Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 29, 2019 | Jul. 31, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 29, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ODP | |
Entity Registrant Name | OFFICE DEPOT INC | |
Entity Central Index Key | 0000800240 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-28 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 546,377,577 | |
Entity Shell Company | false | |
Entity File Number | 1-10948 | |
Entity Tax Identification Number | 592663954 | |
Entity Address, Address Line One | 6600 North Military Trail | |
Entity Address, City or Town | Boca Raton | |
Entity Address, State or Province | Florida | |
Entity Address, Postal Zip Code | 33496 | |
City Area Code | (561) | |
Local Phone Number | 438-4800 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Sales: | ||||
Total sales | $ 2,588 | $ 2,628 | $ 5,356 | $ 5,458 |
Cost of goods and occupancy costs: | ||||
Total cost of goods and occupancy costs | 2,003 | 2,032 | 4,129 | 4,195 |
Gross profit | 585 | 596 | 1,227 | 1,263 |
Selling, general and administrative expenses | 515 | 534 | 1,090 | 1,107 |
Asset impairments | 16 | 45 | ||
Merger and restructuring expenses, net | 69 | 14 | 83 | 31 |
Operating income (loss) | (15) | 48 | 9 | 125 |
Other income (expense): | ||||
Interest income | 5 | 6 | 11 | 12 |
Interest expense | (23) | (31) | (46) | (60) |
Other income, net | 2 | 5 | 5 | 6 |
Income (loss) from continuing operations before income taxes | (31) | 28 | (21) | 83 |
Income tax expense (benefit) | (7) | 9 | (5) | 31 |
Net income (loss) from continuing operations | (24) | 19 | (16) | 52 |
Discontinued operations, net of tax | (3) | 5 | ||
Net income (loss) | $ (24) | $ 16 | $ (16) | $ 57 |
Basic earnings (loss) per common share | ||||
Continuing operations | $ (0.04) | $ 0.03 | $ (0.03) | $ 0.09 |
Discontinued operations | 0.01 | |||
Net basic earnings (loss) per common share | (0.04) | 0.03 | (0.03) | 0.10 |
Diluted earnings (loss) per common share | ||||
Continuing operations | (0.04) | 0.03 | (0.03) | 0.09 |
Discontinued operations | 0.01 | |||
Net diluted earnings (loss) per common share | $ (0.04) | $ 0.03 | $ (0.03) | $ 0.10 |
Product | ||||
Sales: | ||||
Total sales | $ 2,183 | $ 2,196 | $ 4,543 | $ 4,619 |
Cost of goods and occupancy costs: | ||||
Total cost of goods and occupancy costs | 1,731 | 1,737 | 3,570 | 3,628 |
Service | ||||
Sales: | ||||
Total sales | 405 | 432 | 813 | 839 |
Cost of goods and occupancy costs: | ||||
Total cost of goods and occupancy costs | $ 272 | $ 295 | $ 559 | $ 567 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (24) | $ 16 | $ (16) | $ 57 |
Other comprehensive income (loss), net of tax, where applicable: | ||||
Foreign currency translation adjustments | 5 | (18) | 15 | (18) |
Reclassification of foreign currency translation adjustments realized upon disposal of business | 15 | 29 | ||
Other | 1 | |||
Total other comprehensive income (loss), net of tax, where applicable | 5 | (3) | $ 16 | 11 |
Comprehensive income (loss) | $ (19) | $ 13 | $ 68 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 29, 2018 | |
Current assets: | |||
Cash and cash equivalents | $ 444 | $ 658 | |
Receivables, net | 901 | 885 | |
Inventories | 1,113 | 1,065 | |
Prepaid expenses and other current assets | 100 | 75 | |
Timber notes receivable, current maturities | 831 | ||
Total current assets | 3,389 | 2,683 | |
Property and equipment, net | 726 | 763 | |
Operating lease right-of-use assets | 1,380 | ||
Goodwill | 939 | 914 | |
Other intangible assets, net | 406 | 422 | |
Timber notes receivable | 842 | ||
Deferred income taxes | 253 | 284 | |
Other assets | 260 | 258 | |
Total assets | 7,353 | 6,166 | |
Current liabilities: | |||
Trade accounts payable | 1,089 | 1,110 | |
Accrued expenses and other current liabilities | 1,255 | 978 | |
Income taxes payable | 2 | ||
Short-term borrowings and current maturities of long-term debt | 94 | 95 | |
Non-recourse debt, current maturities | 743 | ||
Total current liabilities | 3,181 | 2,185 | |
Deferred income taxes and other long-term liabilities | 178 | 300 | |
Pension and postretirement obligations, net | 111 | 111 | |
Long-term debt, net of current maturities | 618 | 690 | |
Operating lease liabilities | [1] | 1,183 | |
Non-recourse debt | 754 | ||
Total liabilities | 5,271 | 4,040 | |
Commitments and contingencies | |||
Stockholders' equity: | |||
Common stock — authorized 800,000,000 shares of $0.01 par value; issued shares — 620,259,073 at June 29, 2019 and 614,170,704 at December 29, 2018; outstanding shares — 546,348,497 at June 29, 2019 and 543,833,428 at December 29, 2018 | 6 | 6 | |
Additional paid-in capital | 2,659 | 2,677 | |
Accumulated other comprehensive loss | (83) | (99) | |
Accumulated deficit | (204) | (173) | |
Treasury stock, at cost — 73,910,576 shares at June 29, 2019 and 70,337,276 shares at December 29, 2018 | (296) | (285) | |
Total stockholders' equity | 2,082 | 2,126 | |
Total liabilities and stockholders’ equity | $ 7,353 | $ 6,166 | |
[1] | Operating lease payments include $140 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $3 million of legally binding lease payments for an additional operating lease signed but not yet commenced. This operating lease will commence in fiscal year 2020 with a lease term of 10 years. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 29, 2019 | Dec. 29, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, authorized | 800,000,000 | 800,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, issued shares | 620,259,073 | 614,170,704 |
Common stock, shares, outstanding | 546,348,497 | 543,833,428 |
Treasury stock, shares | 73,910,576 | 70,337,276 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities of continuing operations: | ||
Net income (loss) | $ (16) | $ 57 |
Income from discontinued operations, net of tax | 5 | |
Net income (loss) from continuing operations | (16) | 52 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 102 | 98 |
Charges for losses on receivables and inventories | 14 | 18 |
Asset impairments | 45 | |
Compensation expense for share-based payments | 17 | 13 |
Deferred income taxes and deferred tax asset valuation allowances | (9) | 25 |
Contingent consideration payments in excess of acquisition-date liability | (11) | |
Changes in working capital and other | (140) | 45 |
Net cash provided by operating activities of continuing operations | 2 | 251 |
Cash flows from investing activities of continuing operations: | ||
Capital expenditures | (91) | (74) |
Businesses acquired, net of cash acquired | (22) | (30) |
Other investing activities | 2 | |
Net cash used in investing activities of continuing operations | (113) | (102) |
Cash flows from financing activities of continuing operations: | ||
Net payments on long and short-term borrowings | (48) | (51) |
Cash dividends on common stock | (27) | (28) |
Share purchases for taxes, net of proceeds from employee share-based transactions | (9) | (3) |
Repurchase of common stock for treasury | (11) | (8) |
Contingent consideration payments up to amount of acquisition-date liability | (12) | |
Acquisition of non-controlling interest | (18) | |
Other financing activities | 1 | |
Net cash used in financing activities of continuing operations | (107) | (107) |
Cash flows from discontinued operations: | ||
Operating activities of discontinued operations | 0 | 11 |
Investing activities of discontinued operations | 0 | 63 |
Net cash provided by discontinued operations | 74 | |
Effect of exchange rate changes on cash and cash equivalents | 4 | (5) |
Net increase (decrease) in cash and cash equivalents | (214) | 111 |
Cash, cash equivalents and restricted cash at beginning of period | 660 | 639 |
Cash, cash equivalents and restricted cash at end of period — continuing operations | $ 446 | $ 750 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock |
Balance at Dec. 30, 2017 | $ 2,120 | $ 6 | $ 2,711 | $ (78) | $ (273) | $ (246) |
Balance, Shares at Dec. 30, 2017 | 610,353,994 | |||||
Net income (loss) | 41 | 41 | ||||
Other comprehensive income (loss) | 14 | 14 | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) | (3) | (3) | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 3,862,224 | |||||
Amortization of long-term incentive stock grants | 3 | 3 | ||||
Dividends paid on common stock | (14) | (14) | ||||
Adjustment for adoption of accounting standard | (4) | (4) | ||||
Balance at Mar. 31, 2018 | 2,157 | $ 6 | 2,697 | (64) | (236) | (246) |
Balance, Shares at Mar. 31, 2018 | 614,216,218 | |||||
Balance at Dec. 30, 2017 | 2,120 | $ 6 | 2,711 | (78) | (273) | (246) |
Balance, Shares at Dec. 30, 2017 | 610,353,994 | |||||
Net income (loss) | 57 | |||||
Other comprehensive income (loss) | 11 | |||||
Balance at Jun. 30, 2018 | 2,156 | $ 6 | 2,691 | (67) | (220) | (254) |
Balance, Shares at Jun. 30, 2018 | 614,166,567 | |||||
Balance at Mar. 31, 2018 | 2,157 | $ 6 | 2,697 | (64) | (236) | (246) |
Balance, Shares at Mar. 31, 2018 | 614,216,218 | |||||
Net income (loss) | 16 | 16 | ||||
Other comprehensive income (loss) | (3) | (3) | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 198,549 | |||||
Acquisition escrow shares returned | (1) | (1) | ||||
Acquisition escrow shares returned (in shares) | (248,200) | |||||
Amortization of long-term incentive stock grants | 9 | 9 | ||||
Dividends paid on common stock | (14) | (14) | ||||
Repurchase of common stock | (8) | (8) | ||||
Balance at Jun. 30, 2018 | 2,156 | $ 6 | 2,691 | (67) | (220) | (254) |
Balance, Shares at Jun. 30, 2018 | 614,166,567 | |||||
Balance at Dec. 29, 2018 | 2,126 | $ 6 | 2,677 | (99) | (173) | (285) |
Balance, Shares at Dec. 29, 2018 | 614,170,704 | |||||
Net income (loss) | 8 | 8 | ||||
Other comprehensive income (loss) | 11 | 11 | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) | (7) | (7) | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 5,932,430 | |||||
Amortization of long-term incentive stock grants | 8 | 8 | ||||
Dividends paid on common stock | (14) | (14) | ||||
Repurchase of common stock | (11) | (11) | ||||
Adjustment for adoption of accounting standard | (15) | (15) | ||||
Balance at Mar. 30, 2019 | 2,106 | $ 6 | 2,664 | (88) | (180) | (296) |
Balance, Shares at Mar. 30, 2019 | 620,103,134 | |||||
Balance at Dec. 29, 2018 | 2,126 | $ 6 | 2,677 | (99) | (173) | (285) |
Balance, Shares at Dec. 29, 2018 | 614,170,704 | |||||
Net income (loss) | (16) | |||||
Other comprehensive income (loss) | 16 | 16 | ||||
Balance at Jun. 29, 2019 | 2,082 | $ 6 | 2,659 | (83) | (204) | (296) |
Balance, Shares at Jun. 29, 2019 | 620,259,073 | |||||
Balance at Mar. 30, 2019 | 2,106 | $ 6 | 2,664 | (88) | (180) | (296) |
Balance, Shares at Mar. 30, 2019 | 620,103,134 | |||||
Net income (loss) | (24) | (24) | ||||
Other comprehensive income (loss) | 5 | 5 | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) | (1) | (1) | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 155,939 | |||||
Amortization of long-term incentive stock grants | 9 | 9 | ||||
Dividends paid on common stock | (13) | (13) | ||||
Balance at Jun. 29, 2019 | $ 2,082 | $ 6 | $ 2,659 | $ (83) | $ (204) | $ (296) |
Balance, Shares at Jun. 29, 2019 | 620,259,073 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 29, 2019 | Mar. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Statement Of Stockholders Equity [Abstract] | ||||
Dividend paid on common stock, per share | $ 0.025 | $ 0.025 | $ 0.025 | $ 0.025 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 29, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION Office Depot, Inc. including its consolidated subsidiaries (“Office Depot” or the “Company”), is a leading provider of business services and supplies, products and technology solutions to small, medium and enterprise businesses, through a fully integrated business-to-business (“B2B”) distribution platform of 1,320 retail stores, online presence, and dedicated sales professionals and technicians. Through its banner brands Office Depot®, OfficeMax®, CompuCom® and Grand&Toy®, as well as others, the Company offers its customers the tools and resources they need to focus on starting, growing and running their business. The Company’s corporate headquarters is located in Boca Raton, FL, and its primary website is www.officedepot.com. As of June 29, 2019, the Company had three reportable segments (or “Divisions”): Business Solutions Division, Retail Division and the CompuCom Division. The Condensed Consolidated Financial Statements as of June 29, 2019, and for the 13-week and 26-week periods ended June 29, 2019 (also referred to as the “second quarter of 2019” and “the first half of 2019,” respectively) and June 30, 2018 (also referred to as the “second quarter of 2018” and “the first half of 2018,” respectively) are unaudited. However, in management’s opinion, these Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature necessary to provide a fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented. Business acquisitions in 2018 and 2019 are included prospectively from the date of acquisition, thus affecting the comparability of the Company’s financial statements for all periods presented in this report on Form 10-Q. The Company has prepared the Condensed Consolidated Financial Statements included herein pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Some information and note disclosures, which would normally be included in comprehensive annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), have been condensed or omitted pursuant to those SEC rules and regulations. The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. For a better understanding of the Company and its Condensed Consolidated Financial Statements, the Company recommends reading these Condensed Consolidated Financial Statements in conjunction with the audited financial statements, which are included in the Company’s 2018 Form 10-K. These interim results are not necessarily indicative of the results that should be expected for the full year. CASH MANAGEMENT The cash management process generally utilizes zero balance accounts which provide for the settlement of the related disbursement and cash concentration accounts on a daily basis. As of June 29, 2019 and December 29, 2018, Trade accounts payable and Accrued expenses and other current liabilities, in the aggregate, included $22 At June 29, 2019, cash and cash equivalents from continuing operations held outside the United States amounted to $151 million. Restricted Cash : Restricted cash consists primarily of short-term cash deposits having original maturity dates of twelve months or less that serve as collateral to certain of the Company’s letters of credit. Restricted cash is valued at cost, which approximates fair value. At June 29, 2019 and December 29, 2018, restricted cash amounted to $2 million and is included in Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets LEASING ARRANGEMENTS The Company conducts a substantial portion of its business in leased properties. Some of the Company’s leases contain escalation clauses and renewal options. The Company recognizes rental expense for operating leases that contain predetermined fixed escalation clauses on a straight-line basis over the expected term of the lease. Prior to the adoption of the new lease accounting standard on the first day of fiscal 2019, the expected term of a lease was calculated from the date the Company first took possession of the facility, including any periods of free rent, and extended through the non-cancellable period and any option or renewal periods management believed were reasonably assured of being exercised. Rent abatements and escalations were considered in the calculation of minimum lease payments in the Company’s lease classification assessment and in determining straight-line rent expense for operating leases. Straight-line rent expense was also adjusted to reflect any allowances or reimbursements provided by the lessor. When required under lease agreements, estimated costs to return facilities to original condition were accrued over the lease period. Subsequent to the adoption of the new lease accounting standard, the Company first determines whether an arrangement is a lease at inception. Once that determination is made, leasing arrangements are presented on the Condensed Consolidated Balance Sheet as follows: • Finance leases : o Property and equipment, net – leases which were referred to as capital leases under the old accounting standard; o Short-term borrowings and current maturities of long-term debt – short-term obligations to make lease payments arising from the finance lease; o Long-term debt, net of current maturities – long-term obligations to make lease payments arising from the finance lease. • Operating leases : o Operating lease right-of-use (“ROU”) assets – the Company’s right to use the underlying asset for the lease term; o Accrued expenses and other current liabilities – short-term obligations to make lease payments arising from the operating lease; o Operating lease liabilities – long-term obligations to make lease payments arising from the operating lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of the future minimum lease payments over the lease term. As the rate implicit in the lease is not readily determinable for any of the leases, the Company has utilized its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company uses the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. The operating lease ROU asset also includes any lease payments made prior to commencement and excludes lease incentives and initial direct costs incurred. Certain leases include one or more options to renew, with renewal terms that can extend the lease from five to 25 years or more, which is generally at the Company’s discretion. Any option or renewal periods management believed were reasonably certain of being exercised are included in the lease term. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, for which it has made an accounting policy election to account for these as a single lease component. Refer to the “New Accounting Standards” section below for more information including the impact on the Condensed Consolidated Financial Statements relating to the adoption of the new lease accounting standard. NEW ACCOUNTING STANDARDS Standards that are not yet adopted: • Financial Instruments – Credit Losses : In June 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update that modifies the measurement of expected credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The update will change the accounting for credit impairment by adding an impairment model that is based on expected losses rather than incurred losses. In July 2018, the FASB approved an amendment to the new guidance that provides transition relief to the adopting entities and allows for an election of the fair value option on certain financial instruments. This accounting standards update, as amended, is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2018. The Company is evaluating the impact of this new standard and believes the adoption will not have a material impact on its Condensed Consolidated Financial Statements. • Cloud computing arrangements : In August 2018, the FASB issued an accounting standards update that provides guidance regarding the accounting for implementation costs in cloud computing arrangements. This accounting update is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the impact of this new standard and believes the adoption will not have a material impact on its Condensed Consolidated Financial Statements. • Fair value measurements : In August 2018, the FASB issued an accounting standards update that adds, removes, and modifies the disclosure requirements related to fair value measurements. This accounting update is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the impact of this new standard and believes the adoption will not have a material impact on its Condensed Consolidated Financial Statements. • Defined benefit plan : In August 2018, the FASB issued an accounting standards update that modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This accounting update is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the impact of this new standard and believes the adoption will not have a material impact on its Condensed Consolidated Financial Statements. Standards that were adopted: • Leases : In February 2016, the FASB issued an accounting standards update that requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The accounting treatment for finance leases and lessors remains relatively unchanged. The accounting standards update also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. The initial standard required a modified retrospective transition approach, with application, including disclosures, in all comparative periods presented. In July 2018, the FASB approved an amendment to the new guidance that introduced an alternative modified retrospective transition approach granting companies the option of using the effective date of the new standard as the date of initial application. The Company adopted the standard on the first day of the first quarter of 2019 using this alternative transition approach. The Company elected the transition package of practical expedients that is permitted by the standard. The package of practical expedients allows the Company to not reassess previous accounting conclusions regarding whether existing arrangements are or contain leases, the classification of existing leases, and the treatment of initial direct costs. The Company did not elect the hindsight transition practical expedient allowed for by the new standard, which allows entities to use hindsight when determining lease term and impairment of ROU assets. Additionally, the Company elected certain other practical expedients offered by the new standard which it will apply to all asset classes, including the option not to separate lease and non-lease components and instead to account for them as a single lease component and the option not to recognize ROU assets and related liabilities that arise from short-term leases (i.e., leases with terms of twelve months or less that do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise). Substantially all of the Company’s retail store locations, supply chain facilities, certain corporate facilities and copy print equipment are subject to operating lease arrangements. As a result, the standard had material impacts on the Condensed Consolidated Balance Sheet, but did not have an impact on the Condensed Consolidated Statement of Operations and Condensed Consolidated Statement of Cash Flows. The most significant impacts of the standard on the Condensed Consolidated Balance Sheet on the date of adoption were as follows: o Recognition of $1.4 billion Operating lease right-of-use assets and $1.6 billion Operating lease liabilities o Derecognition of approximately $41 million of Property and equipment, net and $39 million of financing obligations associated with non-owned properties that were capitalized under previously existing build-to-suit lease accounting rules o Cumulative effect of $15 million adoption date adjustments to Accumulated deficit comprised of a $20 million impairment charge, net of tax effect, to the ROU assets, primarily because the fair market value of certain retail stores was lower than their carrying value prior to the adoption date; $4 million deferred gain, net of tax effect, related to transactions accounted for as sales and operating leasebacks under the previous lease standard; and a $1 million credit, net of tax effect, arising from the derecognition of assets and liabilities associated with non-owned properties that were capitalized under previously existing build-to-suit lease accounting rules. As part of its adoption of the new lease accounting standard, the Company also implemented new internal controls and updated accounting policies and procedures, operational processes and documentation practices to enable the preparation of financial information on adoption. Refer to Note 8 for additional disclosures required as a result of the adoption of this new standard. • Goodwill : In January 2017, the FASB issued an accounting standards update that simplifies how entities assess goodwill for impairment. The revised guidance eliminates the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. Under this accounting update, a goodwill impairment loss should instead be measured at the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the carrying amount of goodwill. This accounting standards update is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted. The Company adopted this accounting standards update on the first day of the second quarter of 2019 with no material impact to its Condensed Consolidated Financial Statements. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 29, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 2. ACQUISITIONS Since 2017, the Company has been undergoing a strategic business transformation to pivot into an integrated B2B distribution platform, with the objective of expanding its product offerings to include value-added services for its customers and capture greater market share. As part of this transformation, the Company acquired four businesses during the first half of 2019. These four acquisitions are small independent regional office supply distribution businesses that continue to expand the Company’s reach and distribution network into geographic areas that were previously underserved. Of these four acquisitions, two were completed in the first quarter of 2019, and two were completed in the second quarter of 2019. The aggregate total purchase consideration, including contingent consideration, for the four acquisitions completed in the first half of 2019 was approximately $25 During 2018, the Company recognized a contingent consideration liability of $25 million in connection with the acquisition of an enterprise IT solutions integrator and managed services provider. In the first quarter of 2019, the Company paid $23 million of this contingent consideration liability, of which $12 million was treated as a financing cash outflow because it related to the acquisition-date accrual, and $11 million was presented as a cash outflow from operating activities on the Condensed Consolidated Statement of Cash Flows as it was accrued subsequent to the acquisition date based on new information obtained on the financial performance of the acquired entity. The remaining $2 million of this contingent consideration liability will be paid during the fourth quarter of 2019 and will be treated as a cash outflow from operating activities. Based on new information received, the preliminary purchase price allocations of the companies acquired in 2018 have been adjusted during the respective measurement periods. These adjustments were insignificant individually and in the aggregate to the Company’s Condensed Consolidated Financial Statements. The measurement periods for acquisitions completed in the first half of 2018 closed within the first half of 2019. Under the guidance on accounting for business combinations, merger and integration costs are not included as components of consideration transferred, instead, they are accounted for as expenses in the period in which the costs are incurred. Transaction-related expenses are included in the Merger and restructuring expense, net line in the Condensed Consolidated Statements of Operations. Refer to Note 3 for additional information about the merger and restructuring expenses incurred during the second quarter and first half of 2019. |
MERGER AND RESTRUCTURING ACTIVI
MERGER AND RESTRUCTURING ACTIVITY | 6 Months Ended |
Jun. 29, 2019 | |
Business Combinations [Abstract] | |
MERGER AND RESTRUCTURING ACTIVITY | NOTE 3. MERGER AND RESTRUCTURING ACTIVITY Since 2017, the Company has taken actions to optimize its asset base and drive operational efficiencies. These actions include acquiring profitable businesses, closing underperforming retail stores and non-strategic distribution Second Quarter First Half (In millions) 2019 2018 2019 2018 Merger and transaction related expenses, net Severance and retention $ — $ 3 $ 1 $ 5 Transaction and integration 5 4 12 11 Facility closure, contract termination, and other expenses, net — 5 — 8 Total Merger and transaction related expenses, net 5 12 13 24 Restructuring expenses Severance 40 — 40 — Professional fees 16 2 19 6 Facility closure, contract termination, and other expenses, net 8 — 11 1 Total Restructuring expenses 64 2 70 7 Total Merger and restructuring expenses, net $ 69 $ 14 $ 83 $ 31 • Merger and transaction related expenses, net : Severance and retention include expenses related to the integration of staff functions in connection with business acquisitions and are expensed through the severance and retention period. Transaction and integration primarily include legal, accounting, and other third-party expenses incurred in connection with acquisitions and business integration activities. Facility closure, contract termination and other expenses, net primarily relate to facility closure accruals, contract termination costs, gains and losses on asset dispositions, and accelerated depreciation. Also included in the merger and transaction related expenses, net in the second quarter and first half of 2018 are $2 million and $5 million of integration expenses, respectively, associated with the OfficeMax merger, as well as $3 million of facility closure costs which were all incurred in the first quarter of 2018. All integration activities associated with the OfficeMax merger were completed in 2018. • Restructuring expenses : In May 2019, the Company announced that its Board of Directors approved a company-wide, multi-year, cost reduction and business improvement program to systematically drive down costs, improve operational efficiencies, and enable future growth investments. Under this program (the “Business Acceleration Program”), the Company has made and will continue to make organizational realignments stemming from process improvements, increase leverage of technology and accelerate use of automation. This has resulted and will continue to result in the elimination of certain positions and a flatter organization. In connection with the Business Acceleration Program, the Company also anticipates closing approximately 90 underperforming retail stores in 2020 and 2021, and 9 other facilities, consisting of distribution centers and sales offices. Total estimated costs to implement the Business Acceleration Program are expected to be approximately $112 million comprised of: (a) severance and related employee costs of approximately $40 million (b) recruitment and relocation costs of approximately $2 million (c) retail store and facility closure costs of approximately $26 million (d) third-party costs to facilitate the execution of the Program of approximately $36 million (e) other costs of approximately $8 million Of the aggregate costs to implement the Business Acceleration Program, approximately $100 million are expected to be cash expenditures through 2021 funded primarily with cash on hand and cash from operations. In fiscal 2019, the Company expects to incur approximately $85 million, of which approximately $70 million will be cash, for severance and related employee costs, recruitment and relocation, and third-party costs including legal and consulting fees under the Business Acceleration Program. Of the $70 million cash expenditures expected in 2019, approximately $30 million has been paid through the end of the second quarter of 2019. Included in restructuring expenses in the second quarter of 2019 are $40 million of severance costs, $3 million of retail store and facility closure costs, $19 million in third-party professional fees, and $1 million of other costs incurred in connection with the Business Acceleration Program. Also included in restructuring expenses in the second quarter and first half of 2019 and 2018 are costs incurred in connection with the Comprehensive Business Review, a program the Company announced in 2016. These costs include severance, facility closure costs, contract termination, accelerated depreciation, relocation and disposal gains and losses, as well as other costs associated with retail store closures. In the second quarter and first half of 2019, the Company closed 39 and 41 retail stores, respectively, and expects to close approximately 16 additional stores through the end of the Comprehensive Business Review program in 2019. Additionally, restructuring expenses in the second quarter and first half of 2018 also reflect professional fee expenses incurred in connection with the Company’s multi-year strategic transformation which began in 2017. MERGER AND RESTRUCTURING ACCRUALS The activity in the merger and restructuring accruals in the first half of 2019 is presented in the table below. Certain merger and restructuring charges are excluded from the table because they are paid as incurred or non-cash, such as accelerated depreciation and gains and losses on asset dispositions. Balance as of Balance as of December 29, Charges Cash Adjustments June 29, (In millions) 2018 Incurred Payments (a) 2019 Termination benefits: Merger-related accruals $ 3 $ — $ (2 ) $ — $ 1 Comprehensive Business Review — 1 — — 1 Business Acceleration Plan — 40 (21 ) — 19 Lease and contract obligations, accruals for facilities closures and other costs: Merger-related accruals 10 — — (10 ) — Comprehensive Business Review 5 6 (3 ) (3 ) 5 Business Acceleration Plan — 21 (7 ) — 14 Total $ 18 $ 68 $ (33 ) $ (13 ) $ 40 (a) Represents reclassification of operating lease obligations associated with facility closures to Operating lease ROU assets on the Condensed Consolidated Balance Sheet in accordance with the new lease accounting standard. The short-term and long-term components of these liabilities are included in Accrued expenses and other current liabilities and Deferred income taxes and other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheets. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 29, 2019 | |
Revenue From Contract With Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 4. REVENUE RECOGNITION PRODUCTS AND SERVICES REVENUE The following table provides information about disaggregated revenue by Division, and major products and services categories. Second Quarter of 2019 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 745 $ 355 $ — $ 4 $ 1,104 Technology 315 404 75 — 794 Furniture and other 189 95 — 1 285 Services Technology — 7 181 (4 ) 184 Copy, print, and other 79 139 2 1 221 Total $ 1,328 $ 1,000 $ 258 $ 2 $ 2,588 Second Quarter of 2018 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 717 $ 374 $ — $ 3 $ 1,094 Technology 327 449 56 (4 ) 828 Furniture and other 179 93 — 2 274 Services Technology — 7 219 (1 ) 225 Copy, print, and other 75 130 2 — 207 Total $ 1,298 $ 1,053 $ 277 $ — $ 2,628 First Half of 2019 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 1,506 $ 807 $ — $ 6 $ 2,319 Technology 639 872 137 1 1,649 Furniture and other 372 201 — 2 575 Services Technology — 14 363 (6 ) 371 Copy, print, and other 155 281 6 — 442 Total $ 2,672 $ 2,175 $ 506 $ 3 $ 5,356 First Half of 2018 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 1,452 $ 842 $ — $ 4 $ 2,298 Technology 681 988 103 (5 ) 1,767 Furniture and other 351 201 — 2 554 Services Technology — 16 429 (1 ) 444 Copy, print, and other 142 250 3 — 395 Total $ 2,626 $ 2,297 $ 535 $ — $ 5,458 • Products revenue includes the sale of : o Supplies such as paper, writing instruments, office supplies, cleaning and breakroom items o Technology related products such as toner and ink, printers, computers, tablets and accessories, and electronic storage o Furniture and other products such as desks, seating, and luggage, and certain revenue adjustments The Company sells its supplies, furniture and other products through its Business Solutions and Retail Divisions, and its technology products through all three Divisions. Customers can purchase products through the Company’s call centers, electronically through its Internet websites, or through its retail stores. Revenues from supplies, technology, and furniture and other product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer. Furniture and other products also include arrangements where customers can make special furniture interior design and installation orders that are customized to their needs. The performance obligations related to these arrangements are satisfied over time. • Services revenue includes the sale of: o Technology service offerings provided through the Company’s CompuCom Division, such as end user computing support, managed information technology (“IT”) services, data center monitoring and management, service desk, network infrastructure, IT workforce solutions, mobile device management, IT integration solutions and cloud services, as well as technology service offerings provided in the Company’s retail stores, such as installation and repair o Copy, print, and other service offerings such as managed