ManpowerGroup 2014 Annual Report Download - page 26

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24
Due to our industry’s sensitivity to economic factors, the inherent difficulty in forecasting the direction and strength of the
economy and the short-term nature of staffing assignments, it is difficult to forecast future demand for our services with
certainty. As a result, we monitor a number of economic indicators, as well as recent business trends, to predict future
revenue trends for each of our reportable segments. Based upon these anticipated trends, we determine what level of
personnel and office investments are necessary to take full advantage of growth opportunities.
Our business is organized and managed primarily on a geographic basis, with Right Management currently operating as a
separate global business unit. Each country and business unit generally have their own distinct operations and management
team, providing services under our global brands. We have an executive sponsor for each global brand who is responsible
for ensuring the integrity and consistency of delivery locally. Each operation reports directly or indirectly through a regional
manager, to a member of executive management. Given this reporting structure, all of our operations have been segregated
into the following reporting segments: Americas, which includes United States and Other Americas; Southern Europe,
which includes France, Italy and Other Southern Europe; Northern Europe; APME (Asia Pacific Middle East); and Right
Management.
The Americas, Southern Europe, Northern Europe and APME segments derive a significant majority of their revenues from
the placement of contingent workers. The remaining revenues within these segments are derived from other workforce
solutions and services, including recruitment and assessment, training and development, and ManpowerGroup Solutions.
ManpowerGroup Solutions includes TBO, MSP and RPO. Right Management’s revenues are derived from career
management and workforce consulting services. Segment revenues represent sales to external clients. Due to the nature
of our business, we generally do not have export sales. We provide services to a wide variety of clients, none of which
individually comprises a significant portion of revenues for us as a whole or for any segment.
FINANCIAL MEASURES — CONSTANT CURRENCY AND ORGANIC CONSTANT CURRENCY
Changes in our financial results include the impact of changes in foreign currency exchange rates and acquisitions.
We provide “constant currency” and “organic constant currency” calculations in this report to remove the impact of these
items. We express year-over-year variances that are calculated in constant currency and organic constant currency as
a percentage.
When we use the term “constant currency,” it means that we have translated financial data for a period into United States
dollars using the same foreign currency exchange rates that we used to translate financial data for the previous period.
We believe that this calculation is a useful measure, indicating the actual growth of our operations. We use constant
currency results in our analysis of subsidiary or segment performance. We also use constant currency when analyzing our
performance against that of our competitors. Substantially all of our subsidiaries derive revenues and incur expenses within
a single country and, consequently, do not generally incur currency risks in connection with the conduct of their normal
business operations. Changes in foreign currency exchange rates primarily impact reported earnings and not our actual
cash flow unless earnings are repatriated.
When we use the term “organic constant currency,” it means that we have further removed the impact of acquisitions in the
current period from our constant currency calculation. We believe that this calculation is useful because it allows us to show
the actual growth of our pre-existing business.
The constant currency and organic constant currency financial measures are used to supplement those measures that are
in accordance with United States Generally Accepted Accounting Principles (“GAAP”). These Non-GAAP financial measures
may not provide information that is directly comparable to that provided by other companies in our industry, as other
Management’s Discussion & Analysis
MANAGEMENT’S DISCUSSION & ANALYSIS
of financial condition and results of operations