Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ODP | |
Entity Registrant Name | The ODP Corporation | |
Entity Central Index Key | 0000800240 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 37,378,079 | |
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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
Income Statement [Abstract] | ||||
Sales | $ 2,009 | $ 2,172 | $ 6,025 | $ 6,385 |
Cost of goods and occupancy costs | 1,535 | 1,686 | 4,655 | 4,983 |
Gross profit | 474 | 486 | 1,370 | 1,402 |
Selling, general and administrative expenses | 379 | 391 | 1,123 | 1,164 |
Asset impairments | 3 | 3 | 13 | 8 |
Merger, restructuring and other operating expenses, net | 1 | 8 | 2 | 42 |
Operating income | 91 | 84 | 232 | 188 |
Other income (expense): | ||||
Interest income | 3 | 1 | 7 | 3 |
Interest expense | (5) | (1) | (15) | (10) |
Other income, net | 3 | 5 | 8 | 9 |
Income from continuing operations before income taxes | 92 | 89 | 232 | 190 |
Income tax expense | 22 | 22 | 56 | 48 |
Net income from continuing operations | 70 | 67 | 176 | 142 |
Discontinued operations, net of tax | 7 | |||
Net income | $ 70 | $ 67 | $ 176 | $ 149 |
Basic earnings (loss) per share | ||||
Continuing operations | $ 1.83 | $ 1.39 | $ 4.52 | $ 2.92 |
Discontinued operations | (0.01) | 0.14 | ||
Net basic earnings (loss) per share | 1.83 | 1.38 | 4.52 | 3.06 |
Diluted earnings (loss) per share | ||||
Continuing operations | 1.79 | 1.36 | 4.38 | 2.84 |
Discontinued operations | (0.01) | 0.13 | ||
Net diluted earnings (loss) per share | $ 1.79 | $ 1.35 | $ 4.38 | $ 2.97 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income (Loss) | $ 70 | $ 67 | $ 176 | $ 149 |
Other comprehensive income, net of tax, where applicable: | ||||
Foreign currency translation adjustments | (7) | (19) | (31) | |
Reclassification of foreign currency translation adjustments realized upon disposal of business | 6 | |||
Pension valuation adjustments | (43) | (3) | (44) | (5) |
Total other comprehensive income, net of tax, where applicable | (50) | (22) | (44) | (30) |
Comprehensive income | $ 20 | $ 45 | $ 132 | $ 119 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 384 | $ 403 |
Receivables, net | 542 | 536 |
Inventories | 782 | 828 |
Prepaid expenses and other current assets | 37 | 36 |
Current assets held for sale | 9 | 107 |
Total current assets | 1,754 | 1,910 |
Property and equipment, net | 352 | 352 |
Operating lease right-of-use assets | 951 | 874 |
Goodwill | 468 | 464 |
Other intangible assets, net | 42 | 46 |
Deferred income taxes | 141 | 182 |
Other assets | 272 | 321 |
Total assets | 3,980 | 4,149 |
Current liabilities: | ||
Trade accounts payable | 818 | 821 |
Accrued expenses and other current liabilities | 930 | 1,005 |
Income taxes payable | 3 | 17 |
Short-term borrowings and current maturities of long-term debt | 9 | 16 |
Total current liabilities | 1,760 | 1,859 |
Deferred income taxes and other long-term liabilities | 118 | 122 |
Pension and postretirement obligations, net | 16 | 16 |
Long-term debt, net of current maturities | 164 | 172 |
Operating lease liabilities | 767 | 693 |
Total liabilities | 2,825 | 2,862 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock-authorized 80,000,000 shares of $0.01 par value; issued shares-66,695,068 at September 30, 2023 and 65,636,015 at December 31, 2022; outstanding shares--37,626,086 at September 30, 2023 and 42,213,046 at December 31, 2022 | 1 | 1 |
Additional paid-in capital | 2,744 | 2,742 |
Accumulated other comprehensive loss | (121) | (77) |
Accumulated deficit | (275) | (451) |
Treasury stock, at cost- 29,068,982 shares at September, 2023 and 23,422,969 shares at December 31, 2022 | (1,194) | (928) |
Total stockholders' equity | 1,155 | 1,287 |
Total liabilities and stockholders’ equity | $ 3,980 | $ 4,149 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
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 | 66,695,068 | 65,636,015 |
Common stock, shares, outstanding | 37,626,086 | 42,213,046 |
Treasury stock, shares | 29,068,982 | 23,422,969 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 24, 2022 | |
Cash flows from operating activities: | ||
Net Income (Loss) | $ 176 | $ 149 |
Income from discontinued operations, net of tax | 7 | |
Net income from continuing operations | 176 | 142 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 87 | 100 |
Amortization of debt discount and issuance costs | 1 | |
Charges for losses on receivables and inventories | 16 | 15 |
Asset impairments | 13 | 8 |
Gain on disposition of assets, net | (3) | (4) |
Compensation expense for share-based payments | 28 | 31 |
Deferred income taxes and deferred tax asset valuation allowances | 39 | 33 |
Changes in working capital and other operating activities | (96) | (246) |
Net cash provided by operating activities of continuing operations | 261 | 79 |
Net cash provided by operating activities | 261 | 79 |
Cash flows from investing activities: | ||
Capital expenditures | (76) | (68) |
Businesses acquired, net of cash acquired | (9) | |
Proceeds from disposition of assets | 105 | 6 |
Settlement of company-owned life insurance policies | 3 | 3 |
Net cash provided by (used in) investing activities of continuing operations | 23 | (59) |
Net cash provided by investing activities of discontinued operations | 5 | 74 |
Net cash provided by investing activities | 28 | 15 |
Cash flows from financing activities: | ||
Net payments on long and short-term borrowings | (12) | (16) |
Debt retirement | (204) | (43) |
Debt issuance | 200 | |
Share purchases for taxes, net of proceeds from employee share-based transactions | (26) | (19) |
Repurchase of common stock for treasury | (264) | (69) |
Other financing activities | (4) | |
Net cash used in financing activities of continuing operations | (306) | (151) |
Net cash used in financing activities | (306) | (151) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (6) | |
Net decrease in cash, cash equivalents and restricted cash | (17) | (63) |
Cash, cash equivalents and restricted cash at beginning of period | 404 | 537 |
Cash, cash equivalents and restricted cash at end of period | 387 | 474 |
Supplemental information on non-cash investing and financing activities | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | 275 | 171 |
Promissory note receivable obtained from disposition of discontinued operations | 59 | 55 |
Cash taxes paid, net | 27 | |
Earn-out receivable obtained from disposition of discontinued operations | 9 | 9 |
Cash interest paid, net of amounts capitalized and non-recourse debt | 5 | |
Right-of-use assets obtained in exchange for new finance lease liabilities | $ 4 | 2 |
Other current receivable obtained from disposition of discontinued operations | 30 | |
Transfer from additional paid-in capital to treasury stock for final settlement of the accelerated share repurchase agreement | $ 29 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock |
Balance at Dec. 25, 2021 | $ 1,438 | $ 1 | $ 2,692 | $ (6) | $ (617) | $ (632) |
Balance, Shares at Dec. 25, 2021 | 64,704,979 | |||||
