ManpowerGroup 2008 Annual Report Download - page 70

68 Notes to Consolidated Financial Statements Manpower Annual Report 2008
Notes To Consolidated Financial Statements
in millions, except per share data
Statement of Objections from the Competition Council alleging illegal information sharing between us and certain of our
competitors. We responded to this Statement of Objections in February 2008, defending our position.
In June 2008, we received a Report from the Competition Council, which was prepared by the case handler for the Competition
Council and opened the second phase of the procedure before the Competition Council. The Report rejected all of the
defense arguments we made in our initial response and maintained the objections as set forth in the Statement of Objections.
It also provided the Competition Council with the elements for the calculation of fines, including the case handler’s estimation
of our portion of the alleged damage to the economy.
We responded to the June 2008 Report in August 2008, providing further arguments and information in defense of our
position and providing our own estimation of the alleged damage to the economy. A hearing on the matter before the
Competition Council was held in October 2008.
After considering the input that has been provided, the Competition Council rendered its decision in the matter in February
2009 and levied a fine of €42.0 ($53.8) based on the council’s determination of the damage to the economy attributable to the
alleged misconduct, with adjustment for aggravating or mitigating factors. We will be required to pay this fine in early 2009,
but are currently planning to appeal the Competition Council’s decision. We had previously recorded a reserve sufficient to
cover the fine.
GUARANTEES
We have entered into certain guarantee contracts and stand-by letters of credit that total $158.0 ($107.6 for guarantees and
$50.4 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 significant 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 financial 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: 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 significant 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 finance 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 generally do not have export or intersegment sales. We provide
services to a wide variety of clients, none of which individually comprise a significant portion of revenue for us as a whole.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies.
We evaluate performance based on Operating Unit Profit, which is equal to segment revenues less direct costs and branch
and national headquarters operating costs. This profit 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.