensation20,652  19,655  
Accrued payroll and benefit costs$684,729  $743,602  
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. Nonqualified plans are provided for employees not eligible for the qualified plans. These plans include provisions for salary deferrals and Company matching and discretionary contributions. The asset value of the nonqualified plans was $363.7 million and $398.4 million as of March 31, 2020 and December 31, 2019, respectively, and is included in other current assets in the unaudited Condensed Consolidated Statements of Financial Position. The liability value for the nonqualified plans was $373.0 million and $421.2 million as of March 31, 2020 and December 31, 2019, respectively, and is included in current accrued payroll and benefit costs in the unaudited Condensed Consolidated Statements of Financial Position. Deferred compensation plan and other benefits related to the Company’s executive chairman were $91.9 million and $91.8 million as of March 31, 2020 and December 31, 2019, respectively, and are included in the liability value for the nonqualified plans. Net unrealized gains and (losses) on these nonqualified plan assets and liabilities were $(48.7) million and $23.7 million for the three months ended March 31, 2020 and 2019, respectively.
The Company’s contribution expense for its qualified defined contribution plans and nonqualified benefits plans totaled $5.6 million and $3.6 million for the three months ended March 31, 2020 and 2019, respectively.
The Company has statutory defined contribution plans and defined benefit plans outside the U.S., which are not material.
Note I—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. The complaint alleges that a putative class of current and former employees of the Company working in California since March 13, 2010 were denied compensation for the time they spent interviewing “for temporary and permanent employment opportunities” as well as performing activities related to the interview process. Gentry seeks recovery on her own behalf and on behalf of the putative class in an unspecified amount for this allegedly unpaid compensation. Gentry also seeks recovery of an unspecified amount for the alleged failure of the Company to provide her and the putative class with accurate wage statements. Gentry also seeks an unspecified amount of other damages, attorneys’ fees, and statutory penalties, including penalties for allegedly not paying all wages due upon separation to former employees and statutory penalties on behalf of herself and other allegedly “aggrieved employees” as defined by California’s Labor Code Private Attorney General Act (“PAGA”). On January 4, 2016, the Court denied a motion by the Company to compel all of Gentry’s claims, except the PAGA claim, to individual arbitration. At this stage of the litigation, it is not feasible to predict the outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the

13




ROBERT HALF INTERNATIONAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
March 31, 2020
Company’s Financial Statements. The Company believes it has meritorious defenses to the allegations and the Company intends to continue to vigorously defend against the litigation.
On April 6, 2018, Plaintiff Shari Dorff, on her own behalf and on behalf of a putative class of allegedly similarly situated individuals, filed a complaint against the Company in the Superior Court of California, County of Los Angeles. In addition to certain claims individual to Plaintiff Dorff, the complaint alleges that salaried recruiters based in California have been misclassified as exempt employees and seeks an unspecified amount for: unpaid wages resulting from such alleged misclassification; alleged failure to provide a reasonable opportunity to take meal periods and rest breaks; alleged failure to pay wages on a timely basis both during employment and upon separation; alleged failure to comply with California requirements regarding wage statements and record-keeping; and alleged improper denial of expense reimbursement. Plaintiff Dorff also seeks an unspecified amount of other damages, attorneys’ fees, and penalties, including but not limited to statutory penalties on behalf of herself and other allegedly “aggrieved employees” as defined by PAGA. At this stage of the litigation, it is not feasible to predict the outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the Company’s Financial Statements. The Company believes it has meritorious defenses to the allegations and the Company intends to continue to vigorously defend against the litigation.
The Company is involved in a number of other lawsuits arising in the ordinary course of business. While management does not expect any of these other matters to have a material adverse effect on the Company’s results of operations, financial position or cash flows, litigation is subject to certain inherent uncertainties.
Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred.
Note J—Stockholders’ Equity
Stock Repurchase Program. As of March 31, 2020, the Company is authorized to repurchase, from time to time, up to 1.5 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions. The number and the cost of common stock shares repurchased during the three months ended March 31, 2020 and 2019, are reflected in the following table (in thousands):
 Three Months Ended
March 31,
 20202019
Common stock repurchased (in shares)983  781  
Common stock repurchased$51,477  $51,608  
 
Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of applicable statutory withholding taxes. The number and the cost of repurchases related to employee stock plans made during the three months ended March 31, 2020 and 2019, are reflected in the following table (in thousands):
 Three Months Ended
March 31,
 20202019
Repurchases related to employee stock plans (in shares)280  257  
Repurchases related to employee stock plans$12,022  $16,708  
The repurchased shares are held in treasury and are presented as if constructively retired. Treasury stock is accounted for using the cost method. Repurchase activity for the three months ended March 31, 2020 and 2019, is presented in the unaudited Condensed Consolidated Statements of Stockholders’ Equity.