Net Income (Loss) | 55 | 55 | ||||
Other comprehensive income (loss) | 5 | 5 | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) | (14) | (14) | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 652,606 | |||||
Amortization of long-term incentive stock grants | 9 | 9 | ||||
Other | (1) | (1) | ||||
Balance at Mar. 26, 2022 | 1,492 | $ 1 | 2,687 | (1) | (562) | (633) |
Balance, Shares at Mar. 26, 2022 | 65,357,585 | |||||
Balance at Dec. 25, 2021 | 1,438 | $ 1 | 2,692 | (6) | (617) | (632) |
Balance, Shares at Dec. 25, 2021 | 64,704,979 | |||||
Net Income (Loss) | 149 | |||||
Other comprehensive income (loss) | (30) | |||||
Balance at Sep. 24, 2022 | 1,499 | $ 1 | 2,733 | (36) | (468) | (731) |
Balance, Shares at Sep. 24, 2022 | 65,632,777 | |||||
Balance at Mar. 26, 2022 | 1,492 | $ 1 | 2,687 | (1) | (562) | (633) |
Balance, Shares at Mar. 26, 2022 | 65,357,585 | |||||
Net Income (Loss) | 27 | 27 | ||||
Other comprehensive income (loss) | (13) | (13) | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) | (3) | (3) | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 142,993 | |||||
Amortization of long-term incentive stock grants | 10 | 10 | ||||
Final settlement of the accelerated share repurchase agreement | 29 | (29) | ||||
Balance at Jun. 25, 2022 | 1,513 | $ 1 | 2,723 | (14) | (535) | (662) |
Balance, Shares at Jun. 25, 2022 | 65,500,578 | |||||
Net Income (Loss) | 67 | 67 | ||||
Other comprehensive income (loss) | (22) | (22) | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) | (2) | (2) | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 132,199 | |||||
Amortization of long-term incentive stock grants | 12 | 12 | ||||
Repurchase of common stock | (69) | (69) | ||||
Balance at Sep. 24, 2022 | 1,499 | $ 1 | 2,733 | (36) | (468) | (731) |
Balance, Shares at Sep. 24, 2022 | 65,632,777 | |||||
Balance at Dec. 31, 2022 | 1,287 | $ 1 | 2,742 | (77) | (451) | (928) |
Balance, Shares at Dec. 31, 2022 | 65,636,015 | |||||
Net Income (Loss) | 72 | 72 | ||||
Other comprehensive income (loss) | 2 | 2 | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) | (19) | (19) | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 812,978 | |||||
Amortization of long-term incentive stock grants | 9 | 9 | ||||
Repurchase of common stock | (202) | (202) | ||||
Other | (1) | (1) | ||||
Balance at Apr. 01, 2023 | 1,148 | $ 1 | 2,732 | (75) | (379) | (1,131) |
Balance, Shares at Apr. 01, 2023 | 66,448,993 | |||||
Balance at Dec. 31, 2022 | 1,287 | $ 1 | 2,742 | (77) | (451) | (928) |
Balance, Shares at Dec. 31, 2022 | 65,636,015 | |||||
Net Income (Loss) | 176 | |||||
Other comprehensive income (loss) | (44) | |||||
Repurchase of common stock | (266) | |||||
Balance at Sep. 30, 2023 | 1,155 | $ 1 | 2,744 | (121) | (275) | (1,194) |
Balance, Shares at Sep. 30, 2023 | 66,695,068 | |||||
Balance at Apr. 01, 2023 | 1,148 | $ 1 | 2,732 | (75) | (379) | (1,131) |
Balance, Shares at Apr. 01, 2023 | 66,448,993 | |||||
Net Income (Loss) | 34 | 34 | ||||
Other comprehensive income (loss) | 4 | 4 | ||||
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) | 148,113 | |||||
Amortization of long-term incentive stock grants | 9 | 9 | ||||
Repurchase of common stock | (31) | (31) | ||||
Other | 1 | 1 | ||||
Balance at Jul. 01, 2023 | 1,161 | $ 1 | 2,737 | (71) | (344) | (1,162) |
Balance, Shares at Jul. 01, 2023 | 66,597,106 | |||||
Net Income (Loss) | 70 | 70 | ||||
Other comprehensive income (loss) | (50) | (50) | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) | (3) | (3) | ||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 97,962 | |||||
Amortization of long-term incentive stock grants | 10 | 10 | ||||
Repurchase of common stock | (32) | (32) | ||||
Other | (1) | (1) | ||||
Balance at Sep. 30, 2023 | $ 1,155 | $ 1 | $ 2,744 | $ (121) | $ (275) | $ (1,194) |
Balance, Shares at Sep. 30, 2023 | 66,695,068 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Sep. 24, 2022 | Jun. 25, 2022 | Mar. 26, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net Income (Loss) | $ 70 | $ 34 | $ 72 | $ 67 | $ 27 | $ 55 | $ 176 | $ 149 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
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”) is a leading provider of products, services and technology solutions through an integrated business-to-business (“B2B”) distribution platform and omni-channel presence, which includes supply chain and distribution operations, dedicated sales professionals, a B2B digital procurement solution, online presence, and a network of Office Depot and OfficeMax retail stores. Through its operating companies ODP Business Solutions, LLC; Office Depot, LLC; Veyer, LLC; and Varis, Inc., The ODP Corporation empowers every business, professional, and consumer to achieve more every day. The Company has four reportable segments (or “Divisions”), which are ODP Business Solutions Division, Office Depot Division, Veyer Division, and Varis Division. Refer to Note 4 for additional information. The Company’s CompuCom Division was sold through a single disposal group on December 31, 2021. Accordingly, that business is presented as discontinued operations. Refer to Note 12 for additional information. The Condensed Consolidated Financial Statements as of September 30, 2023, and for the 13-week and 39-week periods ended September 30, 2023 (also referred to as the “third quarter of 2023” and “year-to-date 2023”, respectively) and September 24, 2022 (also referred to as the “third quarter of 2022” and “year-to-date 2022”, 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. The Company made a business acquisition in 2023 which is included prospectively from the date of acquisition, thus affecting the comparability of the Company’s financial statements for the periods presented in this Quarterly Report on Form 10-Q. Refer to Note 2 for additional information. 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 2022 Form 10-K. These interim results are not necessarily indicative of the results that should be expected for the full year. CASH MANAGEMENT The cash management process generally utilizes zero balance accounts which provide for the settlement of the related disbursement and cash concentration accounts on a daily basis. Amounts not yet presented for payment to zero balance disbursement accounts of $ 9 million and $ 16 million at September 30, 2023 and December 31, 2022, respectively, are presented in Trade accounts payable and Accrued expenses and other current liabilities. At September 30, 2023 and December 31, 2022 , cash and cash equivalents held outside the United States amounted to $ 101 million and $ 113 million, respectively. Year-to-date 2023 , the Company repatriated $ 25 million cash that was held in Canada, for a cost of $ 1 million. The Company has certain ongoing pension obligations related to its frozen defined benefit pension plan in the United Kingdom. Restricted cash consists primarily of cash in bank committed to fund UK pension obligations based on the agreements that govern the UK pension plan. Restricted cash is valued at cost, wh ich approximates fair value. Restricted