Gain on Sale of Investment in Unconsolidated Joint Venture

9 Months Ended

Sep. 28, 2013

Gain on Sale of Investment in Unconsolidated Joint Venture

Note N – Gain on Sale of Investment in Unconsolidated Joint Venture

The Company participated in a joint venture in Mexico since 1994. Because control was shared equally with a partner, this investment was accounted for using the equity method. On July 9, 2013, the Company completed the sale of its investment in Office Depot de Mexico to Grupo Gigante, S.A.B. de C.V. for the Mexican Peso amount of 8,777 million in cash (approximately $680 million at then-current exchange rates). A pretax gain of $381 million was recognized in the third quarter of 2013 ($382 million for the year-to-date period) as Gain on the disposition of joint venture in Other income (expense) in the Condensed Consolidated Statements of Operations. The gain is net of third party fees, as well as recognition of $39 million of cumulative translation losses released from other comprehensive income because the subsidiary holding the joint venture investment was substantially liquidated. Refer to Note I for discussion of related goodwill impairment and Note K for income tax impacts of the sale.

The investment balance of $241.8 million and $236.3 million at December 29, 2012 and September 29, 2012, respectively, was included in Other Assets in the Condensed Consolidated Balance Sheets. The Company’s proportionate share of Office Depot de Mexico’s net income prior to the sale is presented in Miscellaneous income, net in the Condensed Consolidated Statements of Operations.

The following tables provide summarized information from the statements of income for Office Depot de Mexico for the periods presented prior to the sale of the Company’s investment. Statement of income data for 2013 is presented through June 29, 2013 which is the last date of the second quarter, as the incremental amounts for the period through the sale date are not significant:

	Through June 29,		2012
(In thousands)	2013		Third Quarter		Year-to-Date
Sales	$	562,886	$	316,255	$	860,838
Gross profit		169,043		93,820		254,343
Net income		28,374		20,791		47,141