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Manpower Reports 4th Quarter and Full-Year 2005 Results

PRNewswire-FirstCall
MILWAUKEE
Jan 27, 2006

Manpower Inc. (NYSE: MAN) today reported that net earnings per diluted share for the three months ended December 31, 2005 increased 38% to $1.01 from 73 cents in the prior year period. Net earnings in the quarter increased to $89.1 million from $69.6 million a year earlier. Revenues for the fourth quarter totaled $4.1 billion, an increase of one percent from the year-earlier period.

Results for the fourth quarter were negatively affected by relatively weaker foreign currencies compared to the prior year period. On a constant currency basis, net earnings per diluted share for the quarter were $1.07 on an 8 percent improvement in revenues. The fourth quarter was positively impacted by a lower income tax rate as a result of tax planning that was completed during the quarter.

Jeffrey A. Joerres, Manpower Chairman and Chief Executive Officer, said, "The Manpower team across the world delivered another solid quarter to cap off a solid year. We had outstanding performances in several geographies, including the U.S., the Nordics, Italy, Australia and Elan, our European IT staffing company."

Net earnings per diluted share for the year ended December 31, 2005 were $2.87, an increase of 11% from $2.59 per diluted share in 2004. Net earnings were $260.1 million compared to $245.7 million in the prior year. Revenues for the year were $16.1 billion, an increase of 8 percent from the prior year. On a constant currency basis, net earnings per diluted share for the year were $2.89 on an 8 percent improvement in revenues.

Joerres stated, "We continue to make substantial progress on the strategic front with the expansion of our specialty businesses and the depth of Manpower offerings that are helping our clients win in their respective markets.

"The momentum that has been established in 2005 positions us well to take advantage of the positive market trends we are currently experiencing.

"We are anticipating the first quarter of 2006 diluted net earnings per share to be in the range of 36 to 39 cents. This includes an estimated negative currency impact of 3 cents and the impact of expensing stock options of 3 cents per diluted share."

Included in the 2004 results were first quarter non-operating gains of $14.2 million ($10.2 million net of income taxes), or 11 cents per diluted share and a third quarter favorable adjustment to the income tax provision of $8.0 million or 8 cents per diluted share.

In conjunction with its fourth quarter earnings release, Manpower will broadcast its conference call live over the Internet on January 27, 2006 at 7:30 a.m. CST (8:30 a.m. EST). Interested parties are invited to listen to the webcast and view the presentation by logging on to http://investor.manpower.com/ .

Supplemental financial information referenced in the conference call can be found at http://investor.manpower.com/ .

About Manpower Inc.

Manpower Inc. (NYSE: MAN) is a world leader in the employment services industry, offering customers a continuum of services to meet their needs throughout the employment and business cycle. The company specializes in permanent, temporary and contract recruitment; employee assessment; training; career transition; organizational consulting; and professional financial services. Manpower's worldwide network of 4,400 offices in 72 countries and territories enables the company to meet the needs of its 400,000 customers per year, including small and medium size enterprises in all industry sectors, as well as the world's largest multinational corporations. The focus of Manpower's work is on raising productivity through improved quality, efficiency and cost-reduction, enabling customers to concentrate on their core business activities. In addition to the Manpower brand, the company operates under the brand names of Right Management Consultants, Jefferson Wells and Elan. More information on Manpower Inc. is available at http://www.manpower.com/ .

Forward-Looking Statements

This news release contains statements, including earning projections, that are forward-looking in nature and, accordingly, are subject to risks and uncertainties regarding the Company's expected future results. The Company's actual results may differ materially from those described or contemplated in the forward-looking statements. Factors that may cause the Company's actual results to differ materially from those contained in the forward-looking statements can be found in the Company's reports filed with the SEC, including the information under the heading 'Forward-Looking Statements' in its Annual Report on Form 10-K for the year ended December 31, 2004, which information is incorporated herein by reference.

                              Manpower Inc.
                          Results of Operations
                   (In millions, except per share data)

                                           Three Months Ended December 31
                                                               % Variance
                                                            Amount  Constant
                                            2005     2004  Reported Currency
                                                     (Unaudited)

  Revenues from services (a)              $4,123.2  $4,072.7    1.2%   7.9%

  Cost of services                         3,352.4   3,308.5    1.3%

    Gross profit                             770.8     764.2    0.9%   7.1%

  Selling and administrative expenses        638.5     646.7   -1.3%   4.6%

    Operating profit                         132.3     117.5   12.6%  20.5%

  Interest and other expense                   6.9       8.9  -22.0%

    Earnings before income taxes             125.4     108.6   15.4%

  Provision for income taxes                  36.3      39.0   -7.0%

    Net earnings                             $89.1     $69.6   27.9%  41.0%



  Net earnings per share - basic             $1.02     $0.77   32.5%

  Net earnings per share - diluted           $1.01     $0.73   38.4%  46.6%


  Weighted average shares - basic             87.2      90.1   -3.3%

  Weighted average shares - diluted           88.5      97.5   -9.2%


  (a)  Revenues from services include fees received from our franchise
       offices of $9.1 million and $9.5 million for the three months ended
       December 31, 2005 and 2004, respectively.  These fees are primarily
       based on revenues generated by the franchise offices, which were
       $388.6 million and $418.2 million for the three months ended
       December 31, 2005 and 2004, respectively.