cash was $ 3 million and $ 1 million at September 30, 2023 and December 31, 2022 , respectively. REVENUE AND CONTRACT BALANCES The Company generates substantially all of its revenue from contracts with customers for the sale of products and services. Refer to Note 4 for information on revenue by reportable segment and product category. Contract balances primarily consist of receivables, assets related to deferred contract acquisition costs, liabilities related to payments received in advance of performance under the contract, and liabilities related to unredeemed gift cards and loyalty programs. The following table provides information about receivables, contract assets and contract liabilities from contracts with customers: September 30, December 31, (In millions) 2023 2022 Trade receivables, net $ 435 $ 412 Short-term contract assets 5 8 Long-term contract assets 1 2 Short-term contract liabilities 33 41 Long-term contract liabilities — — The Company recognized revenues of $ 24 million and $ 23 million year-to-date 2023 and year-to-date 2022 , respectively, which were included in the short-term contract liability balance at the beginning of each respective period. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 2. ACQUISITIONS Since 2017, the Company has been acquiring profitable regional office supply distribution businesses to expand its reach and distribution network into geographic areas that were previously underserved. In the first quarter of 2023, the Company acquired a small independent regional office supply distribution business in the U.S. There have not been any other acquisitions in year-to-date 2023 . The Company’s strategy has been to acquire businesses with purchase prices ranging from $ 5 million to $ 15 million, which were individually insignificant to the Company. The business acquired was consistent with acquisitions of similar sized businesses in the past and the acquisition was primarily funded with cash on hand. The acquisition was treated as a purchase 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 the acquired office supply distribution business includes $ 4 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 September 30, 2023. 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 business is combined with the Company’s operating results subsequent to the purchase date and are included in the ODP Business Solutions Division, as described in Note 4. Certain disclosures set forth under ASC 805, including supplemental pro forma financial information, are not disclosed because the operating results of the acquired business are not material to the Company. 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 third quarter and year-to-date 2023 . |
MERGER, RESTRUCTURING AND OTHER
MERGER, RESTRUCTURING AND OTHER ACTIVITY | 9 Months Ended |
Sep. 30, 2023 | |
Merger Restructuring And Other Activity [Abstract] | |
MERGER, RESTRUCTURING AND OTHER ACTIVITY | NOTE 3. MERGER, RESTRUCTURING AND OTHER ACTIVITY 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 facilities, consolidating functional activities, eliminating redundant positions and disposing of non-strategic businesses and assets. The expenses and any income recognized directly associated with these actions are included in Merger, restructuring and other operating expenses, net on a separate line in the Condensed Consolidated Statements of Operations in order to identify these activities apart from the expenses incurred to sell to and service customers. These expenses are not included in the determination of Division operating income. The table below summarizes the major components of Merger, restructuring and other operating expenses, net. Third Quarter Year-to-Date (In millions) 2023 2022 2023 2022 Merger and transaction related expenses Transaction and integration $ — $ ( 7 ) $ — $ ( 7 ) Total Merger and transaction related expenses — ( 7 ) — ( 7 ) Restructuring expenses Severance — ( 1 ) — ( 2 ) Professional fees — — — — Facility closure, contract termination, and other expenses, net 1 2 2 4 Total Restructuring expenses, net 1 1 2 2 Other operating expenses Professional fees — 14 — 47 Total Other operating expenses — 14 — 47 Total Merger, restructuring and other operating expenses, net $ 1 $ 8 $ 2 $ 42 MERGER AND TRANSACTION RELATED EXPENSES Transaction and integration expenses include legal, accounting, and other third-party expenses incurred in connection with acquisitions. Year-to-date 2023, the Company recognized transaction and integration expenses of less than $ 1 million related to the acquisition of the small independent regional office supply distribution business. The Company did not incur any transaction and integration expenses in the third quarter of 2023. In the third quarter of 2022 , the Company recognized $ 7 million income related to an earn-out adjustment on the acquisition of BuyerQuest Holdings, Inc. Year-to-date 2022 , the Company did no t incur any additional transaction and integration expenses. 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 was 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. In December 2022, the Company’s Board of Directors approved to extend the program through 2024. The Company closed four and 30 retail stores, respectively, in the third quarter and year-to-date 2023 . The Company had closed a total of 237 retail stores and two distribution facilities in 2022, 2021 and 2020 under the Maximize B2B Restructuring Plan. It is anticipated that additional retail stores will be closed in 2023 and 2024. However, it is generally understood that closures will approximate the store’s lease termination date. In the third quarter and year-to-date 2023 , the Company had $ 1 million and $ 2 million of restructuring costs, respectively, associated with the Maximize B2B Restructuring Plan. In the third quarter and year-to-date 2023 , the Company made cash payments of $ 3 million and $ 7 million, respectively, associated with expenditures for the Maximize B2B Restructuring Plan. Since its inception in 2020, the Company incurred $ 83 million in restructuring expenses to implement the Maximize B2B Restructuring Plan through year-to-date 2023 for its continuing operations, of which $ 68 million were cash expenditures. Total estimated restructuring costs related to the Maximize B2B Restructuring Plan are expected to be up to $ 95 million. In the third quarter and year-to-date 2022 , the Company incurred $ 2 million and $ 4 million, respectively, in facility closure and other costs associated with the Maximize B2B Restructuring Plan. The Company also reversed $ 1 million and $ 2 million of employee severance accruals in the third quarter and year-to-date 2022 due to changes in estimates. The Company had $ 2 million and $ 5 million of cash expenditures in the third quarter and year-to-date 2022, respectively, associated with the Maximize B2B Restructuring Plan. OTHER OPERATING EXPENSES Other operating expenses represent costs incurred that are incremental to those related to running the Company’s core operations, which are presented within