Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 26, 2021 | Jul. 28, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 26, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ODP | |
Entity Registrant Name | The ODP Corporation | |
Entity Central Index Key | 0000800240 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-25 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 53,328,218 | |
Entity Shell Company | false | |
Entity File Number | 1-10948 | |
Entity Tax Identification Number | 85-1457062 | |
Entity Address, Address Line One | 6600 North Military Trail | |
Entity Address, City or Town | Boca Raton | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33496 | |
City Area Code | 561 | |
Local Phone Number | 438-4800 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | |
Sales: | ||||
Total sales | $ 2,286 | $ 2,158 | $ 4,652 | $ 4,883 |
Cost of goods and occupancy costs: | ||||
Total cost of goods and occupancy costs | 1,814 | 1,742 | 3,646 | 3,837 |
Gross profit | 472 | 416 | 1,006 | 1,046 |
Selling, general and administrative expenses | 428 | 406 | 880 | 928 |
Asset impairments | 115 | 401 | 127 | 413 |
Merger, restructuring and other operating expenses, net | 7 | 65 | 21 | 81 |
Operating loss | (78) | (456) | (22) | (376) |
Other income (expense): | ||||
Interest income | 3 | |||
Interest expense | (6) | (11) | (14) | (29) |
Loss on extinguishment and modification of debt | (12) | (12) | ||
Other income, net | 5 | 4 | 16 | 5 |
Loss before income taxes | (79) | (475) | (20) | (409) |
Income tax expense (benefit) | 9 | (36) | 15 | (15) |
Net loss | $ (88) | $ (439) | $ (35) | $ (394) |
Loss per share | ||||
Basic | $ (1.62) | $ (8.34) | $ (0.65) | $ (7.46) |
Diluted | $ (1.62) | $ (8.19) | $ (0.65) | $ (7.31) |
Product | ||||
Sales: | ||||
Total sales | $ 1,961 | $ 1,857 | $ 4,012 | $ 4,194 |
Cost of goods and occupancy costs: | ||||
Total cost of goods and occupancy costs | 1,590 | 1,531 | 3,199 | 3,358 |
Service | ||||
Sales: | ||||
Total sales | 325 | 301 | 640 | 689 |
Cost of goods and occupancy costs: | ||||
Total cost of goods and occupancy costs | $ 224 | $ 211 | $ 447 | $ 479 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss | $ (88) | $ (439) | $ (35) | $ (394) |
Other comprehensive income (loss), net of tax, where applicable: | ||||
Foreign currency translation adjustments | 4 | 13 | 9 | (28) |
Other | 1 | 1 | (1) | |
Total other comprehensive income (loss), net of tax, where applicable | 5 | 13 | 10 | (29) |
Comprehensive loss | $ (83) | $ (426) | $ (25) | $ (423) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 26, 2021 | Dec. 26, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 691 | $ 729 |
Receivables, net | 681 | 631 |
Inventories | 957 | 930 |
Prepaid expenses and other current assets | 82 | 65 |
Total current assets | 2,411 | 2,355 |
Property and equipment, net | 533 | 576 |
Operating lease right-of-use assets | 1,053 | 1,170 |
Goodwill | 575 | 609 |
Other intangible assets, net | 341 | 357 |
Deferred income taxes | 151 | 162 |
Other assets | 314 | 329 |
Total assets | 5,378 | 5,558 |
Current liabilities: | ||
Trade accounts payable | 979 | 919 |
Accrued expenses and other current liabilities | 1,089 | 1,138 |
Income taxes payable | 10 | 12 |
Short-term borrowings and current maturities of long-term debt | 22 | 24 |
Total current liabilities | 2,100 | 2,093 |
Deferred income taxes and other long-term liabilities | 193 | 197 |
Pension and postretirement obligations, net | 38 | 43 |
Long-term debt, net of current maturities | 337 | 354 |
Operating lease liabilities | 869 | 991 |
Total liabilities | 3,537 | 3,678 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock — authorized 80,000,000 shares of $0.01 par value; issued shares — 64,623,396 at June 26, 2021 and 62,551,255 at December 26, 2020; outstanding shares — 53,747,179 at June 26, 2021 and 52,694,062 at December 26, 2020 | 1 | 1 |
Additional paid-in capital | 2,707 | 2,675 |
Accumulated other comprehensive loss | (22) | (32) |
Accumulated deficit | (444) | (409) |
Treasury stock, at cost — 10,876,217 shares at June 26, 2021 and 9,857,193 shares at December 26, 2020 | (401) | (355) |
Total stockholders' equity | 1,841 | 1,880 |
Total liabilities and stockholders’ equity | $ 5,378 | $ 5,558 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 26, 2021 | Dec. 26, 2020 |
Statement Of Financial Position [Abstract] | ||
Common stock, authorized | 80,000,000 | 80,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, issued shares | 64,623,396 | 62,551,255 |
Common stock, shares, outstanding | 53,747,179 | 52,694,062 |
Treasury stock, shares | 10,876,217 | 9,857,193 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 26, 2021 | Jun. 27, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (35) | $ (394) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 89 | 97 |
Charges for losses on receivables and inventories | 10 | 16 |
Asset impairments | 127 | 413 |
(Gain) loss on disposition of assets, net | (3) | 5 |
Loss on extinguishment and modification of debt | 12 | |
Compensation expense for share-based payments | 20 | 16 |
Deferred income taxes and deferred tax asset valuation allowances | 6 | (3) |
Changes in working capital and other operating activities | (139) | 18 |
Net cash provided by operating activities | 75 | 180 |
Cash flows from investing activities: | ||
Capital expenditures | (29) | (40) |
Businesses acquired, net of cash acquired | (28) | (18) |
Proceeds from collection of notes receivable | 818 | |
Proceeds from disposition of assets | 3 | 1 |
Settlement of company-owned life insurance policies | 21 | 1 |
Net cash provided by (used in) investing activities | (33) | 762 |
Cash flows from financing activities: | ||
Net payments on long and short-term borrowings | (13) | (30) |
Debt retirement | (1,187) | |
Debt issuance | 400 | |
Cash dividends on common stock | (13) | |
Share purchases for taxes, net of proceeds from employee share-based transactions | (23) | (5) |
Repurchase of common stock for treasury | (46) | (30) |
Other financing activities | (1) | (7) |
Net cash used in financing activities | (83) | (872) |
Effect of exchange rate changes on cash and cash equivalents | 3 | (6) |
Net increase (decrease) in cash and cash equivalents | (38) | 64 |
Cash, cash equivalents and restricted cash at beginning of period | 729 | 700 |
Cash, cash equivalents and restricted cash at end of period | 691 | 764 |
Supplemental information on non-cash investing and financing activities | ||
Right-of-use assets obtained in exchange for new finance lease liabilities | 2 | 3 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 39 | $ 63 |
Business acquired in exchange for common stock issuance | $ 35 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Millions | Total | BuyerQuest Acquisition | Adjustment for Adoption of Accounting Standard | Common Stock | Common StockBuyerQuest Acquisition | Additional Paid-in Capital | Additional Paid-in CapitalBuyerQuest Acquisition | Accumulated Other Comprehensive Loss | Accumulated Deficit | Accumulated DeficitAdjustment for Adoption of Accounting Standard | Treasury Stock |
Balance at Dec. 28, 2019 | $ 2,173 | $ (1) | $ 1 | $ 2,652 | $ (66) | $ (89) | $ (1) | $ (325) | |||
Balance, Shares at Dec. 28, 2019 | 62,042,477 | ||||||||||
Net income (loss) | 45 | 45 | |||||||||
Other comprehensive income (loss) | (42) | (42) | |||||||||
Exercise and release of incentive stock (including income tax benefits and withholding) | (4) | (4) | |||||||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 426,591 | ||||||||||
Amortization of long-term incentive stock grants | 7 | 7 | |||||||||
Dividends paid on common stock | (13) | (13) | |||||||||
Repurchase of common stock | (30) | (30) | |||||||||
Balance at Mar. 28, 2020 | 2,135 | $ 1 | 2,642 | (108) | (45) | (355) | |||||
Balance, Shares at Mar. 28, 2020 | 62,469,068 | ||||||||||
Balance at Dec. 28, 2019 | 2,173 | $ (1) | $ 1 | 2,652 | (66) | (89) | $ (1) | (325) | |||
Balance, Shares at Dec. 28, 2019 | 62,042,477 | ||||||||||
Net income (loss) | (394) | ||||||||||
Other comprehensive income (loss) | (29) | ||||||||||
Balance at Jun. 27, 2020 | 1,717 | $ 1 | 2,650 | (95) | (484) | (355) | |||||
Balance, Shares at Jun. 27, 2020 | 62,514,546 | ||||||||||
Balance at Mar. 28, 2020 | 2,135 | $ 1 | 2,642 | (108) | (45) | (355) | |||||
Balance, Shares at Mar. 28, 2020 | 62,469,068 | ||||||||||
Net income (loss) | (439) | (439) | |||||||||
Other comprehensive income (loss) | 13 | 13 | |||||||||
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) | 45,478 | ||||||||||
Amortization of long-term incentive stock grants | 9 | 9 | |||||||||
Balance at Jun. 27, 2020 | 1,717 | $ 1 | 2,650 | (95) | (484) | (355) | |||||
Balance, Shares at Jun. 27, 2020 | 62,514,546 | ||||||||||
Balance at Dec. 26, 2020 | 1,880 | $ 1 | 2,675 | (32) | (409) | (355) | |||||
Balance, Shares at Dec. 26, 2020 | 62,551,255 | ||||||||||
Net income (loss) | 53 | 53 | |||||||||
Other comprehensive income (loss) | 5 | 5 | |||||||||
Exercise and release of incentive stock (including income tax benefits and withholding) | (23) | (23) | |||||||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 1,225,876 | ||||||||||
Amortization of long-term incentive stock grants | 10 | 10 | |||||||||
Common stock issuance related to the BuyerQuest acquisition | $ 35 | $ 35 | |||||||||
Common stock issuance related to the BuyerQuest acquisition, (in shares) | 827,498 | ||||||||||
Balance at Mar. 27, 2021 | 1,960 | $ 1 | 2,697 | (27) | (356) | (355) | |||||
Balance, Shares at Mar. 27, 2021 | 64,604,629 | ||||||||||
Balance at Dec. 26, 2020 | 1,880 | $ 1 | 2,675 | (32) | (409) | (355) | |||||
Balance, Shares at Dec. 26, 2020 | 62,551,255 | ||||||||||
Net income (loss) | (35) | ||||||||||
Other comprehensive income (loss) | 10 | ||||||||||
Repurchase of common stock | (46) | ||||||||||
Balance at Jun. 26, 2021 | 1,841 | $ 1 | 2,707 | (22) | (444) | (401) | |||||
Balance, Shares at Jun. 26, 2021 | 64,623,396 | ||||||||||
Balance at Mar. 27, 2021 | 1,960 | $ 1 | 2,697 | (27) | (356) | (355) | |||||
Balance, Shares at Mar. 27, 2021 | 64,604,629 | ||||||||||
Net income (loss) | (88) | (88) | |||||||||
Other comprehensive income (loss) | 5 | 5 | |||||||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 18,767 | ||||||||||
Amortization of long-term incentive stock grants | 10 | 10 | |||||||||
Repurchase of common stock | (46) | (46) | |||||||||
Balance at Jun. 26, 2021 | $ 1,841 | $ 1 | $ 2,707 | $ (22) | $ (444) | $ (401) | |||||
Balance, Shares at Jun. 26, 2021 | 64,623,396 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) | 3 Months Ended |
Mar. 28, 2020$ / shares | |
Statement Of Stockholders Equity [Abstract] | |
Dividend paid on common stock, per share | $ 0.25 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 26, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The ODP Corporation, including its consolidated subsidiaries (“ODP” or the “Company”), At June 26, 2021, the Company had three reportable segments (or “Divisions”): Business Solutions Division, Retail Division and CompuCom Division. The Condensed Consolidated Financial Statements as of June 26, 2021, and for the 13-week and 26-week periods ended June 26, 2021 (also referred to as the “second quarter of 2021” and the “first half of 2021,” respectively) and June 27, 2020 (also referred to as the “second quarter of 2020” and the “first half of 2020,” 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 2020 and 2021 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 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 2020 Form 10-K. These interim results are not necessarily indicative of the results that should be expected for the full year. PLANNED SEPARATION OF CONSUMER BUSINESS As previously announced, in May 2021, the Company’s Board of Directors unanimously approved a plan to pursue a separation of the Company into two independent, publicly traded companies. When the plan was announced, the Company expected to structure it as a tax-free spin-off of the Company’s B2B related operations. Following further review, the Company determined that it should utilize the flexibility created by the holding company reorganization in 2020 to structure the separation as a tax-free spin-off of the Company’s consumer business, with the Company retaining its B2B related operations (the “Separation”), as further described below. The Company believes that this modified approach will be more efficient considering that it is expected that the majority of the Company’s current management team and Directors will remain with the B2B business which will continue to be owned by “The ODP Corporation.” Each company is expected to have a unique and highly focused strategy and investment profile, as follows: • ODP – a leading B2B solutions provider serving small, medium and enterprise level companies, mainly consisting of the contract sales channel of the Business Solutions Division, which includes operations in Canada and the independent regional office supply distribution businesses within the U.S. that the Company has been acquiring since 2017. ODP will also own the newly formed B2B digital platform technology business, including BuyerQuest, as well as the Company’s global sourcing office, and its other sourcing, supply chain and logistics assets; and • NewCo – an Office Depot branded leading provider of retail consumer and small business products and services distributed via approximately 1,100 Office Depot and OfficeMax retail locations and an eCommerce presence, officedepot.com The Separation is expected to allow ODP and NewCo to pursue market opportunities and separate growth strategies, and improve value for shareholders and stakeholders. While ODP and NewCo will be separate, independent companies, they will share commercial agreements that will allow them to continue to leverage scale benefits in such areas as product sourcing and supply chain. The Separation is expected to occur through a tax-free stock dividend of shares of NewCo to ODP’s shareholders as of a record date to be determined by the Company’s Board of Directors, after which ODP shareholders will own 100% of the equity in both of the publicly traded companies. The Separation is intended to be completed during the first half of 2022, subject to customary conditions, including final approval by the Company’s Board of Directors, opinions from tax counsel and a favorable ruling by the IRS on the tax-free nature of the transaction to the Company and to its shareholders, the filing and effectiveness of a registration statement with the U.S. Securities and Exchange Commission, the approved listing of NewCo’s common stock on a national securities exchange and the completion of any necessary financings. There can be no assurances regarding the ultimate timing of the Separation or that the transaction will be completed. In addition, on June 29, 2021, the Company’s Board of Directors provided their alignment with management’s commitment to a plan to sell its CompuCom Division through a single disposal group. Refer to Note 13 for additional information. 