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SEGMENT INFORMATION | 9 Months Ended
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Sep. 28, 2019
Segment Reporting [Abstract] |
SEGMENT INFORMATION | NOTE 5. SEGMENT INFORMATION At September 28, 2019, the Company had three reportable segments: Business Solutions Division, Retail Division and the CompuCom Division. The Business Solutions Division sells nationally branded as well as the Company’s private branded office supply and adjacency products and services to customers in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada. Business Solutions Division customers are served through dedicated sales forces, catalogs, telesales, and electronically through the Company’s Internet websites. The Retail Division includes retail stores in the United States, Puerto Rico and the U.S. Virgin Islands, which offer office supplies, technology products and solutions, business machines and related supplies, print, cleaning, breakroom and facilities products, and office furniture as well as business services including copying, printing, mailing, shipping and technology support services. In addition, the print needs for retail and business customers are also facilitated through the Company’s regional print production centers. The CompuCom Division provides IT services and products to enterprise organizations in the United States and Canada, and offers a broad range of solutions including end user computing support, managed IT services, data center monitoring and management, service desk, network infrastructure, IT workforce solutions, mobile device management, IT integration solutions and cloud services. The retained global sourcing operations previously included in the former International Division are not significant and have been presented as Other. Also included in Other is the elimination of intersegment revenues of $3 million and $9 million for the third quarter and year-to-date 2019, respectively, and $4 million and $10 million for the third quarter and year-to-date 2018, respectively. The products and services offered by the Business Solutions Division and the Retail Division are similar, but the CompuCom Division’s offerings are focused on IT services and related products. The Company’s three operating segments are its three reportable segments. The Business Solutions Division, the Retail Division and the CompuCom Division are managed separately as they represent separate channels in the way the Company serves its customers, and they are managed accordingly. 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 Business Solutions Division, the Retail Division or the CompuCom Division, including asset impairments and merger and restructuring expenses, 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. In addition, the Company regularly evaluates the appropriateness of the reportable segments based on how the business is managed, including decision-making about resources allocation and assessing performance of the segments, particularly in light of organizational changes, merger and acquisition activity and changing laws and regulations. Therefore, the current reportable segments may change in the future. The following is a summary of sales and operating income (loss) by each of the Divisions and Other, reconciled to consolidated totals.
|  | Sales |
|  | Third Quarter |  |  | Year-to-Date |
(In millions) |  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Business Solutions Division |  | $ | 1,350 |  |  | $ | 1,364 |  |  | $ | 4,022 |  |  | $ | 3,990 |
Retail Division |  |  | 1,177 |  |  |  | 1,254 |  |  |  | 3,352 |  |  |  | 3,551 |
CompuCom Division |  |  | 252 |  |  |  | 268 |  |  |  | 758 |  |  |  | 803 |
Other |  |  | 3 |  |  |  | 1 |  |  |  | 7 |  |  |  | 1 |
Total |  | $ | 2,782 |  |  | $ | 2,887 |  |  | $ | 8,139 |  |  | $ | 8,345 |
|  | Division Operating Income (Loss) |
|  | Third Quarter |  |  | Year-to-Date |
(In millions) |  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Business Solutions Division |  | $ | 71 |  |  | $ | 67 |  |  | $ | 203 |  |  | $ | 189 |
Retail Division |  |  | 84 |  |  |  | 70 |  |  |  | 160 |  |  |  | 165 |
CompuCom Division |  |  | 3 |  |  |  | 1 |  |  |  | (11 | ) |  |  | 12 |
Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 | )
Total |  | $ | 158 |  |  | $ | 138 |  |  | $ | 352 |  |  | $ | 365 |
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) |  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Total Divisions operating income |  | $ | 158 |  |  | $ | 138 |  |  | $ | 352 |  |  | $ | 365 |
Add/(subtract): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset impairments |  |  | (5 | ) |  |  | — |  |  |  | (50 | ) |  |  | — |
Merger and restructuring expenses, net |  |  | (22 | ) |  |  | (14 | ) |  |  | (105 | ) |  |  | (45 | )
Unallocated expenses |  |  | (23 | ) |  |  | (19 | ) |  |  | (80 | ) |  |  | (90 | )
Interest income |  |  | 5 |  |  |  | 7 |  |  |  | 16 |  |  |  | 18 |
Interest expense |  |  | (22 | ) |  |  | (31 | ) |  |  | (68 | ) |  |  | (91 | )
Other income, net |  |  | 2 |  |  |  | 4 |  |  |  | 7 |  |  |  | 11 |
Income from continuing operations before income taxes |  | $ | 93 |  |  | $ | 85 |  |  | $ | 72 |  |  | $ | 168 |
The components of goodwill by segment are provided in the following table:
|  | Business Solutions |  |  | Retail |  |  | CompuCom |  |  |  |  |
(In millions) |  | Division |  |  | Division |  |  | Division |  |  | Total |
Balance as of December 29, 2018 |  | $ | 387 |  |  | $ | 78 |  |  | $ | 449 |  |  | $ | 914 |
Acquisitions |  |  | 20 |  |  |  | — |  |  |  | — |  |  |  | 20 |
Foreign currency rate impact |  |  | — |  |  |  | — |  |  |  | 4 |  |  |  | 4 |
Balance as of September 28, 2019 |  | $ | 407 |  |  | $ | 78 |  |  | $ | 453 |  |  | $ | 938 |
Refer to Note 2 for additional information on the acquisitions made during year-to-date 2019. During the third quarter of 2019, the Company performed its annual goodwill impairment test using a quantitative assessment that combined the income approach and the market approach valuation methodologies, and concluded that the fair value of each reporting unit exceeded their respective carrying amount as of the assessment date, which was the first day of the quarter. The Company also did not identify any impairment related to its indefinite-lived intangible assets that were tested quantitatively as of the assessment date. The Company continues to monitor the performance of its Contract reporting unit, a component of the Business Solutions Division segment, and its CompuCom reporting unit, which both passed the quantitative assessment with margins in excess of those determined in the Company’s 2018 annual assessment. The CompuCom Division reported an operating loss for year-to-date 2019 that was mainly driven by temporary shortfalls in revenue and profitability in the first quarter of 2019, and has improved its operational performance during the second and third quarters. The Company continues to undertake several actions to improve the future operating performance of CompuCom, including the use of automation and technology to further improve service efficiency, simplifying organizational structures to improve service velocity, and aligning sales efforts to better serve its customers and accelerate cross-selling opportunities. The anticipated impacts of these actions are reflected in key assumptions used in the quantitative assessment, and if not realized, could result in future impairment of goodwill and indefinite-lived intangible assets for the CompuCom reporting unit.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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