Selling, general and administrative expenses on the Condensed Consolidated Statements of Operations. The Company did not incur any other operating expenses in the third quarter and year-to-date 2023. Year-to-date 2022 , the Company had incurred $ 33 million in third-party professional fees associated with the previously planned separation of its consumer business, which was all incurred in the first half of 2022. Also, during the third quarter of 2022, the Company incurred $ 14 million in third-party professional fees in connection with the re-alignment of its operations into four Divisions. For additional information, see Note 1. “Summary of Significant Accounting Policies” in Notes to Consolidated Financial Statements and Management’s Discussion and Analysis in the 2022 Form 10-K. MERGER, RESTRUCTURING AND OTHER ACCRUALS The activity in the merger, restructuring and other accruals year-to-date 2023 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 31, Charges (credits) Cash September 30, (In millions) 2022 Incurred Payments 2023 Termination benefits: Maximize B2B Restructuring Plan $ 5 $ — $ ( 3 ) $ 2 Lease and contract obligations, accruals for facilities Maximize B2B Restructuring Plan 4 4 ( 4 ) 4 Comprehensive Business Review 1 — — 1 Previously planned separation of consumer business and re-alignment 2 — ( 2 ) — Total $ 12 $ 4 $ ( 9 ) $ 7 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. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 4. SEGMENT INFORMATION At September 30, 2023 , the Company had four reportable segments: ODP Business Solutions Division – The Company’s leading B2B distribution solutions provider serving small, medium and enterprise level companies, including those in the public and education sectors. This segment includes the contract sales channel of the Company’s previous Business Solutions Division, and operates in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada. The ODP Business Solutions Division sells nationally branded, as well as the Company’s private branded, office supply and adjacency products and services to customers, who are served through a dedicated sales force, catalogs, telesales, and electronically through the Company’s Internet websites. Adjacency products and services include cleaning, janitorial, and breakroom supplies, office furniture, technology products, and copy and print services. This segment also includes our Federation entities, which are over a dozen regional office supply distribution businesses acquired by the Company as part of its transformation to expand its reach and distribution network into geographic areas that were previously underserved, and which continue to operate under their own brand names. The acquisition of these businesses has allowed for an effective means to expand our distribution reach, target new business customers and grow our offerings beyond traditional office supplies. Office Depot Division – The Company’s leading provider of retail consumer and small business products and services distributed through a fully integrated omni-channel platform of 938 Office Depot and OfficeMax retail locations in the United States, Puerto Rico and the U.S. Virgin Islands, and an eCommerce presence (www.officedepot.com). The Office Depot Division sells 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 offering business services including copying, printing, digital imaging, mailing, shipping and technology support services. In addition, the print needs for retail and business customers are facilitated through the Company’s regional print production centers. Veyer Division – The Company’s supply chain, distribution, procurement and global sourcing operation, which specializes in B2B and consumer business service delivery, with core competencies in distribution, fulfillment, transportation, global sourcing and purchasing. The Veyer Division’s customers include our Office Depot Division and ODP Business Solutions Division, as well as third-party customers. The Veyer Division also includes the Company’s global sourcing operations in Asia. Varis Division – The Company’s tech-enabled B2B indirect procurement marketplace, which provides a seamless way for buyers and suppliers to transact through the platform’s consumer-like buying experience, advanced spend management tools, network of suppliers, and technology capabilities. In connection with the Company’s development efforts of this Division, it acquired BuyerQuest Holdings, Inc. (“BuyerQuest”) in 2021, a software as a service eProcurement platform company. BuyerQuest’s operating results are included in the Varis Division. The Varis Division currently serves enterprise businesses and provides its services to middle- and small-sized businesses. It is focused on filling the growing demand for a B2B centric digital commerce platform that is modern, trusted, and provides the procurement controls and visibility businesses require to operate. 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 Divisions, 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. The following is a summary of sales and operating income (loss) by each of the Divisions, reconciled to consolidated totals: (In millions) ODP Business Solutions Division Office Depot Division Veyer Division Varis Division Eliminations Total Third Quarter of 2023 Sales (external) $ 996 $ 1,000 $ 11 $ 2 $ — $ 2,009 Sales (internal) 4 10 1,320 — ( 1,334 ) — Total sales $ 1,000 $ 1,010 $ 1,331 $ 2 $ ( 1,334 ) $ 2,009 Division operating income (loss) $ 56 $ 66 $ 10 $ ( 17 ) $ — $ 115 Year-to-Date 2023 Sales (external) $ 3,001 $ 2,991 $ 28 $ 5 $ — $ 6,025 Sales (internal) 11 27 4,044 — ( 4,082 ) — Total sales $ 3,012 $ 3,018 $ 4,072 $ 5 $ ( 4,082 ) $ 6,025 Division operating income (loss) $ 140 $ 186 $ 31 $ ( 48 ) $ — $ 309 Third Quarter of 2022 Sales (external) $ 1,030 $ 1,133 $ 7 $ 2 $ — $ 2,172 Sales (internal) 5 10 1,477 — ( 1,492 ) — Total sales $ 1,035 $ 1,143 $ 1,484 $ 2 $ ( 1,492 ) $ 2,172 Division operating income (loss) $ 48 $ 83 $ 9 $ ( 17 ) $ — $ 123 Year-to-Date 2022 Sales (external) $ 3,004 $ 3,358 $ 18 $ 5 $ — $ 6,385 Sales (internal) 15 25 4,415 — ( 4,455 ) — Total sales $ 3,019 $ 3,383 $ 4,433 $ 5 $ ( 4,455 ) $ 6,385 Division operating income (loss) $ 103 $ 228 $ 25 $ ( 48 ) $ — $ 308 The reconciliation of the measure of Division operating income to Consolidated income from continuing operations before income taxes is as follows: Third Quarter Year-to-Date (In millions) 2023 2022 2023 2022 Total Divisions operating income $ 115 $ 123 $ 309 $ 308 Add/(subtract): Asset impairments ( 3 ) ( 3 ) ( 13 ) ( 8 ) Merger, restructuring and other operating expenses, net ( 1 ) ( 8 ) ( 2 ) ( 42 ) Unallocated expenses ( 20 ) ( 28 ) ( 62 ) ( 70 ) Interest income 3 1 7 3 Interest expense ( 5 ) ( 1 ) ( 15 ) ( 10 ) Other income, net 3 5 8 9 Income from continuing operations before income taxes $ 92 $ 89 $ 232 $ 190 The following table provides information about disaggregated sales by major categories: Third Quarter Year-to-Date (In millions) 2023 2022 2023 2022 Major sales categories Supplies $ 1,013 $ 