Division Information

3 Months Ended

Mar. 30, 2013

Division Information

Note H – Division Information

Office Depot operates in three Divisions: North American Retail Division, North American Business Solutions Division, and International Division. Each of these Divisions is managed separately primarily because it serves a different customer group. Division operating income (loss) 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 General and administrative and other expenses considered directly or closely related to their operations and allocates corporate support costs. 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 significant accounts and balances by each of the Divisions, reconciled to consolidated totals.

	Sales
	First Quarter
(In thousands)	2013		2012
North American Retail Division	$	1,143,841	$	1,219,582
North American Business Solutions Division		815,700		827,740
International Division		758,719		825,487
Total	$	2,718,260	$	2,872,809
	Division Operating Income (Loss)
	First Quarter
(In thousands)	2013		2012
North American Retail Division	$	15,016	$	18,062
North American Business Solutions Division		25,296		21,958
International Division		4,809		(2,097	)
Total	$	45,121	$	37,923

A reconciliation of the measure of Division operating income to consolidated earnings before income taxes is as follows:

	First Quarter
(In thousands)	2013			2012
Total Division operating income	$	45,121		$	37,923
Add/(subtract):
Recovery of purchase price		—			68,314
Merger and other expenses		(15,184	)		—
Unallocated charges		(20	)		(6,874	)
Unallocated operating expenses		(20,272	)		(21,673	)
Interest income		410			367
Interest expense		(16,395	)		(14,478	)
Loss on extinguishment of debt		—			(12,069	)
Miscellaneous income, net		6,357			8,979
Earnings before income taxes	$	17		$	60,489

The gross amount of goodwill and the amount of accumulated impairment losses as of March 30, 2013 are provided in the following table:

(In thousands)	North American Retail Division			North American Business Solutions Division			International Division			Total
Goodwill	$	1,842		$	367,790		$	908,015		$	1,277,647
Accumulated impairment losses		(1,842	)		(348,359	)		(863,134	)		(1,213,335	)
Balance as of December 29, 2012		—			19,431			44,881			64,312
2013 Changes:
Foreign currency exchange rate changes		—			—			(77	)		(77	)
Balance as of March 30, 2013	$	—		$	19,431		$	44,804		$	64,235