8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 28, 2020

TRINET GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware		001-36373	95-3359658
(State or other jurisdiction of incorporation or organization)		(Commission File Number)	(I.R.S. Employer Identification No.)
One Park Place, Suite 600
Dublin,	CA		94568
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (510) 352-5000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock par value $0.000025 per share	TNET	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ¨

Item 2.02 Results of Operations and Financial Condition

On April 28, 2020, TriNet Group, Inc. (the “Company”) issued a press release announcing the Company’s financial and operating results for the quarter ended March 31, 2020. A copy of the press release, entitled “TriNet Announces First Quarter 2020 Results” is furnished as Exhibit 99.1 hereto and incorporated by reference.

The information in this current report on Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Appointment of Interim Principal Financial Officer

On April 28, 2020, the TriNet Group, Inc. (the “Company”) entered into an agreement (the “Agreement”) with Michael Peter Harris Murphy, the Company’s current Vice President and Chief Accounting Officer, to serve as the Company’s Vice President and Interim Chief Financial Officer, effective no later than May 15, 2020. Mr. Murphy will continue to serve in his role as the Company’s Chief Accounting Officer through May 15, 2020, or such earlier date as determined by the Company in consultation with Mr. Murphy (such earlier date, the “Effective Date”), at which time he will begin to serve as the Company’s Interim Chief Financial Officer.

Mr. Murphy, age 52, has served as the Company’s Chief Accounting Officer since July 2016. Prior to joining the Company, Mr. Murphy served as Chief Accounting Officer at QBE North America, a global insurance provider, from October 2014 to July 2016. Prior to this, Mr. Murphy served as Director of Financial Reporting at AIG, a global insurance provider, from 2013 to 2014. Before joining AIG, Mr. Murphy worked for seven years as Controller for AEGIS Insurance Services Ltd., a mutual insurance company, starting in 2006. Prior to this time, Mr. Murphy worked in several senior finance roles at Marsh & McLennan for approximately 10 years. Mr. Murphy is a Chartered Accountant from the Institute of Chartered Accountants in England and Wales and holds a BSc in Statistics, Computing, Operations Research & Economics from the University College London. Mr. Murphy has nearly 30 years’ experience on finance and accounting matters across multiple industries, including his work with the Company’s financial statements and filings under the Securities Exchange Act of 1934 (the “Exchange Act”).

There are no family relationships between Mr. Murphy and any director or executive officer of the Company, and Mr. Murphy has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

In connection with his new position, Mr. Murphy will be eligible to receive a retention bonus, which will be paid if Mr. Murphy remains an employee with the Company through each of the following Exchange Act reporting requirements: (a) the Company’s Form 10-Qs for the second and third quarters of fiscal year 2020 (“FY2020”) and (b) the Company’s Form 10-K for FY2020. Mr. Murphy’s base salary, target bonus opportunity, equity award opportunities, severance benefits and eligibility under any of the Company’s benefit plans will not otherwise materially change in connection with this change in position.

The foregoing description of the Agreement contained herein does not purport to be complete and is qualified in its entirety by reference to the complete text of the Agreement.  A copy of the Agreement will be filed as an exhibit to the Registrant’s quarterly report on Form 10-Q for the fiscal quarter ending June 30, 2020.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits   

Exhibit Number	Description
99.1	Press Release, dated April 28, 2020, entitled “TriNet Announces First Quarter 2020 Results"
104	Cover Page Interactive Data File (embedded with the Inline XBRL document)

INDEX TO EXHIBITS

Exhibit Number	Description
99.1	Press Release, dated April 28, 2020, entitled “TriNet Announces First Quarter 2020 Results"
104	Cover Page Interactive Data File (embedded with the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			TriNet Group, Inc.
Date:	April 28, 2020	By:	/s/ Samantha Wellington
			Samantha Wellington
			Senior Vice President, Chief Legal Officer and Secretary

EX-99.1

Exhibit 99.1

TriNet Announces First Quarter 2020 Results

12% Growth in GAAP Total Revenues and 13% Growth in Net Service Revenues for the First Quarter 2020

44% Growth in GAAP Net Income and 41% Growth in Adjusted Net Income for the First Quarter 2020

DUBLIN, Calif. —April 28, 2020—TriNet Group,Inc.(NYSE:TNET),a leading provider of comprehensive human resources solutions for small to midsize businesses,todayannouncedfinancialresultsforthe firstquarter endedMarch 31, 2020. The first quarter highlights below include non-GAAP financial measures which are reconciled later in this release.

