Information on Business Segments

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Information on Business Segments

15. Information on Business Segments

The Company's 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, primarily Northern Europe, Brazil, Australia and Mexico.

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.

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 traditional office supply resellers, wholesalers and other retailers, including on-line retailers. We also supply some of our products directly to large commercial and industrial end-users, and provide business machine maintenance and certain repair services. Additionally, we also supply private label products within the office products sector.

Our school products include notebooks, folders, decorative calendars and stationery products. We distribute our school products primarily through mass merchandisers, and other retailers, such as grocery, drug and office superstores as well as on-line retailers. We also supply private label products within the school products sector.

Our calendar products are sold through all the same channels where we sell office or school products, as well as directly to consumers both on-line and through direct mail.

Our customers are primarily large global and regional resellers of our products including traditional office supply resellers, wholesalers and other retailers, including on-line retailers. Mass merchandisers and retail channels primarily sell to individual consumers but also to small businesses. We also sell to commercial contract dealers, wholesalers, distributors and independent dealers who primarily serve business end-users. 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. We also sell calendar and computer products directly to consumers.

Computer Products Group

Our Computer Products Group designs, sources, distributes, markets and sells accessories for laptop and desktop computers and tablets. These accessories primarily include security products, input devices such as presenters, mice and trackballs, ergonomic aids such as foot and wrist rests, docking stations, and other PC and tablet accessories. We sell these products mostly under the Kensington^®, Microsaver^® and ClickSafe^® brand names, with the majority of revenue coming from the U.S. and Northern Europe. Our computer products are manufactured by third-party suppliers, principally in Asia, and are 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, as well as directly to consumers on-line.

Net sales by business segment for the years ended December 31, 2015, 2014 and 2013 were as follows:

(in millions of dollars)	2015		2014		2013
ACCO Brands North America	$	963.3	$	1,006.0	$	1,041.4
ACCO Brands International	426.9		546.9		566.6
Computer Products Group	120.2		136.3		157.1
Net sales	$	1,510.4	$	1,689.2	$	1,765.1

Operating income by business segment for the years ended December 31, 2015, 2014 and 2013 were as follows:

(in millions of dollars)	2015			2014			2013
ACCO Brands North America	$	147.6		$	140.7		$	98.2
ACCO Brands International	40.8			62.9			66.5
Computer Products Group	10.3			8.2			13.7
Segment operating income	198.7			211.8			178.4
Corporate	(35.2		)	(38.2		)	(32.6		)
Operating income(a)	163.5			173.6			145.8
Interest expense	44.5			49.5			59.0
Interest income	(6.6		)	(5.6		)	(4.3		)
Equity in earnings of joint ventures	(7.9		)	(8.1		)	(8.2		)
Other expense, net	2.1			0.8			7.6
Income from continuing operations before income tax	$	131.4		$	137.0		$	91.7

(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.

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

	December 31,
(in millions of dollars)	2015		2014
ACCO Brands North America(b)	$	413.8	$	433.7
ACCO Brands International(b)	335.0		429.7
Computer Products Group(b)	61.5		62.4
Total segment assets	810.3		925.8
Unallocated assets	1,142.0		1,287.9
Corporate(b)	1.1		1.4
Total assets	$	1,953.4	$	2,215.1

(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)	2015		2014
ACCO Brands North America(c)	$	1,220.7	$	1,272.4
ACCO Brands International(c)	531.5		692.7
Computer Products Group(c)	75.9		77.0
Total segment assets	1,828.1		2,042.1
Unallocated assets	124.2		171.6
Corporate(c)	1.1		1.4
Total assets	$	1,953.4	$	2,215.1

(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)	2015		2014
U.S.	$	111.5	$	122.0
U.K.	38.9		34.1
Brazil	31.9		49.3
Australia	10.6		12.0
Other countries	16.2		18.1
Property, plant and equipment, net	$	209.1	$	235.5

Net sales by geographic region^(d) for the years ended December 31, 2015, 2014 and 2013 were as follows:

(in millions of dollars)	2015		2014		2013
U.S.	$	904.3	$	921.0	$	955.5
Canada	121.4		150.6		159.7
Netherlands	108.7		130.2		130.2
Brazil	92.0		154.0		157.2
Australia	91.8		108.5		119.8
U.K.	76.4		89.1		101.3
Mexico	49.6		58.8		58.9
Other countries	66.2		77.0		82.5
Net sales	$	1,510.4	$	1,689.2	$	1,765.1

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

Top Customers

Net sales to our five largest customers totaled $637.7 million, $706.0 million and $680.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. Net sales to Staples, our largest customer, were $204.1 million (14%), $224.1 million (13%) and $229.5 million (13%) for the years ended December 31, 2015, 2014 and 2013, respectively. Net sales to Office Depot, our second largest customer, were $152.5 million (10%) and $190.9 million (11%) for the years ended December 31, 2015, and 2014, respectively. Net sales to no other customers exceeded 10% of net 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 company's domestic and international customer base, thus spreading the credit risk. As of December 31, 2015 and 2014, our top five trade account receivables totaled $152.3 million and $144.2 million, respectively.