1,080 $ 3,012 $ 3,106 Technology 531 597 1,674 1,871 Furniture and other 297 336 846 948 Copy and print 168 159 493 460 Total $ 2,009 $ 2,172 $ 6,025 $ 6,385 The components of goodwill by segment are as follows: (In millions) Balance as of December 31, 2022 Acquisitions Balance as of September 30, 2023 ODP Business Solutions Division $ 142 $ 4 $ 146 Office Depot Division 219 — 219 Veyer Division 35 — 35 Varis Division 68 — 68 Total $ 464 $ 4 $ 468 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. Each reportable segment also represents a reporting unit. The most recent annual impairment assessment was performed during the fourth quarter of 2022, using a quantitative assessment for its Varis reporting unit, and qualitative assessments for all other reporting units. The quantitative assessment for Varis reporting unit combined the income approach and the market approach valuation methodologies and concluded that the fair value of this reporting unit exceeded its carrying amount by 21 %. The Varis reporting unit has been in operation since 2021, therefore the Company has less experience estimating the operating performance of this reporting unit. Although it continues to add new customers and suppliers, its expected revenue increase has been slower than anticipated due to the time it requires to ramp up activity for new customers. As a result, the current operating performance of the Varis reporting unit has fallen below projections in year-to-date 2023. In addition, the Company has performed an extensive evaluation of triggering events for this reporting unit and determined that there is not an impairment as of September 30, 2023. The Company’s long-term planning process is performed annually in the fourth quarter, which aligns with the timing of the Company’s annual goodwill and indefinite-lived intangible assessment date. Changes to the critical assumptions used to estimate the fair value of this reporting unit, including changes in projected revenue growth rates, gross margin or expenses may result in a different calculation of fair value, and it is reasonably possible that impairment charges could be recognized in the near future. The Company will continue to evaluate the recoverability of goodwill at the reporting unit level. 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 value, resulting in additional goodwill impairment charges. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 5. INCOME TAXES The Company’s effective tax rates were 24 % for both the third quarter and year-to-date 2023 , and 25 % for both the third quarter and year-to-date 2022. For the third quarter and year-to-date 2023, the Company’s effective rates were primarily impacted by the recognition of research and development tax credits and a tax benefit associated with stock-based compensation awards year-to-date. For the third quarter and year-to-date 2022 , the Company’s effective rates were primarily impacted by the recognition of a tax benefit associated with stock-based compensation awards year-to-date. 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 %. 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 2021 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. 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 PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 6. EARNINGS PER SHARE The following table represents the calculation of earnings per common share – basic and diluted: Third Quarter Year-to-Date (In millions, except per share amounts) 2023 2022 2023 2022 Basic Earnings Per Share Numerator: Net income from continuing operations $ 70 $ 67 $ 176 $ 142 Income from discontinued operations, net of tax — — — 7 Net income $ 70 $ 67 $ 176 $ 149 Denominator: Weighted-average shares outstanding 38 48 39 49 Basic earnings per share Continuing operations $ 1.83 $ 1.39 $ 4.52 $ 2.92 Discontinued operations — ( 0.01 ) — 0.14 Net basic earnings per share $ 1.83 $ 1.38 $ 4.52 $ 3.06 Diluted Earnings Per Share Numerator: Net income from continuing operations $ 70 $ 67 $ 176 $ 142 Income from discontinued operations, net of tax — — — 7 Net income $ 70 $ 67 $ 176 $ 149 Denominator: Weighted-average shares outstanding 38 48 39 49 Effect of dilutive securities: Stock options and restricted stock 1 1 1 1 Diluted weighted-average shares outstanding 39 49 40 50 Diluted earnings per share Continuing operations $ 1.79 $ 1.36 $ 4.38 $ 2.84 Discontinued operations — ( 0.01 ) — 0.13 Net diluted earnings per share $ 1.79 $ 1.35 $ 4.38 $ 2.97 Awards of stock options and nonvested shares representing additional shares of outstanding common stock were less than one million in both the third quarter and year-to-date 2023 , respectively, and one million and less than one million in the third quarter and year-to-date 2022 , respectively, but they were not included in the computation of diluted weighted-average shares outstanding because their effect would have been antidilutive. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 7. DEBT On April 17, 2020, the Company entered into the Third Amended and Restated Credit Agreement (the “Third Amended Credit Agreement”), which provided 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. During the first quarter of 2022, the Company reduced its asset-based revolving credit facility by $ 200 million to $ 1.0 billion and retired $ 43 million of outstanding FILO Term Loan Facility loans under the Third Amended Credit Agreement. Also, during the first quarter of 2023, the Third Amended Credit Agreement was amended to replace the LIBOR-based Eurocurrency reference interest rate option with a reference interest rate option based upon SOFR. Other than the foregoing, the material terms of the Third Amended Credit Agreement remain unchanged. 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. Year-to-date 2023, t he Company elected to draw down $ 200 million under the Third Amended Credit Agreement to fund the repurchase of its common stock from HG Vora Special Opportunities Master Fund, Ltd. (“HG Vora”) as part of the Company's existing $ 1 billion stock repurchase program, as well as for working capital management and timing of collections and disbursements. This was repaid during the second and third quarters of 2023, resulting in no revolving loans outstanding at September 30, 2023 . During the third quarter of 2023, the Company retired $ 4 million of outstanding FILO Term Loan Facility loans. At September 30, 2023 , the Company had $ 53 million of outstanding FILO Term Loan Facility loans, $ 38 million of outstanding standby letters of credit, and $ 771 million of available credit under the Third Amended Credit Agreement. The Company was in compliance with all applicable covenants at September 30, 2023 . |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 8. 