ManpowerGroup 2012 Annual Report Download - page 72

The €350.0 Notes, €200.0 Notes and other euro-denominated borrowings have been designated as a hedge of our net
investment in subsidiaries with a euro functional currency. Since our net investment in these subsidiaries exceeds the
respective amount of the designated borrowings, translation gains or losses related to these borrowings are included as a
component of accumulated other comprehensive income.
REVOLVING CREDIT AGREEMENT
On October 5, 2011, we entered into a $800.0 Five-Year Credit Agreement (the “Agreement”) with a syndicate of commercial
banks. This Agreement replaced our previous $400.0 revolving credit facility. The Agreement allows for borrowing in various
currencies and up to $150.0 may be used for the issuance of stand-by letters of credit. The Agreement terminates in
October 2016. Outstanding letters of credit issued under the Agreement totaled $0.9 and $1.6 as of December 31, 2012
and 2011, respectively. Additional borrowings of $799.1 and $798.4 were available to us under the Agreement as of
December 31, 2012 and 2011, respectively.
Under the Agreement, a credit ratings-based pricing grid determines the facility fee and the credit spread that we add to
the applicable interbank borrowing rate on all borrowings. At our current credit rating, the annual facility fee is 22.5 bps paid
on the entire $800.0 facility and the credit spread is 127.5 bps on any borrowings. Any downgrades from the credit
agencies would unfavorably impact our facility fees and result in additional costs ranging from approximately $0.2 to $0.4
annually. We had no borrowings under this Agreement as of both December 31, 2012 and 2011.
The Agreement contains customary restrictive covenants pertaining to our management and operations, including
limitations on the amount of subsidiary debt that we may incur and limitations on our ability to pledge assets, as well as
financial covenants, including covenants requiring, among other things, that we comply with a leverage ratio (net Debt-to-
EBITDA) of not greater than 3.5 to 1 and a fixed charge coverage ratio of not less than 1.5 to 1. The Agreement also
contains customary events of default, including, among others, payment defaults, material inaccuracy of representations
and warranties, covenant defaults, bankruptcy or involuntary proceedings, certain monetary and non-monetary judgments,
change of control and customary ERISA defaults.
As defined in the Agreement, we had a net Debt-to-EBITDA ratio of 0.97 to 1 (compared to the maximum allowable ratio of
3.5 to 1) and a Fixed Charge Coverage ratio of 2.84 to 1 (compared to the minimum required ratio of 1.5 to 1) as of
December 31, 2012.
DEBT MATURITIES
The maturities of long-term debt payable within each of the four years subsequent to December 31, 2013 are as follows:
2014 — $0.4, 2015 through 2017 — none.
08.
Retirement and Deferred Compensation Plans
DEFINED BENEFIT PLANS
We sponsor several qualified and nonqualified pension plans covering permanent employees. The reconciliation of the
changes in the plans’ benefit obligations and the fair value of plan assets and the funded status of the plans are
as follows:
United States Plans Non-United States Plans
Year Ended December 31 2012 2011 2012 2011
Change in Benefit Obligation
Benefit obligation, beginning of year $ 57.5 $ 56.2 $ 264.7 $ 244.8
Service cost ——10.4 9.9
Interest cost 2.6 2.8 12.5 12.7
Curtailments —— —(1.9)
Transfers —— (0.1) (0.5)
Actuarial loss 6.0 3.1 20.4 9.4
Plan participant contributions ——2.2 2.4
Benefits paid (4.2) (4.6) (5.6) (6.6)
Currency exchange rate changes —— 10.7 (5.5)
Benefit obligation, end of year $ 61.9 $ 57.5 $ 315.2 $ 264.7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
in millions, except share and per share data
70 ManpowerGroup 2012 Annual Report Notes to Consolidated Financial Statements