print and fulfillment services, product subscriptions, and sales of third party software, gift cards, warranties, remote support as well as rental income on operating lease arrangements where the Company conveys to its customers the right to use devices and other equipment for a stated period The largest offering in the technology service category is end user computing, which provides on-site services to assist corporate end users with their information technology needs. Services are either billed on a rate per hour or per user, or on a fixed monthly retainer basis. For the majority of technology service offerings contracts, the Company has the right to invoice the customer in an amount that directly corresponds with the value to the customer of the Company’s performance to date and as such the Company recognizes revenue based on the amount billable to the customer in accordance with the practical expedient provided by the current revenue guidance. Substantially all of the Company’s other service offerings are satisfied at a point in time and revenue is recognized as such. The largest other service offering is copy and print services, which includes printing, copying, and digital imaging. The majority of copy and print services are fulfilled through retail stores and the related performance obligations are satisfied within a short period of time (generally within the same day). REVENUE RECOGNITION AND SIGNIFICANT JUDGMENTS Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company is entitled to receive in exchange for those products or services. For product sales, transfer of control occurs at a point in time, typically upon delivery to the customer. For service offerings, the transfer of control and satisfaction of the performance obligation is either over time or at a point in time. When performance obligations are satisfied over time, the Company evaluates the pattern of delivery and progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Revenue is recognized net of allowance for returns and net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Shipping and handling costs are considered fulfillment activities and are recognized within the Company’s cost of goods sold. Contracts with customers could include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Determining the standalone selling price also requires judgment. The Company did not have significant revenues Products are generally sold with a right of return and the Company may provide other incentives, such as rebates and coupons, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The Company estimates returns and incentives at contract inception and includes the amount in the transaction price for which significant reversal is not probable. These estimates are updated at the end of each reporting period as additional information becomes available. The Company offers a customer loyalty program that provides customers with rewards that can be applied to future purchases or other incentives. Loyalty rewards are accounted for as a separate performance obligation and a deferred liability is recorded in the amount of the transaction price allocated to the rewards, inclusive of the impact of estimated breakage. The estimated breakage of loyalty rewards is based on historical redemption rates experienced under the loyalty program. Revenue is recognized when the loyalty rewards are redeemed or expire. As of June 29, 2019, the Company had $11 million of deferred liability related to the loyalty program, which is included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. The Company recognizes revenue in certain circumstances before product delivery occurs (commonly referred to as bill-and-hold transactions). Revenue from bill-and-hold transactions is recognized when all specific requirements for transfer of control under a bill-and-hold arrangement have been met which include, among other things, a request from the customer that the product be held for future scheduled delivery. For these bill-and-hold arrangements, the associated product inventory is identified separately as belonging to the customer and is ready for physical transfer. CONTRACT BALANCES The timing of revenue recognition may differ from the timing of invoicing to customers. A receivable is recognized in the period the Company delivers goods or provides services, and is recorded at the invoiced amount, net of an allowance for doubtful accounts. A receivable is also recognized for unbilled services where the Company’s right to consideration is unconditional, and is recorded based on an estimate of time and materials. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 20 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the contracts do not include a significant financing component. The primary purpose of the Company’s invoicing terms is to provide customers with simplified and predictable ways of purchasing its products and services. The Company receives payments from customers based upon contractual billing schedules. Contract assets include amounts related to deferred contract acquisition costs (refer to the section “Costs to Obtain a Contract” below) and if applicable, the Company’s conditional right to consideration for completed performance under a contract. The short and long-term components of contract assets in the table below are included in Prepaid expenses and other current assets, and Other assets, respectively, in the Condensed Consolidated Balance Sheets. Contract liabilities include payments received in advance of performance under the contract, and are recognized as revenue when the performance obligation is completed under the contract, as well as accrued contract acquisition costs, liabilities related to the Company’s loyalty program and gift cards. The short and long-term components of contract liabilities in the table below are included in Accrued expenses and other current liabilities, and Deferred income taxes and other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheets. The following table provides information about receivables, contract assets and contract liabilities from contracts with customers: June 29, December 29, (In millions) 2019 2018 Trade receivables, net $ 632 $ 655 Short-term contract assets 25 22 Long-term contract assets 15 17 Short-term contract liabilities 48 52 Long-term contract liabilities 1 1 During the second quarter and first half of 2019, the Company did not have any contract assets related to conditional rights. The Company recognized revenues of $22 million during the first half of 2019 which were included in the short-term contract liability balance at the beginning of the period. There were no contract assets and liabilities that were recognized during the second quarter and first half of 2019 as a result of business combinations. There were no significant adjustments to revenue from performance obligations satisfied in previous periods and there were no contract assets recognized at the beginning of the period that transferred to receivables during the second quarter and first half of 2019. Substantially all of the purchase orders and statements of work related to contracts with customers require delivery of the product or service within one year or less. For certain service contracts that exceed one year, the Company recognizes revenue at the amount to which it has the right to invoice for services performed. Accordingly, the Company has applied the optional exemption provided by the new revenue recognition standard relating to unsatisfied performance obligations and does not disclose the value of unsatisfied performance obligations for its contracts. COSTS TO OBTAIN A CONTRACT The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company has determined that certain rebate incentive programs meet the requirements to be capitalized. These costs are periodically reviewed for impairment, and are amortized on a straight-line basis over the expected period of benefit. As of June 29, 2019 , capitalized acquisition costs amounted to $ 40 million, which is reflected in short-term contract assets and long-term contract assets in the table above. During the second quarter and first half of 2019 , amortization expense was $ 8 million and $ 17 million , respectively, and there was no impairment loss in relation to costs capitalized. The Company had no asset impairment charges related to contract assets in the periods presented herein. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 5. SEGMENT INFORMATION At The retained global sourcing operations previously included in the former International Division are not significant and have been presented as Other. Also included in Other is the elimination of intersegment revenues of $3 million and $6 million for the second quarter and first half of 2019, respectively, and $5 million and $6 million for the second quarter and first half of 2018, respectively. The products and services offered by the Business Solutions Division and the Retail Division are similar, but the CompuCom Division’s offerings are focused on IT services and related products. The Company’s three operating segments are the three reportable segments. The Business Solutions Division, the Retail Division and the CompuCom Division are managed separately as they represent separate channels in the way the Company serves its customers, and they are managed accordingly. The accounting policies for each segment are the same as those described in Note 1. 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 Business Solutions Division, the Retail Division or the CompuCom Division, including asset impairments and merger and restructuring expenses, 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. In addition, the Company regularly evaluates the appropriateness of the reportable segments based on how the business is managed, including decision-making about resources allocation and assessing performance of the segments, particularly in light of organizational changes, merger and acquisition activity and changing laws and regulations. Therefore, the current reportable segments may change in the future. The following is a summary of sales and operating income (loss) by each of the Divisions and Other, reconciled to consolidated totals, after the elimination of the discontinued operations for all periods. Sales Second Quarter First Half (In millions) 2019 2018 2019 2018 Business Solutions Division $ 1,328 $ 1,298 $ 2,672 $ 2,626 Retail Division 1,000 1,053 2,175 2,297 CompuCom Division 258 277 506 535 Other 2 — 3 — Total $ 2,588 $ 2,628 $ 5,356 $ 5,458 Division Operating Income (Loss) Second Quarter First Half (In millions) 2019 2018 2019 2018 Business Solutions Division $ 86 $ 67 $ 132 $ 122 Retail Division 9 22 76 94 CompuCom Division 1 6 (13 ) 12 Other — — — (1 ) Total $ 96 $ 95 $ 195 $ 227 A reconciliation of the measure of Division operating income to Consolidated income (loss) from continuing operations before income taxes is as follows: Second Quarter First Half (In millions) 2019 2018 2019 2018 Total Divisions operating income $ 96 $ 95 $ 195 $ 227 Add/(subtract): Asset impairments (16 ) — (45 ) — Merger and restructuring expenses, net (69 ) (14 ) (83 ) (31 ) Unallocated expenses (26 ) (33 ) (58 ) (71 ) Interest income 5 6 11 12 Interest expense (23 ) (31 ) (46 ) (60 ) Other income, net 2 5 5 6 Income (loss) from continuing operations before income taxes $ (31 ) $ 28 $ (21 ) $ 83 The components of goodwill by segment are provided in the following table: Business Solutions Retail CompuCom (In millions) Division Division Division Total Balance as of December 29, 2018 $ 387 $ 78 $ 449 $ 914 Acquisitions 20 — — 20 Foreign currency rate impact — — 5 5 Balance as of June 29, 2019 $ 407 $ 78 $ 454 $ 939 Refer to Note 2 for additional information on the acquisitions made during the first half of 2019. As of June 29, 2019, the Company believes that its goodwill and indefinite-lived intangible assets are recoverable for all reporting units. The Company continues to monitor the performance of its CompuCom Division, which reported an operating loss for the first half of 2019 mainly driven by lower than expected revenue from existing customer contracts, compounded by less than commensurate reductions in associated expenses. The Company believes that the revenue and profitability shortfall in the first quarter of 2019 at CompuCom were temporary. This is supported by the fact that CompuCom’s business in the second quarter has improved relative to the first quarter. In addition, the Company continues to undertake several actions to improve the future operating performance of CompuCom, including the use of automation and technology to further improve service efficiency, simplifying organizational structures to improve service velocity, and organizing sales efforts to better serve its customers and accelerate cross-selling opportunities. However, if the Company’s actions do not result in improved financial performance at CompuCom, there is a reasonable possibility of future impairment of goodwill and indefinite-lived intangible assets for the CompuCom reporting unit. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 6. INCOME TAXES The Company’s effective rates for the second quarter and first half of 2019 differ from the statutory rate of 21% enacted as part of the Tax Cuts and Jobs Act primarily due to the impact of state taxes and certain nondeductible items, adjustments to certain tax benefits and the mix of income and losses across U.S. and non-U.S. jurisdictions. The Company’s effective tax rates in prior periods have varied considerably as a result of several primary factors including the mix of income and losses across U.S. and non-U.S. jurisdictions, the impact of excess tax deficiencies associated with stock-based compensation awards and the derecognition of valuation allowances against deferred tax assets that were not more-likely-than-not realizable in the U.S. and certain non-U.S. jurisdictions. During 2019 and 2018, the mix of income and losses across jurisdictions, although still applicable, has become less of a factor in influencing the Company’s effective tax rates due to the dispositions of the international businesses and improved operating results. As a result, the Company’s effective tax rates are 23% The Tax Cuts and Jobs Act repealed the corporate Alternative Minimum Tax (“AMT”) and allows unutilized AMT credits to be refunded. For tax years 2018 through 2020, taxpayers may receive 50% of their uncredited balances as a cash refund with any remaining amounts refunded in full in 2021. The Company determined it is more-likely-than-not that $45 million of its AMT credits will be refunded and is estimated to occur in the first quarter of 2020. Accordingly, the Company reclassified $45 million from non-current deferred tax assets to income tax receivables in the first quarter of 2019. The Company continues to have a U.S. valuation allowance for certain U.S. federal credits and state tax attributes, which relate to deferred tax assets that require certain types of income or for income to be earned in certain jurisdictions in order to be realized. The Company will continue to assess the realizability of its deferred tax assets in the U.S. and remaining foreign jurisdictions in future periods. Changes in pretax income projections could impact this evaluation in future periods. The Company files a U.S. federal income tax return and other income tax returns in various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state and local income tax examinations for years prior to 2017 and 2013, respectively. The acquired OfficeMax U.S. consolidated group is no longer subject to U.S. federal income tax examination, and with few exceptions, is no longer subject to U.S. state and local income tax examinations for years prior to 2013. The Company’s U.S. federal income tax return for 2017 is currently under review. Generally, the Company is subject to routine examination for years 2012 and forward in its international tax jurisdictions. It is not reasonably possible that certain tax positions will be resolved within the next 12 months. Additionally, the Company anticipates that it is reasonably possible that new issues will be raised or resolved by tax authorities that may require changes to the balance of unrecognized tax benefits; however, an estimate of such changes cannot be reasonably made. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 6 Months Ended |
Jun. 29, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 7. EARNINGS (LOSS) PER SHARE The following table represents the calculation of net earnings (loss) per common share – basic and diluted: Second Quarter First Half (In millions, except per share amounts) 2019 2018 2019 2018 Basic Earnings (Loss) Per Share Numerator: Net income (loss) from continuing operations $ (24 ) $ 19 $ (16 ) $ 52 Income (loss) from discontinued operations, net of tax — (3 ) — 5 Net income (loss) $ (24 ) $ 16 $ (16 ) $ 57 Denominator: Weighted-average shares outstanding 546 557 544 556 Basic earnings (loss) per share: Continuing operations $ (0.04 ) $ 0.03 $ (0.03 ) $ 0.09 Discontinued operations — — — 0.01 Net earnings (loss) per share $ (0.04 ) $ 0.03 $ (0.03 ) $ 0.10 Diluted Earnings (Loss) Per Share Numerator: Net income (loss) from continuing operations $ (24 ) $ 19 $ (16 ) $ 52 Income (loss) from discontinued operations, net of tax — (3 ) — 5 Net income (loss) $ (24 ) $ 16 $ (16 ) $ 57 Denominator: Weighted-average shares outstanding 546 557 544 556 Effect of dilutive securities: Stock options and restricted stock 3 8 8 8 Diluted weighted-average shares outstanding 549 565 552 564 Diluted earnings (loss) per share: Continuing operations $ (0.04 ) $ 0.03 $ (0.03 ) $ 0.09 Discontinued operations — — — 0.01 Net diluted earnings (loss) per share $ (0.04 ) $ 0.03 $ (0.03 ) $ 0.10 Awards of stock options and nonvested shares representing approximately 10 million and 8 million additional shares of common stock were outstanding for the second quarter and first half of 2019, respectively, and approximately 7 million for the second quarter and first half of 2018, but were not included in the computation of diluted weighted-average shares outstanding because their effect would have been antidilutive. |
LEASES
LEASES | 6 Months Ended |
Jun. 29, 2019 | |
Leases [Abstract] | |
