Company: KELYB
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000055135-25-000007
Chunk: 49

Company: KELLY SERVICES INC
Filing Date: 2025-02-13
Form: 10-K
Item: Item 8
Chunk 49
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 2024 totaled $30.5 million, comprised of $19.6 million of capital loss carryforwards that expire in 

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KELLY SERVICES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2029, and $10.9 million of net operating loss carryforwards of which $9.1 million have no expiration and $1.8 million expire between 2025 and 2044.  The Company has established a valuation allowance for certain loss carryforwards, future deductible items, outside basis differences, and for a portion of its U.S. foreign tax credit carryforwards.  The decrease in valuation allowance during 2024 was primarily due to the Company’s sale of its EMEA staffing operations which included companies with $24.4 million of valuation allowances.  The outside basis difference included in the 2023 deferred balance was for held for sale assets at the end of 2023 which were sold during the first quarter of 2024 when the Company completed the sale of its EMEA staffing operations.  This transaction generated a capital loss, $19.6 million of which is carried forward. A valuation allowance of $21.4 million was recorded against the outside basis difference at year-end 2023, and $19.2 million against the capital loss carryforward at year-end 2024.  The foreign tax credit valuation allowance is $15.0 million at year-end 2024 and $14.5 million at year-end 2023 and will continue to be monitored.  The valuation allowance is determined in accordance with the provisions of ASC 740, "Income Taxes," which requires an assessment of both negative and positive evidence when measuring the need for a valuation allowance.  The Company’s uncertainty in the ability to create future capital gains, and its recent lack of adequate U.S. foreign source income to fully utilize foreign tax credit carryforwards, represented sufficient negative evidence to require a valuation allowance under ASC 740.  The Company intends to maintain a valuation allowance until sufficient positive evidence exists to support realization of the deferred tax assetsThe differences between income taxes from continuing operations for financial reporting purposes and the U.S. statutory rate of 21% in 2024, 2023, and 2022 are as follows (in millions of dollars): 202420232022Income tax based on statutory rate$(4.6)$5.2 $(14