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. Amounts not yet presented for payment to zero balance disbursement accounts of $13 million and $23 million at June 26, 2021 and December 26, 2020, respectively, are presented in Trade accounts payable and Accrued expenses and other current liabilities. At June 26, 2021 and December 26, 2020, cash and cash equivalents held outside the United States amounted to $151 million and $159 million, respectively. 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. There was no restricted cash at both June 26, 2021 and December 26, 2020. NEW ACCOUNTING STANDARDS Standards that were adopted: Defined benefit plan : In August 2018, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update that modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The Company adopted this accounting standards update on the first day of the first quarter of 2021 with no material impact on its Condensed Consolidated Financial Statements. Income Taxes : In December 2019, the FASB issued an accounting standards update that simplifies the accounting for income taxes by eliminating certain exceptions to the guidance related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The accounting standards update also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The Company adopted this accounting standards update on the first day of the first quarter of 2021 with no material impact on its Condensed Consolidated Financial Statements. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 26, 2021 | |
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 is evolving its B2B business to include a new digital procurement platform focused on transforming the B2B procurement and sourcing industry. On January 29, 2021, in connection with the Company’s development efforts in this area, the Company acquired BuyerQuest Holdings, Inc. (“BuyerQuest”), a business services software company with an eProcurement platform for approximately $71 million, subject to customary post-closing adjustments. The purchase consideration for BuyerQuest includes $61 million paid at closing, funded with $26 million of cash on hand and the issuance of 827,498 shares of the Company’s common stock, and up to $10 million contingent consideration that will be payable over a two-year As part of its transformation, the Company continues to acquire profitable regional office supply distribution businesses to expand its reach and distribution network into geographic areas that were previously underserved. During the first half of 2021, the Company acquired one small independent regional office supply distribution business for approximately $2 million funded with cash on hand, subject to customary post-closing adjustments. The acquisitions were treated as purchases in accordance with ASC 805, Business Combinations (“ASC 805”) which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transactions including goodwill and other intangible assets. The Company has performed a preliminary purchase price allocation of the aggregate purchase price to the estimated fair values of assets and liabilities acquired in the transactions. The preliminary purchase price allocation for BuyerQuest includes $6 million of technology intangible assets and $67 million of goodwill. The preliminary purchase price allocation for the acquired office supply distribution business includes $1 million of goodwill. An immaterial amount of the aggregate purchase price was allocated to working capital accounts. These assets and liabilities are included in the Condensed Consolidated Balance Sheet as of June 26, 2021. As additional information is obtained about these assets and liabilities within the measurement period (not to exceed one year from the dates of acquisition), the Company will refine its estimates of fair value to allocate the purchase price. The operating results of the acquired businesses are combined with the Company’s operating results subsequent to their purchase dates. The operating results of the acquired office supply distribution business are included in the Business Solutions Division, and the operating results of BuyerQuest are included in Other, as described in Note 5. Certain disclosures set forth under ASC 805, including supplemental pro forma financial information, are not disclosed because the operating results of the acquired businesses, individually and in the aggregate, are not material to the Company. Based on new information received, the preliminary purchase price allocations of the companies acquired in 2020 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 2020 closed within the first half of 2021. Under the business combinations accounting guidance, 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, restructuring and other operating expenses, net line in the Condensed Consolidated Statements of Operations. Refer to Note 3 for additional information about the merger, restructuring and other operating expenses incurred during the second quarter and first half of 2021. |
MERGER, RESTRUCTURING AND OTHER
MERGER, RESTRUCTURING AND OTHER ACTIVITY | 6 Months Ended |
Jun. 26, 2021 | |
Merger Restructuring And Other Activity [Abstract] | |
MERGER, RESTRUCTURING AND OTHER ACTIVITY | NOTE 3. MERGER, RESTRUCTURING AND OTHER 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) 2021 2020 2021 2020 Merger and transaction related expenses Transaction and integration $ — $ 7 1 14 Total Merger and transaction related expenses — 7 1 14 Restructuring expenses Severance (7 ) 42 (6 ) 42 Professional fees — 5 1 11 Facility closure, contract termination, and other expenses, net — 11 9 14 Total Restructuring expenses, net (7 ) 58 4 67 Other operating expenses Professional fees 14 — 16 — Total Other operating expenses 14 — 16 — Total Merger, restructuring and other operating expenses, net $ 7 $ 65 $ 21 $ 81 MERGER AND TRANSACTION RELATED EXPENSES In the second quarter of 2021, the Company did not incur any transaction and integration expenses. During the first half of 2021, the Company incurred $1 million of transaction and integration expenses. In the second quarter and first half of 2020, the Company incurred $7 million and $14 million of merger and transaction related expenses, respectively. These expenses include legal, accounting, and other third-party expenses incurred in connection with acquisitions and business integration activities primarily related to the CompuCom Division in the second quarter and first half of 2020, and to other acquisitions in the first half of 2021. RESTRUCTURING EXPENSES Maximize B2B Restructuring Plan In May 2020, the Company’s Board of Directors approved a restructuring plan to realign the Company’s operational focus to support its “business-to-business” solutions and IT services business units and improve costs (“Maximize B2B Restructuring Plan”). Implementation of the Maximize B2B Restructuring Plan is expected to be substantially completed by the end of 2023. The Maximize B2B Restructuring Plan aims to generate savings through optimizing the Company’s retail footprint, removing costs that directly support the Retail business and additional measures to implement a company-wide low-cost business model, which will then be invested in accelerating the growth of the Company’s business-to-business platform. The plan is broader than restructuring programs the Company has implemented in the past and includes closing and/or consolidating retail stores and distribution facilities and the reduction of up to 13,100 employee positions by the end of 2023. The Company is evaluating the number and timing of retail store and distribution facility closures and/or consolidations. However, it is generally understood that closures will approximate the store’s lease termination date. The Company closed 54 and 61 retail stores under the Maximize B2B Restructuring Plan during the second quarter and first half of 2021, respectively. The Company had closed 70 retail stores and two distribution facilities in 2020 under the Maximize B2B Restructuring Plan. It is anticipated that additional retail stores will be closed in 2021. Total estimated restructuring costs related to the Maximize B2B Restructuring Plan are expected to be up to $115 million, comprised of: (a) severance costs of approximately $53 million; (b) facility closure costs of approximately $34 million, which are mainly related to retail stores; and (c) other costs, including contract termination costs, to facilitate the execution of the Maximize B2B Restructuring Plan of approximately $28 million. The total costs of up to $115 million above are less than the Company’s estimate of total costs for this restructuring plan in prior quarters, mainly as a result of the reduction in the number of expected retail store and distribution facility closures based upon the Company’s most recent evaluation of economic factors that influence expected store closures. There could be further fluctuations in the estimate of total expected costs in the future as a result of changes in the Company’s business strategy, including the Separation described in Note 1 above. In addition, the reduction of employee positions may also be impacted as a result of fewer retail store closures and the changes in the Company’s business strategy. The $115 million of total costs are expected to be incurred as cash expenditures through 2023 and funded primarily with cash on hand and cash from operations. The Company incurred $90 million in restructuring expenses to implement the Maximize B2B Restructuring Plan since its inception in 2020 and through the first half of 2021, of which $44 million were cash expenditures. In the second quarter of 2021, the Company incurred $(2) million, net, in restructuring expenses associated with the Maximize B2B Restructuring Plan, which consisted of $2 million in reversal of employee severance accruals due to changes in estimates, a $1 million gain on sale of retail store assets, partially offset by $1 million of facility closure, contract termination and other costs. In the first half of 2021, the Company incurred $9 million in restructuring expenses associated with the Maximize B2B Restructuring Plan, which consisted of $1 million in third-party professional fees, $10 million of facility closure, contract termination and other costs, partially offset by $1 million in reversal of employee severance accruals due to changes in estimates and a $1 million gain on sale of retail store assets. The facility closure costs were mainly related to retail store closure accruals and accelerated depreciation. Of these amounts, $11 million and $16 million were cash expenditures in the second quarter and the first half of 2021, respectively. In the second quarter of 2020, the Company incurred $51 m illion in restructuring expenses associated with the Maximize B2B Restructuring Plan, which consisted of $42 million in severance and $9 million of facility closure costs and other that were mainly related to facility closure accruals, gains and losses on asset dispositions, and accelerated depreciation. Of these amounts, $3 million were cash expenditures in the second quarter of 2020. Other Included in restructuring expenses in the second quarter and first half of 2021 were $(5) OTHER OPERATING EXPENSES CompuCom strategic alternatives review In January 2021, the Company’s Board of Directors announced that as a result of a business review of CompuCom, management has initiated a process to explore a value-maximizing sale of the Company’s CompuCom Division to maximize CompuCom’s full potential and drive forward its future value and success. The Company incurred $1 million and $2 million in third-party professional fees associated with exploring