NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1
.
Basis of Presentation
The accompanying unaudited consolidated financial statements of Kelly Services, Inc. (the Company, Kelly, we or us) have been prepared in accordance with Rule 10-01 of Regulation S-X and do not include all the information and notes required by generally accepted accounting principles for complete financial statements. All adjustments, including normal recurring adjustments, have been made which, in the opinion of management, are necessary for a fair statement of the results of the interim periods. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. The unaudited consolidated financial statements should be read in conjunction with the Company's consolidated financial statements and notes thereto for the fiscal year ended January 1, 2012, included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 16, 2012 (the 2011 consolidated financial statements). The Company's third fiscal quarter ended on September 30, 2012 (2012) and October 2, 2011 (2011), each of which contained 13 weeks. The corresponding 2012 and 2011 year-to-date periods each contained 39 weeks.
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.
Effective with the first quarter of 2012, certain vendor management and other technology costs which were previously included in selling, general and administrative (SG&A) expenses are now included in cost of services, and the prior year's results were revised to conform to this presentation. The only effect of this change was to increase cost of services and decrease SG&A expenses (and gross profit) by $2.9 million in the third quarter of 2011 and $7.9 million in the first nine months of 2011 from those amounts previously reported in 2011.
Earnings from discontinued operations represent adjustments to costs of litigation, net of tax, retained from the 2007 sale of the Kelly Home Care business unit.
2. Fair Value Measurements
Trade accounts receivable, accounts payable, accrued liabilities, accrued payroll and related taxes and short-term borrowings approximate their fair values due to the short-term maturities of these assets and liabilities.
Assets Measured at Fair Value on a Recurring Basis
The following tables present assets measured at fair value on a recurring basis as of third quarter-end 2012 and year-end 2011 on the consolidated balance sheet by fair value hierarchy level, as described below.
Level 1 measurements consist of unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 measurements include quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3 measurements include significant unobservable inputs.
|
|
Fair Value Measurements on a Recurring Basis
As of Third Quarter-End 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
(In millions of dollars)
|
|
Money market funds
|
|
$
|
2.3
|
|
|
$
|
2.3
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Available-for-sale investment
|
|
|
37.0
|
|
|
|
37.0
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at fair value
|
|
$
|
39.3
|
|
|
$
|
39.3
|
|
|
$
|
-
|
|
|
$
|
-
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(UNAUDITED)
2. Fair Value Measurements (continued)
|
|
Fair Value Measurements on a Recurring Basis
As of Year-End 2011
|
|
Description
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
(In millions of dollars)
|
|
Money market funds
|
|
$
|
2.0
|
|
|
$
|
2.0
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Available-for-sale investment
|
|
|
27.1
|
|
|
|
27.1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at fair value
|
|
$
|
29.1
|
|
|
$
|
29.1
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Money market funds as of third quarter-end 2012 and as of year-end 2011 represent investments in money market accounts, all of which are restricted as to use and are included in prepaid expenses and other current assets on the consolidated balance sheet. The valuations were based on quoted market prices of those accounts as of the respective period end.
Available-for-sale investment represents the Company's investment in Temp Holdings Co., Ltd. (Temp Holdings), a leading integrated human resources company in Japan, and is included in other assets on the consolidated balance sheet. The valuation is based on the quoted market price of Temp Holdings stock on the Tokyo Stock Exchange as of the period end. The unrealized loss of $0.5 million for the 13 weeks ended 2012 and unrealized loss of $0.6 million for the 13 weeks ended 2011 was recorded in other comprehensive income, a component of stockholders' equity. The unrealized gain
of $9.8 million for the 39 weeks ended 2012 and unrealized loss of $1.1 million for the 39 weeks ended 2011 was recorded in other comprehensive income.
