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MERGER | 6 Months Ended
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Jun. 28, 2014
MERGER | NOTE 2. MERGER On November 5, 2013, the Company completed its merger with OfficeMax. Each former share of OfficeMax common stock issued and outstanding immediately prior to the Merger was converted to 2.69 shares of Office Depot common stock. The Company issued approximately 240 million shares of Office Depot, Inc. common stock to former holders of OfficeMax common stock, representing approximately 45% of the approximately 530 million total shares of Company common stock outstanding on the Merger date. Additionally, OfficeMax employee based stock options and restricted stock were converted into mirror awards exercisable or earned in Office Depot, Inc. common stock. The value of these awards was apportioned between total Merger consideration and unearned compensation to be recognized over the remaining original vesting periods of the awards. Office Depot was determined to be the acquirer for accounting purposes. The Merger was an all-stock transaction, valued at the closing price of Office Depot, Inc. common stock on the Merger date. Approximately $1.4 billion of consideration was allocated on a preliminary basis, pending completion of the valuation of the fair value of assets acquired and liabilities assumed. Goodwill has not yet been allocated to the reporting units. The valuation will be finalized during the measurement period which will not exceed one year from the Merger date. As the Company has worked to complete the purchase price allocation, certain preliminary values have been adjusted since the Merger date. Initial amounts allocated to certain international property and equipment accounts decreased by $16 million, customer intangible accounts increased by $1 million and tax account adjustments were $1 million. Additionally, $24 million of goodwill has been allocated to the Grupo OfficeMax business in connection with the pending sale. These adjustments and partial allocation resulted in a net $8 million reduction in total goodwill through the end of the second quarter of 2014. Under the guidance on accounting for business combinations, merger and integration costs are not included as components of consideration transferred but are accounted for as expenses in the period in which the costs are incurred. Transaction-related expenses are included in the Merger, restructuring, and other operating expenses, net line in the Condensed Consolidated Statements of Operations. Refer to Note 3 for additional information about the expenses incurred during 2014. Additionally, in accordance with certain Merger-related agreements, in both July and November 2013, the Company redeemed 50% of the redeemable preferred stock outstanding. Redeemable preferred stock dividends included in the Condensed Consolidated Statement of Operations and Condensed Consolidated Statement of Cash Flows for the second quarter and first half of 2013 relate to contractual dividends incurred prior to the redemptions. Consolidated joint venture held for sale In June 2014, the Company entered into an agreement with its joint venture partner to sell its 51% capital stock interest in Grupo OfficeMax, the former OfficeMax business in Mexico. The agreement has been approved by the appropriate Mexican regulatory authorities and is expected to be completed during the third quarter of 2014. This disposition will not have a major effect on the Company’s operations and financial results, therefore, the transaction does not meet the discontinued operations criteria under the recently issued and early adopted accounting standards disclosed in Note 1. The sale price is considered to be the most appropriate indication of the joint venture fair value and no significant gain or loss is expected on disposition. Anticipated cost to sell have been accrued. The significant line items included in the Condensed Consolidated Statements of Operations are as follows:
|  | 2014 |
(In millions) |  | Second Quarter |  |  | First Half |
Sales |  | $ | 59 |  |  | $ | 127 |
Cost of goods sold and occupancy costs |  |  | (43 | ) |  |  | (94 | )
Selling, general and administrative expenses |  |  | (14 | ) |  |  | (25 | )
Other expenses |  |  | — |  |  |  | (2 | )
Income before income taxes |  |  | 2 |  |  |  | 6 |
Income attributable to Office Depot, before income taxes |  |  | 1 |  |  |  | 4 |
The transaction was not contemplated at the Merger date, but because of the subsequent decisions to sell, the joint venture’s assets and liabilities are presented in the Condensed Consolidated Balance Sheet at June 28, 2014 and December 28, 2013, as Assets of consolidated joint venture held for sale and Liabilities of consolidated joint venture held for sale, respectively, and include the following:
(In millions) |  | June 28, 2014 |  |  | December 28, 2013 |
Cash and cash equivalents |  | $ | 4 |  |  | $ | 7 |
Receivables, net |  |  | 18 |  |  |  | 18 |
Inventories |  |  | 81 |  |  |  | 71 |
Property and equipment, net |  |  | 38 |  |  |  | 47 |
Goodwill |  |  | 24 |  |  |  | — |
Other assets |  |  | 11 |  |  |  | 10 |
Assets of consolidated joint venture held for sale |  | $ | 176 |  |  | $ | 153 |
Trade accounts payable |  | $ | 39 |  |  | $ | 44 |
Debt |  |  | 11 |  |  |  | 7 |
Accrued expenses and other liabilities |  |  | 22 |  |  |  | 22 |
Liabilities of consolidated joint venture held for sale |  | $ | 72 |  |  | $ | 73 |
Through the earlier of completion of the transaction or December 31, 2014, the Company’s joint venture partner waived their rights, if any, to measurement or exercise of provisions in the current joint venture agreement that could require the Company to purchase their ownership interests.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4922-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4934-128472 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4926-128472 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4845-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 + Details
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