Quantitative and Qualitative Disclosures About Market Risk.
+Added: Foreign Currency
We are exposed to foreign currency risk primarily related to our foreign subsidiaries.
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Intercompany transactions which create foreign currency risk include services, royalties, loans, contributions and distributions.
−Removed: On November 2, 2023, the Company entered into a foreign currency forward contract with a notional amount of €90 million to manage the foreign currency risk associated with the sale of our EMEA staffing operations (see Disposition footnote), which was completed in the first quarter of 2024.
+Added: On November 2, 2023, the Company entered into a foreign currency forward contract with a notional amount of €90 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.
−Removed: An unrealized loss of $3.6 million associated with the forward contract was recorded as of December 31, 2023.
+Added: An unrealized loss of $3.6 million associated with the forward contract was recorded as of year-end 2023.
A total loss of $2.4 million was realized upon settlement on January 5, 2024;
therefore, the Company recorded a gain of $1.2 million in the first quarter of 2024 (see Fair Value Measurements footnote in the notes to our consolidated financial statements for more details).
−Removed: On 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 the additional expected proceeds in the third quarter of 2024 related to the sale of our EMEA staffing operations (see Disposition footnote).
+Added: On 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 the additional expected proceeds in the third quarter of 2024 related to the sale of our EMEA staffing operations (see Acquisition and Disposition footnote in the notes to our consolidated financial statements).
The expected proceeds are recorded as a euro-denominated receivable which is remeasured each period.
−Removed: 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 statement of earnings (see Fair Value Measurements footnote in the notes to our consolidated financial statements for more details).
−Removed: In addition, we are exposed to interest rate risks through our use of the multi-currency line of credit and other borrowings.
−Removed: A hypothetical fluctuation of 10% of market interest rates would not have had a material impact on 2024 first quarter earnings.
+Added: 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) loss on sale of EMEA staffing operations in the consolidated statement of earnings.
+Added: An unrealized gain of $0.2 million associated with the forward contract was recorded in the first six months of 2024 (see Fair Value Measurements footnote in the notes to our consolidated financial statements for more details).
+Added: Interest Rates
+Added: We are exposed to interest rate risks through the use of our credit facilities and other local borrowings, when applicable.
+Added: A hypothetical fluctuation of 10% of market interest rates would not have had a material impact on 2024 second quarter earnings.
We are exposed to market risk as a result of our obligation to pay benefits under our nonqualified deferred compensation plan and our related investments in company-owned variable universal life insurance policies.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.