DIVISION INFORMATION

9 Months Ended

Sep. 26, 2015

DIVISION INFORMATION

NOTE 12. DIVISION INFORMATION

The Company has three reportable segments: North American Retail Division, North American Business Solutions Division, and International Division. The North American Retail Division includes retail stores in the United States, including Puerto Rico and the U.S. Virgin Islands, which offer office supplies, technology products and solutions, business machines and related supplies, facilities products, and office furniture. Most stores also have a copy and print center offering printing, reproduction, mailing and shipping. The North American Business Solutions Division sells office supply products and services in Canada and the United States, including Puerto Rico and the U.S. Virgin Islands. North American Business Solutions Division customers are served through dedicated sales forces, through catalogs, telesales, and electronically through its Internet sites. The International Division sells office products and services through direct mail catalogs, contract sales forces, Internet sites, and retail stores in Europe and Asia/Pacific.

The former OfficeMax business in Mexico is presented as Other. The integration of this business into the International Division was suspended in the second quarter of 2014 due to its sale, and it was managed and reported independently of the Company’s other international businesses, through the date of the sale.

The office supply products and services offered across all operating segments are similar. Division operating income is determined based on the measure of performance reported internally to manage the business and for resource allocation. This measure charges to the respective Divisions those expenses considered directly or closely related to their operations and allocates support costs. Certain operating expenses and credits are not allocated to the Divisions including Asset impairments and Merger, restructuring and other operating expenses, net, as well as expenses and credits retained at the Corporate level, including certain management costs and legacy pension and environmental matters. Other companies may charge more or less of these items to their segments and results may not be comparable to similarly titled measures used by other entities.

The following is a summary of Sales and Division operating income by each of the Divisions, reconciled to consolidated totals.

	Sales
	Third Quarter				Year-to-Date
(In millions)	2015		2014		2015		2014
North American Retail Division	$	1,604	$	1,722	$	4,599	$	4,989
North American Business Solutions Division		1,438		1,522		4,348		4,554
International Division		648		797		2,060		2,565
Other		—		28		—		155
Total	$	3,690	$	4,069	$	11,007	$	12,263
	Division Operating Income
	Third Quarter				Year-to-Date
(In millions)	2015		2014		2015		2014
North American Retail Division	$	120	$	79	$	248	$	110
North American Business Solutions Division		66		67		186		165
International Division		1		10		17		25
Total	$	187	$	156	$	451	$	300

A reconciliation of the measure of Division operating income to Consolidated income (loss) before income taxes is as follows:

	Third Quarter						Year-to-Date
(In millions)	2015			2014			2015			2014
Total Division operating income	$	187		$	156		$	451		$	300
Add/(subtract):
Other operating income		—			1			—			8
Asset impairments		(1	)		(6	)		(10	)		(77	)
Merger, restructuring, and other operating expenses, net		(111	)		(72	)		(274	)		(276	)
Legal accrual		—			(1	)		—			(81	)
Unallocated expenses		(24	)		(29	)		(79	)		(88	)
Interest income		6			6			18			18
Interest expense		(22	)		(25	)		(71	)		(65	)
Other income (expense), net		(1	)		1			1			(1	)
Income (loss) before income taxes	$	34		$	31		$	36		$	(262	)

The gross amount of goodwill and the amount of accumulated impairment losses as of September 26, 2015 and December 27, 2014 are provided in the following table:

(In millions)	North American Retail Division			North American Business Solutions Division			International Division			Total
Goodwill	$	80		$	647		$	922		$	1,649
Accumulated impairment losses		(2	)		(349	)		(907	)		(1,258	)
Balance as of December 27, 2014		78			298			15			391
Additions		—			5			—			5
Balance as of September 26, 2015	$	78		$	303		$	15		$	396

Refer to Note 2 for additional information on goodwill associated with the first quarter 2015 additions.