                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                           Three Months Ended December 31
                                                               % Variance
                                                            Amount  Constant
                                            2005     2004  Reported Currency
                                                     (Unaudited)
  Revenues from Services:
    United States (a)                      $534.2    $517.4    3.2%    3.2%
    France                                1,381.6   1,409.9   -2.0%    6.9%
    EMEA                                  1,467.1   1,435.8    2.2%   10.9%
    Jefferson Wells                          96.1     102.9   -6.5%   -6.5%
    Right                                    97.4     106.9   -8.9%   -5.4%
    Other Operations                        546.8     499.8    9.4%   12.3%
                                         $4,123.2  $4,072.7    1.2%    7.9%

  Operating Unit Profit:
    United States                           $23.2     $16.8   38.4%   38.4%
    France                                   47.3      55.0  -14.1%   -6.2%
    EMEA                                     53.9      41.3   30.4%   42.9%
    Jefferson Wells                           4.4      13.2  -66.5%  -66.5%
    Right                                     3.3      (0.4)    N/A     N/A
    Other Operations                         19.4      10.3   87.1%   91.3%
                                            151.5     136.2
  Corporate expenses                         15.9      15.4
  Amortization of intangible assets           3.3       3.3
      Operating profit                      132.3     117.5   12.6%   20.5%
  Interest and other expense (b)              6.9       8.9
      Earnings before income taxes         $125.4    $108.6


  (a)  In the United States, revenues from services include fees received
       from the related franchise offices of $6.5 million and $6.7 million
       for the three months ended December 31, 2005 and 2004, respectively.
       These fees are primarily based on revenues generated by the franchise
       offices, which were $311.8 million and $310.4 million for the three
       months ended December 31, 2005 and 2004, respectively.

  (b)  The components of interest and other expense (income) were:

          Interest expense                  $11.9     $11.4
          Interest income                    (3.4)     (3.2)
          Foreign exchange gains               -       (1.5)
          Miscellaneous (income)
           expense, net                      (1.6)      2.2
                                             $6.9      $8.9



                              Manpower Inc.
                          Results of Operations
                   (In millions, except per share data)

                                               Year Ended December 31
                                                               % Variance
                                                            Amount  Constant
                                            2005     2004  Reported Currency
                                                     (Unaudited)
  Revenues from services (a)           $16,080.4  $14,930.0   7.7%     7.7%

  Cost of services                      13,131.8   12,141.9   8.2%

    Gross profit                         2,948.6    2,788.1   5.8%     5.7%

  Selling and administrative expenses    2,512.1    2,392.3   5.0%     4.9%

    Operating profit                       436.5      395.8  10.3%    10.9%

  Interest and other expenses               41.8       26.3  59.2%

    Earnings before income taxes           394.7      369.5   6.8%

  Provision for income taxes               134.6      123.8   8.7%

    Net earnings                          $260.1     $245.7   5.9%     7.9%



  Net earnings per share - basic           $2.95      $2.76   6.9%

  Net earnings per share - diluted         $2.87      $2.59  10.8%    11.6%


  Weighted average shares - basic           88.1       88.9  -0.9%

  Weighted average shares - diluted         91.1       96.8  -5.8%


  (a)  Revenues from services include fees received from our franchise
       offices of $35.8 million and $34.5 million for the year ended
       December 31, 2005 and 2004, respectively.  These fees are primarily
       based on revenues generated by the franchise offices, which were
       $1,510.7 million and $1,487.1 million for the year ended December 31,
       2005 and 2004, respectively.



                              Manpower Inc.
                          Operating Unit Results
                              (In millions)

                                              Year Ended December 31
                                                               % Variance
                                                            Amount  Constant
                                            2005     2004  Reported Currency
                                                     (Unaudited)
  Revenues from Services:
    United States (a)                   $2,048.3   $2,041.1    0.4%    0.4%
    France                               5,532.0    5,226.7    5.8%    6.1%
    EMEA                                 5,604.8    5,084.3   10.2%   10.7%
    Jefferson Wells                        386.2      340.6   13.4%   13.4%
    Right                                  405.9      431.1   -5.9%   -6.4%
    Other Operations                     2,103.2    1,806.2   16.4%   14.5%
                                       $16,080.4  $14,930.0    7.7%    7.7%

  Operating Unit Profit:
    United States                          $68.7      $49.3   39.3%   39.3%
    France                                 166.5      178.8   -6.9%   -6.1%
    EMEA                                   153.9      115.1   33.7%   36.6%
    Jefferson Wells                         33.3       51.4  -35.2%  -35.2%
    Right                                   24.5       24.5    0.0%   -4.7%
    Other Operations                        61.7       46.0   34.1%   31.8%
                                           508.6      465.1
  Corporate expenses                        59.0       57.0
  Amortization of intangible assets         13.1       12.3
      Operating profit                     436.5      395.8   10.3%   10.9%
  Interest and other expenses (b)           41.8       26.3
      Earnings before income taxes        $394.7     $369.5



  (a)  In the United States, revenues from services include fees received
       from the related franchise offices of $24.9 million and $25.0 million
       for the year ended December 31, 2005 and 2004, respectively.  These
       fees are primarily based on revenues generated by the franchise
       offices, which were $1,196.9 million and $1,181.5 million for the
       year ended December 31, 2005 and 2004, respectively.