the sale of CompuCom in the second quarter and first half of 2021, respectively. On June 29, 2021, management obtained the Board of Directors’ alignment and committed to a plan to sell CompuCom through a single disposal group. Refer to Note 13 for additional information. USR Parent, Inc. proposals During the first quarter of 2021, the Company received two proposals from USR Parent, Inc., the parent company of Staples Inc. and a portfolio company of Sycamore Partners, to acquire 100% of the Company’s issued and outstanding stock or certain assets of the Company. After careful review and consideration of the proposals and in consultation with the Company’s financial and legal advisors, the Company’s Board of Directors unanimously concluded that the transactions described in the proposals were not in the best interest of the Company and its shareholders, and that there was a more compelling path forward to create value. The Company filed statements on Schedule 14D-9 with the SEC on January 19, 2021 and March 15, 2021 containing its Board of Directors’ recommendation. Also, on March 31, 2021, USR Parent, Inc. publicly announced that it decided to defer the March 2021 launch of a tender offer for the Company’s common stock while reserving the right to commence one in the future. During the second quarter of 2021, the Company received a third proposal from USR Parent, Inc. to acquire the Company’s consumer business, including its retail stores, and reiterated its intention to commence a tender offer if negotiations for an alternative transaction are not successful. The Company’s Board of Directors is carefully reviewing the third proposal with the assistance of its financial and legal advisors to determine the course of action that it believes is in the best interests of the Company and its shareholders. In order to relieve the Company from the continuation of a costly and burdensome process, the FTC has agreed to defer requiring further responses from the Company unless and until USR Parent, Inc. formally launches a tender offer or the parties execute a negotiated agreement. Additionally, on May 4, 2021 the Canadian Competition Bureau (the “Bureau”) advised the Company that it has determined that USR Parent, Inc.’s proposed acquisition of the Company would likely result in a substantial lessening or prevention of competition in the sale of business essentials to enterprise customers in Canada. While it is not known for certain what the Bureau would do if USR Parent, Inc. actually launches a tender offer in the future, the Bureau’s determination signals that the Bureau would likely challenge the acquisition. The Company cannot be certain that USR Parent, Inc. will not commence a tender offer in the future. The Company a nticipates that it will incur additional significant legal and other expenses in the future if USR Parent, Inc. pursues a tender offer. Planned Separation of Consumer Business In May 2021, the Company’s Board of Directors unanimously approved a plan to pursue a separation of the Company into two independent, publicly traded companies, as further described in Note 1 above. The Company expects to incur significant costs in connection with the Separation, which are expected to primarily be third-party professional fees related to investment banking, accounting, legal, consulting and other similar types of services associated with the Separation transaction, as well as costs associated with the operational separation of the two companies, such as those related to human resources, brand management, real estate and IT infrastructure. Separation costs also may include the costs associated with bonuses and restricted stock grants awarded to certain employees for retention through the Separation. The Company incurred $11 million in third-party professional fees associated with the Separation in the second quarter and first half of 2021 related to the Separation and expects to continue to incur additional Separation costs in 2021 and 2022 until the Separation is completed. The Company currently estimates that such additional costs will exceed $100 million, although such estimate is subject to a number of assumptions and uncertainties. MERGER, RESTRUCTURING AND OTHER ACCRUALS The activity in the merger, restructuring and other accruals in the first half of 2021 is presented in the table below. Certain merger, restructuring and other 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 26, Charges (credits) Cash June 26, (In millions) 2020 Incurred Payments 2021 Termination benefits: Maximize B2B Restructuring Plan 30 (1 ) (5 ) 24 Business Acceleration Program 8 (5 ) (3 ) — Lease and contract obligations, accruals for facilities closures and other costs: Merger-related accruals 1 — — 1 Maximize B2B Restructuring Plan 10 6 (9 ) 7 Business Acceleration Program 1 — (1 ) — Comprehensive Business Review 2 — — 2 CompuCom strategic alternatives review — 2 (1 ) 1 USR Parent, Inc. proposals — 3 (3 ) — Planned separation of consumer business — 11 — 11 Total $ 52 $ 16 $ (22 ) $ 46 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. 26, 2021 | |
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 2021 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 592 $ 299 $ — $ 4 $ 895 Technology 297 389 67 — 753 Furniture and other 188 120 — 5 313 Services Technology — 5 153 (5 ) 153 Copy, print, and other 69 101 2 — 172 Total $ 1,146 $ 914 $ 222 $ 4 $ 2,286 Second Quarter of 2020 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 548 $ 263 $ — $ 6 $ 817 Technology 271 424 58 2 $ 755 Furniture and other 146 135 — 4 $ 285 Services Technology — 6 153 (4 ) $ 155 Copy, print, and other 59 84 3 — $ 146 Total $ 1,024 $ 912 $ 214 $ 8 $ 2,158 First Half of 2021 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 1,167 $ 660 $ — $ 5 $ 1,832 Technology 606 828 116 — 1,550 Furniture and other 363 258 — 9 630 Services Technology — 11 299 (7 ) 303 Copy, print, and other 138 196 3 — 337 Total $ 2,274 $ 1,953 $ 418 $ 7 $ 4,652 First Half of 2020 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 1,302 $ 683 $ — $ 7 $ 1,992 Technology 588 907 122 2 1,619 Furniture and other 322 257 — 4 583 Services Technology — 15 322 (7 ) 330 Copy, print, and other 146 207 6 — 359 Total $ 2,358 $ 2,069 $ 450 $ 6 $ 4,883 Products revenue includes the sale of: • Supplies such as paper, writing instruments, office supplies, cleaning and breakroom items, and personal protective equipment; • Technology related products such as toner and ink, printers, computers, tablets and accessories, and electronic storage; and • Furniture and other products such as desks, seating, and luggage. 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: • Technology service offerings provided through the Company’s CompuCom Division, such as technology lifecycle management, end user computing and collaboration, service desk, remote technology monitoring and management, and information technology (“IT”) workforce solutions, as well as technology support services offerings provided in the Company’s retail stores, such as installation and repair; and • 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 IT needs. Services are either billed on a rate per hour, per event, or per user, or on a fixed recurring basis. For the majority of technology service offerings contracts, the Company has the right to invoice the customer for 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 for 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 generated from such contracts in the first halves of 2021 and 2020. 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 deferred revenue 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 26, 2021 and December 26, 2020, the Company had $11 million and $12 million of deferred revenue related to the loyalty program, respectively, 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, which 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 26, December 26, (In millions) 2021 2020 Trade receivables, net $ 561 $ 501 Short-term contract assets 18 15 Long-term contract assets 13 15 Short-term contract liabilities 49 50 Long-term contract liabilities 3 4 In the first halves of 2021 and 2020, the Company did not have any contract assets related to conditional rights. The Company recognized revenues of $23 million and $19 million in the first halves of 2021 and 2020, respectively, which were included in the short-term contract liability balance at the beginning of each respective period. The Company recognized no contract assets and $2 million of contract liabilities in the first half of 2021 as a result of business combinations. There were no contract assets and liabilities that were recognized in the first half 2020 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 A majority 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 current 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 26, 2021 and December 26, 2020, capitalized acquisition costs amounted to $31 million and $30 million, respectively, and are reflected in short-term contract assets and long-term contract assets in the table above. In the second quarter and first half of 2021, amortization expenses were $8 million and $14 million, respectively. In the second quarter and first half of 2020, amortization expenses were $7 million and $15 million, respectively. The Company had no asset impairment charges related to contract assets in the periods presented herein. T here is uncertainty regarding the impacts of COVID-19, the novel coronavirus on the global and national economies, which could negatively affect the Company’s customers and result in future impairments of contract assets. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 26, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 5. SEGMENT INFORMATION At June 26, 2021, the Company had three reportable segments: Business Solutions Division, Retail Division and CompuCom Division. The Business Solutions Division sells nationally branded as well as the Company’s private branded office supply and adjacency products and services to customers in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada. Business Solutions Division customers are served through a dedicated sales force, catalogs, telesales, and electronically through the Company’s Internet websites. The Retail Division includes a chain of retail stores in the United States, Puerto Rico and the U.S. Virgin Islands, which sell office supplies, technology products and solutions, business machines and related supplies, cleaning, breakroom and facilities products, personal protective equipment, and office furniture as well as offer business services including copying, printing, digital imaging, mailing, shipping and technology support services. In addition, the print needs for retail and business customers are also facilitated through the Company’s regional print production centers. The CompuCom Division provides IT services and products to enterprise organizations in the United States and Canada, and offers a broad range of solutions including technology lifecycle management, end user computing and collaboration, service desk, remote technology monitoring and management, and IT workforce solutions. On June 29, 2021, management obtained the Board of Directors’ alignment and committed to a plan to sell its CompuCom Division through a single disposal group. The retained global sourcing operations previously included in the former International Division are not significant and have been presented as Other. The operating results of BuyerQuest are not significant in the second quarter and first half of 2021 and are included in Other since its acquisition on January 29, 2021. Also included in Other is the elimination of intersegment revenues of $6 million and $10 million for the second quarter and first half of 2021, respectively, and $3 million and $7 million for the second quarter and first half of 2020, 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 its 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. The accounting policies for each segment are the same as those described in Note 1 of the 2020 Form 10-K. 