17. Information on Business Segments

The Company has three reportable business segments each of which is comprised of different geographic regions. The Company's three reportable business segments are as follows:



Reportable Business Segment	Geographic Regions	Primary Brands
ACCO Brands North America	United States and Canada	AT-A-GLANCE^®, Five Star^®, GBC^®, Hilroy^®, Kensington^®, Mead^®, Quartet^®, and Swingline^®

ACCO Brands EMEA	Europe, Middle East and Africa	Derwent^®, Esselte^®, GBC^®, Kensington^®, Leitz^®, NOBO^®, Rapid^®, and Rexel^®

ACCO Brands International	Australia/N.Z., Latin America and Asia-Pacific	Artline^®, Barrilito^®, GBC^®, Kensington^®, Marbig^®, Quartet^®, Rexel^®, Tilibra^®, and Wilson Jones^®

Each of the Company's three reportable business segments designs, markets, sources, manufactures and sells recognized consumer and other end-user demanded brands used in businesses, schools and homes. Product designs are tailored based on end-user preferences in each geographic region.

Our product categories include school products; storage and organization; laminating, binding and shredding machines and related consumable supplies; calendars; stapling and punching; whiteboards; computer accessories; and do-it-yourself tools, among others. Our portfolio of consumer and other end-user demanded brands includes both globally and regionally recognized brands.

ACCO Brands North America

The ACCO Brands North America segment is comprised of the United States and Canada where the Company is a leading branded supplier of consumer and business products under brands such as AT-A-GLANCE^®, Five Star^®, GBC^®, Hilroy^®, Kensington^®, Mead^®, Quartet^®, and Swingline^®.The ACCO Brands North America segment designs, sources or manufactures and distributes school products (such as notebooks); calendars; laminating, binding and shredding machines and related consumable supplies; whiteboards; storage and organization products (such as three-ring binders, sheet protectors and indexes), stapling and punching products; computer accessories, among others, which are primarily used in schools, homes and businesses. The majority of revenue in this segment is related to consumer and home products and is associated with the "back-to-school" season and calendar year-end purchases; we expect sales of consumer products to become an increasingly greater percentage of our revenue as demand for consumer products is growing faster than most business-related products.

ACCO Brands EMEA

The ACCO Brands EMEA segment is comprised largely of Europe, but also includes export sales to the Middle East and Africa. The Company is a leading branded supplier of consumer and business products under brands such as Derwent^®, Esselte^®, GBC^®, Kensington^®, Leitz^®, NOBO^®, Rapid^®, and Rexel^®.The ACCO Brands EMEA segment designs, manufactures or sources and distributes storage and organization products (such as lever-arch binders, sheet protectors and indexes); stapling and punching products; laminating, binding and shredding products and related consumable supplies; do-it-yourself tools; computer accessories, among others, which are primarily used in businesses, homes and schools.

ACCO Brands International

The ACCO Brands International segment is comprised of Australia/New Zealand (N.Z.), Latin America and Asia-Pacific where the Company is a leading branded supplier of consumer and business products. These brands include Artline^®, Barrilito^®, GBC^®, Kensington^®, Marbig^®, Quartet^®, Rexel^®, Tilibra^®, and Wilson Jones^®, among others. The ACCO Brands International segment designs, sources or manufactures and distributes school products (such as notebooks); storage and organization products (such as three-ring binders, sheet protectors and indexes); laminating, binding and shredding products and related consumable supplies; writing instruments; computer accessories; whiteboards; stapling and punching products; calendars and janitorial supplies, among others, which are primarily used in schools, businesses and homes. The majority of revenue in this segment is related to consumer products and is associated with the "back-to-school" season and calendar year-end purchases. We expect sales of consumer products to become an increasingly greater percentage of our revenue as demand for consumer products is growing faster than most business-related products.

Customers

ACCO Brands markets and sells its strong multi-product offering broadly and is not dependent on any one channel. Our products are sold through all relevant channels, namely retailers, including: mass retailers; e-tailers; discount, drug/grocery and variety chains; warehouse clubs; hardware and specialty stores; independent office product dealers; office superstores; wholesalers; and contract stationers. We also sell directly to commercial and consumer end-users through our e-commerce platform and our direct sales organization.