14




ROBERT HALF INTERNATIONAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
March 31, 2020
Repurchases of shares and issuances of cash dividends are applied first to the extent of retained earnings and any remaining amounts are applied to capital surplus.
Note K—Net Income Per Share
The calculation of net income per share for the three months ended March 31, 2020 and 2019, is reflected in the following table (in thousands, except per share amounts):
 Three Months Ended  March 31,
 20202019
Net income$89,915  $109,798  
Basic:
Weighted average shares
113,187  117,068  
Diluted:
Weighted average shares
113,187  117,068  
Dilutive effect of potential common shares671  898  
Diluted weighted average shares113,858  117,966  
Net income per share:
Basic$.79  $.94  
Diluted$.79  $.93  
 
Note L—Business Segments
The Company has three reportable segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. Operating segments are defined as components of the Company for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. The temporary and consultant staffing segment provides specialized staffing in the accounting and finance, administrative and office, information technology, legal, advertising, marketing and web design fields. The permanent placement staffing segment provides full-time personnel in the accounting, finance, administrative and office, and information technology fields. The risk consulting and internal audit services segment provides business and technology risk consulting and internal audit services.
The accounting policies of the segments are set forth in Note A—“Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The Company evaluates performance based on income from operations before net interest income, intangible asset amortization expense, and income taxes.

15




ROBERT HALF INTERNATIONAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
March 31, 2020
The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results for the three months ended March 31, 2020 and 2019 (in thousands):

 Three Months Ended
March 31,
 20202019
Service revenues
Temporary and consultant staffing$1,092,120  $1,084,627  
Permanent placement staffing120,489  131,562  
Risk consulting and internal audit services294,082  252,341  
$1,506,691  $1,468,530  
Operating income
Temporary and consultant staffing$93,764  $106,018  
Permanent placement staffing10,911  21,557  
Risk consulting and internal audit services26,469  18,654  
131,144  146,229  
Amortization of intangible assets338  342  
Interest income, net(957) (1,496) 
Income before income taxes$131,763  $147,383  

Note M—Subsequent Events
On April 30, 2020, the Company announced the following:
Quarterly dividend per share$.34
Declaration dateApril 30, 2020
Record dateMay 26, 2020
Payment dateJune 15, 2020