LEASES | NOTE 8. LEASES The Company leases retail stores and other facilities, vehicles, and equipment under operating lease agreements. Facility leases typically are for a fixed non-cancellable term with one or more renewal options. In addition to rent payments, the Company is required to pay certain variable lease costs such as real estate taxes, insurance and common-area maintenance on most of the facility leases. For leases beginning in 2019, the Company accounts for lease components (e.g., fixed payments including rent) and non-lease components (e.g., real estate taxes, insurance costs and common-area maintenance costs) as a single lease component. Many lease agreements contain tenant improvement allowances, rent holidays, and/or rent escalation clauses. Certain leases contain provisions for additional rent to be paid if sales exceed a specified amount, though such payments have been immaterial during the periods presented. The Company subleases certain real estate to third parties, consisting mainly of operating leases for space within the retail stores. The components of lease expense were as follows: Second Quarter First Half (In millions) 2019 2019 Finance lease cost: Amortization of right-of-use assets $ 4 $ 8 Interest on lease liabilities 1 2 Operating lease cost 109 220 Short-term lease cost — 3 Variable lease cost 32 65 Sublease income (1 ) (1 ) Total lease cost $ 145 $ 297 Supplemental cash flow information related to leases was as follows: First Half (In millions) 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 2 Operating cash flows from operating leases 246 Financing cash flows from finance leases 9 Right-of-use assets obtained in exchange for new finance lease liabilities 12 Right-of-use assets obtained in exchange for new operating lease liabilities 130 Supplemental balance sheet information related to leases was as follows: June 29, (In millions, except lease term and discount rate) 2019 Property and equipment, net $ 48 Operating lease right-of-use assets 1,380 Accrued expenses and other current liabilities 378 Short-term borrowings and current maturities of long-term debt 17 Long-term debt, net of current maturities 57 Operating lease liabilities 1,183 Weighted-average remaining lease term – finance leases 5 years Weighted-average remaining lease term – operating leases 5 years Weighted-average discount rate – finance leases 6.6 % Weighted-average discount rate – operating leases 7.0 % Maturities of lease liabilities as of June 29, 2019 were as follows: June 29, 2019 Operating Finance (In millions) Leases (1) Leases (2) 2019 (excluding the first half of 2019) $ 237 $ 12 2020 424 18 2021 340 17 2022 272 14 2023 207 12 Thereafter 416 15 1,896 88 Less imputed interest (335 ) (14 ) Total $ 1,561 $ 74 Reported as of June 29, 2019 Accrued expenses and other current liabilities $ 378 $ — Short-term borrowings and current maturities of long-term debt — 17 Long-term debt, net of current maturities — 57 Operating lease liabilities 1,183 — Total $ 1,561 $ 74 (1) Operating lease payments include $140 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $3 million of legally binding lease payments for an additional operating lease signed but not yet commenced. This operating lease will commence in fiscal year 2020 with a lease term of 10 years. (2) Finance lease payments exclude $8 million of legally binding lease payments for an additional finance lease signed but not yet commenced. This finance lease will commence in fiscal year 2019 with a lease term of 3 years. Adoption of the new lease accounting standard using the alternative transition method required the Company to provide relevant disclosures in accordance with ASC 840, Leases for all prior periods presented. The table below represents future minimum lease payments due under the non-cancelable portions of leases including facility leases that were accrued as store closure costs as of December 29, 2018. The table was updated from the version previously included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018 within the Notes to Consolidated Financial Statements to adjust for certain inconsistencies that management identified in the first quarter of fiscal year 2019 during the implementation of ASC 842, Leases. Specifically, the Company corrected the schedule to include additional lease commitments for option periods at the time of execution as opposed to the original extension date. December 29, (In millions) 2018 2019 $ 466 2020 374 2021 285 2022 214 2023 144 Thereafter 235 1,718 Less sublease income (11 ) Total $ 1,707 |
DEBT
DEBT | 6 Months Ended |
Jun. 29, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 9. DEBT In connection with the consummation of the acquisition of CompuCom, the Company entered into a credit agreement, dated as of November 8, 2017 (the “Term Loan Credit Agreement”), which provides for a $750 million term loan facility with a maturity date of November 8, 2022. The Term Loan Credit Agreement was amended in November 2018. The Company was in compliance with all applicable financial covenants associated with the Term Loan Credit Agreement at June 29, 2019. In May 2011, the Company entered into an amended and restated credit agreement, which was amended and restated in May 2016 for an additional five years, and was further amended in December 2016 and November 2017 (the Amended and Restated Credit Agreement including all amendments is referred to as the “Amended Credit Agreement”). The Amended Credit Agreement provides for a revolving credit facility of up to $1.2 billion and will mature on May 13, 2021. As provided in the Amended Credit Agreement, available amounts that can be borrowed are based on percentages of certain outstanding accounts receivable, credit card receivables, and inventory of the Company. At June 29, 2019, the Company had $999 NON-RECOURSE DEBT The Installment Notes (the “Timber notes receivable”) and the related Securitization Notes (the “Non-recourse debt”), as defined in the 2018 Form 10-K, are scheduled to mature on January 29, 2020 and October 31, 2019, respectively. As described in the indenture governing the Non-recourse debt, if the Company does not provide a redemption notice in September 2019, the maturity date of the Non-recourse debt will extend to January 29, 2020, provided that the majority holders of the Non-recourse debt do not disallow the extension by October 21, 2019. The extension of the maturity date of the Non-recourse debt will result in an increase in the interest rate for the extension period at the greater of 7.42% or LIBOR plus 2.55%, capped at 13%. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 29, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 10. STOCKHOLDERS’ EQUITY Accumulated other comprehensive income (loss) activity, net of tax, where applicable, is provided in the following table: Foreign Change in Currency Deferred Translation Pension and (In millions) Adjustments Other Total Balance at December 29, 2018 $ (50 ) $ (49 ) $ (99 ) Other comprehensive income activity 15 1 16 Balance at June 29, 2019 $ (35 ) $ (48 ) $ (83 ) TREASURY STOCK In November 2018, the Board of Directors approved a stock repurchase program of up to $100 million of its common stock effective January 1, 2019, which extends until the end of 2020 and may be suspended or discontinued at any time. The stock repurchase authorization permits the Company to repurchase stock from time-to-time through a combination of open market repurchases, privately negotiated transactions, 10b5-1 trading plans, accelerated stock repurchase transactions and/or other derivative transactions. The exact number and timing of stock repurchases will depend on market conditions and other factors, and will be funded through available cash balances. However, the Company’s ability to repurchase its common stock in 2019 is subject to certain restrictions under the Company’s Term Loan Credit Agreement. During the first quarter of 2019, the Company purchased approximately 4 million shares of its common stock at a cost of $10 million, excluding commissions, and as of June 29, 2019, approximately $90 million remains available for stock repurchases under the current stock repurchase authorization. During the second quarter of 2019, the Company did not repurchase any of its common stock. Refer to the “Unregistered Sales of Equity Securities and Use of Proceeds” section in Part II, “Other Information” for additional information. DIVIDENDS ON COMMON STOCK In the second quarter and first half of 2019, the Company’s Board of Directors declared a quarterly cash dividend in the amount of $0.025 per share on its common stock, resulting in total cash payments of $13 million and $27 million, respectively. Dividends have been recorded as a reduction to additional paid-in capital as the Company is in an accumulated deficit position. Payment of dividends is permitted under the Company’s Amended Credit Agreement provided that the Company has the required minimum liquidity or fixed charge ratio, but may be limited if the Company does not meet the necessary requirements. Additionally, under the Company’s Term Loan Credit Agreement, payment of dividends is permitted subject to compliance with an annual limit. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 29, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | NOTE 11. EMPLOYEE BENEFIT PLANS PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS – NORTH AMERICA The components of net periodic pension expense (benefit) for the Company’s North America pension plans are as follows: Second Quarter First Half (In millions) 2019 2018 2019 2018 Service cost $ 2 $ 1 $ 4 $ 2 Interest cost 9 9 18 18 Expected return on plan assets (11 ) (10 ) (21 ) (21 ) Net periodic pension benefit $ — $ — $ 1 $ (1 ) During the first half of 2019, $1 million of cash contributions were made to the North American pension plans. The Company expects to make additional cash contributions of approximately $1 million to the North America pension plans during the remainder of 2019. PENSION PLAN – UNITED KINGDOM The components of net periodic pension benefit for the Company’s UK pension plan are as follows: Second Quarter First Half (In millions) 2019 2018 2019 2018 Service cost $ — $ — $ — $ — Interest cost 1 1 3 3 Expected return on plan assets (2 ) (2 ) (4 ) (4 ) Net periodic pension benefit $ (1 ) $ (1 ) $ (1 ) $ (1 ) The UK pension plan is in a net asset position. During the first half of 2019, cash contributions of $1 million were made to the UK pension plan. The Company is required to make an additional cash contribution of $1 million to the UK pension plan during the remainder of 2019. Net periodic pension benefits for the North America and UK pension and other postretirement benefit plans (the “Plans”) are recorded at the corporate level. The service cost for the Plans are reflected in Selling, general and administrative expenses, and the other components of net periodic pension benefits are reflected in Other income, net, in the Condensed Consolidated Statements of Operations. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 12. FAIR VALUE MEASUREMENTS The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. In developing its fair value estimates, the Company uses the following hierarchy: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Significant unobservable inputs that are not corroborated by market data. Generally, these fair value measures are model-based valuation techniques such as discounted cash flows or option pricing models using the Company’s own estimates and assumptions or those expected to be used by market participants. RECURRING FAIR VALUE MEASUREMENTS In accordance with GAAP, certain assets and liabilities are required to be recorded at fair value on a recurring basis. The Company’s assets and liabilities that are adjusted to fair value on a recurring basis are money market funds that qualify as cash equivalents, and derivative fin ancial instruments. As of June 29 , 2019 and December 29, 2018 , the Company did not have any money market funds that had floating net asset values that required measurement. The fair values of the Company’s foreign currency contracts and fuel contracts are the amounts receivable or payable to terminate the agreements at the reporting date, taking into account current exchange rates and commodity prices. The values are based on market-based inputs or unobservable inputs that are corroborated by market data. Amounts associated with these derivative financial instruments are considered Level 1 measurements, and were not significant for the reported periods. At June 29, 2019 and December 29, 2018, Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheet included less than $1 million related to derivative foreign currency and fuel contracts. NONRECURRING FAIR VALUE MEASUREMENTS In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records certain assets and liabilities at fair value on a nonrecurring basis as required by GAAP. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. In the second quarter and first half of 2019, the Company recognized asset impairment charges of $ The Company regularly reviews retail store long-lived assets for impairment indicators at the individual store level, as this represents the lowest level of identifiable cash flows. When indicators of impairment are present, a recoverability analysis is performed which considers the estimated undiscounted cash flows over the retail store’s remaining life and uses input from retail operations and accounting and finance personnel. These inputs include management’s best estimates of store-level sales, gross margins, direct expenses, exercise of future lease renewal options when reasonably certain to be exercised, and resulting cash flows, by their nature, include judgments about how current initiatives will impact future performance. In the second quarter and first half of 2019, the assumptions used within the recoverability analysis for the retail stores were updated to consider current quarter store operational results and formal plans for additional store closures. These assumptions reflected declining sales over the forecast period, and gross margin and operating cost assumptions that are consistent with recent actual results and consider plans for future initiatives. If the undiscounted cash flows of a retail store cannot support the carrying amount of its assets, the assets are impaired if necessary and written down to estimated fair value. The fair value of retail store assets is determined using a discounted cash flow analysis which uses Level 2 unobservable inputs that are corroborated by market data such as real estate broker’s opinions. Specifically, the analysis uses assumptions of potential rental rates for each retail store location which are based on market data for comparable locations. These estimated cash flows used in the second quarter and first half of 2019 impairment calculation were discounted at a weighted average discount rate of 5%. The Company will continue to evaluate initiatives to improve performance and lower operating costs. To the extent that forward-looking sales and operating assumptions are not achieved and are subsequently reduced, additional impairment charges may result. However, at the end of the second quarter and first half of 2019, the impairment recognized reflects the Company’s best estimate of future performance. OTHER FAIR VALUE DISCLOSURES The fair values of cash and cash equivalents, receivables, trade accounts payable and accrued expenses and other current liabilities approximate their carrying values because of their short-term nature. The following table presents information about financial instruments at the balance sheet dates indicated. June 29, December 29, 2019 2018 Carrying Fair Carrying Fair (In millions) Amount Value Amount Value Financial assets: Timber notes receivable $ 831 $ 831 $ 842 $ 835 Company-owned life insurance 92 92 91 91 Financial liabilities: Recourse debt: Term Loan, due 2022 428 450 463 490 Revenue bonds, due in varying amounts periodically through 2029 186 186 186 184 American & Foreign Power Company, Inc. 5% debentures, due 2030 14 14 14 14 Non-recourse debt — Timber notes 743 743 754 750 The following methods and assumptions were used to estimate the fair value of each class of financial instruments: • Timber notes receivable : Fair value is determined as the present value of expected future cash flows discounted at the current interest rate for loans of similar terms with comparable credit risk (Level 2 measure). • Company-owned life insurance : In connection with the 2013 OfficeMax merger, the Company acquired company-owned life insurance policies on certain former employees. The fair value of the company-owned life insurance policies is derived using determinable net cash surrender value (Level 2 measure). • Recourse debt : Recourse debt, for which there were no transactions on the measurement date, was valued based on quoted market prices near the measurement date when available or by discounting the future cash flows of each instrument using rates based on the most recently observable trade or using rates currently offered to the Company for similar debt instruments of comparable maturities (Level 2 measure). • Non-recourse debt : Fair value is estimated by discounting the future cash flows of the instrument at rates currently available to the Company for similar instruments of comparable maturities (Level 2 measure). |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 29, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13. COMMITMENTS AND CONTINGENCIES LEGAL MATTERS The Company is involved in litigation arising in the normal course of business. While, from time to time, claims are asserted that make demands for a large sum of money (including, from time to time, actions which are asserted to be maintainable as class action suits), the Company does not believe that contingent liabilities related to these matters (including the matters discussed below), either individually or in the aggregate, will materially affect the Company’s financial position, results of operations or cash flows. In addition, in the ordinary course of business, sales to and transactions with government customers may be subject to lawsuits, investigations, audits and review by governmental authorities and regulatory agencies, with which the Company cooperates. Many of these lawsuits, investigations, audits and reviews are resolved without material impact to the Company. While claims in these matters may at times assert large demands, the Company does not believe that contingent liabilities related to these matters, either individually or in the aggregate, will materially affect its financial position, results of operations or cash flows. In December 2016, the Federal Trade Commission ("FTC'') issued a Civil Investigative Demand (“CID”) to the Company requiring the Company to produce certain documents and materials and to answer certain interrogatories relating to the Company’s use of the product PC Healthcheck, a software program manufactured by a third-party vendor and provided to the Company for its customers prior to December 31, 2016. On March 29, 2019, the U.S. District Court for the Southern District of Florida entered the Stipulation to Entry of Order for Permanent Injunction and Monetary Judgment, or the “Consent Order,” wherein, the FTC Commissioners agreed to accept payment of $25 million to compensate affected Company customers and the Company agreed to implement a compliance certification, record creation and maintenance program. Additionally, in January 2017 and May 2017 , the Consumer Protection Division s of each of the Office of Attorney General, State of Washington ("Washington AG'') and the Office of Attorney General, State of Texas (''Texas AG''), respectively, each issued a CID to the Company requiring the Company to produce certain documents and materials and to answer certain interrogatories relating to PC Healthcheck. The Company is cooperating with the Washington AG and Texas AG with respect to these matters. At this time, it is difficult to predict the timing, the likely outcome, and/or potential range of loss, if any, of these state matters. In addition to the foregoing, OfficeMax is named as a defendant in a number of lawsuits, claims, and proceedings arising out of the operation of certain paper and forest products assets prior to those assets being sold in 2004, for which OfficeMax agreed to retain responsibility. Also, as part of that sale, OfficeMax agreed to retain responsibility for all pending or threatened proceedings and future proceedings alleging asbestos-related injuries arising out of the operation of the paper and forest products assets prior to the closing of the sale. The Company has made provision for losses with respect to the pending proceedings. Additionally, as of June 29, 2019, the Company has made provision for environmental liabilities with respect to certain sites where hazardous substances or other contaminants are or may be located. For these liabilities, our estimated range of reasonably possible losses was approximately $10 million to $20 million. The Company regularly monitors its estimated exposure to these liabilities. As additional information becomes known, these estimates may change, however, the Company does not believe any of these OfficeMax retained proceedings are material to the Company’s financial position, results of operations or cash flows. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 29, 2019 | |
