ManpowerGroup 2004 Annual Report Download - page 68

2004 Annual Report MANPOWER INC.66
Marketable Securities
We account for our security investments under SFAS No. 115, “Accounting for Certain Investments in Debt and Equity
Securities,” and have determined that all such investments are classified as available-for-sale. Accordingly, unrealized gains
and unrealized losses that are determined to be temporary, net of related income taxes, are included in Accumulated
Other Comprehensive Income, which is a separate component of Shareholders’ Equity. Realized gains and losses, and
unrealized losses determined to be other-than-temporary, are recorded in our consolidated statements of operations. As
of December 31, 2004 and 2003, our available-for-sale investments had a market value of $8.8 and $6.4, respectively,
and an adjusted cost basis of $6.3 in 2004 and 2003. As of December 31, 2004, none of these available-for-sale invest-
ments had unrealized losses.
We hold a 49% interest in our Swiss franchise, which maintains an investment portfolio with a market value of $115.2
as of December 31, 2004. This portfolio is comprised of a wide variety of European and U.S. debt and equity securities
as well as various professionally-managed funds, all of which are classified as available-for-sale. Our net share of realized
gains and losses, and declines in value determined to be other-than-temporary, are included in our consolidated state-
ments of operations. Our share of net unrealized gains and unrealized losses that are determined to be temporary related
to these investments are included in Accumulated Other Comprehensive Income, with the offsetting amount increasing
or decreasing our investment in the franchise. In this portfolio, there were no unrealized losses by investment type as
of December 31, 2004.
Capitalized Software
We capitalize purchased software as well as internally developed software. Internal software development costs are
capitalized from the time the internal use software is considered probable of completion until the software is ready for
use. Business analysis, system evaluation, selection and software maintenance costs are expensed as incurred.
Capitalized software costs are amortized using the straight-line method over the estimated useful life of the software.
The net capitalized software balance of $47.2 and $46.7 as of December 31, 2004 and 2003, respectively, is included
in Other Assets in the consolidated balance sheets. Amortization expense related to the capitalized software costs was
$9.3, $5.5, and $4.7 for 2004, 2003, and 2002, respectively.
Property and Equipment
A summary of property and equipment as of December 31 is as follows:
2004 2003
Land $ 2.5 $ 2.3
Buildings 32.4 29.7
Furniture, fixtures and autos 221.2 200.0
Computer equipment 169.8 163.3
Leasehold improvements 243.9 211.0
$ 669.8 $ 606.3
Property and equipment are stated at cost and are depreciated using primarily the straight-line method over the following
estimated useful lives: buildings – up to 40 years; leasehold improvements – lesser of life of asset or lease term;
furniture and equipment – 3 to 15 years. Expenditures for renewals and betterments are capitalized whereas expenditures
for repairs and maintenance are charged to income as incurred. Upon sale or disposition of property and equipment,
the difference between the unamortized cost and the proceeds is recorded as either a gain or a loss and is included in
our consolidated statements of operations.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
in millions, except share and per share data