ManpowerGroup 2006 Annual Report Download - page 54

Manpower฀2006฀Annual฀Report
50
NOT ES฀TO฀CONSOLID AT ED฀FINA NCIAL ฀S TATEMENT S฀
in฀million s,฀except฀per฀sha re฀data
Notes฀to฀Consolidated฀Financial฀Statements฀
Pretax฀income฀of฀foreign฀operations฀was฀$264.9,฀$189.7฀and฀$170.9฀in฀2006,฀2005฀and฀2004,฀respectively.฀We฀have฀not฀฀
provided฀U.S.฀income฀taxes฀and฀foreign฀withholding฀taxes฀on฀$863.7฀of฀unremitted฀earnings฀of฀foreign฀subsidiaries฀that฀is฀฀
considered฀to฀be฀reinvested฀indefinitely.฀Deferred฀taxes฀are฀provided฀on฀unremitted฀earnings฀of฀foreign฀subsidiaries฀when฀we฀
plan฀to฀remit฀those฀earnings.฀As฀of฀December฀31,฀2006฀and฀2005,฀we฀have฀recorded฀a฀deferred฀tax฀liability฀of฀$23.5฀and฀$9.8,฀
respectively,฀related฀to฀foreign฀earnings฀that฀we฀plan฀to฀remit.
We฀have฀tax฀contingencies฀recorded฀related฀to฀items฀in฀various฀countries,฀which฀are฀included฀in฀Other฀Long-Term฀Liabilities.฀
These฀reserve฀balances฀will฀be฀adjusted฀to฀the฀extent฀that฀these฀items฀are฀settled฀for฀amounts฀different฀than฀the฀amounts฀we฀
have฀recorded.฀In฀2004,฀we฀received฀notification฀that฀income฀tax฀audits฀for฀certain฀years฀had฀been฀completed.฀Based฀on฀the฀฀
results฀of฀these฀audits,฀we฀reversed฀a฀tax฀contingency฀reserve฀of฀$8.0฀to฀income฀in฀the฀third฀quarter฀of฀2004฀($0.08฀per฀share฀on฀
a฀diluted฀basis).
06.
ACC OUNTS ฀R ECEIVABLE฀SE CURIT IZATIO N
We฀and฀certain฀of฀our฀U.S.฀subsidiaries฀have฀an฀agreement฀(the฀“Receivables฀Facility”)฀with฀a฀financial฀institution฀whereby฀we฀
may฀transfer฀on฀a฀continuous฀basis฀an฀interest฀in฀all฀eligible฀trade฀accounts฀receivable.฀Pursuant฀to฀the฀Receivables฀Facility,฀we฀
formed฀Ironwood฀Capital฀Corporation฀(“ICC”),฀a฀wholly฀owned,฀special฀purpose,฀bankruptcy-remote฀subsidiary฀that฀is฀fully฀฀
consolidated฀in฀our฀financial฀statements.฀ICC฀was฀formed฀for฀the฀sole฀purpose฀of฀transferring฀receivables฀that฀we฀and฀certain฀of฀
our฀subsidiaries฀generate.฀Under฀the฀Receivables฀Facility,฀we฀and฀certain฀of฀our฀subsidiaries,฀irrevocably฀and฀without฀recourse,฀
may฀transfer฀all฀of฀our฀accounts฀receivable฀to฀ICC.฀ICC,฀in฀turn,฀subject฀to฀certain฀conditions,฀may฀from฀time฀to฀time฀transfer฀an฀
undivided฀interest฀in฀these฀receivables฀and฀is฀permitted฀to฀receive฀advances฀of฀up฀to฀$200.0฀for฀the฀transfer฀of฀such฀undivided฀
interest.฀In฀July฀2006,฀we฀amended฀the฀Receivables฀Facility฀to฀extend฀its฀maturity฀to฀July฀2007฀and฀reduce฀the฀fees฀for฀the฀facility.฀
All฀other฀terms฀remain฀substantially฀unchanged.
Under฀the฀Receivables฀Facility,฀ICC฀has฀the฀ability฀to฀repurchase,฀in฀full฀or฀in฀part,฀the฀accounts฀receivable฀it฀transferred฀to฀the฀
third฀party.฀Therefore,฀transfers฀made฀do฀not฀qualify฀for฀sale฀accounting,฀and฀accordingly,฀the฀receivables฀transferred฀to฀the฀third฀
party฀remain฀on฀our฀consolidated฀balance฀sheet฀with฀the฀corresponding฀advance฀being฀recorded฀as฀debt฀and฀amounts฀charged฀
on฀outstanding฀borrowings฀during฀the฀year฀are฀recorded฀as฀interest฀expense.฀No฀amounts฀were฀advanced฀under฀this฀facility฀as฀
of฀December฀31,฀2006฀and฀2005.
Fees฀associated฀with฀the฀amounts฀advanced฀were฀$0.4฀in฀2006,฀2005฀and฀2004,฀respectively,฀and฀were฀recorded฀as฀Other฀
Expense฀in฀the฀consolidated฀statements฀of฀operations.
07.
GOO DWILL
Changes฀in฀the฀carrying฀value฀of฀goodwill฀by฀reportable฀segment฀are฀as฀follows:
United฀States EMEA
Jefferson฀
Wells฀
Right฀
Management
Other฀
Operations Total
Balance,฀December฀31,฀2004 $฀ 81.1 $฀ 215.2 $฀ 148.9 $฀ 450.9 $฀ 53.8 $฀ 949.9
Goodwill฀acquired฀throughout฀the฀year — 1.6 — 0.9 0.7 3.2
Currency฀impact฀and฀other — (23.2) 0.3 (3.2) (3.1) (29.2)
Balance,฀December฀31,฀2005 $฀ 81.1 $฀ 193.6 $฀ 149.2 $฀ 448.6 $฀ 51.4 $฀ 923.9
Goodwill฀acquired฀throughout฀the฀year 0.4 1.5 0.6 14.0 — 16.5
Currency฀impact฀and฀other — 25.7 — 6.1 0.4 32.2
Balance,฀December฀31,฀2006 $฀ 81.5 $฀ 220.8 $฀ 149.8 $฀ 468.7 $฀ 51.8 $฀ 972.6
There฀were฀no฀significant฀reductions฀to฀goodwill฀as฀a฀result฀of฀dispositions฀or฀impairments฀during฀2006฀or฀2005.