ManpowerGroup 2007 Annual Report Download - page 63

60 Manpower 2007 Annual Report Notes to Consolidated Financial Statements
Notes To Consolidated Financial Statements
in millions, except per share data
14.
Contingencies
Litigation
We are involved in a number of lawsuits arising in the ordinary course of business which will not, in the opinion of management,
have a material effect on our results of operations, fi nancial position or cash fl ows.
In November 2004, French authorities commenced an investigation at our French headquarters. According to the search
warrant, the investigation stems from a complaint submitted during 2003 to the European Commission and subsequently
transferred to France’s Direction Generale de la Concurrence, de la Consommation et de la Repression des Fraudes (the
‘Competition Council’), a body of the French Financial Department that investigates frauds and competition violations. In
November 2007, we received a Statement of Objections from the Competition Council in connection with their investigation.
The Statement of Objections alleges illegal information sharing between us and certain of our competitors.
A Statement of Objections is a further step in the proceedings under French competition law with respect to the matter. We
have reviewed the allegations made in the Statement of Objections with our legal counsel, have responded to the Competition
Council and intend to vigorously defend our position as the proceedings continue. We have had discussions with representatives
of the Competition Council and with our legal counsel, and at this time, we are not able to predict the outcome of the proceedings,
the ultimate exposure or the timing of any resolution. However, based on the probability that we will incur liability and other
information currently available, we recorded a reserve of $15.0 in the fourth quarter related to this matter. The fi nal resolution of
this matter could differ signifi cantly from the amount that we have recorded.
Guarantees
We have entered into certain guarantee contracts and stand-by letters of credit that total $129.3 ($78.2 for guarantees and
$51.1 for stand-by letters of credit). The guarantees primarily relate to indebtedness and bank accounts. The stand-by letters of
credit relate to insurance requirements and debt facilities. If certain conditions were met under these arrangements, we would
be required to satisfy our obligation in cash. Due to the nature of these arrangements and our historical experience, we do not
expect to make any signifi cant payments under these arrangements.
15.
Segment Data
We are organized and managed primarily on a geographic basis, with the exception of Jefferson Wells and Right Management,
which are operated as separate global business units. Each country and business unit primarily has its own distinct operations,
is managed locally by its own management team and maintains its own fi nancial reports. Each operation reports directly, or
indirectly through a regional manager, to a member of executive management. Given this reporting structure, all of our operations
have been segregated into the following reporting segments: the United States; France; Other EMEA (Europe, Middle East and
Africa, excluding France and Italy); Italy; Jefferson Wells; Right Management; and Other Operations.
The United States, France, Other EMEA, Italy and Other Operations segments derive a signifi cant majority of their revenues
from the placement of contingent workers. The remaining revenues within these segments are derived from other human
resource services, including permanent employee recruitment, temporary and permanent employee testing, selection, and
training and recruitment process outsourcing. The Jefferson Wells segment revenues are derived from services related to internal
controls, tax, technology risk management, and fi nance and accounting. The Right Management segment revenues are
derived from outplacement and consulting services. Segment revenues represent sales to external clients primarily within a
single segment. Due to the nature of our business, we do not have export or intersegment sales. We provide services to a wide
variety of clients, none of which individually comprise a signifi cant portion of revenue for us as a whole.
The accounting policies of the segments are the same as those described in the summary of signifi cant accounting policies. We
evaluate performance based on Operating Unit Profi t, which is equal to segment revenues less direct costs and branch and
national headquarters operating costs. This profi t measure does not include amortization of intangibles related to the acquisition
of Right Management, interest and other income and expense amounts or income taxes. Total assets for the segments are
reported after the elimination of investments in subsidiaries and intercompany accounts.