XML 145 R27.htm IDEA: XBRL DOCUMENT v2.4.0.8
SEGMENT INFORMATION
 12 Months Ended
Dec. 28, 2013
SEGMENT INFORMATION

NOTE 19. SEGMENT INFORMATION

As a result of the Merger, the Company is in a period of transition as it relates to organizational alignment and management reporting which could impact segment reporting in future periods. However at December 28, 2013, the Company had the following three reportable segments: North American Retail Division, North American Business Solutions Division, and International Division. Following the date of the Merger, the former OfficeMax U.S. Retail business is included in the North American Retail Division. The former OfficeMax United States and Canada Contract business is included in the North American Business Solutions Division. The former OfficeMax businesses in Australia, New Zealand and Mexico are included in the International Division. The office supply products and services offered across all operating segments are similar. Certain operating segments are aggregated into the way the business is managed and evaluated. The accounting policies for each segment are the same as those described in Note 1. Division operating income (loss) is determined based on the measure of performance reported internally to manage the business and for resource allocation. This measure charges to the respective Divisions those expenses considered directly or closely related to their operations and allocates support costs. Other companies may charge more or less of these items to their segments and results may not be comparable to similarly titled measures used by other entities.

During the fourth quarter of 2013, the Company modified its measure of business segment operating income for management reporting purposes to exclude from the determination of segment operating results the impact related to asset impairments, Merger and integration, restructuring and other charges and credits. Oversight of these activities starting in fourth quarter of 2013 was provided at the Corporate level. Prior period operating expenses have been recast to conform to the current period presentation for the change in measurement of Division operating results. Asset impairment of $11 million recorded in 2011 remained in the determination of North America Retail Division operating results.

A summary of significant accounts and balances by segment, reconciled to consolidated totals follows.

(In millions)

North

American

Retail

North

American
Business
Solutions

 International

Corporate,
Eliminations

and Other*

Consolidated

Total

Sales

 2013 $ 4,614 $ 3,580 $ 3,048 $ — $ 11,242
2012 $ 4,458 $ 3,215 $ 3,023 $ — $ 10,696
2011 $ 4,870 $ 3,262 $ 3,357 $ — $ 11,489

Division operating income

 2013 $ 8 $ 113 $ 34 $ — $ 155
2012 $ 24 $ 110 $ 36 $ — $ 170
2011 $ 42 $ 78 $ 66 $ — $ 186

Capital expenditures

 2013 $ 63 $ 24 $ 39 $ 11 $ 137
2012 $ 61 $ 31 $ 25 $ 3 $ 120
2011 $ 71 $ 32 $ 26 $ 1 $ 130

Depreciation and amortization

 2013 $ 105 $ 51 $ 30 $ 23 $ 209
2012 $ 103 $ 43 $ 34 $ 23 $ 203
2011 $ 109 $ 42 $ 37 $ 23 $ 211

Charges for losses on receivables and inventories

 2013 $ 38 $ 9 $ 12 $ — $ 59
2012 $ 40 $ 6 $ 19 $ — $ 65
2011 $ 31 $ 7 $ 18 $ — $ 56

Net earnings from equity method investments

 2013 $ — $ — $ 14 $ — $ 14
2012 $ — $ — $ 30 $ — $ 30
2011 $ — $ — $ 31 $ — $ 31

Assets

 2013 $ 1,847 $ 1,573 $ 1,327 $ 2,730 $ 7,477
2012 $ 1,189 $ 670 $ 1,312 $ 840 $ 4,011

*

Amounts included in “Eliminations and Other” consist of assets (including all cash and cash equivalents) and depreciation related to corporate activities. Also, the December 28, 2013 Assets balance in Corporate, Eliminations and Other includes $377 million of goodwill that will be allocated to reporting units when the purchase price allocation process is complete.

A reconciliation of the measure of Division operating income to Income (loss) before income taxes follows.

(In millions) 2013 2012 2011

Division operating income

 $ 155 $ 170 $ 186

Add/(subtract):

Recovery of purchase price

 — 68 —

Asset impairments

 (70 ) (139 ) —

Merger, restructuring, and other operating expenses, net

 (201 ) (56 ) (56 )

Unallocated expenses

 (89 ) (74 ) (96 )

Interest income

 5 2 1

Interest expense

 (69 ) (69 ) (33 )

Loss on extinguishment of debt

 — (12 ) —

Gain on disposition of joint venture

 382 — —

Other income (expense), net

 14 35 31

Income (loss) before income taxes

 $ 127 $ (75 ) $ 33

As of December 28, 2013, the Company sold to customers throughout North America, Europe, Asia/Pacific and Latin America. The Company operates through wholly-owned and majority-owned entities and participates in other ventures and alliances. There is no single country outside of the United States or single customer that accounts for 10% or more of the Company’s total sales. Geographic financial information relating to the Company’s business is as follows (in millions).

Sales Property and Equipment, Net
2013 2012 2011 2013 2012 2011

United States

 $ 8,119 $ 7,671 $ 8,108 $ 977 $ 707 $ 902

International

 3,123 3,025 3,381 332 149 165

Total

 $ 11,242 $ 10,696 $ 11,489 $ 1,309 $ 856 $ 1,067

The Company classifies products into three categories: (1) supplies, (2) technology, and (3) furniture and other. The supplies category includes products such as paper, binders, writing instruments, and school supplies. The technology category includes products such as desktop and laptop computers, monitors, tablets, printers, ink and toner, cables, software, digital cameras, telephones, and wireless communications products. The furniture and other category includes products such as desks, chairs, luggage, sales in the copy and print centers, and other miscellaneous items.

Total Company sales by product group were as follows:

2013 2012 2011

Supplies

 46.6% 45.8% 44.6%

Technology

 40.6% 41.8% 43.5%

Furniture and other

 12.8% 12.4% 11.9%

100.0% 100.0% 100.0%