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SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2016
SEGMENT INFORMATION

NOTE 16. SEGMENT INFORMATION

Following the application of discontinued operations accounting for substantially all of the businesses formerly presented as the International Division, the Company has two 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. The North American Business Solutions Division sells office supply products and services throughout North America, including the United States, Puerto Rico, the U.S. Virgin Islands and Canada. 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 December 31, 2016 and have been presented as Other, pending management assessment of the future of this business and how it will be managed.

The office supply products and services offered across all operating segments are similar. The Company’s two operating segments are the two reportable segments. The North American Retail Division and North American Business Solutions Division are managed separately, primarily because of the way customers are reached and served. Due to the sale of the Company’s interest in Grupo OfficeMax in August 2014, the joint venture’s results have been reported as the Corporate level to align with how this information was presented for management reporting. The accounting policies for each segment are the same as those described in Note 1. 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, Merger, restructuring and other operating (income) expenses, net, and Legal accrual, 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.

 

A summary of significant accounts and balances by segment, reconciled to consolidated totals, after the elimination of discontinued operations for all periods is as follows.

 

(In millions)           

North

American

Retail

     

North

American

Business

Solutions

      Other     

Corporate,

Eliminations,

and
Discontinued
Operations*

     

Consolidated

Total

  

Sales

      2016      $ 5,603      $ 5,400      $ 18      $ —      $ 11,021  
     2015        6,004        5,708        15        —        11,727  
     2014        6,528        6,013        14        155        12,710  

Division operating income

      2016        299        265        1        —        565  
     2015        310        226        3        —        539  
     2014        126        232        1        —        359  

Capital expenditures

      2016        58        42        —        11        111  
     2015        56        70        —        18        144  
     2014        44        29        —        23        96  

Depreciation and amortization

      2016        90        69        —        22        181  
     2015        130        82        —        41        253  
     2014        140        85        —        52        277  

Charges for losses on receivables and inventories

      2016        58        20        —        —        78  
     2015        42        11        —        —        53  
     2014        48        4        —        —        52  

Assets

      2016        1,542        1,713        4        2,281        5,540  
     2015        1,625        1,607        4        3,206        6,442  
     2014        1,736        1,687        4        3,330        6,757  

 

* Amounts included in “Corporate, Eliminations, and Discontinued Operations” consist of (i) assets (including all cash and cash equivalents) and depreciation related to corporate activities of continuing operations, (ii) assets of discontinued operations amounting to $142 million, $1.1 billion and $1.2 billion for the years ended December 31, 2016, December 26, 2015 and December 27, 2014, respectively, and (iii) accounts and balances associated with Grupo OfficeMax prior to disposition.

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

 

(In millions)    2016      2015      2014  

Division operating income

    $ 565      $ 539      $ 359  

Add/(subtract):

         

Other operating income (loss)

      —        —        8  

Asset impairments

      (15 )       (13 )       (56 ) 

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

      80        (242 )       (334 ) 

Legal accrual

      —        —        (81 ) 

Unallocated expenses

      (99 )       (101 )       (124 ) 

Interest income

      22        22        22  

Interest expense

      (80 )       (91 )       (87 ) 

Loss on extinguishment of debt

      (15 )       —        —  

Other income (expense), net

      1        1        2  
  

 

 

  

Income (loss) from continuing operations before income taxes

    $ 459      $ 115      $ (291 ) 
  

 

 

  

 

There is no single customer that accounts for 10% or more of the Company’s total sales.

The Company classifies products into three broad categories: (1) supplies, (2) technology, and (3) furniture and other. The supplies category includes products such as paper, writing instruments, office supplies, cleaning and breakroom items. The technology category includes products such as toner and ink, computers, tablets and accessories, printers, electronic storage, as well as services for technology products. The furniture and other category includes products such as desks, seating, and luggage, as well as sales in our copy and print centers.

Total Company sales by product category were as follows:

 

     2016      2015      2014  

Supplies

      45.2%        44.4%        43.6%  

Technology

      38.9%        40.2%        41.2%  

Furniture and other

      15.9%        15.4%        15.2%  
  

 

 

  
     100.0%        100.0%        100.0%  
  

 

 

  

As of December 31, 2016, goodwill totaled $363 million, of which $78 million was recorded in the North American Retail Division and $285 million in the North American Solutions Division.