First quarter highlights include:

• Total revenues increased12% to $1.0 billion and Net Service Revenues increased13% to $283 million, as compared to the same period last year.

• Net income was $91 million, or $1.31 per diluted share, compared to net income of $63 million, or $0.89 per diluted share, in the same period last year.

• Adjusted Net Income was $97 million, or $1.41 per diluted share, compared to Adjusted Net Income of $69 million, or $0.98 per diluted share, in the same period last year.

• Adjusted EBITDA was $145 million, representing an Adjusted EBITDA Margin of 51%.

• Average Worksite Employees (WSEs) increased8% as compared to the same period last year, to approximately 336,000.

• Total WSEs increased6% compared to the same period last year, to approximately 337,000.

Financing activities:

• In March 2020, TriNet drew down the remaining $234 million on its credit facility strengthening its short-term cash reserves.

“Over the last two months, we have witnessed the devastating impact of COVID-19,” said Burton M. Goldfield, TriNet's President and CEO. “Our thoughts are with all those of hurt by this pandemic. As a leader in providing SMBs with comprehensive HR services, we recognize the enormity of what they are facing. We are leveraging our resources to help businesses navigate this difficult environment. Simultaneously, we have taken steps to secure our business, including ensuring the safety of our employees, maintaining the strength of our balance sheet, and continuing to strategically invest in our platform.

Mr. Goldfield continued, “Our strong first quarter financial results highlighted the strength of our vertical market platform and disciplined approach to client selection and cost management. While the environment has changed, our team is united in working through this crisis and positioning our company for long-term success.”

TriNet’s total revenues for the first quarter of 2020increased12% from the first quarter of 2019 to $1.0 billion, while Net Service Revenues (Total revenues less insurance costs) for the first quarter of 2020increased13% from the first quarter 2019, to $283 million. Net Insurance Service Revenues consisted of insurance service revenues of $892 million, less insurance costs of $765 million. Professional service revenues for the first quarter of 2020increased15%, and Net Insurance Service Revenues for the first quarter of 2020increased10%, each as compared to the first quarter of 2019.

At March 31, 2020, TriNet had cash and cash equivalents of $521 million and total debt of $620 million.

1

Quarterly Report on Form 10-Q

We anticipate filing our Quarterly Report on Form 10-Q (“Form 10-Q”) for the three months ended March 31, 2020 with the SEC and making it available at http://www.trinet.com today, April 28, 2020. This press release should be read in conjunction with the Form 10-Q and the related Notes to Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Form 10-Q.

Earnings Conference Call and Audio Webcast

TriNet will host a conference call at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its quarterly and annual results for 2020 and provide quarterly and annual financial guidance for 2020. TriNet encourages participants to pre-register for the conference call. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. To pre-register, go to: http://dpregister.com/10141687. For those who would like to join the call but have not pre-registered, they can do so by dialing +1 (412) 317-5426 and requesting the “TriNet Conference Call.” The live webcast of the conference call can be accessed on the Investor Relations section of TriNet’s website at http://investor.trinet.com. A replay of the webcast will be available on this site for approximately one year. A telephonic replay will be available for one week following the conference call at +1 (412) 317-0088 conference ID: 10141687.

About TriNet

TriNet is a leading provider of a comprehensive human resources solution for small to midsize businesses, or SMBs. We enhance business productivity by enabling our clients to outsource their human resources, or HR, function to us, allowing them to focus on operating and growing their core businesses. Our HR solutions include services such as payroll processing, human capital consulting, employment law compliance and employee benefits, including health insurance, retirement plans and workers compensation insurance. Our services are delivered by our expert team of HR professionals and enabled by our technology platform, with online and mobile tools, which allow our clients and their employees to efficiently conduct their HR transactions anytime and anywhere. For more information, please visit http://www.trinet.com.