3. Acquisition
During the fourth quarter of 2011, the Company acquired the stock of Tradição Planejamento e Tecnologia de Serviços S.A. and Tradição Tecnologia e Serviços Ltda. (collectively, Tradição), a national service provider in Brazil, for $6.6 million in cash. The following table summarizes the purchase price allocation at the time of purchase, along with measurement period adjustments recognized during the 39 weeks ended 2012. The purchase price allocation is still preliminary, subject to further information relating to certain liabilities assumed.
|
|
Original
Allocation
|
|
|
Adjustments
|
|
|
Revised
Allocation
|
|
|
|
(In millions of dollars)
|
|
Current assets
|
|
$
|
6.3
|
|
|
$
|
-
|
|
|
$
|
6.3
|
|
Goodwill
|
|
|
22.9
|
|
|
|
1.0
|
|
|
|
23.9
|
|
Identified intangibles
|
|
|
5.3
|
|
|
|
0.4
|
|
|
|
5.7
|
|
Other noncurrent assets
|
|
|
0.7
|
|
|
|
-
|
|
|
|
0.7
|
|
Current liabilities
|
|
|
(14.4
|
)
|
|
|
(0.6
|
)
|
|
|
(15.0
|
)
|
Noncurrent liabilities
|
|
|
(14.2
|
)
|
|
|
(0.8
|
)
|
|
|
(15.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase price
|
|
$
|
6.6
|
|
|
$
|
-
|
|
|
$
|
6.6
|
|
The acquisition adjustments relate to an increase in Tradição's estimated identified intangibles balance, acquired contingency reserves and tax liabilities assumed.
KELLY SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(UNAUDITED)
4. Restructuring
Restructuring costs incurred in the first nine months of 2012 amounted to income of $2.2 million. Restructuring costs incurred in the third quarter and first nine months of 2011 amounted to income of $0.6 million and expense of $2.8 million, respectively. These costs primarily related to adjustments to estimated lease termination costs for EMEA Commercial branches that closed in prior years, and were reported as a component of SG&A expenses. Total costs incurred since July 2008 for our restructuring efforts amounted to $44.2 million.
A summary of the balance sheet accrual related to the global restructuring costs follows (in millions of dollars):
Balance at beginning of year
|
|
$
|
4.5
|
|
|
|
|
|
|
Reductions for cash payments
|
|
|
(0.2
|
)
|
|
|
|
|
|
Balance at first quarter-end 2012
|
|
|
4.3
|
|
|
|
|
|
|
Amounts charged (credited) to operations
|
|
|
(2.2
|
)
|
Reductions for cash payments
|
|
|
(0.6
|
)
|
|
|
|
|
|
Balance at second quarter-end 2012
|
|
|
1.5
|
|
|
|
|
|
|
Reductions for cash payments
|
|
|
(0.1
|
)
|
|
|
|
|
|
Balance at third quarter-end 2012
|
|
$
|
1.4
|
|
The remaining balance of $1.4 million as of the 2012 third quarter end represents primarily future lease payments and is expected to be paid by 2016. On a quarterly basis, the Company reassesses the accrual associated with restructuring costs and adjusts it as necessary.
5. Investment in Joint Venture
On July 24, 2012, Temp Holdings Co., Ltd. and the Company entered into a joint venture agreement to expand both companies' presence in North Asia. The joint venture, TS Kelly Workforce Solutions (TS Kelly), is headquartered in Hong Kong and is expected to become effective in the fourth quarter of 2012. Under the terms of the agreement, Toshio Saburi, Executive Managing Director of Temp Holdings Co., Ltd. and board member of the Company, was appointed chief executive officer of TS Kelly.
In connection with this agreement, during the third quarter of 2012, the Company purchased the 30% noncontrolling interest in its Shanghai subsidiary from Shanghai Changning Talent Development Co. Ltd, and recorded a charge to paid-in capital of $1.1 million for the difference between the carrying value of the noncontrolling interest and the fair value of the consideration provided.
KELLY SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(UNAUDITED)
6. Goodwill
The changes in the net carrying amount of goodwill during the 39 weeks ended 2012 are included in the table below. See Acquisition footnote for a description of adjustments to goodwill.
