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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended
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Mar. 29, 2025
Accounting Policies [Abstract] |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The ODP Corporation (including its consolidated subsidiaries, “ODP” or the “Company”) is a leading provider of products, services and technology solutions through an integrated business-to-business (“B2B”) distribution platform and omni-channel presence, which includes supply chain and distribution operations, dedicated sales professionals, online presence, and a network of Office Depot and OfficeMax retail stores. Through its operating companies ODP Business Solutions, LLC; Office Depot, LLC; and Veyer, LLC, The ODP Corporation empowers every business, professional, and consumer to achieve more every day. The Company has three reportable segments (or “Divisions”): ODP Business Solutions Division, Office Depot Division, and Veyer Division. Refer to Note 3 for additional information. The Company’s Varis Division was sold through a single disposal group on October 18, 2024. Accordingly, that business is presented as discontinued operations. The Company retained a minority interest of 19.9% after the sale. Refer to Note 11 for additional information. The Condensed Consolidated Financial Statements as of March 29, 2025, and for the 13-week period ended March 29, 2025 (also referred to as the “first quarter of 2025”), and March 30, 2024 (also referred to as the “first quarter of 2024”) are unaudited. However, in management’s opinion, these Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature necessary to provide a fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. The Company has prepared the Condensed Consolidated Financial Statements included herein pursuant to the rules and regulations of the SEC. Some information and note disclosures, which would normally be included in comprehensive annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), have been condensed or omitted pursuant to those SEC rules and regulations. The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. For a better understanding of the Company and its Condensed Consolidated Financial Statements, the Company recommends reading these Condensed Consolidated Financial Statements in conjunction with the audited financial statements, which are included in the Company’s 2024 Form 10-K. These interim results are not necessarily indicative of the results that should be expected for the full year. CASH MANAGEMENT The cash management process generally utilizes zero balance accounts which provide for the settlement of the related disbursement and cash concentration accounts on a daily basis. Amounts not yet presented for payment to zero balance disbursement accounts of $5 million and $16 million at March 29, 2025 and December 28, 2024, respectively, are presented in Trade accounts payable and Accrued expenses and other current liabilities. At March 29, 2025 and December 28, 2024, cash and cash equivalents held outside the United States amounted to $62 million and $55 million, respectively. In the first quarter of 2024, the Company repatriated $25 million cash that was held in Canada, for a cost of $1 million. The Company has certain ongoing pension obligations related to its frozen defined benefit pension plan in the United Kingdom (“UK”). Restricted cash consists primarily of cash in bank committed to fund UK pension obligations based on the agreements that govern the UK pension plan. Restricted cash is valued at cost, wh ich approximates fair value. Restricted cash was $5 million at both March 29, 2025 and December 28, 2024 and is presented in Other assets. REVENUE AND CONTRACT BALANCES The Company generates substantially all of its revenue from contracts with customers for the sale of products and services. Refer to Note 3 for information on revenue by reportable segment and product category. Contract balances primarily consist of receivables, assets related to deferred contract acquisition costs, liabilities related to payments received in advance of performance under the contract, and liabilities related to unredeemed gift cards and loyalty programs. The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers:
|  | March 29, |  |  | December 28, |
(In millions) |  | 2025 |  |  | 2024 |
Trade receivables, net |  | $ | 355 |  |  | $ | 335 |
Short-term contract assets |  |  | 3 |  |  |  | 4 |
Long-term contract assets |  |  | 7 |  |  |  | 4 |
Short-term contract liabilities |  |  | 25 |  |  |  | 26 |
The Company recognized revenues of $8 million and $9 million the first quarters of 2025 and 2024, respectively, which were included in the short-term contract liability balance at the beginning of each respective period. VENDOR FINANCING PROGRAMS The Company maintains financing agreements with third-party financial institutions through which its vendors, at their sole discretion, may elect to sell their receivables due from the Company to third-party financial institutions at terms negotiated amongst them. The Company’s obligations for applicable vendor invoices, including amounts due and scheduled payment terms, are not changed, and payments related to these obligations are remitted to third-party financial institutions instead of vendors. The Company does not pledge any assets or provide any guarantees to any third party in connection with these financing arrangements. These arrangements have no cost to the Company and do not impact its profitability or working capital. The outstanding amounts due to the third-party financial institutions related to vendors participating in these financing arrangements was $24 million at both March 29, 2025 and December 28, 2024 and were included within Accounts payable. NEW ACCOUNTING STANDARDS Standards that are not yet adopted: Income Taxes: In December 2023, the FASB issued an accounting standard update that enhances the transparency and decision usefulness of income tax disclosures by adding effects from state and local taxes, foreign tax, changes in tax laws or rates in current period, cross-border tax laws, tax credits, valuation allowances, nontaxable and nondeductible items, and unrecognized tax benefits. This update will also require separate disclosure for any reconciling items. This accounting update is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025, with early adoption permitted. The Company is evaluating the impact of this new standard and believes the adoption will result in additional disclosures, but will not have any other impact on its Consolidated Financial Statements. Income Statement: In November 2024, the FASB issued an accounting standard update that modified the disclosure requirements for all public entities related to disaggregation of income statement expenses. The update will require more detailed information to be disclosed about the types of expenses in commonly presented expense captions such as cost of sales and selling, general and administrative expenses. This accounting update is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of this new standard and believes the adoption will have a material impact on its Consolidated Financial Statements.

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- Definition The entire disclosure for the basis of presentation and significant accounting policies concepts. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). Accounting policies describe all significant accounting policies of the reporting entity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 235 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/235/tableOfContent + Details
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