Use of Non-GAAP Financial Measures

Reconciliations of non-GAAP financial measures to TriNet’s financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled “Non-GAAP Financial Measures.”

2

Forward-Looking Statements

This press release contains, and statements made during the above referenced conference call will contain, statements that are not historical in nature, are predictive in nature, or that depend upon or refer to future events or conditions or otherwise contain forward-looking statements within the meaning of Section 21 of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including, among other things, TriNet’s expectations and assumptions regarding: its ability to execute its strategic operational plan, including its vertical strategy and process and common platform improvement initiative, its ability to successfully leverage its scale, and its ability to deliver profitable growth. Forward-looking statements are often identified by the use of words such as, but not limited to, “ability,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “impact,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “value,” “will,” “would” and similar expressions or variations. These statements are not guarantees of future performance, but are based on management’s expectations as of the date hereof and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from our current expectations and any past or future results, performance or achievements. Investors are cautioned not to place undue reliance upon any forward-looking statements.

Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include: the impact of the COVID-19 pandemic on our business and the business of our clients; our ability to mitigate the business risks we face as a co-employer; our ability to manage unexpected changes in workers’ compensation and health insurance claims and costs by worksite employees; the effects of volatility in the financial and economic environment on the businesses that make up our client base; the impact of the concentration of our clients in certain geographies and industries; the impact of failures or limitations in the business systems we rely upon; adverse changes in our insurance coverage or our relationships with key insurance carriers; our ability to manage our client attrition; our ability to improve our technology to satisfy regulatory requirements and meet the expectations of our clients; our ability to effectively integrate businesses we have acquired or may acquire in the future; our ability to effectively manage and improve our operational processes; our ability to attract and retain qualified personnel; the effects of increased competition and our ability to compete effectively; the impact on our business of cyber-attacks and security breaches; our ability to secure our information technology infrastructure and our confidential, sensitive and personal information from cyber-attacks and security breaches; our ability to comply with constantly evolving data privacy and security laws; our ability to manage changes in, uncertainty regarding, or adverse application of the complex laws and regulations that govern our business; changing laws and regulations governing health insurance and employee benefits; our ability to be recognized as an employer of worksite employees under federal and state regulations; changes in the laws and regulations that govern what it means to be an employer, employee or independent contractor; our ability to comply with the laws and regulations that govern PEOs and other similar industries; the outcome of existing and future legal and tax proceedings; fluctuation in our results of operation and stock price due to factors outside of our control, such as the volume and severity of our workers’ compensation and health insurance claims and the amount and timing of our insurance costs, operating expenses and capital expenditure requirements; our ability to comply with the restrictions of our credit facility and meet our debt obligations; and the impact of concentrated ownership in our stock.  Any of these factors could cause our actual results to differ materially from our anticipated results.

3

Further information on risks that could affect TriNet’s results is included in our filings with the U.S. Securities and Exchange Commission (SEC), including under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on our investor relations website at http://investor.trinet.com and on the SEC website at www.sec.gov. Copies of these filings are also available by contacting TriNet Corporation's Investor Relations Department at (510) 875-7201. Except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements in this press release, and any forward-looking statements in this press release speak only as of the date of this press release. In addition, we do not assume any obligation, and do not intend, to update any of our forward-looking statements, except as required by law.

Contacts:
Investors:	Media:
Alex Bauer	Fatima Afzal
TriNet	TriNet
Investorrelations@TriNet.com	Fatima.Afzal@TriNet.com
(510) 875-7201	(510) 875-7265

4

FINANCIAL HIGHLIGHTS

Key Financial and Operating Metrics

We regularly review certain key financial and operating metrics to evaluate growth trends, measure our performance and make strategic decisions. These key financial and operating metrics may change over time. Our key financial and operating metrics for the periods presented were as follows:

	Three Months Ended March 31,
(in millions, except per share and WSE data)	2020		2019		% Change
Income Statement Data:
Total revenues	$	1,048	$	934	12	%
Operating income	120		82		46
Net income	91		63		44
Diluted net income per share of common stock	1.31		0.89		47
Non-GAAP measures (1):
Net Service Revenues	283		251		13
Net Insurance Service Revenues	127		115		10
Adjusted EBITDA	145		108		34
Adjusted Net income	97		69		41
Operating Metrics:
Average WSEs	336,348		312,760		8	%
Total WSEs at period end	336,846		316,906		6

(1)    Refer to Non-GAAP Financial Measures section below for definitions and reconciliations from GAAP measures.

