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36 Management’s Discussion & Analysis Manpower Annual Report 2008
Management’s Discussion & Analysis
of financial condition and results of operations
Sensitivity Analysis – The following table summarizes our debt and derivative instruments that are sensitive to foreign currency
exchange rate and interest rate movements. All computations below are based on the U.S. Dollar spot rate as of December
31, 2008. The exchange rate computations assume a 10% appreciation or 10% depreciation of the Euro and British Pound
to the U.S. Dollar.
The hypothetical impact on 2008 earnings and Accumulated Other Comprehensive (Loss) Income of the stated change in
rates is as follows:
Movements In Movements In
Exchange Rates Interest Rates
10% 10% 10% 10%
Market Sensitive Instrument Depreciation Appreciation Decrease Increase
Euro notes:
€200 million, 4.86% Notes due June 2013 $ 27.9(1) $ (27.9)(1) — —
€300 million, 4.58% Notes due June 2012 41.9(1) (41.9)(1) — —
Revolving credit agreement:
€100 million Euro borrowings 14.0(1) (14.0)(1) 0.7 (0.7)
€100 million interest rate swaps — — (0.7) 0.7
Forward contracts:
$3.7 million to €2.7 million (0.4) 0.4
$27.2 million to £18.6 million (2.7) 2.7
$ 80.7 $ (80.7) $ — $ —
(1) Exchange rate movements are recorded through Accumulated Other Comprehensive (Loss) Income as these instruments have been designated
as an economic hedge of our net investment in subsidiaries with a Euro functional currency.
The hypothetical changes in the fair value of our market sensitive instruments due to changes in interest rates, and changes
in foreign currency exchange rates for the foreign contracts, are as follows:
Market Sensitive Instrument 10% Decrease 10% Increase
Fixed rate debt:
€200 million, 4.86% Notes due June 2013 $ 25.9(1) $ (25.9)(1)
€300 million, 4.58% Notes due June 2012 39.6(1) (39.6)(1)
Derivative instruments:
€100 million interest rate swaps (0.4) 0.4
Forward contacts:
$3.7 million to €2.7 million (0.4) 0.4
$27.2 million to £18.6 million (2.7) 2.7
(1) This change in fair value is not recorded in the financial statements, however disclosure of the fair value is included in Note 1 to the consolidated
financial statements.
IMPACT OF ECONOMIC CONDITIONS
One of the principal attractions of using employment services providers is to maintain a flexible supply of labor to meet
changing economic conditions. Therefore, the industry has been, and remains sensitive to, economic cycles. To help minimize
the effects of these economic cycles, we offer clients a continuum of services to meet their needs throughout the employment
and business cycle. We believe that the breadth of our operations and the diversity of our service mix cushion us against the
impact of an adverse economic cycle in any single country or industry. However, adverse economic conditions in any of our
largest markets, or in several markets simultaneously, would have a material impact on our consolidated financial results.