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 31, 2022 $ ( 39 ) $ ( 38 ) $ ( 77 ) Other comprehensive income activity — ( 44 ) ( 44 ) Balance at September 30, 2023 $ ( 39 ) $ ( 82 ) $ ( 121 ) TREASURY STOCK In October 2022, the Board of Directors approved a new stock repurchase program of up to $ 1 billion, available through December 31, 2025, which replaced the existing $ 600 million stock repurchase program effective November 3, 2022. The new authorization may be suspended or discontinued at any time. The exact timing of share repurchases will depend on market conditions and other factors, and will be funded through available cash balances. The Company repurchased 659 thousand shares of its common stock at a cost of $ 32 million and six million shares of its common stock at a cost of $ 266 million in the third quarter and year-to-date 2023 , respectively. Of the total shares repurchased, two million shares were purchased from HG Vora for a cost of $ 89 million pursuant to the related stock purchase agreement that the Company entered into with HG Vora, effective March 13, 2023. As of September 30, 2023 , $ 583 million remains available for stock repurchases under the current stock repurchase program. Subsequent to the end of the third quarter of 2023 and through November 1, 2023, the Company repurchased 249 thousand shares of its common stock at a cost of $ 11 million. At September 30, 2023 , there were 29 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 7 for additional information about the Company’s compliance with covenants. DIVIDENDS ON COMMON STOCK The Company did not declare any cash dividends in the third quarter and year-to-date 2023 . The Company does not anticipate declaring cash dividends in the foreseeable future. The Company’s Third Amended Credit Agreement permits restricted payments, such as dividends, but may be limited if the Company does not meet the required minimum liquidity or fixed charge coverage ratio requirements. Refer to Note 7 for additional information about the Company’s compliance with covenants. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | NOTE 9. 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: Third Quarter Year-to-Date (In millions) 2023 2022 2023 2022 Service cost $ — $ — $ — $ — Interest cost 8 5 24 16 Expected return on plan assets ( 8 ) ( 6 ) ( 25 ) ( 19 ) Amortization of gain ( 2 ) — ( 5 ) — Net periodic pension benefit $ ( 2 ) $ ( 1 ) $ ( 6 ) $ ( 3 ) The North America qualified pension plan is in a net asset position and included in Other assets in the Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022. The North America nonqualified pension plan is in a net liability position and included in Pension and postretirement obligations, net in the Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022. Year-to-date 2023 , $ 2 million of cash contributions were made to the North America pension plans. The Company expects to make additional cash contributions of less than $ 1 million to the North America pension plans during the remainder of 2023. 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: Third Quarter Year-to-Date (In millions) 2023 2022 2023 2022 Service cost $ — $ — $ — $ — Interest cost 2 1 5 3 Expected return on plan assets ( 2 ) ( 1 ) ( 5 ) ( 5 ) Net periodic pension benefit $ — $ — $ — $ ( 2 ) 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. In July 2023, in accordance with applicable UK pension regulations, Trustees of the UK pension plan entered into an agreement with an insurer for the bulk annuity purchase of the plan, covering 100 % of the plan’s members. The insurer was selected after careful consideration of offers received from multiple independent insurers. This agreement, or buy-in, resulted in an exchange of plan assets for an annuity that covers the plan’s future projected benefit obligations. The initial value of the asset associated with this contract is equal to the premium paid to the insurer to secure the insurance policy. In accordance with US GAAP, the Company has set the value of its liability obligations covered by the annuity buy-in contract to be equal to the fair value of the buy-in contract. This has resulted in a reduction of the net asset position of the UK pension plan and a corresponding charge of $ 44 million to other comprehensive income during the third quarter of 2023. The Company anticipates the buyout of the plan and transfer of future benefit obligations of plan participants to be completed with existing plan funds as early as 2024. Accordingly, the Company does not expect the transaction to result in material cash inflows or outflows. At the completion of the buy-out, the Company will remove the assets and liabilities of the UK pension plan from its Consolidated Balance Sheet and a final non-cash plan settlement loss will be included in net periodic pension cost. The UK pension plan is in a net asset position and included in Other assets in the Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022. Year-to-date 2023 , no cash contributions were made to the UK pension plan, and the Company does not anticipate making further cash contributions to the UK pension plan . |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 10. 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. The Company did not have derivative financial instruments during the third quarter and year-to-date 2023. 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 third quarter and year-to-date 2023 , the Company recognized asset impairment charges of $ 3 million and $ 13 million, respectively. Of these asset impairment charges, $ 2 million and $ 8 million in the third quarter and year-to-date 2023, respectively, related to the impairment of operating lease right-of-use (“ROU”) assets associated with the Company’s retail store locations, with the remainder relating to impairment of fixed assets and other impairment. In the third quarter and year-to-date 2022 , the Company recognized asset impairment charges of $ 3 million and $ 8 million, respectively, primarily related to the impairment of operating lease ROU assets associated with the Company's retail store locations. All impairment charges discussed in the sections below are presented in Asset impairments in the Condensed Consolidated Statements of Operations. 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. 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 third quarter of 2023 impairment calculation were discounted at a weighted average discount rate of 8 %. The Company will continue to evaluate initiatives to improve performance and lower operating costs. There are uncertainties regarding the impact of supply chain and macroeconomic conditions 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 third quarter of 2023, 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. The Company did not identify any impairment indicators for these long-lived assets as of September 30, 2023, and as a result, there were no associated impairment charges. The Company’s corporate headquarters in Boca Raton met the criteria to be classified as held for sale during the third quarter of 2022. The asset was measured at the lower of its carrying amount or estimated fair value less costs to sell upon classification to held for sale, which was $ 104 million, and did not result in any valuation reserve being recorded. Accordingly, the Company presented its corporate headquarters in Boca Raton within current assets held for sale in the Condensed Consolidated Balance Sheets as of December 31, 2022 . The Company had entered into an agreement in principle with a third-party buyer to sell this facility. The sales transaction was completed on April 6, 2023, for a sale price of $ 104 million. As a result, there were no gains or losses recorded as a result of the sales transaction in the third quarter and year-to-date 2023. Upon the completion of the sale, the Company also leased back a portion of the building’s office space from the new owner. 