Discontinued Operations And Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 14. DISCONTINUED OPERATIONS In the third quarter of 2016, the Company’s Board of Directors approved a plan to sell substantially all operations of the former International Division through four disposal groups (Europe, South Korea, Oceania and mainland China) (the “International Operations”). Collectively, these dispositions represent a strategic shift that has a major impact on the Company’s operations and financial results and have been accounted for as discontinued operations. As of the end of fiscal 2018, the sale of the International Operations was complete, and there are no further discontinued operations in 2019. For the first half of 2018, the major components of Discontinued operations, net of tax presented were as follows: Second Quarter First Half (In millions) 2018 2018 Sales $ 21 $ 115 Cost of goods sold and occupancy costs 16 88 Operating expenses 4 21 Restructuring charges 1 1 Other income (expense), net 1 (1 ) Net increase of loss on discontinued operations held for sale — (1 ) Net loss on sale of discontinued operations (3 ) (4 ) Income tax expense (benefit) 1 (6 ) Discontinued operations, net of tax $ (3 ) $ 5 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 29, 2019 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Office Depot, Inc. including its consolidated subsidiaries (“Office Depot” or the “Company”), is a leading provider of business services and supplies, products and technology solutions to small, medium and enterprise businesses, through a fully integrated business-to-business (“B2B”) distribution platform of 1,320 retail stores, online presence, and dedicated sales professionals and technicians. Through its banner brands Office Depot®, OfficeMax®, CompuCom® and Grand&Toy®, as well as others, the Company offers its customers the tools and resources they need to focus on starting, growing and running their business. The Company’s corporate headquarters is located in Boca Raton, FL, and its primary website is www.officedepot.com. As of June 29, 2019, the Company had three reportable segments (or “Divisions”): Business Solutions Division, Retail Division and the CompuCom Division. The Condensed Consolidated Financial Statements as of June 29, 2019, and for the 13-week and 26-week periods ended June 29, 2019 (also referred to as the “second quarter of 2019” and “the first half of 2019,” respectively) and June 30, 2018 (also referred to as the “second quarter of 2018” and “the first half of 2018,” respectively) are unaudited. However, in management’s opinion, these Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature necessary to provide a fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented. Business acquisitions in 2018 and 2019 are included prospectively from the date of acquisition, thus affecting the comparability of the Company’s financial statements for all periods presented in this report on Form 10-Q. The Company has prepared the Condensed Consolidated Financial Statements included herein pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Some information and note disclosures, which would normally be included in comprehensive annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), have been condensed or omitted pursuant to those SEC rules and regulations. The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. For a better understanding of the Company and its Condensed Consolidated Financial Statements, the Company recommends reading these Condensed Consolidated Financial Statements in conjunction with the audited financial statements, which are included in the Company’s 2018 Form 10-K. These interim results are not necessarily indicative of the results that should be expected for the full year. |
CASH MANAGEMENT | CASH MANAGEMENT The cash management process generally utilizes zero balance accounts which provide for the settlement of the related disbursement and cash concentration accounts on a daily basis. As of June 29, 2019 and December 29, 2018, Trade accounts payable and Accrued expenses and other current liabilities, in the aggregate, included $22 At June 29, 2019, cash and cash equivalents from continuing operations held outside the United States amounted to $151 million. Restricted Cash : Restricted cash consists primarily of short-term cash deposits having original maturity dates of twelve months or less that serve as collateral to certain of the Company’s letters of credit. Restricted cash is valued at cost, which approximates fair value. At June 29, 2019 and December 29, 2018, restricted cash amounted to $2 million and is included in Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets |
LEASING ARRANGEMENTS | LEASING ARRANGEMENTS The Company conducts a substantial portion of its business in leased properties. Some of the Company’s leases contain escalation clauses and renewal options. The Company recognizes rental expense for operating leases that contain predetermined fixed escalation clauses on a straight-line basis over the expected term of the lease. Prior to the adoption of the new lease accounting standard on the first day of fiscal 2019, the expected term of a lease was calculated from the date the Company first took possession of the facility, including any periods of free rent, and extended through the non-cancellable period and any option or renewal periods management believed were reasonably assured of being exercised. Rent abatements and escalations were considered in the calculation of minimum lease payments in the Company’s lease classification assessment and in determining straight-line rent expense for operating leases. Straight-line rent expense was also adjusted to reflect any allowances or reimbursements provided by the lessor. When required under lease agreements, estimated costs to return facilities to original condition were accrued over the lease period. Subsequent to the adoption of the new lease accounting standard, the Company first determines whether an arrangement is a lease at inception. Once that determination is made, leasing arrangements are presented on the Condensed Consolidated Balance Sheet as follows: • Finance leases : o Property and equipment, net – leases which were referred to as capital leases under the old accounting standard; o Short-term borrowings and current maturities of long-term debt – short-term obligations to make lease payments arising from the finance lease; o Long-term debt, net of current maturities – long-term obligations to make lease payments arising from the finance lease. • Operating leases : o Operating lease right-of-use (“ROU”) assets – the Company’s right to use the underlying asset for the lease term; o Accrued expenses and other current liabilities – short-term obligations to make lease payments arising from the operating lease; o Operating lease liabilities – long-term obligations to make lease payments arising from the operating lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of the future minimum lease payments over the lease term. As the rate implicit in the lease is not readily determinable for any of the leases, the Company has utilized its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company uses the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. The operating lease ROU asset also includes any lease payments made prior to commencement and excludes lease incentives and initial direct costs incurred. Certain leases include one or more options to renew, with renewal terms that can extend the lease from five to 25 years or more, which is generally at the Company’s discretion. Any option or renewal periods management believed were reasonably certain of being exercised are included in the lease term. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, for which it has made an accounting policy election to account for these as a single lease component. Refer to the “New Accounting Standards” section below for more information including the impact on the Condensed Consolidated Financial Statements relating to the adoption of the new lease accounting standard. |
NEW ACCOUNTING STANDARDS | NEW ACCOUNTING STANDARDS Standards that are not yet adopted: • Financial Instruments – Credit Losses : In June 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update that modifies the measurement of expected credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The update will change the accounting for credit impairment by adding an impairment model that is based on expected losses rather than incurred losses. In July 2018, the FASB approved an amendment to the new guidance that provides transition relief to the adopting entities and allows for an election of the fair value option on certain financial instruments. This accounting standards update, as amended, is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2018. The Company is evaluating the impact of this new standard and believes the adoption will not have a material impact on its Condensed Consolidated Financial Statements. • Cloud computing arrangements : In August 2018, the FASB issued an accounting standards update that provides guidance regarding the accounting for implementation costs in cloud computing arrangements. This accounting update is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the impact of this new standard and believes the adoption will not have a material impact on its Condensed Consolidated Financial Statements. • Fair value measurements : In August 2018, the FASB issued an accounting standards update that adds, removes, and modifies the disclosure requirements related to fair value measurements. This accounting update is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the impact of this new standard and believes the adoption will not have a material impact on its Condensed Consolidated Financial Statements. • Defined benefit plan : In August 2018, the FASB issued an accounting standards update that modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This accounting update is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the impact of this new standard and believes the adoption will not have a material impact on its Condensed Consolidated Financial Statements. Standards that were adopted: • Leases : In February 2016, the FASB issued an accounting standards update that requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The accounting treatment for finance leases and lessors remains relatively unchanged. The accounting standards update also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. The initial standard required a modified retrospective transition approach, with application, including disclosures, in all comparative periods presented. In July 2018, the FASB approved an amendment to the new guidance that introduced an alternative modified retrospective transition approach granting companies the option of using the effective date of the new standard as the date of initial application. The Company adopted the standard on the first day of the first quarter of 2019 using this alternative transition approach. The Company elected the transition package of practical expedients that is permitted by the standard. The package of practical expedients allows the Company to not reassess previous accounting conclusions regarding whether existing arrangements are or contain leases, the classification of existing leases, and the treatment of initial direct costs. The Company did not elect the hindsight transition practical expedient allowed for by the new standard, which allows entities to use hindsight when determining lease term and impairment of ROU assets. Additionally, the Company elected certain other practical expedients offered by the new standard which it will apply to all asset classes, including the option not to separate lease and non-lease components and instead to account for them as a single lease component and the option not to recognize ROU assets and related liabilities that arise from short-term leases (i.e., leases with terms of twelve months or less that do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise). Substantially all of the Company’s retail store locations, supply chain facilities, certain corporate facilities and copy print equipment are subject to operating lease arrangements. As a result, the standard had material impacts on the Condensed Consolidated Balance Sheet, but did not have an impact on the Condensed Consolidated Statement of Operations and Condensed Consolidated Statement of Cash Flows. The most significant impacts of the standard on the Condensed Consolidated Balance Sheet on the date of adoption were as follows: o Recognition of $1.4 billion Operating lease right-of-use assets and $1.6 billion Operating lease liabilities o Derecognition of approximately $41 million of Property and equipment, net and $39 million of financing obligations associated with non-owned properties that were capitalized under previously existing build-to-suit lease accounting rules o Cumulative effect of $15 million adoption date adjustments to Accumulated deficit comprised of a $20 million impairment charge, net of tax effect, to the ROU assets, primarily because the fair market value of certain retail stores was lower than their carrying value prior to the adoption date; $4 million deferred gain, net of tax effect, related to transactions accounted for as sales and operating leasebacks under the previous lease standard; and a $1 million credit, net of tax effect, arising from the derecognition of assets and liabilities associated with non-owned properties that were capitalized under previously existing build-to-suit lease accounting rules. As part of its adoption of the new lease accounting standard, the Company also implemented new internal controls and updated accounting policies and procedures, operational processes and documentation practices to enable the preparation of financial information on adoption. Refer to Note 8 for additional disclosures required as a result of the adoption of this new standard. • Goodwill : In January 2017, the FASB issued an accounting standards update that simplifies how entities assess goodwill for impairment. The revised guidance eliminates the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. Under this accounting update, a goodwill impairment loss should instead be measured at the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the carrying amount of goodwill. This accounting standards update is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted. The Company adopted this accounting standards update on the first day of the second quarter of 2019 with no material impact to its Condensed Consolidated Financial Statements. |