  (b) The components of interest and other expense (income) were:

          Interest expense                 $46.7      $45.4
          Interest income                   (9.8)      (9.4)
          Foreign exchange gains              -        (1.6)
          Miscellaneous expense
           (income), net                     4.9       (8.1)
                                           $41.8      $26.3



                              Manpower Inc.
                       Consolidated Balance Sheets
                              (In millions)

                                                Dec. 31           Dec. 31
                                                  2005              2004
                                                       (Unaudited)
  ASSETS
  Current assets:
    Cash and cash equivalents                     $454.9            $531.8
    Accounts receivable, net                     3,208.2           3,227.8
    Prepaid expenses and other assets              107.5             161.4
    Future income tax benefits                      72.6              96.5
        Total current assets                     3,843.2           4,017.5

  Other assets:
    Goodwill and other intangible
     assets, net                                 1,256.5           1,297.0
    Other assets                                   271.4             305.5
        Total other assets                       1,527.9           1,602.5

  Property and equipment:
    Land, buildings, leasehold
     improvements and equipment                    642.4             669.8
    Less:  accumulated depreciation and
     amortization                                  446.0             446.7
      Net property and equipment                   196.4             223.1
          Total assets                          $5,567.5          $5,843.1

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                              $685.4            $687.1
    Employee compensation payable                  150.6             156.0
    Accrued liabilities                            435.4             505.7
    Accrued payroll taxes and insurance            607.2             569.6
    Value added taxes payable                      441.9             457.8
    Short-term borrowings and current
      maturities of long-term debt                 260.0             225.7
        Total current liabilities                2,580.5           2,601.9

  Other liabilities:
    Long-term debt                                 475.0             676.1
    Other long-term liabilities                    365.4             391.1
        Total other liabilities                    840.4           1,067.2

  Shareholders' equity:
    Common stock                                     1.0               1.0
    Capital in excess of par value               2,346.7           2,296.4
    Retained earnings                              269.9              51.0
    Accumulated other comprehensive
     income                                        (11.0)            109.4
    Treasury stock, at cost                       (460.0)           (283.8)
        Total shareholders' equity               2,146.6           2,174.0
          Total liabilities and
           shareholders' equity                 $5,567.5          $5,843.1



                              Manpower Inc.
                  Consolidated Statements of Cash Flows
                              (In millions)

                                                        Year Ended
                                                        December 31
                                                   2005              2004
                                                        (Unaudited)
  Cash Flows from Operating Activities:
    Net earnings                                  $260.1            $245.7
    Adjustments to reconcile net
     earnings to net cash provided
     by operating activities:
        Depreciation and amortization               92.9              86.5
        Amortization of discount on
         convertible debentures                      1.9               7.8
        Deferred income taxes                       50.0              (8.8)
        Provision for doubtful accounts             22.9              27.3
        Other non-operating gains                   (2.6)            (14.2)
        Changes in operating assets and
         liabilities excluding
         the impact of acquisitions:
            Accounts receivable                   (350.4)           (363.9)
            Other assets                           (47.0)             41.5
            Other liabilities                      244.6             165.5
              Cash provided by
               operating activities                272.4             187.4

  Cash Flows from Investing Activities:
    Capital expenditures                           (77.6)            (67.9)
    Acquisitions of businesses, net of
     cash acquired                                 (12.9)           (117.3)
    Proceeds from sale of an equity
     interest                                         -               29.8
    Proceeds from the sale of property
     and equipment                                   4.8               5.6
              Cash used by investing
               activities                          (85.7)           (149.8)

  Cash Flows from Financing Activities:
    Net borrowings of short-term
      facilities and long-term debt                169.5               5.7
    Cash paid to settle convertible
     debentures                                   (206.6)               -
    Proceeds from settlement of swap
     agreements                                     50.7                -
    Proceeds from stock option and
     purchase plans                                 29.7              60.0
    Repurchases of common stock                   (217.6)               -
    Dividends paid                                 (41.2)            (27.1)
              Cash (used) provided by
               financing activities               (215.5)             38.6

  Effect of exchange rate changes on
   cash                                            (48.1)             29.4
  Change in cash and cash equivalents              (76.9)            105.6

  Cash and cash equivalents, beginning
   of period                                       531.8             426.2
  Cash and cash equivalents, end of
   period                                         $454.9            $531.8

SOURCE: Manpower Inc.

CONTACT: Mike Van Handel, Chief Financial Officer of Manpower Inc.,
+1-414-906-6305

Web site: http://www.manpower.com/
http://investor.manpower.com/


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