ManpowerGroup 2014 Annual Report Download - page 32

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Interest and other expenses are comprised of interest, foreign exchange gains and losses and other miscellaneous
non-operating income and expenses. Interest and other expenses were $36.4 million in 2013 compared to $43.3 million in
2012. Net interest expense decreased $1.8 million in 2013 to $33.4 million from $35.2 million in 2012 due to lower debt
levels as we repaid our €200 million Notes in June 2013 with cash. Other expenses were $3.0 million in 2013 compared to
$8.1 million in 2012. This decrease is due partly to the increase in equity investment income in 2013 compared to 2012,
primarily related to a gain on sale of investments by our minority-owned Swiss Franchise recorded in 2013.
We recorded an income tax expense at an effective rate of 39.4% for 2013, as compared to an effective rate of 46.4% for
2012. The 2013 rate was favorably impacted by a change in the overall mix of earnings, primarily an increase in non-U.S.
income, utilization of net operating losses, and by the reinstatement of the United States Federal Work Opportunity Tax
Credit (“WOTC”). The WOTC was retroactively reinstated to January 1, 2012 as part of the American Taxpayer Relief Act,
which was enacted on January 2, 2013. We recognized the $7.0 million tax benefit related to 2012 during the first quarter of
2013, the period during which the law was enacted. The American Taxpayer Relief Act also extended the WOTC through
December 31, 2013. The 39.4% rate is higher than the U.S. Federal statutory rate of 35% due primarily to the French
business tax and other permanent items.
Net earnings per share — diluted was $3.62 in 2013 compared to $2.47 in 2012. Foreign currency exchange rates
unfavorably impacted net earnings per share — diluted by approximately $0.01 in 2013.
Weighted average shares — diluted decreased 0.7% to 79.6 million in 2013 from 80.1 million in 2012. This decrease is the
result of the full-year impact of share repurchases we made in 2012, partially offset by an increase in the dilutive effect of
share-based awards due to the exercises in 2013 and the increase in our share price.
Segment Results
We evaluate performance based on operating unit profit (“OUP”), which is equal to segment revenues less direct costs and
branch and national headquarters operating costs. This profit measure does not include goodwill and intangible asset
impairment charges or amortization of intangible assets related to acquisitions, interest and other income and expense
amounts or income taxes.
4,583.7
4,510.2
4,595.9
2014
2013
2012
Americas Revenues
($ in millions)
181.6
143.7
111.4
2014
2013
2012
Americas Operating Unit Profit
($ in millions)
Americas — The Americas segment is comprised of 678 Company-owned
branch offices and 180 stand-alone franchise offices. In the Americas,
revenues from services increased 1.6% (5.4% in constant currency) in 2014
compared to 2013. In the United States, revenues from services increased
4.0% in 2014 compared to 2013. The revenue increase in the United States
was attributable to growth in our larger national accounts and in the small/
medium-sized business within our Manpower business and solid growth in
our MSP and RPO offerings within the ManpowerGroup Solutions business.
These increases were partially offset by a decrease in revenues from our
larger global accounts. In Other Americas, revenues from services declined
3.0% (8.0% increase in constant currency) in 2014 compared to 2013.
We experienced constant currency revenue growth in Mexico, Canada,
Argentina due to inflation, Colombia and Brazil of 0.1%, 1.8%, 18.3%, 40.0%,
and 9.5%, respectively.
Management’s Discussion & Analysis
MANAGEMENT’S DISCUSSION & ANALYSIS
of financial condition and results of operations