PRODUCTS AND SERVICES REVENUE | PRODUCTS AND SERVICES REVENUE The following table provides information about disaggregated revenue by Division, and major products and services categories. Second Quarter of 2019 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 745 $ 355 $ — $ 4 $ 1,104 Technology 315 404 75 — 794 Furniture and other 189 95 — 1 285 Services Technology — 7 181 (4 ) 184 Copy, print, and other 79 139 2 1 221 Total $ 1,328 $ 1,000 $ 258 $ 2 $ 2,588 Second Quarter of 2018 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 717 $ 374 $ — $ 3 $ 1,094 Technology 327 449 56 (4 ) 828 Furniture and other 179 93 — 2 274 Services Technology — 7 219 (1 ) 225 Copy, print, and other 75 130 2 — 207 Total $ 1,298 $ 1,053 $ 277 $ — $ 2,628 First Half of 2019 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 1,506 $ 807 $ — $ 6 $ 2,319 Technology 639 872 137 1 1,649 Furniture and other 372 201 — 2 575 Services Technology — 14 363 (6 ) 371 Copy, print, and other 155 281 6 — 442 Total $ 2,672 $ 2,175 $ 506 $ 3 $ 5,356 First Half of 2018 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 1,452 $ 842 $ — $ 4 $ 2,298 Technology 681 988 103 (5 ) 1,767 Furniture and other 351 201 — 2 554 Services Technology — 16 429 (1 ) 444 Copy, print, and other 142 250 3 — 395 Total $ 2,626 $ 2,297 $ 535 $ — $ 5,458 • Products revenue includes the sale of : o Supplies such as paper, writing instruments, office supplies, cleaning and breakroom items o Technology related products such as toner and ink, printers, computers, tablets and accessories, and electronic storage o Furniture and other products such as desks, seating, and luggage, and certain revenue adjustments The Company sells its supplies, furniture and other products through its Business Solutions and Retail Divisions, and its technology products through all three Divisions. Customers can purchase products through the Company’s call centers, electronically through its Internet websites, or through its retail stores. Revenues from supplies, technology, and furniture and other product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer. Furniture and other products also include arrangements where customers can make special furniture interior design and installation orders that are customized to their needs. The performance obligations related to these arrangements are satisfied over time. • Services revenue includes the sale of: o Technology service offerings provided through the Company’s CompuCom Division, such as end user computing support, managed information technology (“IT”) services, data center monitoring and management, service desk, network infrastructure, IT workforce solutions, mobile device management, IT integration solutions and cloud services, as well as technology service offerings provided in the Company’s retail stores, such as installation and repair o Copy, print, and other service offerings such as managed print and fulfillment services, product subscriptions, and sales of third party software, gift cards, warranties, remote support as well as rental income on operating lease arrangements where the Company conveys to its customers the right to use devices and other equipment for a stated period The largest offering in the technology service category is end user computing, which provides on-site services to assist corporate end users with their information technology needs. Services are either billed on a rate per hour or per user, or on a fixed monthly retainer basis. For the majority of technology service offerings contracts, the Company has the right to invoice the customer in an amount that directly corresponds with the value to the customer of the Company’s performance to date and as such the Company recognizes revenue based on the amount billable to the customer in accordance with the practical expedient provided by the current revenue guidance. Substantially all of the Company’s other service offerings are satisfied at a point in time and revenue is recognized as such. The largest other service offering is copy and print services, which includes printing, copying, and digital imaging. The majority of copy and print services are fulfilled through retail stores and the related performance obligations are satisfied within a short period of time (generally within the same day). |
REVENUE RECOGNITION AND SIGNIFICANT JUDGMENTS | REVENUE RECOGNITION AND SIGNIFICANT JUDGMENTS Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company is entitled to receive in exchange for those products or services. For product sales, transfer of control occurs at a point in time, typically upon delivery to the customer. For service offerings, the transfer of control and satisfaction of the performance obligation is either over time or at a point in time. When performance obligations are satisfied over time, the Company evaluates the pattern of delivery and progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Revenue is recognized net of allowance for returns and net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Shipping and handling costs are considered fulfillment activities and are recognized within the Company’s cost of goods sold. Contracts with customers could include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Determining the standalone selling price also requires judgment. The Company did not have significant revenues Products are generally sold with a right of return and the Company may provide other incentives, such as rebates and coupons, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The Company estimates returns and incentives at contract inception and includes the amount in the transaction price for which significant reversal is not probable. These estimates are updated at the end of each reporting period as additional information becomes available. The Company offers a customer loyalty program that provides customers with rewards that can be applied to future purchases or other incentives. Loyalty rewards are accounted for as a separate performance obligation and a deferred liability is recorded in the amount of the transaction price allocated to the rewards, inclusive of the impact of estimated breakage. The estimated breakage of loyalty rewards is based on historical redemption rates experienced under the loyalty program. Revenue is recognized when the loyalty rewards are redeemed or expire. As of June 29, 2019, the Company had $11 million of deferred liability related to the loyalty program, which is included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. The Company recognizes revenue in certain circumstances before product delivery occurs (commonly referred to as bill-and-hold transactions). Revenue from bill-and-hold transactions is recognized when all specific requirements for transfer of control under a bill-and-hold arrangement have been met which include, among other things, a request from the customer that the product be held for future scheduled delivery. For these bill-and-hold arrangements, the associated product inventory is identified separately as belonging to the customer and is ready for physical transfer. |
CONTRACT BALANCES | CONTRACT BALANCES The timing of revenue recognition may differ from the timing of invoicing to customers. A receivable is recognized in the period the Company delivers goods or provides services, and is recorded at the invoiced amount, net of an allowance for doubtful accounts. A receivable is also recognized for unbilled services where the Company’s right to consideration is unconditional, and is recorded based on an estimate of time and materials. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 20 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the contracts do not include a significant financing component. The primary purpose of the Company’s invoicing terms is to provide customers with simplified and predictable ways of purchasing its products and services. The Company receives payments from customers based upon contractual billing schedules. Contract assets include amounts related to deferred contract acquisition costs (refer to the section “Costs to Obtain a Contract” below) and if applicable, the Company’s conditional right to consideration for completed performance under a contract. The short and long-term components of contract assets in the table below are included in Prepaid expenses and other current assets, and Other assets, respectively, in the Condensed Consolidated Balance Sheets. Contract liabilities include payments received in advance of performance under the contract, and are recognized as revenue when the performance obligation is completed under the contract, as well as accrued contract acquisition costs, liabilities related to the Company’s loyalty program and gift cards. The short and long-term components of contract liabilities in the table below are included in Accrued expenses and other current liabilities, and Deferred income taxes and other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheets. The following table provides information about receivables, contract assets and contract liabilities from contracts with customers: June 29, December 29, (In millions) 2019 2018 Trade receivables, net $ 632 $ 655 Short-term contract assets 25 22 Long-term contract assets 15 17 Short-term contract liabilities 48 52 Long-term contract liabilities 1 1 During the second quarter and first half of 2019, the Company did not have any contract assets related to conditional rights. The Company recognized revenues of $22 million during the first half of 2019 which were included in the short-term contract liability balance at the beginning of the period. There were no contract assets and liabilities that were recognized during the second quarter and first half of 2019 as a result of business combinations. There were no significant adjustments to revenue from performance obligations satisfied in previous periods and there were no contract assets recognized at the beginning of the period that transferred to receivables during the second quarter and first half of 2019. Substantially all of the purchase orders and statements of work related to contracts with customers require delivery of the product or service within one year or less. For certain service contracts that exceed one year, the Company recognizes revenue at the amount to which it has the right to invoice for services performed. Accordingly, the Company has applied the optional exemption provided by the new revenue recognition standard relating to unsatisfied performance obligations and does not disclose the value of unsatisfied performance obligations for its contracts. |
COSTS TO OBTAIN A CONTRACT | COSTS TO OBTAIN A CONTRACT The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company has determined that certain rebate incentive programs meet the requirements to be capitalized. These costs are periodically reviewed for impairment, and are amortized on a straight-line basis over the expected period of benefit. As of June 29, 2019 , capitalized acquisition costs amounted to $ 40 million, which is reflected in short-term contract assets and long-term contract assets in the table above. During the second quarter and first half of 2019 , amortization expense was $ 8 million and $ 17 million , respectively, and there was no impairment loss in relation to costs capitalized. The Company had no asset impairment charges related to contract assets in the periods presented herein. |
MERGER AND RESTRUCTURING ACTI_2
MERGER AND RESTRUCTURING ACTIVITY (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Business Combinations [Abstract] | |
Summary of Major Components of Merger and Restructuring Expenses, Net | The table below summarizes the major components of Merger and restructuring expenses, net. Second Quarter First Half (In millions) 2019 2018 2019 2018 Merger and transaction related expenses, net Severance and retention $ — $ 3 $ 1 $ 5 Transaction and integration 5 4 12 11 Facility closure, contract termination, and other expenses, net — 5 — 8 Total Merger and transaction related expenses, net 5 12 13 24 Restructuring expenses Severance 40 — 40 — Professional fees 16 2 19 6 Facility closure, contract termination, and other expenses, net 8 — 11 1 Total Restructuring expenses 64 2 70 7 Total Merger and restructuring expenses, net $ 69 $ 14 $ 83 $ 31 |
Facility Closure and Severance Costs | The activity in the merger and restructuring accruals in the first half of 2019 is presented in the table below. Certain merger and restructuring charges are excluded from the table because they are paid as incurred or non-cash, such as accelerated depreciation and gains and losses on asset dispositions. Balance as of Balance as of December 29, Charges Cash Adjustments June 29, (In millions) 2018 Incurred Payments (a) 2019 Termination benefits: Merger-related accruals $ 3 $ — $ (2 ) $ — $ 1 Comprehensive Business Review — 1 — — 1 Business Acceleration Plan — 40 (21 ) — 19 Lease and contract obligations, accruals for facilities closures and other costs: Merger-related accruals 10 — — (10 ) — Comprehensive Business Review 5 6 (3 ) (3 ) 5 Business Acceleration Plan — 21 (7 ) — 14 Total $ 18 $ 68 $ (33 ) $ (13 ) $ 40 (a) Represents reclassification of operating lease obligations associated with facility closures to Operating lease ROU assets on the Condensed Consolidated Balance Sheet in accordance with the new lease accounting standard. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Disaggregated Revenue by Division, Major Product and Service Categories | The following table provides information about disaggregated revenue by Division, and major products and services categories. Second Quarter of 2019 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 745 $ 355 $ — $ 4 $ 1,104 Technology 315 404 75 — 794 Furniture and other 189 95 — 1 285 Services Technology — 7 181 (4 ) 184 Copy, print, and other 79 139 2 1 221 Total $ 1,328 $ 1,000 $ 258 $ 2 $ 2,588 Second Quarter of 2018 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 717 $ 374 $ — $ 3 $ 1,094 Technology 327 449 56 (4 ) 828 Furniture and other 179 93 — 2 274 Services Technology — 7 219 (1 ) 225 Copy, print, and other 75 130 2 — 207 Total $ 1,298 $ 1,053 $ 277 $ — $ 2,628 First Half of 2019 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 1,506 $ 807 $ — $ 6 $ 2,319 Technology 639 872 137 1 1,649 Furniture and other 372 201 — 2 575 Services Technology — 14 363 (6 ) 371 Copy, print, and other 155 281 6 — 442 Total $ 2,672 $ 2,175 $ 506 $ 3 $ 5,356 First Half of 2018 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 1,452 $ 842 $ — $ 4 $ 2,298 Technology 681 988 103 (5 ) 1,767 Furniture and other 351 201 — 2 554 Services Technology — 16 429 (1 ) 444 Copy, print, and other 142 250 3 — 395 Total $ 2,626 $ 2,297 $ 535 $ — $ 5,458 |
Summary of Receivables, Contract Assets and Contract Liabilities from Contracts with Customers | The following table provides information about receivables, contract assets and contract liabilities from contracts with customers: June 29, December 29, (In millions) 2019 2018 Trade receivables, net $ 632 $ 655 Short-term contract assets 25 22 Long-term contract assets 15 17 Short-term contract liabilities 48 52 Long-term contract liabilities 1 1 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
Summary of Significant Accounts and Balances by Each Divisions and Other | The following is a summary of sales and operating income (loss) by each of the Divisions and Other, reconciled to consolidated totals, after the elimination of the discontinued operations for all periods. Sales Second Quarter First Half (In millions) 2019 2018 2019 2018 Business Solutions Division $ 1,328 $ 1,298 $ 2,672 $ 2,626 Retail Division 1,000 1,053 2,175 2,297 CompuCom Division 258 277 506 535 Other 2 — 3 — Total $ 2,588 $ 2,628 $ 5,356 $ 5,458 Division Operating Income (Loss) Second Quarter First Half (In millions) 2019 2018 2019 2018 Business Solutions Division $ 86 $ 67 $ 132 $ 122 Retail Division 9 22 76 94 CompuCom Division 1 6 (13 ) 12 Other — — — (1 ) Total $ 96 $ 95 $ 195 $ 227 |
Reconciliation of Measure of Division Operating Income to Consolidated Income Before Income Taxes | A reconciliation of the measure of Division operating income to Consolidated income (loss) from continuing operations before income taxes is as follows: Second Quarter First Half (In millions) 2019 2018 2019 2018 Total Divisions operating income $ 96 $ 95 $ 195 $ 227 Add/(subtract): Asset impairments (16 ) — (45 ) — Merger and restructuring expenses, net (69 ) (14 ) (83 ) (31 ) Unallocated expenses (26 ) (33 ) (58 ) (71 ) Interest income 5 6 11 12 Interest expense (23 ) (31 ) (46 ) (60 ) Other income, net 2 5 5 6 Income (loss) from continuing operations before income taxes $ (31 ) $ 28 $ (21 ) $ 83 |
Schedule of Goodwill by Segment | The components of goodwill by segment are provided in the following table: Business Solutions Retail CompuCom (In millions) Division Division Division Total Balance as of December 29, 2018 $ 387 $ 78 $ 449 $ 914 Acquisitions 20 — — 20 Foreign currency rate impact — — 5 5 Balance as of June 29, 2019 $ 407 $ 78 $ 454 $ 939 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Earnings Per Share [Abstract] | |
Calculation of Net Earnings (Loss) Per Common Share | The following table represents the calculation of net earnings (loss) per common share – basic and diluted: Second Quarter First Half (In millions, except per share amounts) 2019 2018 2019 2018 Basic Earnings (Loss) Per Share Numerator: Net income (loss) from continuing operations $ (24 ) $ 19 $ (16 ) $ 52 Income (loss) from discontinued operations, net of tax — (3 ) — 5 Net income (loss) $ (24 ) $ 16 $ (16 ) $ 57 Denominator: Weighted-average shares outstanding 546 557 544 556 Basic earnings (loss) per share: Continuing operations $ (0.04 ) $ 0.03 $ (0.03 ) $ 0.09 Discontinued operations — — — 0.01 Net earnings (loss) per share $ (0.04 ) $ 0.03 $ (0.03 ) $ 0.10 Diluted Earnings (Loss) Per Share Numerator: Net income (loss) from continuing operations $ (24 ) $ 19 $ (16 ) $ 52 Income (loss) from discontinued operations, net of tax — (3 ) — 5 Net income (loss) $ (24 ) $ 16 $ (16 ) $ 57 Denominator: Weighted-average shares outstanding 546 557 544 556 Effect of dilutive securities: Stock options and restricted stock 3 8 8 8 Diluted weighted-average shares outstanding 549 565 552 564 Diluted earnings (loss) per share: Continuing operations $ (0.04 ) $ 0.03 $ (0.03 ) $ 0.09 Discontinued operations — — — 0.01 Net diluted earnings (loss) per share $ (0.04 ) $ 0.03 $ (0.03 ) $ 0.10 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows: Second Quarter First Half (In millions) 2019 2019 Finance lease cost: Amortization of right-of-use assets $ 4 $ 8 Interest on lease liabilities 1 2 Operating lease cost 109 220 Short-term lease cost — 3 Variable lease cost 32 65 Sublease income (1 ) (1 ) Total lease cost $ 145 $ 297 |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: First Half (In millions) 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 2 Operating cash flows from operating leases 246 Financing cash flows from finance leases 9 Right-of-use assets obtained in exchange for new finance lease liabilities 12 Right-of-use assets obtained in exchange for new operating lease liabilities 130 |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: June 29, (In millions, except lease term and discount rate) 2019 Property and equipment, net $ 48 Operating lease right-of-use assets 1,380 Accrued expenses and other current liabilities 378 Short-term borrowings and current maturities of long-term debt 17 Long-term debt, net of current maturities 57 Operating lease liabilities 1,183 Weighted-average remaining lease term – finance leases 5 years Weighted-average remaining lease term – operating leases 5 years Weighted-average discount rate – finance leases 6.6 % Weighted-average discount rate – operating leases 7.0 % |
