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DIVISION INFORMATION
 9 Months Ended
Sep. 24, 2016
DIVISION INFORMATION

NOTE 11. DIVISION INFORMATION

Following the decision to sell the European Business and substantially all of the remaining operations that previously were presented as the International Division, and their presentation as discontinued operations, the Company has two operating segments which are also the reportable segments: North American Retail Division and North American Business Solutions Division. The North American Retail Division includes retail stores in the United States, including Puerto Rico and the U.S. Virgin Islands, which offer office supplies, technology products and solutions, business machines and related supplies, facilities products, and office furniture. Most stores also have a copy and print center offering printing, reproduction, mailing and shipping services. The North American Business Solutions Division sells office supply products and services in Canada and the United States, including Puerto Rico and the U.S. Virgin Islands. North American Business Solutions Division customers are served through dedicated sales forces, through catalogs, telesales, and electronically through its Internet sites.

The retained operations previously included in the International Division are not significant at September 24, 2016 and have been presented as Other.

The office supply products and services offered across the segments are similar. Division operating income 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. Certain operating expenses and credits are not allocated to the Divisions including Asset impairments and Merger, restructuring and other operating (income) expenses, net, as well as expenses and credits retained at the Corporate level, including certain management costs and legacy pension and environmental matters. 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.

The following is a summary of Sales and Division operating income by each of the Divisions, reconciled to consolidated totals, after the elimination of the discontinued operations for all periods.

 

     Sales  
     Third Quarter      Year-to-Date  
(In millions)    2016      2015      2016      2015  

North American Retail Division

    $ 1,482       $ 1,604       $ 4,237       $ 4,599   

North American Business Solutions Division

      1,348         1,438         4,046         4,348   

Other

      6         4         12         14   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 2,836       $ 3,046       $ 8,295       $ 8,961   
  

 

 

     

 

 

     

 

 

     

 

 

  
     Division Operating Income  
     Third Quarter      Year-to-Date  
(In millions)    2016      2015      2016      2015  

North American Retail Division

    $ 105       $ 120       $ 237       $ 248   

North American Business Solutions Division

      81         66         190         186   

Other

      —           —           1         2   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 186       $ 186       $ 428       $ 436   
  

 

 

     

 

 

     

 

 

     

 

 

  

A reconciliation of the measure of Division operating income to Consolidated income from continuing operations before income taxes is as follows:

 

     Third Quarter      Year-to-Date  
(In millions)    2016      2015      2016      2015  

Total Division operating income

    $ 186       $ 186       $ 428       $ 436   

Add/(subtract):

      

Asset impairments

      (9 )       (1 )       (9 )       (10 ) 

Merger, restructuring and other operating income (expenses), net

      (31 )       (79 )       122         (204 ) 

Unallocated expenses

      (29 )       (25 )       (68 )       (81 ) 

Interest income

      6         5         17         16   

Interest expense

      (19 )       (22 )       (63 )       (69 ) 

Loss on extinguishment of debt

      (15 )       —           (15 )       —     

Other income (expense), net

      1         (1 )       1         —     
  

 

 

     

 

 

     

 

 

     

 

 

  

Income from continuing operations before income taxes

    $ 90       $ 63       $ 413       $ 88   
  

 

 

     

 

 

     

 

 

     

 

 

  

As of September 24, 2016, goodwill totaled $363 million, of which $78 million was recorded in the North American Retail Division and $285 million in the North American Business Solutions Division.

As a result of the Company’s annual goodwill impairment analysis, $15 million of goodwill relating to the Australia/New Zealand reporting unit was considered impaired and included in Discontinued operations, net of tax in the Condensed Consolidated Statements of Operations.