ManpowerGroup 2009 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2009 ManpowerGroup annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 82

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82

69
Notes to Consolidated Financial Statements Manpower 2009 Annual Report
FOREIGN CURRENCY EXCHANGE RATE RISK MANAGEMENT
The €300.0 ($429.0) Notes and the €200.0 ($285.6) Notes were designated as economic hedges of our net investment in
our foreign subsidiaries with a Euro functional currency as of December 31, 2009.
For derivatives designated as an economic hedge of the foreign currency exposure of a net investment in a foreign subsidiary, the
gain or loss associated with foreign currency translation is recorded as a component of Accumulated Other Comprehensive
Income (Loss), net of taxes. As of December 31, 2009, we had a $85.4 loss included in Accumulated Other Comprehensive
Income (Loss), net of taxes, as the net investment hedge was deemed effective.
Our forward contracts are not designated as hedges. Consequently, any gain or loss resulting from the change in fair value is
recognized in the current period earnings. These gains or losses are offset by the exposure related to receivables and
payables with our foreign subsidiaries and to interest due on our Euro-denominated notes, which is paid annually in June. We
recorded a gain of $1.7 associated with our forward contracts in Interest and Other Expenses for the year ended December
31, 2009 related to the forward contracts. We had a $0.5 liability related to the forward contracts’ fair value included in Other
Long-Term Liabilities as of December 31, 2009.
The fair value measurements of these items recorded in our consolidated balance sheets as of December 31, 2009 and 2008
are disclosed in Note 1 to the Consolidated Financial Statements.
14.
Contingencies
LITIGATION
We are involved in a number of lawsuits arising in the ordinary course of business which will not, in the opinion of management,
have a material effect on our results of operations, fi nancial position or cash fl ows.
In November 2004, French authorities commenced an investigation at our French headquarters. According to the search
warrant, the investigation stemmed from a complaint submitted during 2003 to the European Commission and subsequently
transferred to France’s Direction Generale de la Concurrence, de la Consommation et de la Repression des Fraudes
(“DGCCRF”), a body of the French Finance Minister that investigates frauds and competition violations. This investigation led
the DGCCRF to transmit the results of its inquiry to the French Competition Council. In November 2007, we received a
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 fi nes, 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 was provided, the Competition Council rendered its decision in the matter in February 2009
and levied a fi ne of €42.0 ($55.9) based on the Competition Council’s determination of the damage to the economy
attributable to the alleged misconduct, with adjustment for aggravating or mitigating factors. We had accrued for this as of
December 31, 2008, paid this fi ne in April 2009 and appealed the Competition Council’s decision. In January 2010, we
received notifi cation that our appeal was denied. We are currently assessing whether to take any further action.