ManpowerGroup 2014 Annual Report Download - page 86

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84
Notes to Consolidated Financial Statements
Foreign Currency Exchange Rate Risk Management
The €350.0 ($423.4) Notes were designated as economic hedges of our net investment in our foreign subsidiaries with a
euro-functional currency as of December 31, 2014.
For derivatives designated as an economic hedge of the foreign currency exposure of a net investment in a foreign
subsidiary, the gain or loss associated with foreign currency translation is recorded as a component of accumulated other
comprehensive (loss) income, net of taxes. As of December 31, 2014, we had a $24.5 unrealized loss included in
accumulated other comprehensive (loss) income, net of taxes, as the net investment hedge was deemed effective.
Our forward contracts are not designated as hedges. Consequently, any gain or loss resulting from the change in fair value
is recognized in the current period earnings. These gains or losses are offset by the exposure related to receivables and
payables with our foreign subsidiaries and to interest due on our euro-denominated notes, which is paid annually in June.
We recorded a gain of $0.2 associated with our forward contracts in interest and other expenses for the year ended
December 31, 2014, partially offsetting the losses recorded for the items noted above.
The fair value measurements of these items recorded in our Consolidated Balance Sheets as of December 31, 2014 and
2013 are disclosed in Note 1 to the Consolidated Financial Statements.
Note 13. Contingencies
Litigation
In the normal course of business, the Company is named as defendant in various legal proceedings in which claims are
asserted against the Company. We record accruals for loss contingencies based on the circumstances of each claim, when
it is probable that a loss has been incurred as of the balance sheet date and can be reasonably estimated. Although the
outcome of litigation cannot be predicted with certainty, we believe the ultimate resolution of these legal proceedings will
not have a material effect on our business or financial condition.
In 2014, we recorded legal costs of $9.0 in the US related to a settlement agreement in connection with a lawsuit in
California involving allegations regarding our wage statements. The settlement agreement was preliminarily approved by the
court in January 2015, with a final ruling expected in June 2015. We believe that the settlement is in our best interest to
avoid the costs and disruption of ongoing litigation.
We experienced a significant increase in client claims against us in France during the second quarter of 2013, requesting
refunds for various payroll tax subsidies that we had received dating back to 2003 related to our French temporary
associates. In March 2014, the French Supreme Court ruled in our favor on this matter, confirming that, as a matter of law,
the benefit of the payroll tax subsidies belongs to the direct employer of the temporary associates. We do not expect to
incur any losses as all of these claims have now been withdrawn as a result of this ruling.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
in millions, except share and per share data