ManpowerGroup 2008 Annual Report Download - page 50

48 Notes to Consolidated Financial Statements Manpower Annual Report 2008
Notes To Consolidated Financial Statements
in millions, except per share data
expense. If the transfer of receivables does not qualify for sale accounting, the related receivable balance remains on our
consolidated balance sheet, the corresponding advance is recorded as debt and the related cost of the transaction is
recorded as interest expense. (See Note 6 for further information.)
FAIR VALUE MEASUREMENTS
As of January 1, 2008, we implemented FASB Statement No. 157 “Fair Value Measurements” (“SFAS 157”) for our financial
assets and financial liabilities. The fair value measurements of those items recorded in our consolidated balance sheets are as
follows:
Fair Value Measurements Using
Quoted Prices in Significant Significant
Active Markets Other Unobservable
for Identical Observable Inputs
2008 Assets (Level 1) Inputs (Level 2) (Level 3)
Assets
Available-for-sale securities $ 0.2 $ 0.2 $ — $ —
Liabilities
Interest rate swap $ 7.4 $ — $ 7.4 $ —
Foreign currency forward contract 8.4 — 8.4 —
$ 15.8 $ — $ 15.8 $ —
We determine the fair value of our available-for-sale securities by using market quotes as of the last day of the period. The fair
value of the interest rate swap and foreign currency forward contracts are measured at the mark-to-market value, from either
directly or indirectly observable third parties.
The carrying values of Cash and Cash Equivalents, Accounts Receivable, Accounts Payable, and other current assets and
liabilities approximates their fair values because of the short-term nature of these instruments. The carrying value of Long-
Term Debt approximates fair value, except for the Euro-denominated notes. The fair value of the Euro-denominated notes, as
determined by the quoted market prices, was $654.7 and $722.5 as of December 31, 2008 and 2007, respectively, compared
to a carrying value of $696.6 and $727.1, respectively.
GOODWILL AND INTANGIBLE ASSETS
We have goodwill, amortizable intangible assets and intangible assets that do not require amortization, as follows:
2008 2007
Accumulated Accumulated
December 31 Gross Amortization Net Gross Amortization Net
Goodwill $ 972.9 $ — $ 972.9 $ 1,045.9 $ — $ 1,045.9
Intangible assets:
Amortizable:
Technology 19.6 19.4 0.2 19.6 15.5 4.1
Franchise agreements 18.0 8.9 9.1 18.0 7.1 10.9
Customer relationships 170.7 43.1 127.6 134.2 29.5 104.7
Other 17.5 7.0 10.5 7.8 4.0 3.8
225.8 78.4 147.4 179.6 56.1 123.5
Non-amortizable:
Tradename 171.2 — 171.2 193.5 — 193.5
Reacquired franchise rights 96.6 — 96.6 47.8 — 47.8
267.8 — 267.8 241.3 — 241.3
Total intangible assets $ 493.6 $ 78.4 $ 415.2 $ 420.9 $ 56.1 $ 364.8
Amortization expense related to intangibles was $22.3 in 2008, $14.5 in 2007 and $13.1 in 2006. Amortization expense
expected in each of the next five years is as follows: 2009 – $24.9, 2010 – $21.5, 2011 – $19.2, 2012 – $13.4, and 2013 –
$12.0. The weighted-average useful lives of the technology, franchise agreements, and client relationships are 5, 10, and 16
years, respectively. The majority of the non-amortizable tradename results from our acquisition of Right Management. The
tradename has been assigned an indefinite life based on our expectation of renewing the tradename, as required, without