|
|
Goodwill,
Gross
as of
Year-End
2011
|
|
|
Accumulated
Impairment
Losses
as of
Year-End
2011
|
|
|
Adjustments
to
Goodwill
|
|
|
Impairment
Losses
|
|
|
Goodwill,
Gross
as of
Third
Quarter-End
2012
|
|
|
Accumulated
Impairment
Losses
as of
Third Quarter
End 2012
|
|
|
Goodwill,
Net
as of
Third
Quarter-End
2012
|
|
|
|
(In millions of dollars)
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas Commercial
|
|
$
|
39.3
|
|
|
$
|
(16.4
|
)
|
|
$
|
1.0
|
|
|
$
|
-
|
|
|
$
|
40.3
|
|
|
$
|
(16.4
|
)
|
|
$
|
23.9
|
|
Americas PT
|
|
|
39.2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
39.2
|
|
|
|
-
|
|
|
|
39.2
|
|
Total Americas
|
|
|
78.5
|
|
|
|
(16.4
|
)
|
|
|
1.0
|
|
|
|
-
|
|
|
|
79.5
|
|
|
|
(16.4
|
)
|
|
|
63.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA Commercial
|
|
|
50.4
|
|
|
|
(50.4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
50.4
|
|
|
|
(50.4
|
)
|
|
|
-
|
|
EMEA PT
|
|
|
22.0
|
|
|
|
(22.0
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
22.0
|
|
|
|
(22.0
|
)
|
|
|
-
|
|
Total EMEA
|
|
|
72.4
|
|
|
|
(72.4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
72.4
|
|
|
|
(72.4
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APAC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APAC Commercial
|
|
|
12.1
|
|
|
|
(12.1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
12.1
|
|
|
|
(12.1
|
)
|
|
|
-
|
|
APAC PT
|
|
|
1.8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.8
|
|
|
|
-
|
|
|
|
1.8
|
|
Total APAC
|
|
|
13.9
|
|
|
|
(12.1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
13.9
|
|
|
|
(12.1
|
)
|
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OCG
|
|
|
26.3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
26.3
|
|
|
|
-
|
|
|
|
26.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Total
|
|
$
|
191.1
|
|
|
$
|
(100.9
|
)
|
|
$
|
1.0
|
|
|
$
|
-
|
|
|
$
|
192.1
|
|
|
$
|
(100.9
|
)
|
|
$
|
91.2
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(UNAUDITED)
7. Earnings Per Share
The reconciliation of basic and diluted earnings per share on common stock for the 13 and 39 weeks ended 2012 and 2011 follows (in millions of dollars except per share data):
|
|
13 Weeks Ended
|
|
|
39 Weeks Ended
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
$
|
16.6
|
|
|
$
|
19.7
|
|
|
$
|
40.8
|
|
|
$
|
40.8
|
|
Less: Earnings allocated to participating securities
|
|
|
(0.5
|
)
|
|
|
(0.5
|
)
|
|
|
(1.1
|
)
|
|
|
(0.9
|
)
|
Earnings from continuing operations available to
common shareholders
|
|
$
|
16.1
|
|
|
$
|
19.2
|
|
|
$
|
39.7
|
|
|
$
|
39.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from discontinued operations
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
0.4
|
|
|
$
|
(1.2
|
)
|
Less: Earnings (loss) allocated to participating securities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Earnings (loss) from discontinued operations available to
common shareholders
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
0.4
|
|
|
$
|
(1.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings
|
|
$
|
16.6
|
|
|
$
|
19.7
|
|
|
$
|
41.2
|
|
|
$
|
39.6
|
|
Less: Earnings allocated to participating securities
|
|
|
(0.5
|
)
|
|
|
(0.5
|
)
|
|
|
(1.1
|
)
|
|
|
(0.9
|
)
|
Net Earnings available to common shareholders
|
|
$
|
16.1
|
|
|
$
|
19.2
|
|
|
$
|
40.1
|
|
|
$
|
38.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share on common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
$
|
0.43
|
|
|
$
|
0.52
|
|
|
$
|
1.07
|
|
|
$
|
1.09
|
|
Earnings (loss) from discontinued operations
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
0.01
|
|
|
$
|
(0.03
|
)
|
Net earnings
|
|
$
|
0.43
|
|
|
$
|
0.52
|
|
|
$
|
1.09
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share on common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
$
|
0.43
|
|
|
$
|
0.52
|
|
|
$
|
1.07
|
|
|
$
|
1.09
|
|
Earnings (loss) from discontinued operations
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
0.01
|
|
|
$
|
(0.03
|
)
|
Net earnings
|
|
$
|
0.43
|
|
|
$
|
0.52
|
|
|
$
|
1.09
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding (millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
37.1
|
|
|
|
36.8
|
|
|
|
37.0
|
|
|
|
36.8
|
|
Diluted
|
|
|
37.1
|
|
|
|
36.8
|
|
|
|
37.0
|
|
|
|
36.8
|
|
Stock
options representing 0.4 million and 0.6 million shares, respectively, for the 13 weeks ended 2012 and 2011, and 0.4 million and 0.6 million shares, respectively, for the 39 weeks ended 2012 and 2011 were excluded from the computation of diluted earnings per share due to their anti-dilutive effect.
