HUDSON HIGHLAND GROUP, INC.

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
CONDENSED STATEMENTS OF OPERATIONS (PARENT COMPANY ONLY)
(in thousands)


	Year Ended December 31,
	2011			2010			2009
Operating expenses:
Selling, general and administrative expenses	$	19,860		$	18,848		$	17,028
Depreciation and amortization		595			152			181
Business reorganization and integration expenses		—			—			137
Operating loss		(20,455	)		(19,000	)		(17,346	)
Other (expense) income:
Interest, net		28			3,084			3,135
Corporate costs allocation and other, net		17,770			14,293			3,661
Equity in earnings (losses) of subsidiaries, net of income taxes		13,557			(1,833	)		(36,047	)
Fee for early extinguishment of credit facility		—			(563	)		—
Income (loss) from continuing operations before provision for income taxes		10,900			(4,019	)		(46,597	)
Provision for (benefit from) income taxes		(9	)		422			(3,645	)
Income (loss) from continuing operations		10,909			(4,441	)		(42,952	)
Income (loss) from discontinued operations, net of income taxes		—			(244	)		2,343
Net income (loss)	$	10,909		$	(4,685	)	$	(40,609	)

HUDSON HIGHLAND GROUP, INC.

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY)
(in thousands, except per share amounts)


	December 31,
	2011		2010
ASSETS
Current assets:
Cash and cash equivalents	$	13,628	$	6,424
Prepaid and other		869		961
Total current assets		14,497		7,385
Property and equipment, net		2,536		2,248
Investment in and advances to/from subsidiaries		95,755		90,190
Other assets		2,377		2,179
Total assets	$	115,165	$	102,002
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, accrued expenses and other current liabilities	$	5,417	$	6,457
Total current liabilities		5,417		6,457
Deferred rent and other non-current liabilities		2,391		2,267
Total liabilities		7,808		8,724
Stockholders’ equity		107,357		93,278
Total liabilities and stockholders’ equity	$	115,165	$	102,002

HUDSON HIGHLAND GROUP, INC.

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY)
(in thousands)


	For the Years Ended December 31,
	2011			2010			2009
Cash flows from operating activities:
Net income (loss)	$	10,909			(4,685	)		(40,609	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Dividend received from subsidiaries		4,515			3,123			—
Non-cash (income) losses from subsidiaries, net of taxes		(13,557	)		5,599			38,960
Depreciation and amortization		595			152			181
Stock-based compensation		1,292			693			638
Net gain on disposal of assets		—			—			(11,628	)
Fee for early extinguishment of credit facility		—			563			—
Other, net		365			460			—
Changes in assets and liabilities, net of effects of business acquisitions:
(Increase) decrease in prepaid and other assets		(1,720	)		1,120			437
(Increase) decrease in due from subsidiaries		7,093			(13,200	)		(4,624	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(828	)		2,696			(3,071	)
Increase (decrease) in accrued business reorganization expenses		—			(210	)		(790	)
Net cash provided by (used in) operating activities		8,664			(3,689	)		(20,506	)
Cash flows from investing activities:
Capital expenditures		367			16			73
Proceeds from sale of assets		—			—			11,628
Change in restricted cash		(1	)		599			515
Payment for acquisitions		—			(2,438	)		(1,669	)
Advances to and investments in subsidiaries, net		(1,438	)		(5,667	)		(3,356	)
Net cash provided by (used in) investing activities		(1,072	)		(7,490	)		7,191
Cash flows from financing activities:
Borrowings under credit facility		37,963			10,869			51,985
Repayments under credit facility		(37,963	)		(21,325	)		(46,836	)
Payment for early extinguishment of credit facility		—			(563	)		—
Payment of deferred financing costs		—			(1,565	)		—
Proceeds from issuance of common stock, net		—			19,116			—
Purchase of treasury stock, including fees		—			—			(703	)
Purchase of restricted stock from employees		(388	)		(71	)		(75	)
Net cash provided by (used in) financing activities		(388	)		6,461			4,371
Net (decrease) increase in cash and cash equivalents		7,204			(4,718	)		(8,944	)
Cash and cash equivalents, beginning of the period		6,424			11,142			20,086
Cash and cash equivalents, end of the period	$	13,628		$	6,424		$	11,142

HUDSON HIGHLAND GROUP, INC.

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
NOTES TO CONDENSED FINANCIAL STATEMENTS
(in thousands)

NOTE 1 — BASIS OF PRESENTATION

Hudson Highland Group, Inc. (the “Parent Company”) is a holding company that conducts substantially all of its business through its subsidiaries. As specified in certain of its subsidiaries’ credit agreements in The Netherlands, Australia and New Zealand, there are restrictions on the Parent Company’s ability to obtain funds from certain of its subsidiaries through dividends, intercompany expenses or interest (refer to Note 13, “Credit Agreements”, to the Company’s Consolidated Financial Statements). As of December 31, 2011, the Company was in a stockholders’ equity position of $107,357, and approximately $35,478 constituted restricted net assets as defined in Rule 4-08(e)(3) of Regulation S-X. The restricted net assets of the Company’s subsidiaries exceeded 25% of the consolidated net assets of the Company and its subsidiaries, thus requiring this Schedule I, “Condensed Financial Information of the Registrant.” Accordingly, the results of operations and cash flows for the years ended December 31, 2011, 2010 and 2009, and the balance sheets as of December 31, 2011 and 2010 have been presented on a “Parent-only” basis. In these statements, the Company’s investments in its consolidated subsidiaries are presented under the equity method of accounting. The Parent-only financial statements should be read in conjunction with the Company’s audited Consolidated Financial Statements included elsewhere herein.

Certain prior year amounts have been reclassified to conform to the current period presentation. For the years ended December 31, 2010 and 2009, the Company reclassified interest income of $4,184 and $3,237, respectively, and provision for income taxes of $418 and $324, respectively, to the equity earnings of subsidiaries. The reclassified amounts related to the interest income earned from the Company’s Australian subsidiary and its withholding tax that were distributed to the Company’s holding company subsidiary.

NOTE 2 — DIVIDENDS RECEIVED

The Company received dividends of $4,515, $3,123 and $0 in 2011, 2010 and 2009, respectively, from its consolidated subsidiaries.

NOTE 3 — CREDIT AGREEMENTS

Several of the Company’s subsidiaries have credit agreements with lenders. Borrowings under the certain agreements are based on agreed percentage of eligible account receivable. The borrowings of the holding company are secured by the accounts receivable of the Company’s U.S. and U.K. subsidiaries. Refer to Note 13, “Credit Agreements” to the Company’s Consolidated Financial Statements for further details.

HUDSON HIGHLAND GROUP, INC. SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT CONDENSED STATEMENTS OF OPERATIONS (PARENT COMPANY ONLY) (in thousands)

HUDSON HIGHLAND GROUP, INC. SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY) (in thousands, except per share amounts)

HUDSON HIGHLAND GROUP, INC. SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY) (in thousands)