ManpowerGroup 2014 Annual Report Download - page 87

ManpowerGroup | Annual Report 2014 85
Notes to Consolidated Financial Statements
In June 2012, we recorded legal costs of $10.0 in the United States for various legal matters, the majority of which was
related to our entry into a settlement agreement in connection with a purported class action lawsuit involving allegations
regarding our vacation pay policies in Illinois. Under the settlement agreement, we agreed to pay $8.0 plus certain related
taxes and administrative fees. We maintain that our vacation pay policies were appropriate and we admit no liability or
wrongdoing, but we believe that settlement is in our best interest to avoid the costs and disruption of ongoing litigation.
Guarantees
We have entered into certain guarantee contracts and stand-by letters of credit that total $172.6 ($126.8 for guarantees and
$45.8 for stand-by letters of credit) as of December 31, 2014. The guarantees primarily relate to operating leases and
indebtedness. The stand-by letters of credit relate to insurance requirements and debt facilities. If certain conditions were
met under these arrangements, we would be required to satisfy our obligation in cash. Due to the nature of these
arrangements and our historical experience, we do not expect to make any significant payments under these arrangements.
Note 14. Segment Data
We are 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, and maintains its own financial reports. We have an executive sponsor for each
global brand who is responsible for ensuring the integrity and consistency of delivery locally. We develop and implement
global workforce solutions for our clients that deliver the outcomes that help them achieve their business strategy. 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; 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 Talent Based Outsourcing (TBO), TAPFIN — Managed Service Provider (MSP) and
Recruitment Process Outsourcing (RPO). The Right Management segment 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 comprise
a significant portion of revenues for us as a whole.
The accounting policies of the segments are the same as those described in the summary of significant accounting
policies. We evaluate performance based on operating unit profit, 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.
Total assets for the segments are reported after the elimination of investments in subsidiaries and intercompany accounts.