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, restructuring and other operating 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. Sales Second Quarter First Half (In millions) 2021 2020 2021 2020 Business Solutions Division $ 1,146 $ 1,024 $ 2,274 $ 2,358 Retail Division 914 912 1,953 2,069 CompuCom Division 222 214 418 450 Other 4 8 7 6 Total $ 2,286 $ 2,158 $ 4,652 $ 4,883 Division Operating Income (Loss) Second Quarter First Half (In millions) 2021 2020 2021 2020 Business Solutions Division $ 31 $ 13 $ 48 $ 53 Retail Division 44 18 145 106 CompuCom Division 3 4 2 7 Other (2 ) — (2 ) — Total $ 76 $ 35 $ 193 $ 166 A reconciliation of the measure of Division operating income to Consolidated loss before income taxes is as follows: Second Quarter First Half (In millions) 2021 2020 2021 2020 Total Divisions operating income $ 76 $ 35 $ 193 $ 166 Add/(subtract): Asset impairments (115 ) (401 ) (127 ) (413 ) Merger, restructuring and other operating expenses, net (7 ) (65 ) (21 ) (81 ) Unallocated expenses (32 ) (25 ) (67 ) (48 ) Interest income — — — 3 Interest expense (6 ) (11 ) (14 ) (29 ) Loss on extinguishment and modification of debt — (12 ) — (12 ) Other income, net 5 4 16 5 Loss before income taxes $ (79 ) $ (475 ) $ (20 ) $ (409 ) The components of goodwill by segment are provided in the following table: Business Solutions Retail CompuCom (In millions) Division Division Division Other Total Balance as of December 26, 2020 $ 316 $ 78 $ 215 $ — $ 609 Acquisitions 1 — — 67 68 Impairments — — (103 ) — (103 ) Foreign currency rate impact — — 1 — 1 Balance as of June 26, 2021 $ 317 $ 78 $ 113 $ 67 $ 575 Additions to goodwill relate to acquisitions made during the first half of 2021, as well as the impact of purchase accounting adjustments associated with 2020 acquisitions. As disclosed in Note 2, these adjustments were insignificant individually and in the aggregate to the Company’s Condensed Consolidated Financial Statements. Refer to Note 2 for additional information on the acquisitions made during the first half of 2021. Goodwill and indefinite-lived intangible assets are tested for impairment annually as of the first day of fiscal December or more frequently when events or changes in circumstances indicate that impairment may have occurred. The most recent annual impairment assessment was performed during the fourth quarter of 2020, using a quantitative assessment for all reporting units. The quantitative assessment combined the income approach and the market approach valuation methodologies and concluded that the fair value of all the Company’s reporting units exceed their carrying amounts. The margin of passage for the CompuCom and Contract reporting units during this assessment were approximately 12%. The Contract reporting unit is a component of the Business Solutions Division segment. During the second quarter of 2021, the Company determined that an indicator of potential impairment existed to require an interim quantitative goodwill impairment test for its CompuCom reporting unit, due to the continued macroeconomic impacts of COVID-19 on CompuCom’s current and projected future results of operations as further described below. The quantitative goodwill impairment test, which combined the income approach and market approach valuation methodologies, indicated that the carrying value of the CompuCom reporting unit exceeded its fair value by $103 million. As a result, the Company recorded a partial goodwill impairment charge of $103 million in the second quarter of 2021 associated with the CompuCom reporting unit. This non-cash impairment charge is presented within the Asset Impairment line in the accompanying Condensed Consolidated Statements of Operations. After the impairment charge, the CompuCom reporting unit has remaining goodwill of $113 million as of June 26, 2021. The decline in the fair value of the CompuCom reporting unit resulted from continued macroeconomic impacts of COVID-19, particularly as it relates to the disruptions to the operations of its business customers, which lowered the projected revenue growth rate and profitability level of the reporting unit. The duration of the impacts of the pandemic are expected to be longer than previously anticipated for CompuCom, which has significantly impacted the Company’s expectations on timing for its customers returning back to levels of historical operations, impacting annuity-based and project-based service revenues, as well as product revenues. In addition, the Company has experienced an increase in product costs due to supply constraints, which had a negative impact on its profitability levels, and is expected to further impact future periods. In addition, the consideration of incremental risk associated with the continued uncertainty related to the pace of the economic recovery was also a factor that contributed to the decline in the fair value of the reporting unit. The fair value estimate for the reporting unit was based on a blended analysis of the present value of future discounted cash flows and market value approach. The significant estimates used in the discounted cash flow model included the Company’s weighted average cost of capital, projected cash flows and the long-term rate of growth. The assumptions were based on the actual historical performance of the reporting unit and took into account the recent and continued weakening of operating results as well as the anticipated rate of recovery, and implied risk premiums based on market prices of the Company’s equity and debt as of the assessment date. Significant estimates in the market approach model included identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and earnings multiples in estimating the fair value of the reporting unit. CompuCom’s tradename, which is an indefinite-lived intangible asset, was also tested for impa irment using the relief from royalty method and was determined to be impaired as its carrying value exceeded its fair value by $11 million . Accordingly, the Company recorded an impairment charge of $11 m illion in the second quarter of 2021 related to this asset. The Company is monitoring the performance of its Contract reporting unit. The Company’s Contract reporting unit, which had also been negatively impacted by COVID-19, has experienced partial recovery as the impacts of the pandemic on its business customers have begun to recede in the second quarter of 2021. The Contract reporting units’ operating performance and future outlook are in line with the Company’s forecasts used in determining the fair value estimates in the most recent quantitative annual impairment test. Accordingly, there are no impairment indicators identified for this reporting unit as of June 26, 2021. The Company also did not identify indicators of impairment related to its other reporting units, which mainly serve consumers through its retail stores and eCommerce platform and have been performing in accordance with forecasts. The Company will continue to evaluate the recoverability of goodwill at the reporting unit level on an annual basis and whenever events or changes in circumstances indicate there may be a potential impairment. If the operating results of the Company’s reporting units deteriorate in the future, it may cause the fair value of one or more of the reporting units to fall below their carrying amount, resulting in additional goodwill impairment charges. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 26, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 6. INCOME TAXES During 2021 and 2020, 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 limited international operations and improved operating results. The Company’s effective tax rates were (11)% and (75)% for the second quarter and first half of 2021, respectively, and 8% and 4% for the second quarter and first half of 2020, respectively. In the first half of 2021, the Company’s effective rate was primarily impacted by the goodwill impairment in the CompuCom reporting unit in the second quarter of 2021 described in Note 5 above, recognition of a large tax windfall associated with stock-based compensation awards year-to-date, recognition of tax benefits due to an agreement reached with the IRS related to a prior tax position and certain reorganization expenses that are not currently deductible. These factors, along with the impact of state taxes and the mix of income and losses across U.S. and non-U.S. jurisdictions, caused the Company’s effective tax rate to differ from the statutory rate of 21%. The Company’s effective tax rate in the prior period has varied considerably primarily due to the impact of goodwill impairment, state taxes, excess tax deficiencies associated with stock-based compensation awards and certain nondeductible items, adjustments to certain tax benefits and the mix of income and losses across U.S. and non-U.S. jurisdictions. Changes in pretax income projections and the mix of income across jurisdictions could impact the effective tax rates in future quarters. The Company continues to have a U.S. valuation allowance for certain U.S. federal credits and state tax attributes, which relates 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 2019 and 2014, 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 2020 is currently under review. Generally, the Company is subject to routine examination for years 2013 and forward in its international tax jurisdictions. It is anticipated that $1 million of 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. 26, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 7. EARNINGS (LOSS) PER SHARE The following table represents the calculation of earnings (loss) per common share – basic and diluted: Second Quarter First Half (In millions, except per share amounts) 2021 2020 2021 2020 Basic Earnings Per Share Numerator: Net loss $ (88 ) $ (439 ) $ (35 ) $ (394 ) Denominator: Weighted-average shares outstanding 54 53 54 53 Basic loss per share $ (1.62 ) $ (8.34 ) $ (0.65 ) $ (7.46 ) Diluted Earnings Per Share Numerator: Net loss $ (88 ) $ (439 ) $ (35 ) $ (394 ) Denominator: Weighted-average shares outstanding 54 53 54 53 Effect of dilutive securities: Stock options and restricted stock — 1 — 1 Diluted weighted-average shares outstanding 54 54 54 54 Diluted loss per share $ (1.62 ) $ (8.19 ) $ (0.65 ) $ (7.31 ) Awards of stock options and nonvested shares representing additional shares of outstanding common stock were 2 million in both the second quarter and first half of 2021, and less than 1 million in both the second quarter and first half of 2020, but were not included in the computation of diluted weighted-average shares outstanding because their effect would have been antidilutive. |
DEBT
DEBT | 6 Months Ended |
Jun. 26, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 8. DEBT On April 17, 2020, the Company entered into the Third Amended and Restated Credit Agreement (the “Third Amended Credit Agreement”), which provides for a $1.2 billion asset-based revolving credit facility and a $100 million asset-based first-in, last-out term loan facility (the “FILO Term Loan Facility”), for an aggregate principal amount of up to $1.3 billion (the “New Facilities”). The New Facilities mature on April 17, 2025. The Third Amended Credit Agreement replaced the Company’s then existing amended and restated credit agreement that was due to mature in May 2021. As provided by the Third Amended Credit Agreement, available amounts that can be borrowed at any given time are based on percentages of certain outstanding accounts receivable, credit card receivables, inventory, cash value of company-owned life insurance policies, and certain specific real estate of the Company. At June 26, 2021, the Company had no revolving loans outstanding, $100 million of outstanding FILO Term Loan Facility loans, $49 million of outstanding standby letters of credit, and $997 million of available credit under the Third Amended Credit Agreement. The Company was |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 26, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 9. STOCKHOLDERS’ EQUITY Accumulated other comprehensive 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 26, 2020 $ (27 ) $ (5 ) $ (32 ) Other comprehensive income activity 9 1 10 Balance at June 26, 2021 $ (18 ) $ (4 ) $ (22 ) TREASURY STOCK In May 2021, the Board of Directors approved a new stock repurchase program of up to $300 million, available through June 30, 2022, which replaced the Company’s then existing $200 million stock repurchase program. The new authorization may be suspended or discontinued at any time. The exact number and timing of stock repurchases will depend on market conditions and other factors, and will be funded through available cash balances. The Company repurchased 1 million shares of its common stock at a cost of $46 million in the second quarter and first half of 2021. As of June 26, 2021, $254 million remains available for stock repurchases under the current stock repurchase program. Subsequent to the end of the second quarter of 2021 and through July 28, 2021, the Company repurchased 486 thousand shares of its common stock at a cost of $23 million. At June 26, 2021, there were 11 million shares of common stock held in treasury. The Company’s Third Amended Credit Agreement permits restricted payments, such as common stock repurchases, but may be limited if the Company does not meet the required minimum liquidity or fixed charge coverage ratio requirements. Refer to Note 8 for additional information about the Company’s compliance with covenants. DIVIDENDS ON COMMON STOCK In May 2020, in order to preserve liquidity during the COVID-19 pandemic and in light of the uncertainties as to its duration and economic impact, the Company’s Board of Directors temporarily suspended the Company’s quarterly cash dividend beginning in the second quarter of 2020. There was no quarterly cash dividend declared and paid in the second quarter and first half of 2021. The Company’s quarterly cash dividend remains temporarily suspended. Refer to Note 8 for additional information about the Company’s compliance with covenants. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 26, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | NOTE 10. EMPLOYEE BENEFIT PLANS PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS – NORTH AMERICA The components of net periodic pension benefit for the Company’s North America pension plans are as follows: Second Quarter First Half (In millions) 2021 2020 2021 2020 Service cost $ — $ — $ — $ — Interest cost 5 7 10 14 Expected return on plan assets (8 ) (8 ) (15 ) (16 ) Net periodic pension benefit $ (3 ) $ (1 ) $ (5 ) $ (2 ) The North American pension plans are in a net liability position and included in Pension and postretirement obligations, net in the Condensed Consolidated Balance Sheets at June 26, 2021 and December 26, 2020. During the first half of 2021, $ 1 PENSION PLAN – UNITED KINGDOM The components of net periodic pension benefit for the Company’s pension plan in the United Kingdom (“UK”) are as follows: Second Quarter First Half (In millions) 2021 2020 2021 2020 Service cost $ — $ — $ — $ — Interest cost 1 1 2 2 Expected return on plan assets (2 ) (1 ) (3 ) (2 ) Net periodic pension benefit $ (1 ) $ — $ (1 ) $ — The UK pension plan is in a net asset position and included in Other assets in the Condensed Consolidated Balance Sheets at June 26, 2021 and December 26, 2020. During the first half of 2021, 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 2021. Net periodic pension benefits for the North America and UK pension plans 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. 26, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 11. 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 financial instruments, which may be entered into to mitigate risks associated with changes in foreign currency exchange rates, fuel and other commodity prices and interest rates. Amounts associated with derivative instruments were not significant. 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 2021, the Company recognized asset impairment charges of $ $114 million related to goodwill and other intangible assets impairment in the CompuCom reporting unit in the second quarter of 2021 The Company regularly reviews retail store 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 retail store-level sales, gross margins, direct expenses, exercise of future lease renewal options when reasonably certain to be exercised, and resulting cash flows that can naturally include judgments about how current initiatives will impact future performance. The assumptions used within the recoverability analysis for the retail stores were updated to consider current quarter retail store operational results and formal plans for future retail store closures as part of the Company’s restructuring programs, including the probability of closure at the retail store level. While it is generally understood that closures will approximate the store’s lease termination date, it is possible that changes in store performance or other conditions could result in future changes in assumptions utilized. 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. The Company also analyzed the impact of the COVID-19 pandemic on store asset recoverability. Due to the nature of products sold, the retail stores were considered to be essential by most local jurisdictions and as a result, the substantial majority of these retail stores have remained open and operational with the appropriate safety measures in place since the beginning of the COVID-19 outbreak, including a curbside pickup option. Since late in the first quarter of 2020, the Company has temporarily reduced retail location hours by two hours daily, which continues to be in effect at the majority of its retail locations. The Company’s recoverability assessment included evaluating the impact of these developments. 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 independent real estate valuation 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 2021 impairment calculation were discounted at a weighted average discount rate of 7%. The Company will continue to evaluate initiatives to improve performance and lower operating costs. There is uncertainty regarding the impact of the COVID-19 pandemic on the future results of operations, including the forecast period used in the recoverability analysis. 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 of 2021, the impairment recognized reflects the Company’s best estimate of future performance. In addition to its retail store assets, the Company also regularly evaluates whether there are impairment indicators associated with its other long-lived assets, including those related to the CompuCom Division, which has been negatively impacted by the COVID-19 pandemic, as discussed in Note 5 above. The Company did not identify any impairment indicators for these long-lived assets as of June 26, 2021, and as a result, there were no associated impairment charges. 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 26, December 26, 2021 2020 Carrying Fair Carrying Fair (In millions) Amount Value Amount Value Financial assets: Company-owned life insurance 135 135 147 147 Financial liabilities: Long-term debt: New Facilities loans under the Third Amended Credit Agreement, due 2025 100 100 100 100 Revenue bonds, due in varying amounts periodically through 2029 176 177 176 177 American & Foreign Power Company, Inc. 5% debentures, due 2030 15 15 15 14 The following methods and assumptions were used to estimate the fair value of each class of financial instruments: • 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, which is the cash surrender value less any outstanding loans (Level 2 measure). • Long-term debt : Long-term 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). The carrying amount of the New Facilities loans under the Third Amended Credit Agreement approximates fair value because the interest rates vary with market interest rates. Refer to Note 8 for additional information about the Third Amended Credit Agreement. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 26, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12. 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. On March 1, 2021, certain IT systems of CompuCom were affected by a malware incident which negatively impacted some services that CompuCom provides to certain of its customers. Certain CompuCom services were not impacted by the malware incident, and CompuCom continued to deliver certain services to those customers throughout March. CompuCom was able to substantially restore delivery capabilities as of March 17, 2021, and had restored its service delivery to substantially all of its customers as of the end of March 2021. As a part of the restoration efforts, CompuCom has taken actions to efficiently and securely restore service delivery to its customers while hardening its systems with enhanced security measures and advanced anti-malware agents. While CompuCom remediated its systems that were directly affected by the malware, CompuCom experienced down time due to temporarily suspending certain services to certain customers and as a result, had loss of service revenue of $2 million and $5 million in the second quarter and first half of 2021, respectively. The Company estimates that the total loss of service revenue due to the malware incident will be between $5 million and $8 million. The Company is continuing to analyze the incident. That analysis could ultimately reveal that information was revealed or compromised. The Company will continue to evaluate information as it becomes known and will record an estimate for losses when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. Further, the Company may become subject to regulatory enforcement actions and litigation that could result in financial judgments or the payment of settlement amounts, and disputes with insurance carriers concerning coverage. 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 26, 2021, 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, the Company’s estimated range of reasonably possible losses was approximately $15 million to $25 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 26, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13. SUBSEQUENT EVENTS In January 2021, the Company’s Board of Directors announced that as a result of a business review of CompuCom, management has initiated a process to explore a value-maximizing sale of the Company’s CompuCom Division to maximize CompuCom’s full potential and drive forward its future value and success. On June 29, 2021, the Company’s Board of Directors aligned with management’s commitment to a plan to sell CompuCom through a single disposal group. Although management did not bring forth a specific transaction to the Board of Directors, management expects to complete the sale within one year. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 26, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The ODP Corporation, including its consolidated subsidiaries (“ODP” or the “Company”), At June 26, 2021, the Company had three reportable segments (or “Divisions”): Business Solutions Division, Retail Division and CompuCom Division. The Condensed Consolidated Financial Statements as of June 26, 2021, and for the 13-week and 26-week periods ended June 26, 2021 (also referred to as the “second quarter of 2021” and the “first half of 2021,” respectively) and June 27, 2020 (also referred to as the “second quarter of 2020” and the “first half of 2020,” 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 2020 and 2021 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 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 2020 Form 10-K. These interim results are not necessarily indicative of the results that should be expected for the full year. |
Planned Separation of Consumer Business | PLANNED SEPARATION OF CONSUMER BUSINESS As previously announced, in May 2021, the Company’s Board of Directors unanimously approved a plan to pursue a separation of the Company into two independent, publicly traded companies. When the plan was announced, the Company expected to structure it as a tax-free spin-off of the Company’s B2B related operations. Following further review, the Company determined that it should utilize the flexibility created by the holding company reorganization in 2020 to structure the separation as a tax-free spin-off of the Company’s consumer business, with the Company retaining its B2B related operations (the “Separation”), as further described below. The Company believes that this modified approach will be more efficient considering that it is expected that the majority of the Company’s current management team and Directors will remain with the B2B business which will continue to be owned by “The ODP Corporation.” Each company is expected to have a unique and highly focused strategy and investment profile, as follows: • ODP – a leading B2B solutions provider serving small, medium and enterprise level companies, mainly consisting of the contract sales channel of the Business Solutions Division, which includes operations in Canada and the independent regional office supply distribution businesses within the U.S. that the Company has been acquiring since 2017. ODP will also own the newly formed B2B digital platform technology business, including BuyerQuest, as well as the Company’s global sourcing office, and its other sourcing, supply chain and logistics assets; and • NewCo – an Office Depot branded leading provider of retail consumer and small business products and services distributed via approximately 1,100 Office Depot and OfficeMax retail locations and an eCommerce presence, officedepot.com The Separation is expected to allow ODP and NewCo to pursue market opportunities and separate growth strategies, and improve value for shareholders and stakeholders. While ODP and NewCo will be separate, independent companies, they will share commercial agreements that will allow them to continue to leverage scale benefits in such areas as product sourcing and supply chain. The Separation is expected to occur through a tax-free stock dividend of shares of NewCo to ODP’s shareholders as of a record date to be determined by the Company’s Board of Directors, after which ODP shareholders will own 100% of the equity in both of the publicly traded companies. The Separation is intended to be completed during the first half of 2022, subject to customary conditions, including final approval by the Company’s Board of Directors, opinions from tax counsel and a favorable ruling by the IRS on the tax-free nature of the transaction to the Company and to its shareholders, the filing and effectiveness of a registration statement with the U.S. Securities and Exchange Commission, the approved listing of NewCo’s common stock on a national securities exchange and the completion of any necessary financings. There can be no assurances regarding the ultimate timing of the Separation or that the transaction will be completed. In addition, on June 29, 2021, the Company’s Board of Directors provided their alignment with management’s commitment to a plan to sell its CompuCom Division through a single disposal group. Refer to Note 13 for additional information. |
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. Amounts not yet presented for payment to zero balance disbursement accounts of $13 million and $23 million at June 26, 2021 and December 26, 2020, respectively, are presented in Trade accounts payable and Accrued expenses and other current liabilities. At June 26, 2021 and December 26, 2020, cash and cash equivalents held outside the United States amounted to $151 million and $159 million, respectively. 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. There was no restricted cash at both June 26, 2021 and December 26, 2020. |