KELLY SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(UNAUDITED)
8. Stock-Based Compensation
The Company adopted an amendment and restatement of the Kelly Services, Inc. Equity Incentive Plan (the Plan) effective December 31, 2011, which was approved by the Company stockholders in May 2012. Under the Plan, the Company may grant stock options (both incentive and nonqualified), stock appreciation rights, restricted stock awards, restricted stock units and performance awards to key employees utilizing the Company's Class A stock. The Plan provides that the maximum number of shares available for grants is 10 percent of the outstanding Class A stock, adjusted for Plan activity over the preceding five years. The Company issues shares out of treasury stock to satisfy stock-based awards.
Restricted Stock
Restricted stock awards and units (collectively, restricted stock), which typically vest over a period of 3 to 5 years, are issued to certain key employees and are subject to forfeiture until the end of an established restriction period. The Company utilizes the market price on the date of grant as the fair market value of restricted stock and expenses the fair value on a straight-line basis over the vesting period.
A summary of the status of nonvested restricted stock under the Plan as of the 13 and 39 weeks ended 2012 and changes during these periods are presented as follows:
|
|
Restricted
Stock
|
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Nonvested at year-end 2011
|
|
|
907,990
|
|
|
$
|
17.41
|
|
Granted
|
|
|
21,200
|
|
|
|
15.02
|
|
Vested
|
|
|
(23,075
|
)
|
|
|
15.08
|
|
Forfeited
|
|
|
(400
|
)
|
|
|
18.25
|
|
Nonvested at first quarter-end 2012
|
|
|
905,715
|
|
|
|
17.41
|
|
Granted
|
|
|
480,700
|
|
|
|
12.91
|
|
Vested
|
|
|
(191,975
|
)
|
|
|
18.15
|
|
Forfeited
|
|
|
(1,650
|
)
|
|
|
16.30
|
|
Nonvested at second quarter-end 2012
|
|
|
1,192,790
|
|
|
|
15.48
|
|
Granted
|
|
|
9,300
|
|
|
|
11.99
|
|
Vested
|
|
|
(4,290
|
)
|
|
|
14.36
|
|
Forfeited
|
|
|
(5,500
|
)
|
|
|
15.88
|
|
Nonvested at third quarter-end 2012
|
|
|
1,192,300
|
|
|
$
|
15.46
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(UNAUDITED)
9. Other (Expense) Income, Net
Included in other (expense) income, net for the 13 and 39 weeks ended 2012 and 2011 are the following:
|
|
13 Weeks Ended
|
|
|
39 Weeks Ended
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
(In millions of dollars)
|
|
|
(In millions of dollars)
|
|
Interest income
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
0.9
|
|
|
$
|
0.8
|
|
Interest expense
|
|
|
(0.7
|
)
|
|
|
(0.7
|
)
|
|
|
(2.6
|
)
|
|
|
(2.6
|
)
|
Dividend income
|
|
|
-
|
|
|
|
-
|
|
|
|
0.3
|
|
|
|
0.2
|
|
Foreign exchange (losses) gains
|
|
|
(0.1
|
)
|
|
|
1.5
|
|
|
|
(0.4
|
)
|
|
|
1.6
|
|
Other
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income, net
|
|
$
|
(0.7
|
)
|
|
$
|
1.0
|
|
|
$
|
(1.8
|
)
|
|
$
|
(0.1
|
)
|
10. Contingencies
The Company is continuously engaged in litigation arising in the ordinary course of its business, typically matters alleging employment discrimination, alleging wage and hour violations or enforcing the restrictive covenants in the Company's employment agreements. While there is no expectation that any of these matters will have a material adverse effect on the Company's results of operations, financial position or cash flows, litigation is always subject to inherent uncertainty and the Company is not able to reasonably predict if any matter will be resolved in a manner that is materially adverse to the Company.
