ManpowerGroup(MAN) - 2022 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1 – Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements for ManpowerGroup Inc., including the balance sheets, statements of operations, comprehensive income (loss), cash flows, and shareholders' equity, along with detailed notes explaining the basis of presentation, accounting policies, and specific financial items for the three months ended March 31, 2022 and 2021 Consolidated Balance Sheets | Metric | March 31, 2022 (in millions) | December 31, 2021 (in millions) | Change (in millions) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------ | :------------------- | :------- | | Cash and cash equivalents | $777.3 | $847.8 | $(70.5) | -8.3% | | Total current assets | $6,369.5 | $6,422.7 | $(53.2) | -0.8% | | Total assets | $9,721.1 | $9,828.9 | $(107.8) | -1.1% | | Total current liabilities | $5,697.2 | $5,780.5 | $(83.3) | -1.4% | | Total shareholders' equity | $2,556.1 | $2,531.7 | $24.4 | 1.0% | Consolidated Statements of Operations | Metric (in millions, except per share data) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change (in millions) | % Change | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | :------------------- | :------- | | Revenues from services | $5,143.3 | $4,924.4 | $218.9 | 4.4% | | Gross profit | $897.1 | $768.1 | $129.0 | 16.8% | | Operating profit | $138.7 | $98.4 | $40.3 | 40.9% | | Net earnings | $91.6 | $62.0 | $29.6 | 47.8% | | Net earnings per share – basic | $1.71 | $1.12 | $0.59 | 52.7% | | Net earnings per share – diluted | $1.68 | $1.11 | $0.57 | 51.4% | Consolidated Statements of Comprehensive Income (Loss) | Metric (in millions) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change (in millions) | | :------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Net earnings | $91.6 | $62.0 | $29.6 | | Total other comprehensive loss | $(10.2) | $(40.5) | $30.3 | | Comprehensive income | $81.4 | $21.5 | $59.9 | Consolidated Statements of Cash Flows | Metric (in millions) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change (in millions) | | :------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Cash provided by operating activities | $70.6 | $140.9 | $(70.3) |\n| Cash used in investing activities | $(18.6) | $(19.1) | $0.5 |\n| Cash used in financing activities | $(95.8) | $(106.0) | $10.2 |\n| Change in cash and cash equivalents | $(70.5) | $(44.4) | $(26.1) |\n| Cash and cash equivalents, end of period | $777.3 | $1,522.7 | $(745.4) | Consolidated Statements of Shareholders' Equity | Metric (in millions) | Balance, December 31, 2021 | Net earnings | Other comprehensive loss | Issuances under equity plans | Share-based compensation expense | Repurchases of common stock | Noncontrolling interest transactions | Balance, March 31, 2022 | | :------------------- | :------------------------- | :----------- | :----------------------- | :--------------------------- | :------------------------------- | :-------------------------- | :----------------------------------- | :---------------------- | | Total Shareholders' Equity | $2,531.7 | $91.6 | $(10.2) | $(8.3) | $10.6 | $(59.9) | $0.6 | $2,556.1 | Notes to Consolidated Financial Statements (1) Basis of Presentation and Accounting Policies - The financial statements are condensed and omit certain disclosures per SEC rules, but are deemed adequate, with adjustments being normal recurring in nature[28][29] - Allowance for doubtful accounts is estimated based on historical write-off experience, age of receivables, market conditions, and specific reviews[30] | Allowance for Doubtful Accounts (in millions) | Three Months Ended March 31, 2022 | | :------------------------------------------ | :-------------------------------- | | Balance, December 31, 2021 | $121.6 | | Provisions charged to earnings | $2.8 | | Write-offs | $(1.4) | | Translation adjustments | $(2.2) | | Balance, March 31, 2022 | $120.8 | - Goodwill impairment tests are performed annually in the third quarter or more frequently if circumstances change, with the 2021 test finding no impairment, but the Netherlands reporting unit's $109.2 million goodwill had a fair value only 5.5% in excess of its carrying value, indicating potential future impairment if operating targets are not met[35][37][38] (2) Recent Accounting Standards - New FASB guidance on government assistance disclosures became effective January 1, 2022, with no impact on financial statements[40] - New FASB guidance on accounting for contract modifications due to LIBOR transition was effective upon issuance (March 2020) and has had no material impact[41] - New FASB guidance on business combinations, effective January 1, 2023, is not expected to have a material impact[42] (3) Revenue Recognition - Revenue is recognized over time for certain client contracts based on the right to invoice, corresponding to value provided[44] - Deferred revenue was $33.5 million as of March 31, 2022, down from $34.8 million as of December 31, 2021[47] Revenue Disaggregation by Service Type and Segment (Three Months Ended March 31) | Segment / Service Type | 2022 (in millions) | 2021 (in millions) | | :--------------------- | :----------------- | :----------------- | | Americas Total | $1,251.2 | $1,002.9 | | Southern Europe Total | $2,193.9 | $2,160.3 | | Northern Europe Total | $1,094.5 | $1,133.8 | | APME Total | $618.2 | $627.4 | | Consolidated Total | $5,143.3 | $4,924.4 | Revenue Disaggregation by Timing of Recognition and Segment (Three Months Ended March 31) | Segment / Timing of Recognition | 2022 (in millions) | 2021 (in millions) | | :------------------------------ | :----------------- | :----------------- | | Services transferred at a point in time (Total) | $5,020.8 | $4,829.9 | | Services transferred over time (Total) | $137.0 | $94.5 | | Consolidated Total | $5,143.3 | $4,924.4 | (4) Share-Based Compensation Plans - Share-based compensation expense increased to $10.6 million in Q1 2022 from $7.5 million in Q1 2021[51] | Share-Based Awards (thousands) | Q1 2022 Shares Granted | Q1 2022 Wtd.-Avg. Fair Value | Q1 202