New Accounting Standards | NEW ACCOUNTING STANDARDS Standards that were adopted: Defined benefit plan : In August 2018, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update that modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The Company adopted this accounting standards update on the first day of the first quarter of 2021 with no material impact on its Condensed Consolidated Financial Statements. Income Taxes : In December 2019, the FASB issued an accounting standards update that simplifies the accounting for income taxes by eliminating certain exceptions to the guidance related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The accounting standards update also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The Company adopted this accounting standards update on the first day of the first quarter of 2021 with no material impact on its Condensed Consolidated Financial Statements. |
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 2021 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 592 $ 299 $ — $ 4 $ 895 Technology 297 389 67 — 753 Furniture and other 188 120 — 5 313 Services Technology — 5 153 (5 ) 153 Copy, print, and other 69 101 2 — 172 Total $ 1,146 $ 914 $ 222 $ 4 $ 2,286 Second Quarter of 2020 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 548 $ 263 $ — $ 6 $ 817 Technology 271 424 58 2 $ 755 Furniture and other 146 135 — 4 $ 285 Services Technology — 6 153 (4 ) $ 155 Copy, print, and other 59 84 3 — $ 146 Total $ 1,024 $ 912 $ 214 $ 8 $ 2,158 First Half of 2021 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 1,167 $ 660 $ — $ 5 $ 1,832 Technology 606 828 116 — 1,550 Furniture and other 363 258 — 9 630 Services Technology — 11 299 (7 ) 303 Copy, print, and other 138 196 3 — 337 Total $ 2,274 $ 1,953 $ 418 $ 7 $ 4,652 First Half of 2020 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 1,302 $ 683 $ — $ 7 $ 1,992 Technology 588 907 122 2 1,619 Furniture and other 322 257 — 4 583 Services Technology — 15 322 (7 ) 330 Copy, print, and other 146 207 6 — 359 Total $ 2,358 $ 2,069 $ 450 $ 6 $ 4,883 Products revenue includes the sale of: • Supplies such as paper, writing instruments, office supplies, cleaning and breakroom items, and personal protective equipment; • Technology related products such as toner and ink, printers, computers, tablets and accessories, and electronic storage; and • Furniture and other products such as desks, seating, and luggage. 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: • Technology service offerings provided through the Company’s CompuCom Division, such as technology lifecycle management, end user computing and collaboration, service desk, remote technology monitoring and management, and information technology (“IT”) workforce solutions, as well as technology support services offerings provided in the Company’s retail stores, such as installation and repair; and • 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 IT needs. Services are either billed on a rate per hour, per event, or per user, or on a fixed recurring basis. For the majority of technology service offerings contracts, the Company has the right to invoice the customer for 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 for 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 generated from such contracts in the first halves of 2021 and 2020. 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 deferred revenue 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 26, 2021 and December 26, 2020, the Company had $11 million and $12 million of deferred revenue related to the loyalty program, respectively, 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, which 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 26, December 26, (In millions) 2021 2020 Trade receivables, net $ 561 $ 501 Short-term contract assets 18 15 Long-term contract assets 13 15 Short-term contract liabilities 49 50 Long-term contract liabilities 3 4 In the first halves of 2021 and 2020, the Company did not have any contract assets related to conditional rights. The Company recognized revenues of $23 million and $19 million in the first halves of 2021 and 2020, respectively, which were included in the short-term contract liability balance at the beginning of each respective period. The Company recognized no contract assets and $2 million of contract liabilities in the first half of 2021 as a result of business combinations. There were no contract assets and liabilities that were recognized in the first half 2020 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 A majority 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 current 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 26, 2021 and December 26, 2020, capitalized acquisition costs amounted to $31 million and $30 million, respectively, and are reflected in short-term contract assets and long-term contract assets in the table above. In the second quarter and first half of 2021, amortization expenses were $8 million and $14 million, respectively. In the second quarter and first half of 2020, amortization expenses were $7 million and $15 million, respectively. The Company had no asset impairment charges related to contract assets in the periods presented herein. T here is uncertainty regarding the impacts of COVID-19, the novel coronavirus on the global and national economies, which could negatively affect the Company’s customers and result in future impairments of contract assets. |
MERGER, RESTRUCTURING AND OTH_2
MERGER, RESTRUCTURING AND OTHER ACTIVITY (Tables) | 6 Months Ended |
Jun. 26, 2021 | |
Merger Restructuring And Other Activity [Abstract] | |
Summary of Major Components of Merger, Restructuring and Other Operating Expenses, Net | The table below summarizes the major components of Merger, restructuring and other operating expenses, net. Second Quarter First Half (In millions) 2021 2020 2021 2020 Merger and transaction related expenses Transaction and integration $ — $ 7 1 14 Total Merger and transaction related expenses — 7 1 14 Restructuring expenses Severance (7 ) 42 (6 ) 42 Professional fees — 5 1 11 Facility closure, contract termination, and other expenses, net — 11 9 14 Total Restructuring expenses, net (7 ) 58 4 67 Other operating expenses Professional fees 14 — 16 — Total Other operating expenses 14 — 16 — Total Merger, restructuring and other operating expenses, net $ 7 $ 65 $ 21 $ 81 |
Facility Closure and Severance Costs | The activity in the merger, restructuring and other accruals in the first half of 2021 is presented in the table below. Certain merger, restructuring and other 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 26, Charges (credits) Cash June 26, (In millions) 2020 Incurred Payments 2021 Termination benefits: Maximize B2B Restructuring Plan 30 (1 ) (5 ) 24 Business Acceleration Program 8 (5 ) (3 ) — Lease and contract obligations, accruals for facilities closures and other costs: Merger-related accruals 1 — — 1 Maximize B2B Restructuring Plan 10 6 (9 ) 7 Business Acceleration Program 1 — (1 ) — Comprehensive Business Review 2 — — 2 CompuCom strategic alternatives review — 2 (1 ) 1 USR Parent, Inc. proposals — 3 (3 ) — Planned separation of consumer business — 11 — 11 Total $ 52 $ 16 $ (22 ) $ 46 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 26, 2021 | |
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 2021 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 592 $ 299 $ — $ 4 $ 895 Technology 297 389 67 — 753 Furniture and other 188 120 — 5 313 Services Technology — 5 153 (5 ) 153 Copy, print, and other 69 101 2 — 172 Total $ 1,146 $ 914 $ 222 $ 4 $ 2,286 Second Quarter of 2020 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 548 $ 263 $ — $ 6 $ 817 Technology 271 424 58 2 $ 755 Furniture and other 146 135 — 4 $ 285 Services Technology — 6 153 (4 ) $ 155 Copy, print, and other 59 84 3 — $ 146 Total $ 1,024 $ 912 $ 214 $ 8 $ 2,158 First Half of 2021 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 1,167 $ 660 $ — $ 5 $ 1,832 Technology 606 828 116 — 1,550 Furniture and other 363 258 — 9 630 Services Technology — 11 299 (7 ) 303 Copy, print, and other 138 196 3 — 337 Total $ 2,274 $ 1,953 $ 418 $ 7 $ 4,652 First Half of 2020 (In millions) Business Solutions Division Retail Division CompuCom Division Other Total Major products and services categories Products Supplies $ 1,302 $ 683 $ — $ 7 $ 1,992 Technology 588 907 122 2 1,619 Furniture and other 322 257 — 4 583 Services Technology — 15 322 (7 ) 330 Copy, print, and other 146 207 6 — 359 Total $ 2,358 $ 2,069 $ 450 $ 6 $ 4,883 |
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 26, December 26, (In millions) 2021 2020 Trade receivables, net $ 561 $ 501 Short-term contract assets 18 15 Long-term contract assets 13 15 Short-term contract liabilities 49 50 Long-term contract liabilities 3 4 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 26, 2021 | |
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. Sales Second Quarter First Half (In millions) 2021 2020 2021 2020 Business Solutions Division $ 1,146 $ 1,024 $ 2,274 $ 2,358 Retail Division 914 912 1,953 2,069 CompuCom Division 222 214 418 450 Other 4 8 7 6 Total $ 2,286 $ 2,158 $ 4,652 $ 4,883 Division Operating Income (Loss) Second Quarter First Half (In millions) 2021 2020 2021 2020 Business Solutions Division $ 31 $ 13 $ 48 $ 53 Retail Division 44 18 145 106 CompuCom Division 3 4 2 7 Other (2 ) — (2 ) — Total $ 76 $ 35 $ 193 $ 166 |
Reconciliation of Measure of Division Operating Income to Consolidated Loss Before Income Taxes (Detail) | A reconciliation of the measure of Division operating income to Consolidated loss before income taxes is as follows: Second Quarter First Half (In millions) 2021 2020 2021 2020 Total Divisions operating income $ 76 $ 35 $ 193 $ 166 Add/(subtract): Asset impairments (115 ) (401 ) (127 ) (413 ) Merger, restructuring and other operating expenses, net (7 ) (65 ) (21 ) (81 ) Unallocated expenses (32 ) (25 ) (67 ) (48 ) Interest income — — — 3 Interest expense (6 ) (11 ) (14 ) (29 ) Loss on extinguishment and modification of debt — (12 ) — (12 ) Other income, net 5 4 16 5 Loss before income taxes $ (79 ) $ (475 ) $ (20 ) $ (409 ) |
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 Other Total Balance as of December 26, 2020 $ 316 $ 78 $ 215 $ — $ 609 Acquisitions 1 — — 67 68 Impairments — — (103 ) — (103 ) Foreign currency rate impact — — 1 — 1 Balance as of June 26, 2021 $ 317 $ 78 $ 113 $ 67 $ 575 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 26, 2021 | |
Earnings Per Share [Abstract] | |
Calculation of Earnings (Loss) Per Common Share | The following table represents the calculation of earnings (loss) per common share – basic and diluted: Second Quarter First Half (In millions, except per share amounts) 2021 2020 2021 2020 Basic Earnings Per Share Numerator: Net loss $ (88 ) $ (439 ) $ (35 ) $ (394 ) Denominator: Weighted-average shares outstanding 54 53 54 53 Basic loss per share $ (1.62 ) $ (8.34 ) $ (0.65 ) $ (7.46 ) Diluted Earnings Per Share Numerator: Net loss $ (88 ) $ (439 ) $ (35 ) $ (394 ) Denominator: Weighted-average shares outstanding 54 53 54 53 Effect of dilutive securities: Stock options and restricted stock — 1 — 1 Diluted weighted-average shares outstanding 54 54 54 54 Diluted loss per share $ (1.62 ) $ (8.19 ) $ (0.65 ) $ (7.31 ) |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 26, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss Activity, Net of Tax | Accumulated other comprehensive 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 26, 2020 $ (27 ) $ (5 ) $ (32 ) Other comprehensive income activity 9 1 10 Balance at June 26, 2021 $ (18 ) $ (4 ) $ (22 ) |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 26, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Pension Benefit | The components of net periodic pension benefit for the Company’s North America pension plans are as follows: Second Quarter First Half (In millions) 2021 2020 2021 2020 Service cost $ — $ — $ — $ — Interest cost 5 7 10 14 Expected return on plan assets (8 ) (8 ) (15 ) (16 ) Net periodic pension benefit $ (3 ) $ (1 ) $ (5 ) $ (2 ) The components of net periodic pension benefit for the Company’s pension plan in the United Kingdom (“UK”) are as follows: Second Quarter First Half (In millions) 2021 2020 2021 2020 Service cost $ — $ — $ — $ — Interest cost 1 1 2 2 Expected return on plan assets (2 ) (1 ) (3 ) (2 ) Net periodic pension benefit $ (1 ) $ — $ (1 ) $ — |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 26, 2021 | |
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 26, December 26, 2021 2020 Carrying Fair Carrying Fair (In millions) Amount Value Amount Value Financial assets: Company-owned life insurance 135 135 147 147 Financial liabilities: Long-term debt: New Facilities loans under the Third Amended Credit Agreement, due 2025 100 100 100 100 Revenue bonds, due in varying amounts periodically through 2029 176 177 176 177 American & Foreign Power Company, Inc. 5% debentures, due 2030 15 15 15 14 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) | 1 Months Ended | 6 Months Ended | |
May 31, 2021Location | Jun. 26, 2021USD ($)StoreSegment | Dec. 26, 2020USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Number of retail stores | Store | 1,091 | ||
Number of reportable segments | Segment | 3 | ||
Accounts payable and accrued expenses and other current liabilities not yet presented for payment | $ 13,000,000 | $ 23,000,000 | |
Cash and cash equivalents | $ 691,000,000 | 729,000,000 | |
