Company: KELYB
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000055135-25-000080
Chunk: 70

Company: KELLY SERVICES INC
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 70
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.0)— — (2.0)Brazil indemnification(1.7)— — (1.7)Total liabilities at fair value$(4.1)$— $(0.4)$(3.7)Money Market FundsMoney market funds represent investments in money market funds that hold government securities, all of which are restricted as of third quarter-end 2025 and year-end 2024, and are included in other assets in the consolidated balance sheet.  These restricted funds represent cash balances that are required to be maintained to fund disability claims in California.  The valuations of money market funds are based on quoted market prices of those accounts as of the respective period end.Interest Rate SwapsOn July 17, 2024, the Company entered into two interest rate swaps with a notional value of $50.0 million each to manage Secured Overnight Financing Rate (“SOFR”) fluctuations on the securitization facility (see Debt footnote).  These contracts were not designated as hedging instruments; therefore, the mark-to-market fair value changes and the cash settlements on the swaps are recognized in earnings.  The Company's interest rate swaps were valued with assistance from a third party based on pricing models using observable inputs, such as SOFR forward rates, and are considered level 2 liabilities, which are remeasured quarterly.  The 12-month interest rate swap was settled in the second quarter of 2025 (see Debt footnote).  As of third quarter-end 2025 and year-end 2024, the Company recorded a liability totaling $0.1 million and $0.4 million, respectively, related to the mark-to-market fair value of the interest rate swaps in accounts payable and accrued liabilities in the consolidated balance sheet.  The net gains and losses recorded in other income (expense), net in the consolidated statements of earnings related to these swaps were not significant as of the third quarter-end 2025.Indemnification LiabilitiesAs of third quarter-end 2025 and year-end 2024, the Company had an indemnification liability totaling $1.2 million and $2.0 million, respectively, relating to the sale of the EMEA staffing operations in January 2024, with the decrease attributable to exchange rate fluctuations.  In the third quarter of 2025, the indemnification liability was reassessed, and as a result of this reassessment, $0.3 million was recorded in (gain) loss on sale of EMEA staffing