ManpowerGroup 2012 Annual Report Download - page 57

We record revenues from sales of services and the related direct costs in accordance with the accounting guidance on
reporting revenue gross as a principal versus net as an agent. In situations where we act as a principal in the transaction,
we report gross revenues and cost of services. When we act as an agent, we report the revenues on a net basis. Amounts
billed to clients for out-of-pocket or other cost reimbursements are included in revenues from services, and the related
costs are included in cost of services.
ALLOWANCE FOR DOUBTFUL ACCOUNTS
We have an allowance for doubtful accounts recorded as an estimate of the accounts receivable balance that may not be
collected. This allowance is calculated on an entity-by-entity basis with consideration for historical write-off experience, the
current aging of receivables and a specific review for potential bad debts. Items that affect this balance mainly include bad
debt expense and the write-off of accounts receivable balances.
Bad debt expense is recorded as selling and administrative expenses in our Consolidated Statements of Operations and
was $29.2, $25.9 and $28.9 in 2012, 2011 and 2010, respectively. Factors that would cause this provision to increase
primarily relate to increased bankruptcies by our clients and other difficulties collecting amounts billed. On the other hand,
an improved write-off experience and aging of receivables would result in a decrease to the provision. Write-offs were
$23.2, $25.0 and $33.5 for 2012, 2011 and 2010, respectively.
ADVERTISING COSTS
We expense production costs of advertising as they are incurred. Advertising expenses were $27.2, $34.0 and $29.2 in
2012, 2011 and 2010, respectively.
REORGANIZATION COSTS
We recorded net reorganization costs of $48.8, $23.1 and $36.1 in 2012, 2011 and 2010, respectively, in selling and
administrative expenses, primarily related to severances and office closures and consolidations in multiple countries. These
expenses are net of reversals of previous accruals resulting mainly from larger-than-estimated cost savings from subleasing
and lease buyouts. During 2012, we made payments of $36.8 out of our reorganization reserve. We expect a majority of the
remaining $41.4 reserve will be paid or utilized in 2013. Changes in the reorganization liability balances for each reportable
segment and Corporate are as follows:
Americas(1)
Southern
Europe(2)
Northern
Europe APME Right Management Corporate Total
Balance, January 1, 2011 $ 7.4 $ 5.6 $ 5.0 $ 0.7 $ 14.4 $ 1.1 $ 34.2
Severance costs, net 2.1 1.1 5.5 0.5 3.1 — 12.3
Office closure costs, net 0.3 0.4 7.7 — 2.4 — 10.8
Costs paid or utilized (5.8) (2.9) (6.4) — (11.7) (1.1) (27.9)
Balance, December 31, 2011 4.0 4.2 11.8 1.2 8.2 — 29.4
Severance costs, net 5.8 2.1 8.3 0.7 3.1 9.2 29.2
Office closure costs, net 4.0 1.7 4.9 — 7.8 1.2 19.6
Costs paid or utilized (9.3) (3.3) (9.4) (1.9) (12.5) (0.4) (36.8)
Balance, December 31, 2012 $ 4.5 $ 4.7 $15.6 $ — $ 6.6 $10.0 $ 41.4
(1) Balance related to United States was $7.4 as of January 1, 2011. In 2011, United States incurred $1.3 for severance costs and $0.3 for office closure
costs and paid/utilized $5.7, leaving a $3.3 liability as of December 31, 2011. In 2012, United States incurred $3.4 for severance costs and $4.0 for
office closure costs and paid/utilized $6.9, leaving a $3.8 liability as of December 31, 2012.
(2) Balance related to France was $5.6 as of January 1, 2011. In 2011, France incurred $0.4 for office closure costs and paid/utilized $2.5, leaving a $3.5
liability as of December 31, 2011. In 2012, France incurred $1.7 for office closure costs and paid/utilized $1.4, leaving a $3.8 liability as of December
31, 2012. Italy had no reorganization liability as of January 1, 2011. In 2011, Italy recorded severance costs of $0.9 and paid out $0.5, leaving a $0.4
liability as of December 31, 2011. In 2012, Italy incurred $0.7 for severance costs and paid $0.2, leaving a $0.9 liability as of December 31, 2012.
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Notes to Consolidated Financial Statements ManpowerGroup 2012 Annual Report