Schedule of Maturities of Lease Liabilities Under Operating and Finance Leases | Maturities of lease liabilities as of June 29, 2019 were as follows: June 29, 2019 Operating Finance (In millions) Leases (1) Leases (2) 2019 (excluding the first half of 2019) $ 237 $ 12 2020 424 18 2021 340 17 2022 272 14 2023 207 12 Thereafter 416 15 1,896 88 Less imputed interest (335 ) (14 ) Total $ 1,561 $ 74 Reported as of June 29, 2019 Accrued expenses and other current liabilities $ 378 $ — Short-term borrowings and current maturities of long-term debt — 17 Long-term debt, net of current maturities — 57 Operating lease liabilities 1,183 — Total $ 1,561 $ 74 (1) Operating lease payments include $140 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $3 million of legally binding lease payments for an additional operating lease signed but not yet commenced. This operating lease will commence in fiscal year 2020 with a lease term of 10 years. (2) Finance lease payments exclude $8 million of legally binding lease payments for an additional finance lease signed but not yet commenced. This finance lease will commence in fiscal year 2019 with a lease term of 3 years. |
Future Minimum Lease Payments due under Non-Cancelable Portions of Leases | The table below represents future minimum lease payments due under the non-cancelable portions of leases including facility leases that were accrued as store closure costs as of December 29, 2018. The table was updated from the version previously included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018 within the Notes to Consolidated Financial Statements to adjust for certain inconsistencies that management identified in the first quarter of fiscal year 2019 during the implementation of ASC 842, Leases. Specifically, the Company corrected the schedule to include additional lease commitments for option periods at the time of execution as opposed to the original extension date. December 29, (In millions) 2018 2019 $ 466 2020 374 2021 285 2022 214 2023 144 Thereafter 235 1,718 Less sublease income (11 ) Total $ 1,707 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) Activity, Net of Tax | Accumulated other comprehensive income (loss) activity, net of tax, where applicable, is provided in the following table: Foreign Change in Currency Deferred Translation Pension and (In millions) Adjustments Other Total Balance at December 29, 2018 $ (50 ) $ (49 ) $ (99 ) Other comprehensive income activity 15 1 16 Balance at June 29, 2019 $ (35 ) $ (48 ) $ (83 ) |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Pension Expense (Benefit) | The components of net periodic pension expense (benefit) for the Company’s North America pension plans are as follows: Second Quarter First Half (In millions) 2019 2018 2019 2018 Service cost $ 2 $ 1 $ 4 $ 2 Interest cost 9 9 18 18 Expected return on plan assets (11 ) (10 ) (21 ) (21 ) Net periodic pension benefit $ — $ — $ 1 $ (1 ) The components of net periodic pension benefit for the Company’s UK pension plan are as follows: Second Quarter First Half (In millions) 2019 2018 2019 2018 Service cost $ — $ — $ — $ — Interest cost 1 1 3 3 Expected return on plan assets (2 ) (2 ) (4 ) (4 ) Net periodic pension benefit $ (1 ) $ (1 ) $ (1 ) $ (1 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets and Liabilities | The following table presents information about financial instruments at the balance sheet dates indicated. June 29, December 29, 2019 2018 Carrying Fair Carrying Fair (In millions) Amount Value Amount Value Financial assets: Timber notes receivable $ 831 $ 831 $ 842 $ 835 Company-owned life insurance 92 92 91 91 Financial liabilities: Recourse debt: Term Loan, due 2022 428 450 463 490 Revenue bonds, due in varying amounts periodically through 2029 186 186 186 184 American & Foreign Power Company, Inc. 5% debentures, due 2030 14 14 14 14 Non-recourse debt — Timber notes 743 743 754 750 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Major Component of Discontinued Operations, Net of Tax | For the first half of 2018, the major components of Discontinued operations, net of tax presented were as follows: Second Quarter First Half (In millions) 2018 2018 Sales $ 21 $ 115 Cost of goods sold and occupancy costs 16 88 Operating expenses 4 21 Restructuring charges 1 1 Other income (expense), net 1 (1 ) Net increase of loss on discontinued operations held for sale — (1 ) Net loss on sale of discontinued operations (3 ) (4 ) Income tax expense (benefit) 1 (6 ) Discontinued operations, net of tax $ (3 ) $ 5 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | Dec. 30, 2018USD ($) | Jun. 29, 2019USD ($) | Mar. 30, 2019USD ($) | Mar. 31, 2018USD ($) | Jun. 29, 2019USD ($)StoreSegment | Dec. 29, 2018USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||||
Number of retail stores | Store | 1,320 | ||||||
Number of reportable segments | Segment | 3 | ||||||
Accounts payable and accrued expenses and other current liabilities not yet presented for payment | $ 22 | $ 22 | $ 27 | ||||
Cash and cash equivalents | 444 | $ 444 | 658 | ||||
Lessee, operating lease, existence of option to extend [true false] | true | ||||||
Operating lease right-of-use assets | 1,380 | $ 1,380 | |||||
Operating lease liabilities | [1] | 1,183 | 1,183 | ||||
Cumulative effect adjustments to accumulated deficit | $ 15 | $ 4 | |||||
Impairment charge, net of tax effect, to ROU assets | $ 13 | $ 39 | |||||
Accounting Standards Update 2016-02 | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Operating lease right-of-use assets | $ 1,400 | ||||||
Operating lease liabilities | 1,600 | ||||||
Derecognition of property and equipment, net | 41 | ||||||
Financing obligations derecognized | 39 | ||||||
Cumulative effect adjustments to accumulated deficit | 15 | ||||||
Impairment charge, net of tax effect, to ROU assets | 20 | ||||||
Deferred gain, net of tax effect, related to sales and operating leasebacks | 4 | ||||||
Derecognition of assets and liabilities, net of tax | $ 1 | ||||||
Minimum | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Extend renewal terms of the lease | 5 years | 5 years | |||||
Maximum | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Extend renewal terms of the lease | 25 years | 25 years | |||||
Prepaid Expenses and Other Current Assets | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Restricted cash | $ 2 | $ 2 | $ 2 | ||||
Non-US | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Cash and cash equivalents | $ 151 | $ 151 | |||||
[1] | Operating lease payments include $140 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $3 million of legally binding lease payments for an additional operating lease signed but not yet commenced. This operating lease will commence in fiscal year 2020 with a lease term of 10 years. |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019USD ($)Business | Mar. 30, 2019USD ($)Business | Jun. 29, 2019USD ($)Business | Dec. 29, 2018USD ($) | |
Business Acquisition, Acquisition Related Costs [Line Items] | ||||
Goodwill | $ 939 | $ 939 | $ 914 | |
Contingent consideration, liability, amount recognized | $ 25 | |||
Contingent consideration liability, amount paid | $ 23 | |||
Contingent consideration payments up to amount of acquisition-date liability | 12 | 12 | ||
Contingent consideration payments in excess of acquisition-date liability | 11 | 11 | ||
Contingent consideration liability expected to be paid | $ 2 | |||
Trade Name | ||||
Business Acquisition, Acquisition Related Costs [Line Items] | ||||
Intangible assets acquired | 4 | 4 | ||
Multiple Acquisition | ||||
Business Acquisition, Acquisition Related Costs [Line Items] | ||||
Business combination consideration transferred | 25 | |||
Goodwill | 20 | 20 | ||
Multiple Acquisition | Customer Relationships | ||||
Business Acquisition, Acquisition Related Costs [Line Items] | ||||
Intangible assets acquired | $ 1 | $ 1 | ||
United States | ||||
Business Acquisition, Acquisition Related Costs [Line Items] | ||||
Number of business acquired | Business | 2 | 2 | 4 |
Summary of Major Components of
Summary of Major Components of Merger and Restructuring Expenses, Net (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Merger and transaction related expenses, net | ||||
Severance and retention | $ 3 | $ 1 | $ 5 | |
Transaction and integration | $ 5 | 4 | 12 | 11 |
Facility closure, contract termination, and other expenses, net | 5 | 8 | ||
Total Merger and transaction related expenses, net | 5 | 12 | 13 | 24 |
Restructuring expenses | ||||
Severance | 40 | 40 | ||
Professional fees | 16 | 2 | 19 | 6 |
Facility closure, contract termination, and other expenses, net | 8 | 11 | 1 | |
Total Restructuring expenses | 64 | 2 | 70 | 7 |
Total Merger and restructuring expenses, net | $ 69 | $ 14 | $ 83 | $ 31 |
Merger and Restructuring Acti_3
Merger and Restructuring Activity - Additional Information (Detail) $ in Millions | May 08, 2019USD ($)StoreDistributionCenterandSalesOffice | Jun. 29, 2019USD ($)Store | Jun. 30, 2018USD ($) | Jun. 29, 2019USD ($)Store | Jun. 30, 2018USD ($) |
Business Acquisition [Line Items] | |||||
Transaction and integration | $ 5 | $ 4 | $ 12 | $ 11 | |
Facility closure, contract termination, and other expenses, net | 5 | 8 | |||
Costs to implement restructuring plan | 68 | ||||
Business Acceleration Program | |||||
Business Acquisition [Line Items] | |||||
Number of retail stores planned to be closed | Store | 90 | ||||
Number of other facilities planned to be closed | DistributionCenterandSalesOffice | 9 | ||||
Costs to implement restructuring plan | $ 112 | ||||
Expected restructuring cost, remainder of fiscal 2019 | 85 | ||||
Business Acceleration Program | Cash Expenditures through 2021 | |||||
Business Acquisition [Line Items] | |||||
Costs to implement restructuring plan | 100 | ||||
Business Acceleration Program | Employee Recruitment and Relocation Costs | |||||
Business Acquisition [Line Items] | |||||
Costs to implement restructuring plan | 2 | ||||
Business Acceleration Program | Retail Store and Facility Closure Costs | |||||
Business Acquisition [Line Items] | |||||
Costs to implement restructuring plan | 26 | 3 | |||
Business Acceleration Program | Third-Party Costs | |||||
Business Acquisition [Line Items] | |||||
Costs to implement restructuring plan | 36 | ||||
Business Acceleration Program | Other Costs | |||||
Business Acquisition [Line Items] | |||||
Costs to implement restructuring plan | 8 | 1 | 21 | ||
Business Acceleration Program | Severance cost | |||||
Business Acquisition [Line Items] | |||||
Costs to implement restructuring plan | 40 | 40 | |||
Expected restructuring cost paid | 30 | $ 30 | |||
Business Acceleration Program | Severance cost | Cash | |||||
Business Acquisition [Line Items] | |||||
Expected restructuring cost for fiscal 2019 | $ 70 | ||||
Business Acceleration Program | Third-Party Professional Fees | |||||
Business Acquisition [Line Items] | |||||
Costs to implement restructuring plan | $ 19 | ||||
Comprehensive Business Review | |||||
Business Acquisition [Line Items] | |||||
Number of retail stores closed | Store | 39 | 41 | |||
Additional number of retail stores planned to be close | Store | 16 | ||||
Comprehensive Business Review | Other Costs | |||||
Business Acquisition [Line Items] | |||||
Costs to implement restructuring plan | $ 6 | ||||
OfficeMax Merger | |||||
Business Acquisition [Line Items] | |||||
Transaction and integration | $ 2 | 5 | |||
Facility closure, contract termination, and other expenses, net | $ 3 |
Severance and Facility Closure
Severance and Facility Closure Costs (Detail) - USD ($) $ in Millions | May 08, 2019 | Jun. 29, 2019 | Jun. 29, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Balance as of December 29, 2018 | $ 18 | |||
Charges Incurred | 68 | |||
Cash Payments | (33) | |||
Adjustments | [1] | (13) | ||
Balance as of June 29, 2019 | $ 40 | 40 | ||
Business Acceleration Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges Incurred | $ 112 | |||
Termination benefits | Merger related accruals | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Balance as of December 29, 2018 | 3 | |||
Cash Payments | (2) | |||
Balance as of June 29, 2019 | 1 | 1 | ||
Termination benefits | Comprehensive Business Review | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges Incurred | 1 | |||
Balance as of June 29, 2019 | 1 | 1 | ||
Termination benefits | Business Acceleration Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges Incurred | 40 | |||
Cash Payments | (21) | |||
Balance as of June 29, 2019 | 19 | 19 | ||
Other Costs | Merger related accruals | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Balance as of December 29, 2018 | 10 | |||
Adjustments | [1] | (10) | ||
Other Costs | Comprehensive Business Review | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Balance as of December 29, 2018 | 5 | |||
Charges Incurred | 6 | |||
Cash Payments | (3) | |||
Adjustments | [1] | (3) | ||
Balance as of June 29, 2019 | 5 | 5 | ||
Other Costs | Business Acceleration Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges Incurred | $ 8 | 1 | 21 | |
Cash Payments | (7) | |||
Balance as of June 29, 2019 | $ 14 | $ 14 | ||
[1] | Represents reclassification of operating lease obligations associated with facility closures to Operating lease ROU assets on the Condensed Consolidated Balance Sheet in accordance with the new lease accounting standard. |
Summary of Disaggregated Revenu
Summary of Disaggregated Revenue by Division, Major Product and Service Categories (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Total sales | $ 2,588 | $ 2,628 | $ 5,356 | $ 5,458 |
Products, Supplies | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 1,104 | 1,094 | 2,319 | 2,298 |
Products, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 794 | 828 | 1,649 | 1,767 |
Products, Furniture and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 285 | 274 | 575 | 554 |
Services, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 184 | 225 | 371 | 444 |
Services, Copy Print and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 221 | 207 | 442 | 395 |
Business Solutions Division | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 1,328 | 1,298 | 2,672 | 2,626 |
Business Solutions Division | Products, Supplies | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 745 | 717 | 1,506 | 1,452 |
Business Solutions Division | Products, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 315 | 327 | 639 | 681 |
Business Solutions Division | Products, Furniture and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 189 | 179 | 372 | 351 |
Business Solutions Division | Services, Copy Print and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 79 | 75 | 155 | 142 |
Retail Division | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 1,000 | 1,053 | 2,175 | 2,297 |
Retail Division | Products, Supplies | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 355 | 374 | 807 | 842 |
Retail Division | Products, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 404 | 449 | 872 | 988 |
Retail Division | Products, Furniture and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 95 | 93 | 201 | 201 |
Retail Division | Services, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 7 | 7 | 14 | 16 |
Retail Division | Services, Copy Print and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 139 | 130 | 281 | 250 |
CompuCom Division | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 258 | 277 | 506 | 535 |
CompuCom Division | Products, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 75 | 56 | 137 | 103 |
CompuCom Division | Services, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 181 | 219 | 363 | 429 |
CompuCom Division | Services, Copy Print and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 2 | 2 | 6 | 3 |
Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 2 | 3 | ||
Other | Products, Supplies | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 4 | 3 | 6 | 4 |
Other | Products, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | (4) | 1 | (5) | |
Other | Products, Furniture and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 1 | 2 | 2 | 2 |
Other | Services, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | (4) | $ (1) | $ (6) | $ (1) |
Other | Services, Copy Print and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | $ 1 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | |
Jun. 29, 2019USD ($) | Jun. 29, 2019USD ($)Segment | Dec. 29, 2018USD ($) | |
Number of reportable segments | Segment | 3 | ||
Deferred liability related to loyalty programs | $ 48,000,000 | $ 48,000,000 | $ 52,000,000 |
Recognition of contract assets as a result of business combination | 0 | 0 | |
Revenue recognition included in short-term contract liabilities | 22,000,000 | ||
Recognition of contract liabilities as a result of business combination | 0 | 0 | |
Significant adjustment to revenue from performance obligations | 0 | 0 | |
Contract with customer, asset, reclassified to receivable | 0 | 0 | |
Capitalized acquisition cost | 40,000,000 | 40,000,000 | |
Capitalized contract cost, amortization | 8,000,000 | 17,000,000 | |
Capitalized contract cost, impairment loss | 0 | 0 | |
Impairment charges related to contract assets | 16,000,000 | 45,000,000 | |
Contract Assets | |||
Impairment charges related to contract assets | 0 | 0 | |
Accrued Expenses and Other Current Liabilities | |||
Deferred liability related to loyalty programs | $ 11,000,000 | $ 11,000,000 |
Summary of Receivables, Contrac
Summary of Receivables, Contract Assets and Contract Liabilities from Contracts with Customers (Detail) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 29, 2018 |
Contract With Customer Asset And Liability [Abstract] | ||
Trade receivables, net | $ 632 | $ 655 |
Short-term contract assets | 25 | 22 |
Long-term contract assets | 15 | 17 |
Short-term contract liabilities | 48 | 52 |
Long-term contract liabilities | $ 1 | $ 1 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 29, 2019USD ($)Segment | Jun. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | 3 | |||
Number of operating segments | 3 | |||
Intersegment Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ | $ 3 | $ 5 | $ 6 | $ 6 |
Reconciliation of Revenue from
Reconciliation of Revenue from Segments to Consolidated (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 2,588 | $ 2,628 | $ 5,356 | $ 5,458 |