16


ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Certain information contained in Management’s Discussion and Analysis and in other parts of this report may be deemed forward-looking statements regarding events and financial trends that may affect the Company’s future operating results or financial positions. These statements may be identified by words such as “estimate”, “forecast”, “project”, “plan”, “intend”, “believe”, “expect”, “anticipate”, or variations or negatives thereof or by similar or comparable words or phrases. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements. These risks and uncertainties include, but are not limited to, the following: changes to or new interpretations of U.S. or international tax regulations, the global financial and economic situation; the duration and impact of the COVID-19 pandemic and efforts to mitigate its spread; changes in levels of unemployment and other economic conditions in the United States or foreign countries where the Company does business, or in particular regions or industries; reduction in the supply of candidates for temporary employment or the Company’s ability to attract candidates; the entry of new competitors into the marketplace or expansion by existing competitors; the ability of the Company to maintain existing client relationships and attract new clients in the context of changing economic or competitive conditions; the impact of competitive pressures, including any change in the demand for the Company’s services, on the Company’s ability to maintain its margins; the possibility of the Company incurring liability for its activities, including the activities of its engagement professionals, or for events impacting its engagement professionals on clients’ premises; the possibility that adverse publicity could impact the Company’s ability to attract and retain clients and candidates; the success of the Company in attracting, training, and retaining qualified management personnel and other staff employees and in managing the recently announced leadership transition; the Company’s ability to comply with governmental regulations affecting personnel services businesses in particular or employer/employee relationships in general; whether there will be ongoing demand for Sarbanes-Oxley or other regulatory compliance services; the Company’s reliance on short-term contracts for a significant percentage of its business; litigation relating to prior or current transactions or activities, including litigation that may be disclosed from time to time in the Company’s Securities and Exchange Commission (“SEC”) filings; the ability of the Company to manage its international operations and comply with foreign laws and regulations; the impact of fluctuations in foreign currency exchange rates; the possibility that the additional costs the Company will incur as a result of health care reform legislation may adversely affect the Company’s profit margins or the demand for the Company’s services; the possibility that the Company’s computer and communications hardware and software systems could be damaged or their service interrupted or the Company could experience a cybersecurity breach; and the possibility that the Company may fail to maintain adequate financial and management controls and as a result suffer errors in its financial reporting. Additionally, with respect to Protiviti, other risks and uncertainties include the fact that future success will depend on its ability to retain employees and attract clients; there can be no assurance that there will be ongoing demand for Sarbanes-Oxley or other regulatory compliance services; failure to produce projected revenues could adversely affect financial results; and there is the possibility of involvement in litigation relating to prior or current transactions or activities. Because long-term contracts are not a significant part of the Company’s business, future results cannot be reliably predicted by considering past trends or extrapolating past results.
Executive Overview
The global outbreak of the coronavirus disease 2019 (“COVID-19”) was declared a pandemic by the World Health Organization and a national emergency by the U.S. Government in March 2020 and has negatively affected the U.S. and global economy, disrupted global supply chains, resulted in significant travel and transport restrictions, including mandated closures and orders to “shelter-in-place”. The Company has been working to ensure the health and welfare of its employees while maintaining its service commitments to customers. As we navigate through this crisis, preserving the long-term intrinsic value of the Company is our guiding principle. Given the magnitude of the COVID 19 impact on the Company’s business, we fully understand that we must also adjust the Company’s cost structure. The extent of the impact of the COVID-19 pandemic 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.
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. Correspondingly, financial results for the first quarter of 2020, specifically the second half of March 2020, began to reflect the COVID-19 impact on the Company’s business, particularly its staffing operations. During the first quarter of 2020, net service revenues were $1.51 billion, an increase of 3% from the prior year. Net income for the quarter was $90 million and diluted net income per share was $.79. Temporary and consultant staffing and risk consulting and internal audit services had modest growth, slightly offset by a decline in permanent placement staffing during the first quarter of 2020, compared to the first quarter of 2019. The Company’s staffing clients, most of whom are small and midsize businesses, are feeling the crisis, and the downstream effect is a much tougher business climate for the Company. Demand for Protiviti’s services was broad-based

17


across its diversified service offerings, including internal audit, technology consulting and regulatory compliance consulting. Protiviti continues to nurture and grow a loyal client base.
The United States economic backdrop as we ended the first quarter of 2020 was one of slowdown and uncertainty as real gross domestic product (“GDP”) decreased 4.8%, while the unemployment rate increased from 3.5% in December 2019 to 4.4% at the end of the first quarter of 2020.
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. We have limited visibility into future revenues not only due to the dependence on macroeconomic conditions noted above, but also because of the relatively short duration of the Company’s client engagements. Accordingly, we typically assess headcount and other investments on at least a quarterly basis. As such, during the first quarter and early into the second quarter of 2020, we took actions to reduce operating costs including laying off the Company’s less experienced and lower performing staff. Impacted corporate staff were furloughed with paid benefits, awaiting a return to higher activity levels.
Capital expenditures, including $10 million for cloud computing arrangements, for the three months ended March 31, 2020, totaled $25 million, approximately 62% 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. We currently expect that 2020 capital expenditures will range from $65 million to $75 million, of which $35 million to $45 million relates to software initiatives and technology infrastructure, including capitalized costs related to implementation of cloud computing arrangements.
Critical Accounting Policies and Estimates
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, 2019. There were no material changes to the Company’s critical accounting policies or estimates for the three months ended March 31, 2020.
Recent Accounting Pronouncements
See Note B—“New Accounting Pronouncements” to the Company’s Condensed Consolidated Financial Statements included under Part I—Item 1 of this report.
Results of Operations
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 market conditions both domestically and abroad. Because of the inherent difficulty in predicting economic trends and the absence of material long-term contracts in any of the Company’s business units, 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 believe the Company is well positioned to meet the demand of our customers.
Temporary and consultant staffing and risk consulting and internal audit services had modest growth, slightly offset by a decline in permanent placement staffing during the first quarter. Robert Half Technology and Robert Half Management Resources divisions turned in solid results during the first quarter. Protiviti had a strong quarter, posting double-digit, year-on-year revenue gains for the eighth consecutive quarter.
The Company’s temporary and permanent placement staffing business has 327 offices in 42 states, the District of Columbia and 17 foreign countries, while Protiviti has 62 offices in 23 states and 11 foreign countries.

