ManpowerGroup 2008 Annual Report Download - page 31

29Manpower Annual Report 2008 Management’s Discussion & Analysis
We have aggregate commitments of $1,998.4 million related to debt, operating leases, severances and office closure costs,
and certain other commitments, as follows:
in Millions 2009 2010-2011 2012-2013 Thereafter
Long-term debt including interest $ 105.4 $ 71.8 $ 865.6 $ —
Short-term borrowings 51.0 — — —
Operating leases 203.2 268.7 139.6 151.4
Severances and other office closure costs 29.2 2.4 0.3 —
FIN 48 income tax liability, interest
and penalties (1) — — — —
Other 34.7 34.5 21.7 18.9
$ 423.5 $ 377.4 $ 1,027.2 $ 170.3
(1) The FIN 48 income tax liability, interest and penalties of $38.1 million is excluded as we cannot determine the years in which these liabilities might
ultimately settle.
In the fourth quarter of 2008, we recorded a reorganization charge of $37.2 million, primarily related to office closures and
consolidations, and severance costs in several countries. As of December 31, 2008, $8.4 million has been paid. We expect a
majority of the remaining $28.8 million will be paid in 2009.
In the fourth quarter of 2007, we established reserves totaling $4.4 million in France for office closure costs and $4.0 million at
Jefferson Wells for severances and other office closure costs related to reorganizations at these entities. Payments against
the $4.4 million reserve in France started in 2008 and have totaled $2.6 million as of December 31, 2008. We expect a
majority of the remaining $1.8 million will be paid in 2009. Of the $4.0 million accrued at Jefferson Wells, $3.7 million has been
paid as of December 31, 2008, of which $3.6 million was paid during 2008. We expect a majority of the remaining $0.3 million
will be paid in 2009.
In 2006, we recorded expenses totaling $9.5 million related to reorganizations in the U.K. for severance and other office
closure costs. As of December 31, 2008, $8.6 million has been paid, of which $1.3 million was paid during 2008. We expect
a majority of the remaining $0.9 million will be paid in 2009. In 2006, we also recorded expenses totaling $6.9 million at Right
Management for severance costs, of which $1.6 million was reversed in 2007 as fewer than expected former employees had
claimed the severance. As of December 31, 2008, $5.2 million has been paid, of which $0.4 million was paid during 2008. We
expect the remaining $0.1 million will be paid in 2009.
We also have entered into guarantee contracts and stand-by letters of credit that total approximately $158.0 million and
$129.3 million as of December 31, 2008 and 2007, respectively ($107.6 million and $78.2 million for guarantees, respectively,
and $50.4 million and $51.1 million for stand-by letters of credit, respectively). Guarantees primarily relate to bank accounts,
operating leases and indebtedness. The stand-by letters of credit relate to workers’ compensation, operating leases and
indebtedness. 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 significant payments
under these arrangements. Therefore, they have been excluded from our aggregate commitments identified above.
Capital Resources
Total capitalization as of December 31, 2008 was $3,436.7 million, comprised of
$952.9 million in debt and $ 2,483.8 million in equity. Debt as a percentage of total
capitalization was 28% as of December 31, 2008 compared to 26% as of
December 31, 2007.
EURO NOTES
We have €200.0 million aggregate principal amount of 4.75% notes due June 14,
2013 (the “€200.0 million Notes”). The €200.0 million Notes were issued at a price of 99.349% to yield an effective interest
rate of 4.862%. The discount of €1.3 million ($1.6 million) is being amortized to interest expense over the term of the €200.0
million Notes. Interest is payable annually on June 14.
07
06
08 952.92,483.8
914.52,669.3
823.22,474.2
Total Capitalization
in millions ($)