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. September 30, December 31, 2023 2022 Carrying Fair Carrying Fair (In millions) Amount Value Amount Value Financial assets: Company-owned life insurance $ 137 $ 137 $ 138 $ 138 Financial liabilities: Long-term debt: New Facilities loans under the Third Amended Credit 2025 53 53 57 57 Revenue bonds, due in varying amounts periodically 2029 75 76 75 76 American & Foreign Power Company, Inc. 5 % debentures, 2030 16 14 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). Death benefits received on company-owned life insurance policies, which are tax-free at payout, typically exceed their cash surrender values. • 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 7 for additional information about the Third Amended Credit Agreement. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11. 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 the ordinary course of business, sales to and transactions with government customers may be subject to lawsuits, investigations, audits and review by governmental authorities and regulatory agencies, with which the Company cooperates. Many of these lawsuits, investigations, audits and reviews are resolved without material impact to the Company. While claims in these matters may at times assert large demands, the Company does not believe that contingent liabilities related to these matters, either individually or in the aggregate, will materially affect its financial position, results of operations, or cash flows. In 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, threatened 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 September 30, 2023 , 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 combined 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. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 12. DISCONTINUED OPERATIONS The Company sold its former CompuCom Division through a single disposal group on December 31, 2021. The transaction was structured and accounted for as an equity sale. The related Securities Purchase Agreement (“SPA”) provides for consideration consisting of a cash purchase price equal to $ 125 million (subject to customary adjustments, including for cash, debt and working capital), an interest-bearing promissory note in the amount of $ 55 million, and a holding fee (“earn-out”) provision providing for payments of up to $ 125 million in certain circumstances. The promissory note accrues interest at six percent per annum, payable on a quarterly basis in cash or in-kind, and is due in full on June 30, 2027. Under the earn-out provision, if the purchaser receives dividends or sale proceeds from the CompuCom business equal to (i) three times its initial capital investment in the CompuCom business plus (ii) 15 % per annum on subsequent capital investments, the Company will be entitled to 50 % of any subsequent dividends or sale proceeds up to and until the Company has received an aggregate of $ 125 million. The Company also agreed to provide certain transitional services to the purchaser for a period of three to twelve months under a separate agreement after closing. The SPA contains customary warranties of the Company and the purchaser. In the fourth quarter of 2022, the Company and the purchaser settled on the cash, debt and working capital adjustments, which resulted in the total cash purchase price of $ 104 million. At the closing date of the transaction, on December 31, 2021, the Company had previously received $ 95 million from the purchaser. Of the additional $ 9 million to be received to settle the total cash purchase price, $ 5 million was received in the first quarter of 2023, and the promissory note was amended in February 2023 to include the remaining $ 4 million, bringing its principal balance to $ 59 million. The earn-out provision was identified to be a derivative in accordance with ASC 815, and its fair value was determined using Monte Carlo simulation as $ 9 million. The promissory note and the earn-out are non-current receivables as of September 30, 2023. The Company did not have any financial results related to discontinued operations on its condensed consolidated statement of operations in the third quarter and year-to-date 2023 . Year-to-date 2022, the Company had loss on disposal of CompuCom of $ 1 million, representing third party professional fees incurred in connection with the sale. In addition, the Company received $ 7 million of insurance proceeds year-to-date 2022 for the malware incident that occurred in 2021 reflected in gain on disposal of discontinued operations, and had an income tax benefit on discontinued operations of $ 1 million . |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The ODP Corporation (including its consolidated subsidiaries, “ODP” or the “Company”) is a leading provider of products, services and technology solutions through an integrated business-to-business (“B2B”) distribution platform and omni-channel presence, which includes supply chain and distribution operations, dedicated sales professionals, a B2B digital procurement solution, online presence, and a network of Office Depot and OfficeMax retail stores. Through its operating companies ODP Business Solutions, LLC; Office Depot, LLC; Veyer, LLC; and Varis, Inc., The ODP Corporation empowers every business, professional, and consumer to achieve more every day. The Company has four reportable segments (or “Divisions”), which are ODP Business Solutions Division, Office Depot Division, Veyer Division, and Varis Division. Refer to Note 4 for additional information. The Company’s CompuCom Division was sold through a single disposal group on December 31, 2021. Accordingly, that business is presented as discontinued operations. Refer to Note 12 for additional information. The Condensed Consolidated Financial Statements as of September 30, 2023, and for the 13-week and 39-week periods ended September 30, 2023 (also referred to as the “third quarter of 2023” and “year-to-date 2023”, respectively) and September 24, 2022 (also referred to as the “third quarter of 2022” and “year-to-date 2022”, 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. The Company made a business acquisition in 2023 which is included prospectively from the date of acquisition, thus affecting the comparability of the Company’s financial statements for the periods presented in this Quarterly Report on Form 10-Q. Refer to Note 2 for additional information. 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 2022 Form 10-K. These interim results are not necessarily indicative of the results that should be expected for the full year. |