Accounting Standards Update 2017-07 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted | true | ||
Change in accounting principle, accounting standards update, adoption date | Dec. 27, 2020 | ||
Change in accounting principle, accounting standards update, immaterial effect | true | ||
Accounting Standards Update 2015-17 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted | true | ||
Change in accounting principle, accounting standards update, adoption date | Dec. 27, 2020 | ||
Change in accounting principle, accounting standards update, immaterial effect | true | ||
Prepaid Expenses and Other Current Assets | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Restricted cash | $ 0 | 0 | |
Non-US | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Cash and cash equivalents | $ 151,000,000 | $ 159,000,000 | |
Spin Off Transaction | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of retail locations | Location | 1,100 | ||
Shareholders equity ownership percentage | 100.00% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) $ in Millions | Jan. 29, 2021USD ($)shares | Jun. 26, 2021USD ($)Business | Dec. 26, 2020USD ($) |
Business Acquisition, Acquisition Related Costs [Line Items] | |||
Goodwill | $ 575 | $ 609 | |
Buyer Quest | |||
Business Acquisition, Acquisition Related Costs [Line Items] | |||
Goodwill | $ 67 | ||
Buyer Quest | Technology Intangible Assets | |||
Business Acquisition, Acquisition Related Costs [Line Items] | |||
Intangible assets acquired | $ 6 | ||
United States | |||
Business Acquisition, Acquisition Related Costs [Line Items] | |||
Business combination consideration transferred | $ 2 | ||
Number of business acquired | Business | 1 | ||
Goodwill | $ 1 | ||
United States | Buyer Quest | |||
Business Acquisition, Acquisition Related Costs [Line Items] | |||
Date of acquisition | Jan. 29, 2021 | ||
Business combination consideration transferred | $ 71 | ||
Business combination consideration transferred payments with cash on hand and issuance of shares of common stock | 61 | ||
Cash on hand | $ 26 | ||
Business combination issuance of shares of common stock | shares | 827,498 | ||
BusinessCombinationContingentConsiderationLiabilityPaymentPeriod | 2 years | ||
United States | Buyer Quest | Maximum | |||
Business Acquisition, Acquisition Related Costs [Line Items] | |||
Contingent consideration, liability, amount recognized | $ 10 |
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. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | |
Merger and transaction related expenses | ||||
Transaction and integration | $ 0 | $ 7 | $ 1 | $ 14 |
Total Merger and transaction related expenses | 7 | 1 | 14 | |
Restructuring expenses | ||||
Severance | (7) | 42 | (6) | 42 |
Professional fees | 5 | 1 | 11 | |
Facility closure, contract termination, and other expenses, net | 11 | 9 | 14 | |
Total Restructuring expenses, net | (7) | 58 | 4 | 67 |
Other operating expenses | ||||
Professional fees | 14 | 16 | ||
Total Other operating expenses | 14 | 16 | ||
Total Merger, restructuring and other operating expenses, net | $ 7 | $ 65 | $ 21 | $ 81 |
Merger, Restructuring and Oth_3
Merger, Restructuring and Other Activity - Additional Information (Detail) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 14 Months Ended | ||||
May 31, 2021USD ($)Company | May 31, 2020USD ($)Employee | Jun. 26, 2021USD ($)Store | Mar. 27, 2021Proposal | Jun. 27, 2020USD ($) | Jun. 26, 2021USD ($)Store | Jun. 27, 2020USD ($) | Dec. 26, 2020StoreFacility | Jun. 26, 2021USD ($) | |
Merger Restructuring And Other Activity [Line Items] | |||||||||
Transaction and integration expenses | $ 0 | $ 7 | $ 1 | $ 14 | |||||
Costs to implement restructuring plan | 16 | ||||||||
Restructuring cash expenditure | 22 | ||||||||
Professional fees | 5 | 1 | 11 | ||||||
USR Parent, Inc. | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Professional fees | 2 | 3 | |||||||
Number of proposal received | Proposal | 2 | ||||||||
Proposal received to acquire issued and outstanding stock or certain assets in percentage | 100.00% | ||||||||
Maximize B2B Restructuring Plan | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Costs to implement restructuring plan | $ (2) | 51 | $ 9 | $ 90 | |||||
Number of retail stores closed | Store | 54 | 61 | 70 | ||||||
Number of distribution facilities closed | Facility | 2 | ||||||||
Gain on sale of retail store assets | $ 1 | $ 1 | |||||||
Restructuring cash expenditure | 11 | 3 | 16 | ||||||
Maximize B2B Restructuring Plan | Cash Expenditures | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Costs to implement restructuring plan | 44 | ||||||||
Maximize B2B Restructuring Plan | Severance Costs | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Costs to implement restructuring plan | $ 53 | (2) | 42 | (1) | |||||
Maximize B2B Restructuring Plan | Retail Store and Facility Closure Costs | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Costs to implement restructuring plan | 34 | 1 | 9 | 10 | |||||
Maximize B2B Restructuring Plan | Other Costs Including Contract Termination Costs | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Costs to implement restructuring plan | $ 28 | 6 | |||||||
Restructuring cash expenditure | 9 | ||||||||
Maximize B2B Restructuring Plan | Third-Party Professional Fees | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Costs to implement restructuring plan | 1 | ||||||||
Maximize B2B Restructuring Plan | Maximum | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Number of expected reduction in employee position | Employee | 13,100 | ||||||||
Costs to implement restructuring plan | $ 115 | ||||||||
Maximize B2B Restructuring Plan | Maximum | Cash Expenditures | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Costs to implement restructuring plan | $ 115 | $ 115 | |||||||
Business Acceleration Program | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Costs to implement restructuring plan | $ 6 | $ 14 | |||||||
Business Acceleration Program | Severance Costs | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Costs to implement restructuring plan | (5) | (5) | |||||||
Business Acceleration Program | Other Costs Including Contract Termination Costs | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Restructuring cash expenditure | 1 | ||||||||
CompuCom Strategic Alternatives Review | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Professional fees | 1 | 2 | |||||||
CompuCom Strategic Alternatives Review | Other Costs Including Contract Termination Costs | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Costs to implement restructuring plan | 2 | ||||||||
Restructuring cash expenditure | 1 | ||||||||
Planned Separation of Consumer Business | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Estimated additional costs | 100 | 100 | $ 100 | ||||||
Number of independent company | Company | 2 | ||||||||
Planned Separation of Consumer Business | Other Costs Including Contract Termination Costs | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Costs to implement restructuring plan | 11 | ||||||||
Planned Separation of Consumer Business | Third-Party Professional Fees | |||||||||
Merger Restructuring And Other Activity [Line Items] | |||||||||
Costs to implement restructuring plan | $ 11 | $ 11 |
Severance and Facility Closure
Severance and Facility Closure Costs (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 14 Months Ended | ||
May 31, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | $ 52 | |||||
Charges (credits) Incurred | 16 | |||||
Cash Payments | (22) | |||||
Ending Balance | $ 46 | 46 | $ 46 | |||
Maximize B2B Restructuring Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Charges (credits) Incurred | (2) | $ 51 | 9 | 90 | ||
Cash Payments | (11) | (3) | (16) | |||
Business Acceleration Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Charges (credits) Incurred | $ 6 | $ 14 | ||||
Termination Benefits | Maximize B2B Restructuring Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | 30 | |||||
Charges (credits) Incurred | (1) | |||||
Cash Payments | (5) | |||||
Ending Balance | 24 | 24 | 24 | |||
Termination Benefits | Business Acceleration Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | 8 | |||||
Charges (credits) Incurred | (5) | |||||
Cash Payments | (3) | |||||
Lease and contract obligations, accruals for facilities closures and other costs | Maximize B2B Restructuring Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | 10 | |||||
Charges (credits) Incurred | $ 28 | 6 | ||||
Cash Payments | (9) | |||||
Ending Balance | 7 | 7 | 7 | |||
Lease and contract obligations, accruals for facilities closures and other costs | Business Acceleration Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | 1 | |||||
Cash Payments | (1) | |||||
Lease and contract obligations, accruals for facilities closures and other costs | Merger related accruals | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | 1 | |||||
Ending Balance | 1 | 1 | 1 | |||
Lease and contract obligations, accruals for facilities closures and other costs | Comprehensive Business Review | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | 2 | |||||
Ending Balance | 2 | 2 | 2 | |||
Lease and contract obligations, accruals for facilities closures and other costs | CompuCom Strategic Alternatives Review | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Charges (credits) Incurred | 2 | |||||
Cash Payments | (1) | |||||
Ending Balance | 1 | 1 | 1 | |||
Lease and contract obligations, accruals for facilities closures and other costs | USR Parent, Inc. Proposals | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Charges (credits) Incurred | 3 | |||||
Cash Payments | (3) | |||||
Lease and contract obligations, accruals for facilities closures and other costs | Planned Separation of Consumer Business | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Charges (credits) Incurred | 11 | |||||
Ending Balance | $ 11 | $ 11 | $ 11 |
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. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | |
Disaggregation Of Revenue [Line Items] | ||||
Total sales | $ 2,286 | $ 2,158 | $ 4,652 | $ 4,883 |
Products, Supplies | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 895 | 817 | 1,832 | 1,992 |
Products, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 753 | 755 | 1,550 | 1,619 |
Products, Furniture and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 313 | 285 | 630 | 583 |
Services, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 153 | 155 | 303 | 330 |
Services, Copy Print and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 172 | 146 | 337 | 359 |
Business Solutions Division | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 1,146 | 1,024 | 2,274 | 2,358 |
Business Solutions Division | Products, Supplies | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 592 | 548 | 1,167 | 1,302 |
Business Solutions Division | Products, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 297 | 271 | 606 | 588 |
Business Solutions Division | Products, Furniture and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 188 | 146 | 363 | 322 |
Business Solutions Division | Services, Copy Print and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 69 | 59 | 138 | 146 |
Retail Division | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 914 | 912 | 1,953 | 2,069 |
Retail Division | Products, Supplies | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 299 | 263 | 660 | 683 |
Retail Division | Products, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 389 | 424 | 828 | 907 |
Retail Division | Products, Furniture and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 120 | 135 | 258 | 257 |
Retail Division | Services, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 5 | 6 | 11 | 15 |
Retail Division | Services, Copy Print and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 101 | 84 | 196 | 207 |
CompuCom Division | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 222 | 214 | 418 | 450 |
CompuCom Division | Products, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 67 | 58 | 116 | 122 |
CompuCom Division | Services, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 153 | 153 | 299 | 322 |
CompuCom Division | Services, Copy Print and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 2 | 3 | 3 | 6 |
Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 4 | 8 | 7 | 6 |
Other | Products, Supplies | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 4 | 6 | 5 | 7 |
Other | Products, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 2 | 2 | ||
Other | Products, Furniture and Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | 5 | 4 | 9 | 4 |
Other | Services, Technology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total sales | $ (5) | $ (4) | $ (7) | $ (7) |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | |||
Jun. 26, 2021USD ($) | Jun. 27, 2020USD ($) | Jun. 26, 2021USD ($)Segment | Jun. 27, 2020USD ($) | Dec. 26, 2020USD ($) | |
Revenue From Contract With Customer [Abstract] | |||||
Number of reportable segments | Segment | 3 | ||||
Revenue From Contract With Customer [Line Items] | |||||
Deferred revenue related to loyalty programs | $ 49,000,000 | $ 49,000,000 | $ 50,000,000 | ||
Capitalized acquisition cost | 31,000,000 | 31,000,000 | 30,000,000 | ||
Capitalized contract cost, amortization | 8,000,000 | $ 7,000,000 | 14,000,000 | $ 15,000,000 | |
