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GOODWILL AND OTHER INTANGIBLE ASSETS
12 Months Ended
Dec. 29, 2018
Goodwill And Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 9. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The components of goodwill by segment are provided in the following table:

 

(In millions)

 

Business

Solutions

Division

 

 

Retail

Division

 

 

CompuCom

Division

 

 

Total

 

Balance as of December 30, 2017

 

$

328

 

 

$

78

 

 

$

445

 

 

$

851

 

Acquisitions

 

 

57

 

 

 

 

 

 

13

 

 

 

70

 

Foreign currency rate impact

 

 

 

 

 

 

 

 

(12

)

 

 

(12

)

Purchase accounting adjustments

 

 

2

 

 

 

 

 

 

7

 

 

 

9

 

Sale of Clearpath Holdings, LLC

 

 

 

 

 

 

 

 

(4

)

 

 

(4

)

Balance as of December 29, 2018

 

$

387

 

 

$

78

 

 

$

449

 

 

$

914

 

 

Goodwill in the Business Solutions Division in the table above is net of $349 million of accumulated impairment loss recognized in 2008.

 

Purchase accounting adjustments primarily relate to goodwill associated with 2017 acquisitions as disclosed in Note 2. These adjustments were made during the respective measurement periods and were based on the receipt of new information about the balances at the time of acquisition. The measurement periods for acquisitions completed in 2017 closed within 2018.

 

Goodwill of $4 million was allocated to the Clearpath Holdings, LLC business as part of the CompuCom acquisition as disclosed in Note 2, and it was removed following the December 2018 sale of that business.

Indefinite-Lived Intangible Assets

The Company had $79 million of trade names and $2 million of other indefinite-lived intangible assets as of December 29, 2018, which were all acquired in 2017 and are included in Other intangible assets, net in the Consolidated Balance Sheets.

Definite Intangible Assets

Definite-lived intangible assets are reviewed periodically to determine whether events and circumstances indicate the carrying amount may not be recoverable or the remaining period of amortization should be revised. In connection with implementing the Comprehensive Business Review, the Company recognized impairment charges associated with favorable leases at closing locations. These impairment charges are presented in Asset impairments in the Consolidated Statements of Operations.

Refer to Note 16 for additional information on fair value measurement of goodwill and other intangible assets.

Definite-lived intangible assets, which are included in Other intangible assets, net in the Consolidated Balance Sheets, are as follows:

 

 

 

December 29, 2018

 

(In millions)

 

Gross

Carrying Amount

 

 

Accumulated

Amortization

 

 

Net

Carrying Amount

 

Customer relationships

 

$

408

 

 

$

(84

)

 

$

324

 

Technology

 

 

19

 

 

 

(9

)

 

 

10

 

Favorable leases

 

 

11

 

 

 

(4

)

 

 

7

 

Total

 

$

438

 

 

$

(97

)

 

$

341

 

 

 

 

December 30, 2017

 

(In millions)

 

Gross

Carrying Amount

 

 

Accumulated

Amortization

 

 

Net

Carrying Amount

 

Customer relationships

 

$

399

 

 

$

(60

)

 

$

339

 

Technology

 

 

19

 

 

 

(1

)

 

 

18

 

Favorable leases

 

 

16

 

 

 

(7

)

 

 

9

 

Total

 

$

434

 

 

$

(68

)

 

$

366

 

 

Definite-lived intangible assets generally are amortized using the straight-line method. The pattern of benefit associated with one customer relationship asset recognized as part of the OfficeMax merger warranted a three-year accelerated declining balance method, and was fully amortized as of December 29, 2018. Favorable leases are amortized using the straight-line method over the lives of the individual leases, including option renewals anticipated in the original valuation. The remaining weighted average amortization periods for customer relationships, technology, and favorable leases are 15 years, 1.5 years, and 17 years, respectively, and 15 years in the aggregate.

Amortization of intangible assets was $31 million in 2018, $9 million in 2017 and $10 million in 2016. Intangible assets amortization expenses are included in the Consolidated Statements of Operations in Selling, general and administrative expenses. Amortization of favorable leases is included in rent expense. Refer to Note 12 for additional information about leases.

Estimated future amortization expense for the intangible assets is as follows:

 

(In millions)

 

 

 

 

2019

 

$

32

 

2020

 

 

27

 

2021

 

 

24

 

2022

 

 

24

 

2023

 

 

21

 

Thereafter

 

 

213

 

Total

 

$

341