(in millions)	March 31, 2020	December 31, 2019	% Change
Balance Sheet Data:
Working capital	284	228	25	%
Total assets	2,765	2,748	1
Debt	620	391	59
Total stockholders’ equity	533	475	12

	Three Months Ended March 31,
(in millions)	2020			2019			% Change
Cash Flow Data:
Net cash used in operating activities	$	(282	)	$	(142	)	99		%
Net cash used in investing activities	(94		)	(11		)	755
Net cash provided by (used in) financing activities	185			(47		)	(494	)
Non-GAAP measures (1):
Corporate operating cash flows	119			78			53

(1) Refer to Non-GAAP Financial Measures section in the following pages for definitions and reconciliations from GAAP measures.

5

FINANCIAL STATEMENTS

TRINET GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended March 31,
(in millions except per share data)	2020			2019
Professional service revenues	$	156		$	136
Insurance service revenues	892			798
Total revenues	1,048			934
Insurance costs	765			683
Cost of providing services	64			64
Sales and marketing	46			46
General and administrative	33			36
Systems development and programming	9			12
Depreciation and amortization of intangible assets	11			11
Total costs and operating expenses	928			852
Operating income	120			82
Other income (expense):
Interest expense, bank fees and other	(4		)	(5		)
Interest income	5			6
Income before provision for income taxes	121			83
Income taxes	30			20
Net income	$	91		$	63
Other comprehensive income, net of income taxes	2			—
Comprehensive income	$	93		$	63
Net income per share:
Basic	$	1.32		$	0.91
Diluted	$	1.31		$	0.89
Weighted average shares:
Basic	68			70
Diluted	69			71

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FINANCIAL STATEMENTS

TRINET GROUP, INC.

CONSOLIDATED BALANCE SHEETS (Unaudited)

(In millions)	March 31, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	521		$	213
Investments	65			68
Restricted cash, cash equivalents and investments	779			1,180
Accounts receivable, net	9			9
Unbilled revenue, net	380			285
Prepaid expenses, net	55			52
Other current assets	83			64
Total current assets	1,892			1,871
Restricted cash, cash equivalents and investments, noncurrent	204			212
Investments, noncurrent	130			125
Property, equipment and software, net	82			85
Operating lease right-of-use asset	52			55
Goodwill	289			289
Other intangible assets, net	14			15
Other assets	102			96
Total assets	$	2,765		$	2,748
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and other current liabilities	$	63		$	31
Revolving credit agreement borrowings	234			—
Long-term debt	22			22
Client deposits	38			44
Accrued wages	429			391
Accrued health insurance costs, net	165			167
Accrued workers' compensation costs, net	63			61
Payroll tax liabilities and other payroll withholdings	567			901
Operating lease liabilities	16			17
Insurance premiums and other payables	11			9
Total current liabilities	1,608			1,643
Long-term debt, noncurrent	364			369
Accrued workers' compensation costs, noncurrent, net	145			144
Deferred taxes	62			61
Operating lease liabilities, noncurrent	45			48
Other non-current liabilities	8			8
Total liabilities	2,232			2,273
Stockholders’ equity:
Preferred stock	—			—
Common stock and additional paid-in capital	703			694
Accumulated deficit	(172		)	(219		)
Accumulated other comprehensive income	2			—
Total stockholders’ equity	533			475
Total liabilities and stockholders’ equity	$	2,765		$	2,748

