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

Company: KELLY SERVICES INC
Filing Date: 2025-02-13
Form: 10-K
Item: Item 8
Chunk 25
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ification liability related to the 2020 sale of the Brazil operations totaling $1.7 million with $0.9 million in accounts payable and accrued liabilities and $0.8 million in other long-term liabilities, and $3.0 million as of year-end 2023 with $0.1 million in accounts payable and accrued liabilities and $2.9 million in other long-term liabilities on the consolidated balance sheet.  As part of the sale, the Company agreed to indemnify the buyer for losses and costs incurred in connection with certain events or occurrences initiated within a six-year period after closing.  The aggregate losses for which the Company will provide indemnification will not exceed $8.8 million.  The valuation of the indemnification liability was established using a discounted cash flow methodology based on probability weighted-average cash flows discounted by weighted-average cost of capital.  The valuation, which represents the fair value, is considered a level 3 liability, and is being measured on a recurring basis.  In 2024, the Company recognized a decrease of $0.7 million to the 

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

indemnification liability related to exchange rate fluctuations and was also reduced by $0.7 million as a result of the fourth quarter reassessment of the liability, both of which are recorded in other income (expense), net in the consolidated statements of earnings.Earnout liabilitiesThe Company recorded an initial earnout liability relating to the 2024 acquisition of MRP totaling $3.4 million in accounts payable and accrued liabilities in the consolidated balance sheet (see Acquisitions and Dispositions footnote).  The valuation of the earnout liability was initially established using the Monte Carlo simulation model and represented the fair value and is considered a level 3 liability.  The maximum total cash payment which may be due related to the earnout liability is $60.0 million.  In the fourth quarter 2024, the liability was reassessed and the fair value was determined to be zero.  As such, there is no liability recorded related to the earnout as of year-end 2024.The Company recorded an earnout liability relating to the 2020 acquisition of Greenwood/Asher, with a remaining liability of $3.3 million at year-end 2022.  The initial valuation of the earnout liability was established using a Black Scholes model and represented the