ManpowerGroup 2013 Annual Report Download - page 73

Notes to Consolidated Financial Statements ManpowerGroup 2013 Annual Report 71
When the €350.0 Notes mature, we plan to repay the amount with available cash, borrowings under our $600.0 revolving
credit facility or a new borrowing. The credit terms, including interest rate and facility fees, of any replacement borrowings
will be dependent upon the condition of the credit markets at that time. We currently do not anticipate any problems
accessing the credit markets should we decide to replace the €350.0 Notes.
The €350.0 Notes 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.
(See the Significant Matters Affecting Results of Operations section of Management’s Discussion & Analysis and Note 12 to
the Consolidated Financial Statements for further information.)
REVOLVING CREDIT AGREEMENT
On October 15, 2013, we amended and restated our Five-Year Credit Agreement (“the Amended Agreement”) with a
syndicate of commercial banks to, among other things: decrease the revolving commitments from $800.0 to $600.0, revise
the termination date of the facility from October 5, 2016 to October 15, 2018, and permit the termination date of the facility
to be extended by an additional year twice during the term of the Amended Agreement. The remaining material terms and
conditions of the Amended Agreement are substantially similar to the material terms and conditions of our Five-Year Credit
Agreement dated October 5, 2011.
The Amended Agreement allows for borrowing in various currencies and up to $150.0 may be used for the issuance
of stand-by letters of credit. We had no borrowings under this facility as of both December 31, 2013 and 2012. Outstanding
letters of credit issued under the Amended Agreement totaled $0.9 as of both December 31, 2013 and 2012. Additional
borrowings of $599.1 and $799.1 were available to us under the facility as of December 31, 2013 and 2012, respectively.
Under the Amended 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 $600.0 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
$0.3 annually.
The Amended 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 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 Amended 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 Amended Agreement, we had a net Debt-to-EBITDA ratio of 0.28 to 1 (compared to the maximum
allowable ratio of 3.5 to 1) and a Fixed Charge Coverage ratio of 3.29 to 1 (compared to the minimum required ratio of 1.5
to 1) as of December 31, 2013.
DEBT MATURITIES
The maturities of long-term debt payable within each of the four years subsequent to December 31, 2014 are as follows:
2015 — $1.0, 2016 — $0.0, 2017 — $0.0 , 2018 — $480.9.