Company: KELYB
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000055135-25-000007
Chunk: 30

Company: KELLY SERVICES INC
Filing Date: 2025-02-13
Form: 10-K
Item: Item 8
Chunk 30
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 to our Softworld and MRP reporting units, respectively. Our Education reportable segment includes goodwill acquired in the fourth quarter of 2020, second quarter of 2022 and fourth quarter of 2024, related to our Education and PTS reporting units, respectively.  (See the Acquisitions and Dispositions footnote for more details regarding each acquisition.)The Company performs its annual goodwill impairment testing in the fourth quarter each year and regularly assesses whenever events or circumstances make it more likely than not that an impairment may have occurred.  We also perform a qualitative review on a quarterly basis of our long-lived assets, comprised of net property and equipment and definite-lived intangible assets, to determine whether events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.2024 Goodwill Impairment AssessmentIn the fourth quarter of 2024, we performed our annual goodwill impairment testing.  For the PTS and Education reporting units, we performed step zero qualitative analyses and have concluded that there are no indications that the fair values of the PTS and Education reporting units are less than their respective carrying values and therefore no further testing was required.  For the Softworld and MRP reporting units, our annual goodwill impairment testing included step one quantitative tests.  As a result of the MRP quantitative assessment, we determined that the estimated fair value of the MRP reporting unit was more than its carrying value.  The estimated fair value of the MRP reporting unit exceeded the carrying value by less than 10%.  If current expectations of future revenue and profit margins are not met, or if market factors outside of our control change significantly, including discount rate, then the goodwill of the MRP reporting unit may be impaired in the future, resulting in goodwill impairment charges.  As a result of the Softworld quantitative assessment, the Company determined that Softworld's estimated fair value of the reporting unit no longer exceeded the carrying value.  Softworld's 2024 financial performance was lower than internal projections due to continued challenging market conditions. As a result, management’s expectation for near-term financial performance and projected long-term growth rates were revised accordingly.  These changes in circumstances were also indicators that the respective long-lived assets may not be recoverable.  Softworld has definite-lived intangible assets, consisting of trade names, customer relationships and non-compete agreements, which are amortized over their estimated useful lives.  We performed a long-lived asset recoverability test for Softworld and determined that undiscounted future cash flows exceeded the carrying amount of