Impairment charges related to contract assets | 115,000,000 | 401,000,000 | 127,000,000 | 413,000,000 | |
Revenue recognition included in short-term contract liabilities | 23,000,000 | 19,000,000 | |||
Recognition of contract assets as a result of business combination | 0 | 0 | |||
Recognition of contract liabilities as a result of business combination | 2,000,000 | 0 | |||
Significant adjustment to revenue from performance obligations | 0 | 0 | |||
Contract with customer, asset, reclassified to receivable | 0 | 0 | |||
Contract Assets | |||||
Revenue From Contract With Customer [Line Items] | |||||
Impairment charges related to contract assets | 0 | $ 0 | 0 | $ 0 | |
Accrued Expenses and Other Current Liabilities | |||||
Revenue From Contract With Customer [Line Items] | |||||
Deferred revenue related to loyalty programs | $ 11,000,000 | $ 11,000,000 | $ 12,000,000 |
Summary of Receivables, Contrac
Summary of Receivables, Contract Assets and Contract Liabilities from Contracts with Customers (Detail) - USD ($) $ in Millions | Jun. 26, 2021 | Dec. 26, 2020 |
Contract With Customer Asset And Liability [Abstract] | ||
Trade receivables, net | $ 561 | $ 501 |
Short-term contract assets | 18 | 15 |
Long-term contract assets | 13 | 15 |
Short-term contract liabilities | 49 | 50 |
Long-term contract liabilities | $ 3 | $ 4 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 26, 2021USD ($) | Jun. 27, 2020USD ($) | Jun. 26, 2021USD ($)Segment | Jun. 27, 2020USD ($) | Dec. 26, 2020USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | Segment | 3 | ||||
Number of operating segments | Segment | 3 | ||||
Goodwill impairment charge | $ 103 | ||||
Goodwill | $ 575 | $ 575 | $ 609 | ||
CompuCom Division and Contract Reporting Unit | |||||
Segment Reporting Information [Line Items] | |||||
Carrying value in excess of fair value for reporting unit, percentage | 12.00% | ||||
BuyerQuest Acquisition | |||||
Segment Reporting Information [Line Items] | |||||
Date of acquisition | Jan. 29, 2021 | ||||
Intersegment Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 6 | $ 3 | $ 10 | $ 7 | |
Operating Segments | CompuCom Division | |||||
Segment Reporting Information [Line Items] | |||||
Goodwill, Fair value | 103 | 103 | |||
Goodwill impairment charge | 103 | 103 | |||
Goodwill | 113 | $ 113 | $ 215 | ||
Operating Segments | CompuCom Division | Trade Name | |||||
Segment Reporting Information [Line Items] | |||||
Indefinite-lived intangible asset, impairment charge | $ 11 |
Reconciliation of Revenue from
Reconciliation of Revenue from Segments to Consolidated (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 2,286 | $ 2,158 | $ 4,652 | $ 4,883 |
Business Solutions Division | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,146 | 1,024 | 2,274 | 2,358 |
Retail Division | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 914 | 912 | 1,953 | 2,069 |
CompuCom Division | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 222 | 214 | 418 | 450 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Sales | $ 4 | $ 8 | $ 7 | $ 6 |
Division Operating Income (Loss
Division Operating Income (Loss) (Detail) - Operating Segments - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Division Operating Income (Loss) | $ 76 | $ 35 | $ 193 | $ 166 |
Business Solutions Division | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Division Operating Income (Loss) | 31 | 13 | 48 | 53 |
Retail Division | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Division Operating Income (Loss) | 44 | 18 | 145 | 106 |
CompuCom Division | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Division Operating Income (Loss) | 3 | $ 4 | 2 | $ 7 |
Other | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Division Operating Income (Loss) | $ (2) | $ (2) |
Reconciliation of Measure of Di
Reconciliation of Measure of Division Operating Income to Consolidated Loss Before Income Taxes (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | |
Segment Reporting Information [Line Items] | ||||
Total Divisions operating income | $ (78) | $ (456) | $ (22) | $ (376) |
Asset impairments | (115) | (401) | (127) | (413) |
Merger, restructuring and other operating expenses, net | (7) | (65) | (21) | (81) |
Unallocated expenses | (32) | (25) | (67) | (48) |
Interest income | 3 | |||
Interest expense | (6) | (11) | (14) | (29) |
Loss on extinguishment and modification of debt | (12) | (12) | ||
Other income, net | 5 | 4 | 16 | 5 |
Loss before income taxes | (79) | (475) | (20) | (409) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Divisions operating income | $ 76 | $ 35 | $ 193 | $ 166 |
Schedule of Goodwill by Segment
Schedule of Goodwill by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 26, 2021 | Jun. 26, 2021 | |
Goodwill [Line Items] | ||
Balance as of December 26, 2020 | $ 609 | |
Acquisitions | 68 | |
Impairments | (103) | |
Foreign currency rate impact | 1 | |
Balance as of June 26, 2021 | $ 575 | 575 |
Operating Segments | Business Solutions Division | ||
Goodwill [Line Items] | ||
Balance as of December 26, 2020 | 316 | |
Acquisitions | 1 | |
Balance as of June 26, 2021 | 317 | 317 |
Operating Segments | Retail Division | ||
Goodwill [Line Items] | ||
Balance as of December 26, 2020 | 78 | |
Balance as of June 26, 2021 | 78 | 78 |
Operating Segments | CompuCom Division | ||
Goodwill [Line Items] | ||
Balance as of December 26, 2020 | 215 | |
Impairments | (103) | (103) |
Foreign currency rate impact | 1 | |
Balance as of June 26, 2021 | 113 | 113 |
Operating Segments | Other | ||
Goodwill [Line Items] | ||
Acquisitions | 67 | |
Balance as of June 26, 2021 | $ 67 | $ 67 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 21.00% | 21.00% | ||
Effective tax rate | (11.00%) | 8.00% | (75.00%) | 4.00% |
Decrease related to current year tax positions | $ 1 |
Calculation of Earnings (Loss)
Calculation of Earnings (Loss) Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 26, 2021 | Mar. 27, 2021 | Jun. 27, 2020 | Mar. 28, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | |
Basic Earnings Per Share | ||||||
Net loss | $ (88) | $ 53 | $ (439) | $ 45 | $ (35) | $ (394) |
Weighted-average shares outstanding | 54 | 53 | 54 | 53 | ||
Basic loss per share | $ (1.62) | $ (8.34) | $ (0.65) | $ (7.46) | ||
Diluted Earnings Per Share | ||||||
Net loss | $ (88) | $ 53 | $ (439) | $ 45 | $ (35) | $ (394) |
Weighted-average shares outstanding | 54 | 53 | 54 | 53 | ||
Stock options and restricted stock | 1 | 1 | ||||
Diluted weighted-average shares outstanding | 54 | 54 | 54 | 54 | ||
Diluted loss per share | $ (1.62) | $ (8.19) | $ (0.65) | $ (7.31) |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Information (Detail) - Nonvested Stock Options and Shares - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Shares excluded from computation of diluted earnings per share | 2 | 2 | ||
Maximum | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Shares excluded from computation of diluted earnings per share | 1 | 1 |
Debt - Additional Information (
Debt - Additional Information (Detail) - Third Amended and Restated Credit Agreement - USD ($) | Apr. 17, 2020 | Jun. 26, 2021 |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity under credit facility | $ 1,300,000,000 | |
Maturity date of debt | Apr. 17, 2025 | |
Available credit under the facility | $ 997,000,000 | |
Revolving loans outstanding | 0 | |
Asset-based Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity under credit facility | $ 1,200,000,000 | |
Asset-based First-in, Last-out Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity under credit facility | $ 100,000,000 | |
Borrowing under credit facility | 100,000,000 | |
Standby Letter of Credit | ||
Debt Instrument [Line Items] | ||
Borrowing under credit facility | $ 49,000,000 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss Activity, Net of Tax (Detail) $ in Millions | 6 Months Ended |
Jun. 26, 2021USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | $ 1,880 |
Balance | 1,841 |
Foreign Currency Translation Adjustments | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | (27) |
Other comprehensive income activity | 9 |
Balance | (18) |
Change in Deferred Pension and Other | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | (5) |
Other comprehensive income activity | 1 |
Balance | (4) |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | (32) |
Other comprehensive income activity | 10 |
Balance | $ (22) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jul. 28, 2021 | Jun. 26, 2021 | Mar. 28, 2020 | Jun. 26, 2021 | May 31, 2021 | Dec. 26, 2020 | Nov. 06, 2019 | |
Shareholders Equity [Line Items] | |||||||
Stock repurchase program, shares purchased | 1,000,000 | 1,000,000 | |||||
Stock repurchase program, shares purchased at cost | $ 46,000,000 | $ 30,000,000 | $ 46,000,000 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 254,000,000 | $ 254,000,000 | |||||
Treasury stock, shares | 10,876,217 | 10,876,217 | 9,857,193 | ||||
Dividends payable, temporarily suspended month and year | 2020-05 | ||||||
Subsequent Event | |||||||
Shareholders Equity [Line Items] | |||||||
Stock repurchase program, shares purchased | 486,000 | ||||||
Stock repurchase program, shares purchased at cost | $ 23,000,000 | ||||||
Maximum | |||||||
Shareholders Equity [Line Items] | |||||||
Stock repurchase program, authorized amount | $ 300,000,000 | $ 200,000,000 |
Components of Net Periodic Pens
Components of Net Periodic Pension Benefit (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | |
North America | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 5 | $ 7 | $ 10 | $ 14 |
Expected return on plan assets | (8) | (8) | (15) | (16) |
Net periodic pension benefit | (3) | (1) | (5) | (2) |
United Kingdom | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 1 | 1 | 2 | 2 |
Expected return on plan assets | (2) | $ (1) | (3) | $ (2) |
Net periodic pension benefit | $ (1) | $ (1) |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jun. 26, 2021USD ($) | |
North America | |
Defined Benefit Plan Disclosure [Line Items] | |
Pension and other postretirement contributions, current period | $ 1 |
Pension and other postretirement contributions, remainder of fiscal year | 1 |
United Kingdom | |
Defined Benefit Plan Disclosure [Line Items] | |
Pension and other postretirement contributions, current period | 1 |
Pension and other postretirement contributions, remainder of fiscal year | $ 1 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 26, 2021 | Jun. 27, 2020 | Jun. 26, 2021 | Jun. 27, 2020 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Asset impairment charges | $ 115 | $ 401 | $ 127 | $ 413 |
Impairment of goodwill and other intangible assets | 114 | 363 | ||
Impairment of operating lease ROU assets | $ 1 | $ 25 | $ 11 | $ 35 |
Retail Stores | Level 2 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Percentage used for analysis | 7.00% | 7.00% |
Schedule of Fair Value of Asset
Schedule of Fair Value of Assets and Liabilities (Detail) - USD ($) $ in Millions | Jun. 26, 2021 | Dec. 26, 2020 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Company-owned life insurance | $ 135 | $ 147 |
Long-Term Debt | New Facilities loans Under Third Amended Credit Agreement due 2025 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 100 | 100 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Company-owned life insurance | 135 | 147 |
Carrying Amount | Long-Term Debt | New Facilities loans Under Third Amended Credit Agreement due 2025 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 100 | 100 |
Revenue bonds, due in varying amounts periodically through 2029 | Long-Term Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 177 | 177 |
Revenue bonds, due in varying amounts periodically through 2029 | Carrying Amount | Long-Term Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 176 | 176 |
American & Foreign Power Company, Inc. 5% debentures, due 2030 | Long-Term Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 15 | 14 |
American & Foreign Power Company, Inc. 5% debentures, due 2030 | Carrying Amount | Long-Term Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 15 | $ 15 |
Schedule of Fair Value of Ass_2
Schedule of Fair Value of Assets and Liabilities (Parenthetical) (Detail) - Long-Term Debt | 6 Months Ended | 12 Months Ended |
Jun. 26, 2021 | Dec. 26, 2020 | |
Carrying Amount | New Facilities loans Under Third Amended Credit Agreement due 2025 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2025 | 2025 |
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 | New Facilities loans Under Third Amended Credit Agreement due 2025 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2025 | 2025 |
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) | 3 Months Ended | 6 Months Ended |
Jun. 26, 2021USD ($) | Jun. 26, 2021USD ($) | |
Commitments And Contingencies Disclosure [Line Items] | ||
Loss of service revenue | $ 2,000,000 | $ 5,000,000 |
Maximum expenses expected to incur | 20,000,000 | |
Accrued expenses through first quarter of 2021 | 10,000,000 | 10,000,000 |
Minimum | ||
Commitments And Contingencies Disclosure [Line Items] | ||
Estimated total loss of service revenue | 5,000,000 | 5,000,000 |
Losses for environmental liabilities | 15,000,000 | |
Maximum | ||
Commitments And Contingencies Disclosure [Line Items] | ||
Estimated total loss of service revenue | $ 8,000,000 | 8,000,000 |
Losses for environmental liabilities | $ 25,000,000 |