Information on Business Segments

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Information on Business Segments

Information on Business Segments

ACCO Brands is organized into three business segments: ACCO Brands North America, ACCO Brands International and Computer Products Group. Our three business segments are described below.

ACCO Brands North America and ACCO Brands International

ACCO Brands North America and ACCO Brands International manufacture, source and sell traditional office products, school supplies and calendar products. ACCO Brands North America comprises the U.S. and Canada, and ACCO Brands International comprises the rest of the world, principally Europe, Latin America, Australia, and Asia-Pacific.

Our office, school and calendar product lines use name brands such as: AT-A-GLANCE^®, Day-Timer^®, Five Star^®, GBC^®, Hilroy^®, Marbig, Mead^®, NOBO, Quartet^®, Rexel, Swingline^®, Tilibra^®, Wilson Jones^® and many others. Products and brands are not confined to one channel or product category and are sold based on end-user preference in each geographic location. We manufacture approximately 50% of our products, and specify and source approximately 50% of our products, primarily from Asia.

The majority of our office products, such as stapling, binding and laminating equipment and related consumable supplies, shredders and whiteboards, are used by businesses. Most of these end-users purchase their products from our customers, which include commercial contract stationers, mass merchandisers, retail superstores, wholesalers, resellers, e-tailers, club stores and dealers. We also supply some of our products directly to large commercial and industrial end-users and provide business machine maintenance and certain repair services.

Our school products include notebooks, folders, decorative calendars, and stationery products. We distribute our school products primarily through traditional and online retail, mass merchandisers, grocery, drug and office superstore channels. We also supply private label products within the school products sector.

Our calendar products are sold throughout all channels where we sell office or school products, as well as direct to consumers.

The customer base to which we sell our products is primarily made up of large global and regional resellers of our products. Mass and retail channels primarily sell to individual consumers but also to small businesses. Office superstores primarily sell to commercial customers but also to individual consumers and small businesses at their retail stores. As a result, there is no clear correlation between product, consumer or distribution channel. We also sell to commercial contract stationers, wholesalers, distributors, e-tailers, and independent dealers. Over half of our product sales by our customers are to business end-users, who generally seek premium products that have added value or ease-of-use features and a reputation for reliability, performance and professional appearance. Some of our binding and laminating equipment products are sold directly to high-volume end-users and commercial reprographic centers.

Computer Products Group

Our Computer Products Group designs, sources, distributes, markets and sells accessories for laptop and desktop computers and tablets and smartphones. These accessories primarily include security products, tablet covers and keypads, smartphone accessories, power adapters, input devices such as mice, laptop computer carrying cases, hubs, docking stations and ergonomic devices. We sell these products mostly under the Kensington^®, Microsaver^® and ClickSafe^® brand names, with the majority of our revenue coming from the U.S. and Western Europe. Our computer products are manufactured by third-party suppliers, principally in Asia, and distributed from our regional facilities. Our computer products are sold primarily to consumer electronics retailers, information technology value-added resellers, original equipment manufacturers and office products retailers.

Net sales by business segment for the years ended December 31, 2013, 2012 and 2011 were as follows:

(in millions of dollars)	2013		2012		2011
ACCO Brands North America	$	1,041.4	$	1,028.2	$	623.1
ACCO Brands International	566.6		551.2		505.0
Computer Products Group	157.1		179.1		190.3
Net sales	$	1,765.1	$	1,758.5	$	1,318.4

Operating income by business segment for the years ended December 31, 2013, 2012 and 2011 were as follows (a):

(in millions of dollars)	2013			2012			2011
ACCO Brands North America	$	98.2		$	86.2		$	37.4
ACCO Brands International	66.5			62.0			58.9
Computer Products Group	13.7			35.9			47.1
Segment operating income	178.4			184.1			143.4
Corporate	(32.6		)	(44.8		)	(28.2		)
Operating income	145.8			139.3			115.2
Interest expense, net	54.7			89.3			77.2
Equity in earnings of joint ventures	(8.2		)	(6.9		)	(8.5		)
Other expense, net	7.6			61.3			3.6
Income (loss) from continuing operations before income tax	$	91.7		$	(4.4	)	$	42.9

(a) Operating income as presented in the segment table above is defined as i) net sales; ii) less cost of products sold; iii) less advertising, selling, general and administrative expenses; iv) less amortization of intangibles; and v) less restructuring charges.

Segment assets:

The following table presents the measure of segment assets used by the Company’s chief operating decision maker.

	December 31,
(in millions of dollars)	2013		2012
ACCO Brands North America (b)	$	465.4	$	505.1
ACCO Brands International (b)	464.1		486.4
Computer Products Group (b)	88.1		90.3
Total segment assets	1,017.6		1,081.8
Unallocated assets	1,364.3		1,424.5
Corporate (b)	1.0		1.4
Total assets	$	2,382.9	$	2,507.7

(b) Represents total assets, excluding: goodwill and identifiable intangibles resulting from business acquisitions, intercompany balances, cash, deferred taxes, prepaid pension assets, prepaid debt issuance costs and joint ventures accounted for on an equity basis.

As a supplement to the presentation of segment assets presented above, the table below presents segment assets, including the allocation of identifiable intangible assets and goodwill resulting from business combinations.

	December 31,
(in millions of dollars)	2013		2012
ACCO Brands North America (c)	$	1,332.0	$	1,398.6
ACCO Brands International (c)	758.4		814.3
Computer Products Group (c)	102.4		104.8
Total segment assets	2,192.8		2,317.7
Unallocated assets	189.1		188.6
Corporate (c)	1.0		1.4
Total assets	$	2,382.9	$	2,507.7

(c) Represents total assets, excluding: intercompany balances, cash, deferred taxes, prepaid pension assets, prepaid debt issuance costs and joint ventures accounted for on an equity basis.

Property, plant and equipment, net by geographic region were as follows:

	December 31,
(in millions of dollars)	2013		2012
U.S.	$	134.4	$	141.0
Brazil	54.7		62.1
U.K.	30.5		22.7
Australia	13.7		17.1
Other countries	20.0		30.7
Property, plant and equipment, net	$	253.3	$	273.6

Net sales by geographic region for the years ended December 31, 2013, 2012 and 2011 were as follows (d):

(in millions of dollars)	2013		2012		2011
U.S.	$	955.5	$	959.2	$	621.3
Canada	159.7		160.8		105.2
Brazil	157.2		118.9		—
Netherlands	130.2		45.9		29.3
Australia	119.8		133.4		143.0
U.K.	101.3		98.0		115.6
Other countries	141.4		242.3		304.0
Net sales	$	1,765.1	$	1,758.5	$	1,318.4

(d) Net sales are attributed to geographic areas based on the location of the selling company.

Major Customers

Sales to our five largest customers totaled $680.5 million, $716.2 million and $508.2 million in the years ended December 31, 2013, 2012 and 2011, respectively. Sales to Staples, our largest customer, were $229.5 million (13%), $236.3 million (13%) and $175.9 million (13%) in the years ended December 31, 2013, 2012 and 2011, respectively. Sales to Office Depot, our second largest customer were $138.9 million (11%) in the year ended December 31, 2011. Sales to no other customer exceeded 10% of consolidated sales for any of the last three years.

A significant percentage of our sales are to customers engaged in the office products resale industry. Concentration of credit risk with respect to trade accounts receivable is partially mitigated because a large number of geographically diverse customers make up each operating companies’ domestic and international customer base, thus spreading the credit risk. At December 31, 2013 and 2012, our top five trade account receivables totaled $194.0 million and $184.3 million, respectively.