Division Information

9 Months Ended

Sep. 29, 2012

Division Information

Note G – Division Information

Office Depot operates in three segments: North American Retail Division, North American Business Solutions Division, and International Division. The following is a summary of our significant accounts and balances by segment (or “Division”), reconciled to consolidated totals.

	Sales
	Third Quarter				Year-to-Date
(In thousands)	2012		2011		2012		2011
North American Retail Division	$	1,173,653	$	1,232,692	$	3,387,087	$	3,633,384
North American Business Solutions Division		827,414		820,864		2,451,549		2,430,431
International Division		691,866		783,181		2,234,256		2,456,023
Total	$	2,692,933	$	2,836,737	$	8,072,892	$	8,519,838
	Division Operating Profit (Loss)
	Third Quarter				Year-to-Date
(In thousands)	2012		2011		2012		2011
North American Retail Division	$	(21,252)	$	41,904	$	1,539	$	102,363
North American Business Solutions Division		54,810		39,145		137,797		100,370
International Division		1,052		19,460		25,959		59,862
Total	$	34,610	$	100,509	$	165,295	$	262,595
A reconciliation of the measure of Division operating profit to consolidated earnings (loss) before income taxes is as follows:
	Third Quarter				Year-to-Date
(In thousands)	2012		2011		2012		2011
Total Division operating profit	$	34,610	$	100,509	$	165,295	$	262,595
Add/(subtract):
Recovery of purchase price		—		—		68,314		—
Unallocated charges		(1,584)		(2,602)		(15,682)		(7,205)
Unallocated operating expenses		(88,126)		(78,790)		(253,984)		(233,908)
Interest income		482		317		1,804		1,158
Interest expense		(16,947)		17,306		(49,128)		(19,512)
Loss on extinguishment of debt		—		—		(12,110)		—
Miscellaneous income, net		13,073		5,536		26,019		19,869
Earnings (loss) before income taxes	$	(58,492)	$	42,276	$	(69,472)	$	22,997

The gross amount of goodwill and the amount of accumulated impairment losses as of September 29, 2012 are provided in the following table:

(In thousands)	North American Retail Division		North American Business Solutions Division		International Division		Total
Goodwill	$	1,842	$	367,790	$	905,602	$	1,275,234
Accumulated impairment losses		(1,842)		(348,359)		(863,134)		(1,213,335)
Balance as of December 31, 2011		—		19,431		42,468		61,899
2012 Changes:
Goodwill		1,842		367,790		905,602		1,275,234
Accumulated impairment losses		(1,842)		(348,359)		(863,134)		(1,213,335)
		—		19,431		42,468		61,899
Foreign currency exchange rate changes		—		—		2,084		2,084
Balance as of September 29, 2012	$	—	$	19,431	$	44,552	$	63,983

The company’s accounting policy is to test for goodwill impairment during the fourth quarter each year but, should events occur or circumstances change, that more likely than not would reduce a reporting unit’s fair value below its carrying value, that test would be accelerated. Based on consideration of relevant accounting guidance, the composition of assets within the related reporting units, current facts and circumstances, including results of operations, intangible assets impairment in Europe and other market conditions, we concluded that a test of goodwill was not required as of September 29, 2012.