7

FINANCIAL STATEMENTS

TRINET GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Three Months Ended March 31,
(in millions)	2020		2019
Operating activities
Net income	91		63
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	15		18
Noncash lease expense	4		—
Stock based compensation	9		9
Changes in operating assets and liabilities:
Accounts receivable, net	—		1
Unbilled revenue, net	(95	)	(9	)
Prepaid expenses, net	(3	)	(12	)
Accounts payable and other current liabilities	29		9
Client deposits	(6	)	(19	)
Accrued wages	38		17
Accrued health insurance costs, net	(2	)	—
Accrued workers' compensation costs, net	3		(2	)
Payroll taxes payable and other payroll withholdings	(334	)	(180	)
Operating lease liabilities	(5	)	(4	)
Other assets	(28	)	(30	)
Other liabilities	2		(3	)
Net cash used in operating activities	(282	)	(142	)
Investing activities
Purchases of marketable securities	(155	)	(30	)
Proceeds from sales and maturities of marketable securities	67		31
Acquisitions of property and equipment	(6	)	(12	)
Net cash used in investing activities	(94	)	(11	)
Financing activities
Repurchase of common stock	(40	)	(38	)
Proceeds from issuance of common stock	—		1
Awards effectively repurchased for required employee withholding taxes	(3	)	(4	)
Proceeds from revolving credit agreement borrowings	234		—
Repayment of debt	(6	)	(6	)
Net cash provided by (used in) financing activities	185		(47	)
Net decrease in cash and cash equivalents, unrestricted and restricted	(191	)	(200	)
Cash and cash equivalents, unrestricted and restricted:
Beginning of period	1,456		1,349
End of period	1,265		1,149
Supplemental disclosures of cash flow information
Interest paid	3		4
Income taxes paid, net	1		1
Supplemental schedule of noncash investing and financing activities
Payable for purchase of property and equipment	1		5

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NON-GAAP FINANCIAL MEASURES

Non-GAAP Financial Measures

In addition to the selected financial measures presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), we monitor other non-GAAP financial measures that we use to manage our business, to make planning decisions, to allocate resources and to use as performance measures in our executive compensation plan. These key financial measures provide an additional view of our operational performance over the long term and provide information that we use to maintain and grow our business.

The presentation of these non-GAAP financial measures is used to enhance the understanding of certain aspects of our financial performance. It is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.

Non-GAAP Measure	Definition	How We Use The Measure
Net Service Revenues	• Sum of professional service revenues and Net Insurance Service Revenues, or total revenues less insurance costs.	• Provides a comparable basis of revenues on a net basis. Professional service revenues are represented net of client payroll costs whereas insurance service revenues are presented gross of insurance costs for financial reporting purposes. • Acts as the basis to allocate resources to different functions and evaluates the effectiveness of our business strategies by each business function. • Provides a measure, among others, used in the determination of incentive compensation for management.
Net Insurance Service Revenues	• Insurance revenues less insurance costs.	• Is a component of Net Service Revenues. • Provides a comparable basis of revenues on a net basis. Professional service revenues are presented net of client payroll costs whereas insurance service revenues are presented gross of insurance costs for financial reporting purposes. Promotes an understanding of our insurance services business by evaluating insurance service revenues net of our WSE related costs which are substantially pass-through for the benefit of our WSEs. Under GAAP, insurance service revenues and costs are recorded gross as we have latitude in establishing the price, service and supplier specifications. • We also sometimes refer to Net Insurance Margin (NIM), which is the ratio of Net Insurance Revenue to Insurance Service Revenue.

9

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA	• Net income, excluding the effects of: - income tax provision, - interest expense, - depreciation, - amortization of intangible assets, and - stock-based compensation expense.	• Provides period-to-period comparisons on a consistent basis and an understanding as to how our management evaluates the effectiveness of our business strategies by excluding certain non-cash charges such as depreciation and amortization, and stock-based compensation recognized based on the estimated fair values. We believe these charges are either not directly resulting from our core operations or not indicative of our ongoing operations. • Enhances comparisons to prior periods and, accordingly, facilitates the development of future projections and earnings growth prospects. • Provides a measure, among others, used in the determination of incentive compensation for management. •We also sometimes refer to Adjusted EBITDA margin, which is the ratio of Adjusted EBITDA to Net Service Revenue.
Adjusted Net Income	• Net income, excluding the effects of: - effective income tax rate(1), - stock-based compensation, - amortization of intangible assets, - non-cash interest expense(2), - the income tax effect (at our effective tax rate(1)) of these pre-tax adjustments.	• Provides information to our stockholders and board of directors to understand how our management evaluates our business, to monitor and evaluate our operating results, and analyze profitability of our ongoing operations and trends on a consistent basis by excluding certain non-cash charges.
Corporate Operating Cash Flows	• Net cash (used in) provided by operating activities, excluding the effects of: - Assets associated with WSEs (accounts receivable, unbilled revenue, prepaid expenses and other current assets) and - Liabilities associated with WSEs (client deposits, accrued wages, payroll tax liabilities and other payroll withholdings, accrued health benefit costs, accrued workers' compensation costs, insurance premiums and other payables, and other current liabilities).	• Provides information that our stockholders and management can use to evaluate our cash flows from operations independent of the current assets and liabilities associated with our WSEs. • Enhances comparisons to prior periods and, accordingly, used as a liquidity measure to manage liquidity between corporate and WSE related activities, and to help determine and plan our cash flow and capital strategies.

