ManpowerGroup 2013 Annual Report Download - page 48

Download and view the complete annual report

Please find page 48 of the 2013 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 92

  • 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
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

46 ManpowerGroup 2013 Annual Report Management’s Discussion & Analysis
MANAGEMENT’S DISCUSSION & ANALYSIS
of financial condition and results of operations
Interest Rates — Our exposure to market risk for changes in interest rates relates primarily to our variable rate long-term
debt obligations. We have historically managed interest rates through the use of a combination of fixed- and variable-rate
borrowings and interest rate swap agreements. As of December 31, 2013, we had the following fixed- and variable-
rate borrowings:
(in millions) Amount
Weighted-
Average
Interest Rate(1)
Variable-rate borrowings $ 34.2 12.5%
Fixed-rate borrowings 483.7 4.5
Total debt $ 517.9 5.0%
(1) The rates are impacted by currency exchange rate movements.
Sensitivity analysis — The following tables summarize our debt and derivative instruments that are sensitive to foreign
currency exchange rate and interest rate movements. All computations below are based on the United States dollar spot
rate as of December 31, 2013 and 2012. The exchange rate computations assume a 10% appreciation or 10% depreciation
of the euro and British pound to the United States dollar.
The hypothetical impact on 2013 and 2012 earnings and accumulated other comprehensive income of the stated change
in rates is as follows:
2013 (in millions) Movements In Exchange Rates
Market Sensitive Instrument 10% Depreciation 10% Appreciation
Euro notes:
€350.0, 4.51% Notes due June 2018 $48.1
(1)
$(48.1)
(1)
Forward contracts:
£7.8 to $12.5 1.3 (1.3)
2012 (in millions) Movements In Exchange Rates
Market Sensitive Instrument 10% Depreciation 10% Appreciation
Euro notes:
€200.0, 4.86% Notes due June 2013 $26.4
(1)
$(26.4)
(1)
€350.0, 4.51% Notes due June 2018 46.2
(1)
(46.2)
(1)
Forward contracts:
£4.0 to $6.4 0.6 (0.6)
(1) Exchange rate movements are recorded through accumulated other comprehensive income as these instruments have been designated as an
economic hedge of our net investment in subsidiaries with a euro-functional currency.
The hypothetical changes in the fair value of our market sensitive instruments due to changes in interest rates, and changes
in foreign currency exchange rates for the forward contracts, are as follows:
As of December 31, 2013
Market Sensitive Instrument (in millions) 10% Decrease 10% Increase
Fixed-rate debt:
€350.0, 4.51% Notes due June 2018 $52.0
(1)
$(52.0)
(1)
Forward contracts:
£7.8 to $12.5 1.3 (1.3)
As of December 31, 2012
Market Sensitive Instrument (in millions) 10% Decrease 10% Increase
Fixed-rate debt:
€200.0, 4.86% Notes due June 2013 $26.8
(1)
$(26.8)
(1)
€350.0, 4.51% Notes due June 2018 51.1
(1)
(51.1)
(1)
Forward contracts:
£4.0 to $6.4 0.6 (0.6)
(1) This change in fair value is not recorded in the Consolidated Financial Statements, however disclosure of the fair value is included in Note 1 to the
Consolidated Financial Statements.