DISCONTINUED OPERATIONS

9 Months Ended

Sep. 25, 2021

Discontinued Operations And Disposal Groups [Abstract]

NOTE 13. DISCONTINUED OPERATIONS

In January 2021, the Company’s Board of Directors announced that as a result of a business review of CompuCom, management has initiated a process to explore a value-maximizing sale of the Company’s former CompuCom Division to maximize CompuCom’s full potential and drive forward its future value and success. On June 29, 2021, the Company’s Board of Directors aligned with management’s commitment to a plan to sell CompuCom through a single disposal group. Although management did not bring forth a specific transaction to the Board of Directors, the Company is actively marketing CompuCom for sale at a price that the Company believes is reasonable in relation to CompuCom’s current fair value. CompuCom is available for immediate sale in its present condition and any sale is expected to be subject to customary regulatory approvals. Based on these considerations, and management’s experience and ability to complete similar transactions in the past, management believes the sale is probable and expects to complete it within one year from June 29, 2021. However, there can be no assurances regarding the ultimate timing of the planned disposition of CompuCom or that such disposition will be completed. The CompuCom disposal group has met the accounting criteria to be classified as held for sale as of June 29, 2021 and is presented as such in the Condensed Consolidated Balance Sheets as of September 25, 2021 and December 26, 2020. The planned disposition of CompuCom represents a strategic shift that will have a major impact on the Company’s operations and financial results. Accordingly, the Company intends to present the operating results and cash flows of its CompuCom Division as discontinued operations for all periods presented.

Merger and restructuring expenses incurred by the former CompuCom Division, that were previously presented as Corporate expenses, are included in the measurement and presentation of discontinued operations in all periods presented.

The following table represents a reconciliation of the major components of discontinued operations, net of tax presented in the Condensed Consolidated Statements of Operations.

	Third Quarter						Year-to-Date
(In millions)	2021			2020			2021			2020
Major components of discontinued operations before income taxes:
Sales:
Products	$	66		$	44		$	182		$	165
Services		135			148			428			470
Total sales		201			192			610			635
Cost of goods and occupancy costs:
Products		57			39			160			150
Services		104			110			331			350
Total cost of goods and occupancy costs		161			149			491			500
Gross profit		40			43			119			135
Selling, general and administrative expenses		29			40			117			128
Asset impairments		—			—			114			248
Merger, restructuring and other operating expenses, net		—			2			(2	)		18
Operating income (loss)		11			1			(110	)		(259	)
Other income, net		—			—			(1	)		1
Income (loss) from major components of discontinued operations before income taxes		11			1			(111	)		(258	)
Loss from classification to held for sale		(1	)		—			(1	)		—
Income (loss) from discontinued operations before income taxes		10			1			(112	)		(258	)
Income tax benefit		(18	)		(22	)		(23	)		(15	)
Discontinued operations, net of tax	$	28		$	23		$	(89	)	$	(243	)

The following table represents the major classes of assets and liabilities of the disposal group classified as held for sale presented in the Condensed Consolidated Balance Sheets as of September 25, 2021 and December 26, 2020.

	September 25,			December 26,
(In millions)	2021			2020
Major classes of assets included in discontinued operations:
Receivables, net	$	209		$	189
Inventories		23			14
Prepaid expenses and other current assets		18			16
Total current assets					219
Property and equipment, net		24			26
Operating lease right-of-use assets		64			62
Goodwill		112			214
Other intangible assets, net		281			301
Other assets		14			19
Total noncurrent assets					622
Less: valuation allowance		(1	)
Total assets of the disposal group classified as held for sale	$	744		$	841
Major classes of liabilities included in discontinued operations:
Trade accounts payable	$	71		$	62
Accrued expenses and other current liabilities		76			90
Total current liabilities					152
Deferred income taxes and other long-term liabilities		76			82
Operating lease liabilities		49			56
Total noncurrent liabilities					138
Total liabilities of the disposal group classified as held for sale	$	272		$	290