Net sales by reportable business segment for the years ended December 31, 2018, 2017 and 2016 were as follows:



(in millions)	2018		2017		2016
ACCO Brands North America	$	940.7	$	999.0	$	1,016.1
ACCO Brands EMEA	605.2		542.8		171.8
ACCO Brands International	395.3		407.0		369.2
Net sales	$	1,941.2	$	1,948.8	$	1,557.1

Operating income by reportable business segment for the years ended December 31, 2018, 2017 and 2016 was as follows:



(in millions)	2018			2017			2016
ACCO Brands North America	$	116.6		$	152.4		$	149.8
ACCO Brands EMEA	59.4			32.0			8.0
ACCO Brands International	49.2			50.9			49.4
Segment operating income	225.2			235.3			207.2
Corporate⁽¹⁾	(38.2		)	(50.8		)	(48.1		)
Operating income⁽²⁾	187.0			184.5			159.1
Interest expense	41.2			41.1			49.3
Interest income	(4.4		)	(5.8		)	(6.4		)
Non-operating pension income	(9.3		)	(8.5		)	(8.2		)
Equity in earnings of joint venture	—			—			(2.1		)
Other expense (income), net	1.6			(0.4		)	1.4
Income before income tax	$	157.9		$	158.1		$	125.1


(1)	Corporate operating loss in 2018, 2017 and 2016 includes transaction costs of $0.5 million, $5.0 million and $10.5 million respectively, primarily for legal and due diligence expenditures associated with the GOBA, Esselte and Pelikan Artline acquisitions.


(2)	Operating income as presented in the segment table above is defined as i) net sales; ii) less cost of products sold; iii) less selling, general and administrative expenses; iv) less amortization of intangibles; and v) less restructuring charges.

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



	December 31,
(in millions)	2018		2017
ACCO Brands North America⁽³⁾	$	456.1	$	413.9
ACCO Brands EMEA⁽³⁾	276.7		287.6
ACCO Brands International⁽³⁾	341.3		338.2
Total segment assets	1,074.1		1,039.7
Unallocated assets	1,711.0		1,758.6
Corporate⁽³⁾	1.3		0.8
Total assets	$	2,786.4	$	2,799.1


(3)	Represents total assets, excluding goodwill and identifiable intangibles resulting from business acquisitions, intercompany balances, cash, deferred taxes, derivatives, prepaid pension assets and prepaid debt issuance costs.

As a supplement to the presentation of reportable business segment assets presented above, the table below presents reportable business segment assets, including the allocation of identifiable intangible assets and goodwill resulting from business combinations.



	December 31,
(in millions)	2018		2017
ACCO Brands North America⁽⁴⁾	$	1,231.0	$	1,204.3
ACCO Brands EMEA⁽⁴⁾	709.2		711.7
ACCO Brands International⁽⁴⁾	629.8		634.0
Total segment assets	2,570.0		2,550.0
Unallocated assets	215.1		248.3
Corporate⁽⁴⁾	1.3		0.8
Total assets	$	2,786.4	$	2,799.1


(4)	Represents total assets, excluding intercompany balances, cash, deferred taxes, derivatives, prepaid pension assets and prepaid debt issuance costs.

Capital spend by reportable business segment was as follows:



	December 31,
(in millions)	2018		2017		2016
ACCO Brands North America	$	24.3	$	16.3	$	10.3
ACCO Brands EMEA	6.1		5.1		2.9
ACCO Brands International	3.7		9.6		5.3
Total capital spend	$	34.1	$	31.0	$	18.5

Depreciation expense by reportable business segment was as follows:



	December 31,
(in millions)	2018		2017		2016
ACCO Brands North America	$	15.9	$	17.7	$	19.7
ACCO Brands EMEA	12.6		11.9		5.0
ACCO Brands International	5.5		6.0		5.7
Total depreciation	$	34.0	$	35.6	$	30.4

Property, plant and equipment, net by geographic region was as follows:



	December 31,
(in millions)	2018		2017
U.S.	$	111.7	$	102.4
Canada	1.9		2.4
ACCO Brands North America	113.6		104.8

ACCO Brands EMEA	100.0		115.4

Australia/N.Z.	13.1		16.0
Latin America	35.1		40.3
Asia-Pacific	1.9		2.0
ACCO Brands International	50.1		58.3
Property, plant and equipment, net	$	263.7	$	278.5

Top Customers

Net sales to our five largest customers totaled $577.3 million, $615.1 million and $663.5 million for the years ended December 31, 2018, 2017 and 2016, respectively. Net sales to no customer exceeded 10% of net sales for the years ended December 31, 2018 and 2017. For the year ended December 31, 2016, net sales to Staples, our largest customer, were $210.5 million (14%) and net sales to Walmart were $161.7 million (10%). Except as disclosed, no other customer represented more than 10% of net sales in any of the last three years.

As of December 31, 2018 and 2017, our top five trade account receivables totaled $125.0 million and $148.4 million, respectively.