(1) Non-GAAP effective tax rate is 25.5% and 26% for the first quarter of 2020 and 2019, respectively, which excludes the income tax impact from stock-based compensation, changes in uncertain tax positions, and nonrecurring benefits or expenses from federal legislative changes.

(2) Non-cash interest expense represents amortization and write-off of our debt issuance costs.

10

NON-GAAP FINANCIAL MEASURES

Reconciliation of GAAP to Non-GAAP Measures

The table below presents a reconciliation of total revenues to Net Service Revenues:

	Three Months Ended March 31,
(in millions)	2020		2019
Total revenues	$	1,048	$	934
Less: Insurance costs	765		683
Net Service Revenues	$	283	$	251

The table below presents a reconciliation of insurance service revenues to Net Insurance Service Revenues:

	Three Months Ended March 31,
(in millions)	2020			2019
Insurance service revenues	$	892		$	798
Less: Insurance costs	765			683
Net Insurance Service Revenues	$	127		$	115
Net Insurance Service Revenue Margin	14		%	14		%

The table below presents a reconciliation of net income to Adjusted EBITDA:

	Three Months Ended March 31,
(in millions)	2020			2019
Net income	$	91		$	63
Provision for income taxes	30			20
Stock based compensation	9			9
Interest expense and bank fees	4			5
Depreciation and amortization of intangible assets	11			11
Adjusted EBITDA	$	145		$	108
Adjusted EBITDA Margin	51		%	43		%

The table below presents a reconciliation of net income to Adjusted Net Income and Adjusted Net Income per share - diluted:

	Three Months Ended March 31,
(in millions, except per share data)	2020			2019
Net income	$	91		$	63
Effective income tax rate adjustment	(1		)	(1		)
Stock based compensation	9			9
Amortization of intangible assets	1			1
Income tax impact of pre-tax adjustments	(3		)	(3		)
Adjusted Net Income	$	97		$	69
GAAP weighted average shares of common stock - diluted	69			71
Adjusted Net Income per share - diluted	$	1.41		$	0.98

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NON-GAAP FINANCIAL MEASURES

The table below presents a reconciliation of net cash used in operating activities to Corporate Operating Cash flows:

	Three Months Ended March 31,
(in millions)	2020			2019
Net cash used in operating activities	$	(282	)	$	(142	)
Change in WSE related other current assets	110			45
Change in WSE related liabilities	291			175
Corporate Operating Cash Flows	$	119		$	78

12

XML

Cover Non-printing	Apr. 28, 2020
Cover page.
Entity Central Index Key	0000937098
Amendment Flag	false
No Trading Symbol Flag

XML

Cover Cover	Apr. 28, 2020
Cover page.
Entity File Number	001-36373
Entity Tax Identification Number	95-3359658
Entity Address, Postal Zip Code	94568
City Area Code	510
Local Phone Number	352-5000
Document Type	8-K
Document Period End Date	Apr. 28, 2020
Entity Registrant Name	TRINET GROUP, INC.
Entity Emerging Growth Company	false
Title of 12(b) Security	Common stock par value $0.000025 per share
Pre-commencement Issuer Tender Offer	false
Pre-commencement Tender Offer	false
Written Communications	false
Soliciting Material	false
Entity Incorporation, State or Country Code	DE
Trading Symbol	TNET
Security Exchange Name	NYSE
Entity Address, Address Line One	One Park Place, Suite 600
Entity Address, City or Town	Dublin,
Entity Address, State or Province	CA