11. Segment Disclosures
The Company's segments are based on the organizational structure for which financial results are regularly evaluated by the Company's chief operating decision maker to determine resource allocation and assess performance. The Company's seven reporting segments are: (1) Americas Commercial, (2) Americas Professional and Technical (Americas PT), (3) Europe, Middle East and Africa Commercial (EMEA Commercial), (4) Europe, Middle East and Africa Professional and Technical (EMEA PT), (5) Asia Pacific Commercial (APAC Commercial), (6) Asia Pacific Professional and Technical (APAC PT) and (7) Outsourcing and Consulting Group (OCG).
The Commercial business segments within the Americas, EMEA and APAC regions represent traditional office services, contact-center staffing, marketing, electronic assembly, light industrial and, in the Americas, substitute teachers. The PT segments encompass a wide range of highly skilled temporary employees, including scientists, financial professionals, attorneys, engineers, IT specialists and healthcare workers. OCG includes recruitment process outsourcing (RPO), contingent workforce outsourcing (CWO), business process outsourcing (BPO), payroll process outsourcing (PPO), executive placement and career transition/outplacement (CTO) services. Corporate expenses that directly support the operating units have been allocated to the Americas, EMEA and APAC regions and OCG based on a work effort, volume or, in the absence of a readily available measurement process, proportionately based on revenue from services.
KELLY SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(UNAUDITED)
11. Segment Disclosures (continued)
The following tables present information about the reported revenue from services and gross profit of the Company by segment, along with a reconciliation to consolidated earnings before taxes, for the 13 and 39 weeks ended 2012 and 2011. Asset information by reportable segment is not presented, since the Company does not produce such information internally, nor does it use such data to manage its business. Our segments themselves did not change from prior periods, however, effective with the first quarter of 2012, we changed the manner in which we evaluate and internally report segments, such that our primary measure of segment performance is now gross profit. Historically, our primary measure of segment performance was gross profit less an allocation of SG&A expenses. We revised the prior period's segment results to conform to the current manner in which we evaluate segment performance.
|
|
13 Weeks Ended
|
|
|
39 Weeks Ended
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
(In millions of dollars)
|
|
|
(In millions of dollars)
|
|
Revenue from Services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas Commercial
|
|
$
|
642.2
|
|
|
$
|
661.7
|
|
|
$
|
1,980.1
|
|
|
$
|
1,985.3
|
|
Americas PT
|
|
|
261.6
|
|
|
|
250.8
|
|
|
|
774.1
|
|
|
|
739.1
|
|
Total Americas Commercial and PT
|
|
|
903.8
|
|
|
|
912.5
|
|
|
|
2,754.2
|
|
|
|
2,724.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA Commercial
|
|
|
214.5
|
|
|
|
261.0
|
|
|
|
641.2
|
|
|
|
751.3
|
|
EMEA PT
|
|
|
41.5
|
|
|
|
46.8
|
|
|
|
125.3
|
|
|
|
134.0
|
|
Total EMEA Commercial and PT
|
|
|
256.0
|
|
|
|
307.8
|
|
|
|
766.5
|
|
|
|
885.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APAC Commercial
|
|
|
85.7
|
|
|
|
101.8
|
|
|
|
258.3
|
|
|
|
303.8
|
|
APAC PT
|
|
|
14.3
|
|
|
|
14.1
|
|
|
|
39.9
|
|
|
|
39.1
|
|
Total APAC Commercial and PT
