XML 19 R11.htm IDEA: XBRL DOCUMENT
v3.24.2.u1

MERGER AND RESTRUCTURING ACTIVITY | 6 Months Ended
--- | ---
Jun. 29, 2024
Merger Restructuring And Other Activity [Abstract] |
MERGER AND RESTRUCTURING ACTIVITY | NOTE 2. MERGER AND RESTRUCTURING ACTIVITY The Company has taken actions to optimize its asset base and drive operational efficiencies. These actions include acquiring profitable businesses, closing underperforming retail stores and non-strategic distribution facilities, consolidating functional activities, eliminating redundant positions and disposing of non-strategic businesses and assets. The expenses and any income recognized directly associated with these actions are included in Merger and restructuring expenses, net on a separate line in the Condensed Consolidated Statements of Operations in order to identify these activities apart from the expenses incurred to sell to and service customers. These expenses are not included in the determination of Division operating income. The table below summarizes the major components of Merger and restructuring expenses, net.
|  | Second Quarter |  |  | First Half |
(In millions) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Merger and transaction related expenses |  |  |  |  |  |  |  |  |  |  |  |
Transaction and integration |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Total Merger and transaction related expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Restructuring expenses |  |  |  |  |  |  |  |  |  |  |  |
Severance |  |  | 15 |  |  |  | — |  |  |  | 26 |  |  |  | — |
Professional fees |  |  | 8 |  |  |  | — |  |  |  | 14 |  |  |  | — |
Facility closure, contract termination, and other expenses, net |  |  | 2 |  |  |  | 1 |  |  |  | 5 |  |  |  | 1 |
Total Restructuring expenses, net |  |  | 25 |  |  |  | 1 |  |  |  | 45 |  |  |  | 1 |
Total Merger and restructuring expenses, net |  | $ | 25 |  |  | $ | 1 |  |  | $ | 45 |  |  | $ | 1 |
MERGER AND TRANSACTION RELATED EXPENSES Transaction and integration expenses include legal, accounting, and other third-party expenses incurred in connection with acquisitions. In the second quarter and first half of 2024, the Company recognized transaction and integration expenses of less than $1 million related to potential acquisition activities. The Company did no t have any transaction and integration expenses in the second quarter of 2023, and had less than $1 million of expenses in the first half of 2023. RESTRUCTURING EXPENSES Project Core In March 2024, the Company’s Board of Directors approved a restructuring plan to redesign its company-wide low-cost business model approach and create further efficiencies in its business to lower costs (“Project Core”). This was driven by a need to significantly reduce costs due to macroeconomic and other factors impacting the Company’s sales, as well as insights gained following the first year of operations of realignment of its operating segments into four divisions. The scope of Project Core was approved in two phases, in March 2024 and April 2024, and includes cost improvement actions across the entire enterprise, including the Varis Division, which is now presented as discontinued operations. It aims to optimize the Company’s organizational structure to support future growth of the business. Project Core is expected to be completed in 2025, with the majority of actions expected to be taken by the end of 2024. Total restructuring costs related to Project Core are estimated to be up to $57 million, of which $35 million are estimated to be termination benefits, which mainly consists of severance, and $22 million are estimated to be costs to facilitate the program, which consists of third-party professional fees, and other incremental employee-related costs to implement actions. All costs of Project Core are expected to be cash expenditures. In the second quarter of 2024, the Company incurred $24 million of restructuring costs associated with Project Core. Of these costs, $15 million was severance and $9 million were costs to facilitate the program, which mainly consisted of third-party professional fees. In the first half of 2024, the Company incurred $42 million of restructuring costs associated with Project Core. Of these costs, $26 million was severance and $16 million were costs to facilitate the program, which mainly consisted of third-party professional fees. In addition, in the first half of 2024, the Company incurred $8 million of severance expenses related to the Varis Division, which are presented in discontinued operations and excluded from the table above. The Company made cash payments of $30 million and $32 million associated with expenditures for Project Core in the second quarter and first half of 2024, respectively. Of these cash payments, $8 million were related to the Varis Division. Maximize B2B Restructuring Plan Since the inception of the Maximize B2B Restructuring Plan in May 2020, the Company has closed a total of 297 retail stores and two distribution facilities through 2023, with an additional eight and 20 retail stores closed in the second quarter and first half of 2024, respectively, under this plan. In the second quarter and first half of 2024, the Company incurred $1 million and $3 million of restructuring costs associated with the Maximize B2B Restructuring Plan, respectively, and made cash payments of $3 million and $5 million associated with these expenditures, respectively. In the second quarter and first half of 2023, the Company incurred $1 million of restructuring costs associated with the Maximize B2B Restructuring Plan, and made cash payments of $1 million and $4 million, respectively, associated with expenditures for the Maximize B2B Restructuring Plan. MERGER AND RESTRUCTURING ACCRUALS The activity in the merger and restructuring accruals the first half of 2024 is presented in the table below. Certain merger and restructuring charges are excluded from the table because they are paid as incurred or non-cash, such as accelerated depreciation and gains and losses on asset dispositions.
|  | Balance as of |  |  |  |  |  |  |  |  | Balance as of |
|  | December 30, |  |  | Charges (credits) |  |  | Cash |  |  | June 29, |
(In millions) |  | 2023 |  |  | Incurred |  |  | Payments |  |  | 2024 |
Termination benefits: |  |  |  |  |  |  |  |  |  |  |  |
Project Core |  | $ | — |  |  | $ | 26 |  |  | $ | (11 | ) |  | $ | 15 |
Maximize B2B Restructuring Plan |  |  | 2 |  |  |  | — |  |  |  | (1 | ) |  |  | 1 |
Lease and contract obligations, accruals for facilities closures and other costs: |  |  |  |  |  |  |  |  |  |  |  |
Project Core |  |  | — |  |  |  | 14 |  |  |  | (12 | ) |  |  | 2 |
Maximize B2B Restructuring Plan |  |  | 3 |  |  |  | 3 |  |  |  | (3 | ) |  |  | 3 |
Comprehensive Business Review |  |  | 1 |  |  |  | (1 | ) |  |  | — |  |  |  | — |
Total |  | $ | 6 |  |  | $ | 42 |  |  | $ | (27 | ) |  | $ | 21 |
Substantially all of these liabilities are short-term and are included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets.

X
- Definition Merger restructuring and other activity. + References No definition available. + Details
Name: | odp_MergerRestructuringAndOtherActivityAbstract
Namespace Prefix: | odp_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent + Details
Name: | us-gaap_MergersAcquisitionsAndDispositionsDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration