Company: KELYB
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000055135-25-000007
Chunk: 23

Company: KELLY SERVICES INC
Filing Date: 2025-02-13
Form: 10-K
Item: Item 8
Chunk 23
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73

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

Forward contractsOn February 8, 2024, the Company entered into a foreign currency forward contract with a notional amount of €17.0 million to manage the foreign currency risk associated with expected additional proceeds related to the sale of our EMEA staffing operations (see Acquisitions and Dispositions footnote).  The expected proceeds are recorded as a euro-denominated receivable which is remeasured quarterly.  The forward contract was designated as a fair value hedge, with the mark-to-market changes of the forward contract offsetting the mark-to-market changes of the receivable in the gain on sale of EMEA staffing operations in the consolidated statements of earnings.  The contract was valued using observable inputs, such as foreign currency exchange rates, and was considered a level 2 liability.  In the fourth quarter of 2024, the Company settled the contract with a $0.4 million cash payment and recognized a corresponding loss of $0.4 million on the contract.  As of year-end 2024, there is no asset or liability related to the forward contract.  On November 2, 2023, the Company entered into a foreign currency forward contract with a notional amount of €90.0 million to manage the foreign currency risk associated with the sale of our EMEA staffing operations, which was completed on January 2, 2024.  This contract was not designated as a hedging instrument; therefore, it was marked-to-market and the changes in fair value were recognized in earnings.  The Company's foreign currency forward contract was valued using observable inputs, such as foreign currency exchange rates, and was considered a level 2 liability.  The Company recorded an unrealized loss of $3.6 million for the year ended 2023 and had a net liability associated with the forward contract of $3.6 million as of year-end 2023.  The Company settled the forward contract on January 5, 2024 for $2.4 million of cash.  Accordingly, the Company recognized a gain of $1.2 million in the first quarter of 2024 in other income (expense), net on the consolidated statements of earnings, which partially offsets the $3.6 million loss recognized in 2023, for a total loss of $2.4 million on the contract.Interest rate swaps