ManpowerGroup 2013 Annual Report Download - page 40

38 ManpowerGroup 2013 Annual Report Management’s Discussion & Analysis
MANAGEMENT’S DISCUSSION & ANALYSIS
of financial condition and results of operations
Our principal ongoing cash needs are to finance working capital, capital expenditures, debt payments, interest expense,
share repurchases, dividends and acquisitions. Working capital is primarily in the form of trade receivables, which generally
increase as revenues increase. The amount of financing necessary to support revenue growth depends on receivables
turnover, which differs in each market where we operate.
Cash provided by operating activities was $396.7 million, $331.6 million and $69.2 million for 2013, 2012 and 2011,
respectively. The increase in cash generated from operating activities in 2013 from 2012 is primarily attributable to the
higher operating earnings in 2013. The increase in 2012 compared to 2011 was primarily attributable to decreased working
capital needs as a result of the declining revenues and a 1.2 day decrease in our Days Sales Outstanding (“DSO”). Changes
in operating assets and liabilities utilized $50.9 million of cash in 2013 as compared to $13.8 million in 2012 and $367.6
million in 2011.
Accounts receivable increased to $4,277.9 million as of December 31, 2013 from $4,179.0 million as of December 31, 2012,
primarily due to increased business volume and the change in exchange rates. Utilizing exchange rates as of December 31,
2012, the December 31, 2013 balance would have been approximately $32.8 million lower than reported.
Capital expenditures were $44.7 million, $72.0 million and $64.9 million during 2013, 2012 and 2011, respectively. These
expenditures were primarily comprised of purchases of computer equipment, office furniture and other costs related to
office openings and refurbishments, as well as capitalized software costs of $0.5 million, $3.3 million and $0.4 million in
2013, 2012 and 2011, respectively.
From time to time, we acquire and invest in companies throughout the world, including franchises. The total cash
consideration paid for acquisitions, net of cash acquired, for the years ended December 31, 2013, 2012 and 2011 was
$46.3 million, $49.0 million and $49.0 million, respectively. Goodwill and intangible assets resulting from the 2013
acquisitions, the majority of which took place in the United Kingdom and Norway, were $52.2 million and $10.1 million,
respectively, as of December 31, 2013. Goodwill and intangible assets resulting from the 2012 acquisitions were $46.2
million and $7.6 million as of December 31, 2012, respectively.
On April 16, 2012, we acquired Damilo Group (“Damilo”), a French firm specializing in IT design solutions, for total
consideration, net of cash acquired, of €21.2 ($28.0) million. Goodwill arising from this transaction was €30.8
($40.6) million. The assumed liabilities and acquired assets, net of goodwill, related intangible assets and cash arising from
the transaction were €33.8 ($44.6) million and €17.9 ($23.6) million, respectively. The related intangible assets were €6.3
($8.0) million, €5.8 ($7.6) million and €5.0 ($6.8) million as of April 16, 2012, December 31, 2012 and December 31, 2013,
respectively.
In 2011, we acquired the shares and voting rights of Proservia SA (“Proservia”), a provider of information technology and
systems engineering solutions in France. The purchase price was €14.89 ($19.93) per share. The total consideration, net of
cash acquired, was €21.6 ($29.4) million. Goodwill arising from this transaction was €20.7 ($27.7) million. The related
intangible assets were €9.4 ($12.4) million and €8.1 ($11.2) million as of December 31, 2012 and 2013, respectively.
Net debt payments were $271.3 million for 2013, as compared to net borrowings of $41.7 million and $15.3 million in 2012
and 2011, respectively. In June 2013, we paid off our €200.0 million 4.75% notes with available cash upon maturity. We use
excess cash to pay down borrowings under facilities when appropriate.
In December 2012 and November 2011, the Board of Directors authorized the repurchase of 8.0 million and 3.0 million
shares of our common stock, respectively. Share repurchases may be made from time to time through a variety of methods,
including open market purchases, block transactions, privately negotiated transactions, accelerated share repurchase
programs, forward repurchase agreements or similar facilities. No repurchases were made in 2013. In 2012, we repurchased
a total of 3.6 million shares, comprised of 0.6 million shares under a previous authorization and 3.0 million shares under the
2011 authorization, at a total cost of $138.2 million. In 2011, we repurchased a total of 2.6 million shares under previous
authorizations at a total cost of $104.5 million. As of December 31, 2013, there were 8.0 million shares remaining authorized
for repurchase under the 2012 authorization and no shares remaining under any previous authorizations.