ManpowerGroup 2014 Annual Report Download - page 40

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permanently invested. As of December 31, 2014 and 2013, we identified approximately $452.8 million and $264.3 million,
respectively, of non-United States earnings that are not permanently invested. Related to these non-United States earnings
that may be remitted, we recorded a deferred tax liability of $53.1 million and $16.7 million as of December 31, 2014 and
2013, respectively. This deferred tax liability increased as of December 31, 2014 from December 31, 2013 due to the 2014
non-United States earnings that are not permanently invested, which had a higher tax cost due to lower foreign tax credits.
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 $306.2 million, $396.7 million and $331.6 million for 2014, 2013 and 2012,
respectively. The decrease in cash generated from operating activities in 2014 from 2013 was primarily attributable to the
increase in the CICE receivable, which by law is not collectible for three years. In 2013, we sold a portion of the 2013
receivable for net proceeds of $104.0 million. We also saw increased working capital needs in 2014 as a result of the growth
in the business. The increase in 2013 compared to 2012 was primarily attributable to the higher operating earnings in
2013. Changes in operating assets and liabilities utilized $314.2 million of cash in 2014, primarily due to the increase in the
CICE receivable, as compared to $50.9 million in 2013 and $13.8 million in 2012.
Accounts receivable decreased to $4,134.5 million as of December 31, 2014 from $4,277.9 million as of December 31, 2013,
primarily due to the change in exchange rates, partially offset by increased business volume. Utilizing exchange rates as of
December 31, 2013, the December 31, 2014 balance would have been approximately $417.6 million higher than reported.
Capital expenditures were $51.5 million, $44.7 million and $72.0 million during 2014, 2013 and 2012, 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 $3.4 million, $0.5 million and $3.3 million in
2014, 2013 and 2012, 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, 2014, 2013 and 2012 was
$32.0 million, $46.3 million and $49.0 million, respectively. Goodwill and intangible assets resulting from the
2014 acquisitions, the majority of which took place in the Netherlands and the United Kingdom, were $39.4 million and
$10.1 million, respectively, as of December 31, 2014. 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 as of December
31, 2013, respectively.
In 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 €5.0 ($6.8) million and €4.2 ($5.1)
million as of December 31, 2013 and December 31, 2014, respectively.
Net debt borrowings were $13.4 million for 2014, as compared to net payments of $271.3 million in 2013 and net borrowings
of $41.7 million in 2012. 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.
Management’s Discussion & Analysis
MANAGEMENT’S DISCUSSION & ANALYSIS
of financial condition and results of operations