Business Solutions Division | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,328 | 1,298 | 2,672 | 2,626 |
Retail Division | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,000 | 1,053 | 2,175 | 2,297 |
CompuCom Division | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 258 | $ 277 | 506 | $ 535 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Sales | $ 2 | $ 3 |
Division Operating Income (Deta
Division Operating Income (Detail) - Operating Segments - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Division Operating Income (Loss) | $ 96 | $ 95 | $ 195 | $ 227 |
Business Solutions Division | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Division Operating Income (Loss) | 86 | 67 | 132 | 122 |
Retail Division | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Division Operating Income (Loss) | 9 | 22 | 76 | 94 |
CompuCom Division | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Division Operating Income (Loss) | $ 1 | $ 6 | $ (13) | 12 |
Other | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Division Operating Income (Loss) | $ (1) |
Reconciliation of Measure of Di
Reconciliation of Measure of Division Operating Income to Consolidated Income Before Income Taxes (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Total Divisions operating income | $ (15) | $ 48 | $ 9 | $ 125 |
Asset impairments | (16) | (45) | ||
Merger and restructuring expenses, net | (69) | (14) | (83) | (31) |
Unallocated expenses | (26) | (33) | (58) | (71) |
Interest income | 5 | 6 | 11 | 12 |
Interest expense | (23) | (31) | (46) | (60) |
Other income, net | 2 | 5 | 5 | 6 |
Income (loss) from continuing operations before income taxes | (31) | 28 | (21) | 83 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Divisions operating income | $ 96 | $ 95 | $ 195 | $ 227 |
Schedule of Goodwill by Segment
Schedule of Goodwill by Segment (Detail) $ in Millions | 6 Months Ended |
Jun. 29, 2019USD ($) | |
Goodwill [Line Items] | |
Balance as of December 29, 2018 | $ 914 |
Acquisitions | 20 |
Foreign currency rate impact | 5 |
Balance as of June 29, 2019 | 939 |
Operating Segments | Business Solutions Division | |
Goodwill [Line Items] | |
Balance as of December 29, 2018 | 387 |
Acquisitions | 20 |
Balance as of June 29, 2019 | 407 |
Operating Segments | Retail Division | |
Goodwill [Line Items] | |
Balance as of December 29, 2018 | 78 |
Balance as of June 29, 2019 | 78 |
Operating Segments | CompuCom Division | |
Goodwill [Line Items] | |
Balance as of December 29, 2018 | 449 |
Foreign currency rate impact | 5 |
Balance as of June 29, 2019 | $ 454 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2020 | Jun. 29, 2019 | Mar. 30, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Income Taxes [Line Items] | ||||||
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 21.00% | 21.00% | ||||
Effective tax rate | 23.00% | 32.00% | 24.00% | 37.00% | ||
Tax cuts and jobs act, alternative minimum tax, tax year description | For tax years 2018 through 2020, taxpayers may receive 50% of their uncredited balances as a cash refund with any remaining amounts refunded in full in 2021 | |||||
Tax cuts and jobs act, alternative minimum tax, percentage of uncredited balances received by taxpayers | 50.00% | |||||
Tax cuts and jobs act, alternative minimum tax, reclassified amount from non-current deferred tax assets to income tax receivables | $ 45 | |||||
Maximum | Scenario Forecast | ||||||
Income Taxes [Line Items] | ||||||
Tax cuts and jobs act, alternative minimum tax, credits refunded | $ 45 |
Calculation of Net Earnings (Lo
Calculation of Net Earnings (Loss) Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2019 | Mar. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Basic Earnings (Loss) Per Share | ||||||
Net income (loss) from continuing operations | $ (24) | $ 19 | $ (16) | $ 52 | ||
Income from discontinued operations, net of tax | (3) | 5 | ||||
Net income (loss) | $ (24) | $ 8 | $ 16 | $ 41 | $ (16) | $ 57 |
Weighted-average shares outstanding | 546 | 557 | 544 | 556 | ||
Continuing operations | $ (0.04) | $ 0.03 | $ (0.03) | $ 0.09 | ||
Discontinued operations | 0.01 | |||||
Net basic earnings (loss) per common share | $ (0.04) | $ 0.03 | $ (0.03) | $ 0.10 | ||
Diluted Earnings (Loss) Per Share | ||||||
Net income (loss) from continuing operations | $ (24) | $ 19 | $ (16) | $ 52 | ||
Income from discontinued operations, net of tax | (3) | 5 | ||||
Net income (loss) | $ (24) | $ 8 | $ 16 | $ 41 | $ (16) | $ 57 |
Weighted-average shares outstanding | 546 | 557 | 544 | 556 | ||
Stock options and restricted stock | 3 | 8 | 8 | 8 | ||
Diluted weighted-average shares outstanding | 549 | 565 | 552 | 564 | ||
Continuing operations | $ (0.04) | $ 0.03 | $ (0.03) | $ 0.09 | ||
Discontinued operations | 0.01 | |||||
Net diluted earnings (loss) per common share | $ (0.04) | $ 0.03 | $ (0.03) | $ 0.10 |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Nonvested Stock Options and Shares | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Shares excluded from computation of diluted earnings per share | 10 | 7 | 8 | 7 |
Components of Lease Expense (De
Components of Lease Expense (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 29, 2019 | Jun. 29, 2019 | |
Finance lease cost: | ||
Amortization of right-of-use assets | $ 4 | $ 8 |
Interest on lease liabilities | 1 | 2 |
Operating lease cost | 109 | 220 |
Short-term lease cost | 3 | |
Variable lease cost | 32 | 65 |
Sublease income | (1) | (1) |
Total lease cost | $ 145 | $ 297 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information Related to Leases (Detail) $ in Millions | 6 Months Ended |
Jun. 29, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from finance leases | $ 2 |
Operating cash flows from operating leases | 246 |
Financing cash flows from finance leases | 9 |
Right-of-use assets obtained in exchange for new finance lease liabilities | 12 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 130 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information Related to Leases (Detail) $ in Millions | Jun. 29, 2019USD ($) | |
Leases [Line Items] | ||
Operating lease right-of-use assets | $ 1,380 | |
Operating lease liabilities | $ 1,183 | [1] |
Weighted-average remaining lease term – finance leases | 5 years | |
Weighted-average remaining lease term – operating leases | 5 years | |
Weighted-average discount rate – finance leases | 6.60% | |
Weighted-average discount rate – operating leases | 7.00% | |
Property and Equipment, Net | ||
Leases [Line Items] | ||
Finance lease right-of-use assets | $ 48 | |
Accrued Expenses and Other Current Liabilities | ||
Leases [Line Items] | ||
Operating Leases liability, Current | 378 | [1] |
Short-Term Borrowings and Current Maturities of Long-Term Debt | ||
Leases [Line Items] | ||
Finance Leases, Current | 17 | [2] |
Long-Term Debt, Net of Current Maturities | ||
Leases [Line Items] | ||
Finance Leases, Non-current | $ 57 | [2] |
[1] | Operating lease payments include $140 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $3 million of legally binding lease payments for an additional operating lease signed but not yet commenced. This operating lease will commence in fiscal year 2020 with a lease term of 10 years. | |
[2] | Finance lease payments exclude $8 million of legally binding lease payments for an additional finance lease signed but not yet commenced. This finance lease will commence in fiscal year 2019 with a lease term of 3 years. |
Schedule of Maturities of Lease
Schedule of Maturities of Lease Liabilities Under Operating and Finance Leases (Detail) $ in Millions | Jun. 29, 2019USD ($) | |
Leases [Line Items] | ||
2019 (excluding the first half of 2019) | $ 237 | [1] |
Operating leases, 2020 | 424 | [1] |
Operating leases, 2021 | 340 | [1] |
Operating leases, 2022 | 272 | [1] |
Operating leases, 2023 | 207 | [1] |
Operating leases, Thereafter | 416 | [1] |
Operating leases, Total minimum payments | 1,896 | [1] |
Operating Leases, Less imputed interest | (335) | [1] |
Operating Leases, Total | 1,561 | [1] |
Operating lease liabilities | 1,183 | [1] |
2019 (excluding the first half of 2019) | 12 | [2] |
Finance Leases, 2020 | 18 | [2] |
Finance Leases, 2021 | 17 | [2] |
Finance Leases, 2022 | 14 | [2] |
Finance Leases, 2023 | 12 | [2] |
Finance Leases, Thereafter | 15 | [2] |
Finance leases, Total minimum payments | 88 | [2] |
Finance Leases, Less imputed interest | (14) | [2] |
Finance Leases, Total | 74 | [2] |
Accrued Expenses and Other Current Liabilities | ||
Leases [Line Items] | ||
Operating Leases, Current | 378 | [1] |
Short-Term Borrowings and Current Maturities of Long-Term Debt | ||
Leases [Line Items] | ||
Finance Leases, Current | 17 | [2] |
Long-Term Debt, Net of Current Maturities | ||
Leases [Line Items] | ||
Finance Leases, Non-current | $ 57 | [2] |
[1] | Operating lease payments include $140 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $3 million of legally binding lease payments for an additional operating lease signed but not yet commenced. This operating lease will commence in fiscal year 2020 with a lease term of 10 years. | |
[2] | Finance lease payments exclude $8 million of legally binding lease payments for an additional finance lease signed but not yet commenced. This finance lease will commence in fiscal year 2019 with a lease term of 3 years. |
Schedule of Maturities of Lea_2
Schedule of Maturities of Lease Liabilities Under Operating and Finance Leases (Parenthetical) (Detail) $ in Millions | 6 Months Ended |
Jun. 29, 2019USD ($) | |
Leases [Line Items] | |
Operating cash flows from operating leases | $ 246 |
Operating Lease, term | 10 years |
Legally binding lease payments excluded from finance lease payments | $ 8 |
Finance Lease, term | 3 years |
Options | |
Leases [Line Items] | |
Operating cash flows from operating leases | $ 140 |
Legally Binding Lease Payments | |
Leases [Line Items] | |
Operating cash flows from operating leases | $ 3 |
Future Minimum Lease Payments d
Future Minimum Lease Payments due under Non-Cancelable Portions of Leases (Detail) $ in Millions | Dec. 29, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 466 |
2020 | 374 |
2021 | 285 |
2022 | 214 |
2023 | 144 |
Thereafter | 235 |
Total before sublease income | 1,718 |
Less sublease income | (11) |
Total | $ 1,707 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Nov. 08, 2017 | May 31, 2011 | Jun. 29, 2019 |
Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Senior secured term loan | $ 750,000,000 | ||
Long term debt, due date | Nov. 8, 2022 | ||
Amended Credit Agreement | |||
Debt Instrument [Line Items] | |||
Long term debt, due date | May 13, 2021 | ||
Expiration period under the new Facility | 5 years | ||
Maximum borrowing capacity under revolving credit facility | $ 1,200,000,000 | ||
Available credit under the Facility | $ 999,000,000 | ||
Amount outstanding under letters of credit | 65,000,000 | ||
Average borrowings under the Facility | $ 0 | ||
Non-Recourse Debt | |||
Debt Instrument [Line Items] | |||
Long term debt, due date | Oct. 31, 2019 | ||
Non-Recourse Debt | Timber Note Receivable | |||
Debt Instrument [Line Items] | |||
Long term debt, due date | Jan. 29, 2020 | ||
Non-Recourse Debt | Minimum | |||
Debt Instrument [Line Items] | |||
Long term debt, interest rate | 7.42% | ||
Non-Recourse Debt | Maximum | |||
Debt Instrument [Line Items] | |||
Long term debt, interest rate | 13.00% | ||
Non-Recourse Debt | LIBOR | |||
Debt Instrument [Line Items] | |||
Long-term debt, basis spread on variable rate | 2.55% |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) Activity, Net of Tax (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2019 | Mar. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance | $ 2,106 | $ 2,126 | $ 2,157 | $ 2,120 | $ 2,126 | $ 2,120 |
Other comprehensive income (loss) | 5 | 11 | (3) | 14 | 16 | 11 |
Balance | 2,082 | 2,106 | 2,156 | 2,157 | 2,082 | 2,156 |
Foreign Currency Translation Adjustments | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance | (50) | (50) | ||||
Other comprehensive income (loss) | 15 | |||||
Balance | (35) | (35) | ||||
Change in Deferred Pension and Other | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance | (49) | (49) | ||||
Other comprehensive income (loss) | 1 | |||||
Balance | (48) | (48) | ||||
Accumulated Other Comprehensive Income (Loss) | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance | (88) | (99) | (64) | (78) | (99) | (78) |
Other comprehensive income (loss) | 5 | 11 | (3) | 14 | 16 | |
Balance | $ (83) | $ (88) | $ (67) | $ (64) | $ (83) | $ (67) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019 | Mar. 30, 2019 | Jun. 29, 2019 | Jun. 30, 2018 | Nov. 30, 2018 | |
Shareholders Equity [Line Items] | |||||
Stock repurchase program, shares purchased | 4,000,000 | ||||
Stock repurchase program, shares purchased at cost excluding commissions | $ 10,000,000 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 90,000,000 | $ 90,000,000 | |||
Common stock repurchased | 0 | ||||
Dividend on common stock | $ 0.025 | ||||
Payments of ordinary dividends, common stock | $ 13,000,000 | $ 27,000,000 | $ 28,000,000 | ||
Maximum | |||||
Shareholders Equity [Line Items] | |||||
Stock repurchase program, authorized amount | $ 100,000,000 |
Components of Net Periodic Pens
Components of Net Periodic Pension Expense (Benefit) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
North America | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 2 | $ 1 | $ 4 | $ 2 |
Interest cost | 9 | 9 | 18 | 18 |
Expected return on plan assets | (11) | (10) | (21) | (21) |
Net periodic pension benefit | 1 | (1) | ||
United Kingdom | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 1 | 1 | 3 | 3 |
Expected return on plan assets | (2) | (2) | (4) | (4) |
Net periodic pension benefit | $ (1) | $ (1) | $ (1) | $ (1) |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jun. 29, 2019USD ($) | |
North America | |
Defined Benefit Plan Disclosure [Line Items] | |
Pension and other postretirement contributions, remainder of fiscal year | $ 1 |
Pension and other postretirement contributions, current period | 1 |
United Kingdom | |
Defined Benefit Plan Disclosure [Line Items] | |
Pension and other postretirement contributions, remainder of fiscal year | 1 |
Pension and other postretirement contributions, current period | $ 1 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 29, 2019 | Jun. 29, 2019 | Dec. 29, 2018 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Asset impairment charges | $ 16,000,000 | $ 45,000,000 | |
Impairment of operating lease ROU assets | $ 13,000,000 | $ 39,000,000 | |
Retail Stores | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Percentage used for analysis | 5.00% | 5.00% | |
Derivative Foreign Currency and Fuel Contract | Maximum | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Accrued expenses and other current liabilities | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 |
Schedule of Fair Value of Asset
Schedule of Fair Value of Assets and Liabilities (Detail) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 29, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Timber notes receivable | $ 831 | $ 835 |
Company-owned life insurance | 92 | 91 |
Non-Recourse Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 743 | 750 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Timber notes receivable | 831 | 842 |
Company-owned life insurance | 92 | 91 |
Carrying Amount | Non-Recourse Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 743 | 754 |
Term Loan, due 2022 | Recourse Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 450 | 490 |
Term Loan, due 2022 | Carrying Amount | Recourse Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 428 | 463 |
Revenue bonds, due in varying amounts periodically through 2029 | Recourse Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 186 | 184 |
Revenue bonds, due in varying amounts periodically through 2029 | Carrying Amount | Recourse Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 186 | 186 |
American & Foreign Power Company, Inc. 5% debentures, due 2030 | Recourse Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 14 | 14 |
American & Foreign Power Company, Inc. 5% debentures, due 2030 | Carrying Amount | Recourse Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 14 | $ 14 |
Schedule of Fair Value of Ass_2
Schedule of Fair Value of Assets and Liabilities (Parenthetical) (Detail) - Recourse Debt | 3 Months Ended | 6 Months Ended |
Dec. 29, 2018 | Jun. 29, 2019 | |
Carrying Amount | Term Loan, due 2022 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2022 | 2022 |
Carrying Amount | Revenue bonds, due in varying amounts periodically through 2029 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2029 | 2029 |
Carrying Amount | American & Foreign Power Company, Inc. 5% debentures, due 2030 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2030 | 2030 |
Long-term debt, interest rate | 5.00% | 5.00% |
Fair Value | Term Loan, due 2022 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2022 | 2022 |
Fair Value | Revenue bonds, due in varying amounts periodically through 2029 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2029 | 2029 |
Fair Value | American & Foreign Power Company, Inc. 5% debentures, due 2030 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2030 | 2030 |
Long-term debt, interest rate | 5.00% | 5.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | Mar. 29, 2019 | Jun. 29, 2019 |
Commitments and Contingencies Disclosure [Line Items] | ||
Payments for legal settlements | $ 25 | |
Minimum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Losses for environmental liabilities | $ 10 | |
Maximum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Losses for environmental liabilities | $ 20 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) | 3 Months Ended |
Sep. 24, 2016Group | |
Discontinued Operations And Disposal Groups [Abstract] | |
Number of disposal groups | 4 |
Major Component of Discontinued
Major Component of Discontinued Operations, Net of Tax (Detail) - Discontinued Operations, Held-for-Sale - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Sales | $ 21 | $ 115 |
Cost of goods sold and occupancy costs | 16 | 88 |
Operating expenses | 4 | 21 |
Restructuring charges | 1 | 1 |
Other income (expense), net | 1 | (1) |
Net increase of loss on discontinued operations held for sale | (1) | |
Net loss on sale of discontinued operations | (3) | (4) |
Income tax expense (benefit) | 1 | (6) |
Discontinued operations, net of tax | $ (3) | $ 5 |