|
|
|
100.0
|
|
|
|
115.9
|
|
|
|
298.2
|
|
|
|
342.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OCG
|
|
|
104.7
|
|
|
|
80.7
|
|
|
|
282.8
|
|
|
|
222.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Intersegment revenue
|
|
|
(10.3
|
)
|
|
|
(7.1
|
)
|
|
|
(26.6
|
)
|
|
|
(20.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Total
|
|
$
|
1,354.2
|
|
|
$
|
1,409.8
|
|
|
$
|
4,075.1
|
|
|
$
|
4,154.7
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(UNAUDITED)
11. Segment Disclosures (continued)
|
|
13 Weeks Ended
|
|
|
39 Weeks Ended
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
(In millions of dollars)
|
|
|
(In millions of dollars)
|
|
Earnings from Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas Commercial gross profit
|
|
$
|
96.4
|
|
|
$
|
93.6
|
|
|
$
|
292.1
|
|
|
$
|
278.9
|
|
Americas PT gross profit
|
|
|
40.9
|
|
|
|
37.9
|
|
|
|
120.8
|
|
|
|
109.8
|
|
Americas Region gross profit
|
|
|
137.3
|
|
|
|
131.5
|
|
|
|
412.9
|
|
|
|
388.7
|
|
Americas Region SG&A expenses
|
|
|
(101.5
|
)
|
|
|
(97.7
|
)
|
|
|
(303.4
|
)
|
|
|
(296.3
|
)
|
Americas Region Earnings from Operations
|
|
|
35.8
|
|
|
|
33.8
|
|
|
|
109.5
|
|
|
|
92.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA Commercial gross profit
|
|
|
33.4
|
|
|
|
42.1
|
|
|
|
101.1
|
|
|
|
121.6
|
|
EMEA PT gross profit
|
|
|
10.5
|
|
|
|
12.7
|
|
|
|
32.7
|
|
|
|
36.1
|
|
EMEA Region gross profit
|
|
|
43.9
|
|
|
|
54.8
|
|
|
|
133.8
|
|
|
|
157.7
|
|
EMEA Region SG&A expenses
|
|
|
(40.0
|
)
|
|
|
(46.7
|
)
|
|
|
(124.2
|
)
|
|
|
(143.3
|
)
|
EMEA Region Earnings from Operations
|
|
|
3.9
|
|
|
|
8.1
|
|
|
|
9.6
|
|
|
|
14.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APAC Commercial gross profit
|
|
|
12.8
|
|
|
|
14.7
|
|
|
|
38.4
|
|
|
|
42.5
|
|
APAC PT gross profit
|
|
|
6.2
|
|
|
|
5.6
|
|
|
|
16.7
|
|
|
|
16.2
|
|
APAC Region gross profit
|
|
19.0
|
|
|
20.3
|
|
|
|
55.1
|
|
|
|
58.7
|
|
APAC Region SG&A expenses
|
|
|
(18.8
|
)
|
|
|
(19.8
|
)
|
|
|
(57.5
|
)
|
|
|
(59.1
|
)
|
APAC Region Earnings from Operations
|
|
|
0.2
|
|
|
|
0.5
|
|
|
|
(2.4
|
)
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OCG gross profit
|
|
|
28.2
|
|
|
|
19.8
|
|
|
|
75.0
|
|
|
|
55.8
|
|
OCG SG&A expenses
|
|
|
(24.2
|
)
|
|
|
(20.0
|
)
|
|
|
(69.6
|
)
|
|
|
(59.2
|
)
|
OCG Earnings from Operations
|
|
|
4.0
|
|
|
|
(0.2
|
)
|
|
|
5.4
|
|
|
|
(3.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
(19.9
|
)
|
|
|
(20.1
|
)
|
|
|
(59.6
|
)
|
|
|
(58.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Total
|
|
|
24.0
|
|
|
|
22.1
|
|
|
|
62.5
|
|
|
|
45.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (Expense) Income, Net
|
|
|
(0.7
|
)
|
|
|
1.0
|
|
|
|
(1.8
|
)
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Taxes
|
|
$
|
23.3
|
|
|
$
|
23.1
|
|
|
$
|
60.7
|
|
|
$
|
44.9
|
|
12.
New Accounting Pronouncements
None.
13. Subsequent Event
In October 2012, management made the decision to no longer pursue our PeopleSoft billing system implementation project in the U.S., Canada and Puerto Rico. Accordingly, based on the estimated costs to complete, management terminated the project at that time and will record pretax charges of approximately $3.0 million during the fourth quarter of 2012 to write off previously capitalized costs associated with the PeopleSoft billing system. Because management had not made the decision to abandon the PeopleSoft billing system project until the fourth quarter, we have determined this matter to be a fourth quarter accounting event.