ManpowerGroup 2004 Annual Report Download - page 72

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2004 Annual Report MANPOWER INC.70
The acquisition-related costs consist primarily of investment banking, legal and accounting fees, printing costs and other
external costs directly related to the acquisition.
In connection with this acquisition, we have also established reserves for severances and other office closure costs
related to streamlining RMC’s worldwide operations that total $24.5. We have recorded a net deferred tax asset of $6.5
related to these items. During 2004, approximately $7.8 was paid from these reserves. Of the remaining balance,
approximately $15.1 will be paid during 2005, with the remaining $1.6 to be paid thereafter.
Based on an independent valuation, we have identified $162.5 of amortizable intangible assets related to RMC’s customer
list, technology and franchise agreements. These items were assigned a weighted-average useful life of approximately
15 years. We have also identified $191.3 as an indefinite-lived intangible asset related to RMC’s tradename. A deferred
tax liability of $136.3 was established for the difference between book and tax basis related to RMC’s intangible assets.
Based on the independent valuation and the fair value of tangible assets acquired, $389.6 was recorded as Goodwill.
Approximately $8.0 of Goodwill, related to the acquisition fees, will be deductible for tax purposes. Therefore we’ve recorded
a deferred tax asset of $2.9.
The following represents the assets acquired and liabilities assumed to arrive at net cash paid and equity issued for the
acquisition of RMC as of January 22, 2004.
Current Assets
Cash $ 10.8
Accounts receivable, net 86.0
Other current assets 20.4
Goodwill 389.6
Intangible assets 353.8
Other assets 18.6
Property and equipment 41.8
Total assets acquired 921.0
Current Liabilities
Accounts payable (17.2)
Accrued liabilities (122.4)
Long-term debt (4.4)
Long-term deferred tax liability (123.7)
Other long-term liabilities (22.7)
Total liabilities assumed (290.4)
Cash paid and value of equity issued $ 630.6
The pro forma consolidated results below combine the historical results of our operations and RMC’s operations for
the years ended December 31, 2004 and 2003 and have been prepared to reflect the acquisition as if it had been
consummated as of the beginning of each period.
Year ended December 31 2004 2003
Revenue from services $ 14,954.0 $ 12,636.1
Net earnings 246.4 173.5
Net earnings per share $2.75$1.98
Net earnings per share – diluted 2.58 1.88
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
in millions, except share and per share data