ManpowerGroup 2008 Annual Report Download - page 23

21Manpower Annual Report 2008 Management’s Discussion & Analysis
Net Earnings Per Share– Diluted decreased 52.0% to $2.75 in 2008 compared to $5.73 in 2007. This decrease includes:
the lesser impact from the modification to the payroll tax calculation in France, a $44.8 million, net of tax decrease, or $0.50 per
diluted share;
the increased expense for the French competition investigation, a $35.0 million, net of tax decrease, or $0.45 per diluted share;
the goodwill and intangible asset impairment charge, a $154.6 million, net of tax decrease, or $1.94 per diluted share;
the 2004 business tax refund in France, a $28.3 million, net of tax increase, or $0.36 per diluted share;
the global reorganization costs recorded in the fourth quarter of 2008, a $27.2 million, net of tax decrease, or $0.34 per
diluted share; and
higher foreign currency exchange rates, a $0.37 per diluted share increase.
Weighted Average Shares – Diluted decreased 5.8% to 79.7 million in 2008 from 84.6 million in 2007. This decline is primarily
a result of our repurchase of 2.2 million shares and 6.1 million shares of our common stock during 2008 and 2007, respectively,
and an increase in the total anti-dilutive shares excluded from the calculation in 2008 compared to 2007.
CONSOLIDATED RESULTS – 2007 COMPARED TO 2006
The following table presents selected consolidated financial data for 2007 as compared to 2006.
Variance in Organic
Reported Constant Constant
(in millions except per share data) 2007 2006 Variance Currency Currency
Revenues from services $ 20,500.3 $ 17,562.5 16.7% 9.0% 8.7%
Cost of services 16,651.7 14,416.5 15.5
Gross profit 3,848.6 3,146.0 22.3 14.7
Gross profit margin 18.8% 17.9%
Selling and administrative expenses 3,023.2 2,613.9 15.7 8.9
Selling and administrative expenses as a % of revenue 14.7% 14.9%
Operating profit 825.4 532.1 55.1 43.3 42.2
Operating profit margin 4.0% 3.0%
Net interest expense 29.0 35.8 (19.0)
Other expenses 5.2 14.4 (63.9)
Earnings before income taxes and discontinued operations 791.2 481.9 64.2 52.7
Provision for income taxes 306.5 176.2 73.9
Effective income tax rate 38.7% 36.6%
Net earnings from continuing operations 484.7 305.7 58.6% 47.4%
Income from discontinued operations, net of income taxes — 92.3
Net earnings $ 484.7 $ 398.0
Net earnings per share - diluted:
Continuing operations $ 5.73 $ 3.48 64.7% 53.2%
Discontinued operations — 1.06
Total $ 5.73 $ 4.54
Weighted average shares - diluted 84.6 87.7 (3.6)%
The year-over-year increase in revenue is primarily attributable to:
a 7.7% increase due to the impact of currency exchange rates;
a 0.3% increase due to acquisitions;
increased demand for our services in most of our markets, including France, Other EMEA, Italy, Right Management and
Other Operations, where revenues increased 7.0%, 18.5%, 13.0%, 1.3% and 10.5%, respectively, on a constant currency
basis; and
solid growth in our permanent recruitment business which increased 33.9% on a consolidated basis in constant currency.
Included in the increase in Gross Profit is a 7.6% increase due to currency and a 5.0% increase due to a modification to the
calculation of payroll taxes in France, which reduced the amount of payroll taxes, retroactive to January 1, 2006, through
September 30, 2007 by $157.1 million. (See Note 1 to the consolidated financial statements for further information.)