18


Non-GAAP Financial Measures
The financial results of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the SEC. To help readers understand the Company’s financial performance, the Company supplements its GAAP financial results with revenue growth rates derived from non-GAAP revenue amounts.
Variations in the Company’s financial results include the impact of changes in foreign currency exchange rates and billing days. The Company provides “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. 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 non-GAAP financial measures provided herein may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies may calculate such financial results differently. The Company’s non-GAAP financial measures are not measurements of financial performance under GAAP, and should not be considered as alternatives to actual revenue growth derived from revenue amounts presented in accordance with GAAP. The Company does not consider these non-GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial results. A reconciliation of the as adjusted revenue growth rates to the reported revenue growth rates is provided herein.
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 March 31, 2020 and 2019
Revenues. The Company’s revenues were $1.51 billion for the three months ended March 31, 2020, increasing by 2.6% compared to $1.47 billion for the three months ended March 31, 2019. Revenues from foreign operations represented 22% of total revenues for the three months ended March 31, 2020, down from 24% of total revenues for the three months ended March 31, 2019. 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 March 31, 2020, risk consulting and internal audit services continued to post strong growth rates, compared to the same period in 2019. Contributing factors for each reportable segment are discussed below in further detail.
Temporary and consultant staffing revenues were $1.09 billion for the three months ended March 31, 2020, increasing by 0.7% compared to revenues of $1.08 billion for the three months ended March 31, 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 were essentially flat for the first quarter of 2020 compared to the first quarter of 2019. In the U.S., revenues in the first quarter of 2020 increased 2.0% on an as reported basis and 0.5% on an as adjusted basis, compared to the first quarter of 2019. For the Company’s international operations, 2020 first quarter revenues decreased 3.8% on an as reported basis and decreased 1.9% on an as adjusted basis, compared to the first quarter of 2019.
Permanent placement staffing revenues were $120 million for the three months ended March 31, 2020, decreasing by 8.4% compared to revenues of $132 million for the three months ended March 31, 2019. Key drivers of permanent placement staffing revenues consist of the number of candidate placements and average fees earned per placement. The second half of March 2020, began to reflect the COVID-19 impact on permanent placement staffing operations. On an as adjusted basis,

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permanent placement staffing revenues decreased 9.0% for the first quarter of 2020 compared to the first 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 first quarter of 2020 decreased 4.9% on an as reported basis and 6.3% on an as adjusted basis, compared to the first quarter of 2019. For the Company’s international operations, revenues for the first quarter of 2020 decreased 15.9% on an as reported basis and decreased 14.6% on an as adjusted basis, compared to the first 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 $294 million for the three months ended March 31, 2020, increasing by 16.5% compared to revenues of $252 million for the three months ended March 31, 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. On an as adjusted basis, risk consulting and internal audit services revenues increased 15.5% for the first quarter of 2020 compared to the first quarter of 2019, primarily due to an increase in billable hours. In the U.S., revenues in the first quarter of 2020 increased 21.3% on an as reported basis and 19.5% on an as adjusted basis, compared to the first quarter of 2019. Contributing to the U.S. increase were services related to business performance improvement, technology consulting, and internal audit and financial advisory practice areas. The Company’s risk consulting and internal audit services revenues from international operations increased 1.3% on an as reported basis and 2.4% on an as adjusted basis for the first quarter of 2020 compared to the first 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 March 31, 2020, is presented in the following table:
GlobalUnited StatesInternational
Temporary and consultant staffing
As Reported0.7 %2.0 %-3.8 %
Billing Days Impact-1.4 %-1.5 %-1.4 %
Currency Impact0.7 %—  3.3 %
As Adjusted0.0 %0.5 %-1.9 %
Permanent placement staffing
As Reported-8.4 %-4.9 %-15.9 %
Billing Days Impact-1.4 %-1.4 %-1.1 %
Currency Impact0.8 %—  2.4 %
As Adjusted-9.0 %-6.3 %-14.6 %
Risk consulting and internal audit services
As Reported16.5 %21.3 %1.3