Cash Management | CASH MANAGEMENT The cash management process generally utilizes zero balance accounts which provide for the settlement of the related disbursement and cash concentration accounts on a daily basis. Amounts not yet presented for payment to zero balance disbursement accounts of $ 9 million and $ 16 million at September 30, 2023 and December 31, 2022, respectively, are presented in Trade accounts payable and Accrued expenses and other current liabilities. At September 30, 2023 and December 31, 2022 , cash and cash equivalents held outside the United States amounted to $ 101 million and $ 113 million, respectively. Year-to-date 2023 , the Company repatriated $ 25 million cash that was held in Canada, for a cost of $ 1 million. The Company has certain ongoing pension obligations related to its frozen defined benefit pension plan in the United Kingdom. Restricted cash consists primarily of cash in bank committed to fund UK pension obligations based on the agreements that govern the UK pension plan. Restricted cash is valued at cost, wh ich approximates fair value. Restricted cash was $ 3 million and $ 1 million at September 30, 2023 and December 31, 2022 , respectively. |
Revenue and Contract Balances | REVENUE AND CONTRACT BALANCES The Company generates substantially all of its revenue from contracts with customers for the sale of products and services. Refer to Note 4 for information on revenue by reportable segment and product category. Contract balances primarily consist of receivables, assets related to deferred contract acquisition costs, liabilities related to payments received in advance of performance under the contract, and liabilities related to unredeemed gift cards and loyalty programs. The following table provides information about receivables, contract assets and contract liabilities from contracts with customers: September 30, December 31, (In millions) 2023 2022 Trade receivables, net $ 435 $ 412 Short-term contract assets 5 8 Long-term contract assets 1 2 Short-term contract liabilities 33 41 Long-term contract liabilities — — The Company recognized revenues of $ 24 million and $ 23 million year-to-date 2023 and year-to-date 2022 , respectively, which were included in the short-term contract liability balance at the beginning of each respective period. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
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: September 30, December 31, (In millions) 2023 2022 Trade receivables, net $ 435 $ 412 Short-term contract assets 5 8 Long-term contract assets 1 2 Short-term contract liabilities 33 41 Long-term contract liabilities — — |
MERGER, RESTRUCTURING AND OTH_2
MERGER, RESTRUCTURING AND OTHER ACTIVITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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. Third Quarter Year-to-Date (In millions) 2023 2022 2023 2022 Merger and transaction related expenses Transaction and integration $ — $ ( 7 ) $ — $ ( 7 ) Total Merger and transaction related expenses — ( 7 ) — ( 7 ) Restructuring expenses Severance — ( 1 ) — ( 2 ) Professional fees — — — — Facility closure, contract termination, and other expenses, net 1 2 2 4 Total Restructuring expenses, net 1 1 2 2 Other operating expenses Professional fees — 14 — 47 Total Other operating expenses — 14 — 47 Total Merger, restructuring and other operating expenses, net $ 1 $ 8 $ 2 $ 42 |
Facility Closure and Severance Costs | The activity in the merger, restructuring and other accruals year-to-date 2023 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 31, Charges (credits) Cash September 30, (In millions) 2022 Incurred Payments 2023 Termination benefits: Maximize B2B Restructuring Plan $ 5 $ — $ ( 3 ) $ 2 Lease and contract obligations, accruals for facilities Maximize B2B Restructuring Plan 4 4 ( 4 ) 4 Comprehensive Business Review 1 — — 1 Previously planned separation of consumer business and re-alignment 2 — ( 2 ) — Total $ 12 $ 4 $ ( 9 ) $ 7 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Summary of Sales and Operating Income (Loss) by Each of the Divisions, Reconciled to Consolidated Totals | The following is a summary of sales and operating income (loss) by each of the Divisions, reconciled to consolidated totals: (In millions) ODP Business Solutions Division Office Depot Division Veyer Division Varis Division Eliminations Total Third Quarter of 2023 Sales (external) $ 996 $ 1,000 $ 11 $ 2 $ — $ 2,009 Sales (internal) 4 10 1,320 — ( 1,334 ) — Total sales $ 1,000 $ 1,010 $ 1,331 $ 2 $ ( 1,334 ) $ 2,009 Division operating income (loss) $ 56 $ 66 $ 10 $ ( 17 ) $ — $ 115 Year-to-Date 2023 Sales (external) $ 3,001 $ 2,991 $ 28 $ 5 $ — $ 6,025 Sales (internal) 11 27 4,044 — ( 4,082 ) — Total sales $ 3,012 $ 3,018 $ 4,072 $ 5 $ ( 4,082 ) $ 6,025 Division operating income (loss) $ 140 $ 186 $ 31 $ ( 48 ) $ — $ 309 Third Quarter of 2022 Sales (external) $ 1,030 $ 1,133 $ 7 $ 2 $ — $ 2,172 Sales (internal) 5 10 1,477 — ( 1,492 ) — Total sales $ 1,035 $ 1,143 $ 1,484 $ 2 $ ( 1,492 ) $ 2,172 Division operating income (loss) $ 48 $ 83 $ 9 $ ( 17 ) $ — $ 123 Year-to-Date 2022 Sales (external) $ 3,004 $ 3,358 $ 18 $ 5 $ — $ 6,385 Sales (internal) 15 25 4,415 — ( 4,455 ) — Total sales $ 3,019 $ 3,383 $ 4,433 $ 5 $ ( 4,455 ) $ 6,385 Division operating income (loss) $ 103 $ 228 $ 25 $ ( 48 ) $ — $ 308 |
Reconciliation of Measure of Division Operating Income to Consolidated Income (Loss) from Continuing Operations Before Income Taxes | The reconciliation of the measure of Division operating income to Consolidated income from continuing operations before income taxes is as follows: Third Quarter Year-to-Date (In millions) 2023 2022 2023 2022 Total Divisions operating income $ 115 $ 123 $ 309 $ 308 Add/(subtract): Asset impairments ( 3 ) ( 3 ) ( 13 ) ( 8 ) Merger, restructuring and other operating expenses, net ( 1 ) ( 8 ) ( 2 ) ( 42 ) Unallocated expenses ( 20 ) ( 28 ) ( 62 ) ( 70 ) Interest income 3 1 7 3 Interest expense ( 5 ) ( 1 ) ( 15 ) ( 10 ) Other income, net 3 5 8 9 Income from continuing operations before income taxes $ 92 $ 89 $ 232 $ 190 |
Summary of Disaggregated Revenue from Major Sales Categories | The following table provides information about disaggregated sales by major categories: Third Quarter Year-to-Date (In millions) 2023 2022 2023 2022 Major sales categories Supplies $ 1,013 $ 1,080 $ 3,012 $ 3,106 Technology 531 597 1,674 1,871 Furniture and other 297 336 846 948 Copy and print 168 159 493 460 Total $ 2,009 $ 2,172 $ 6,025 $ 6,385 |
Schedule of Goodwill by Segment | The components of goodwill by segment are as follows: (In millions) Balance as of December 31, 2022 Acquisitions Balance as of September 30, 2023 ODP Business Solutions Division $ 142 $ 4 $ 146 Office Depot Division 219 — 219 Veyer Division 35 — 35 Varis Division 68 — 68 Total $ 464 $ 4 $ 468 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Calculation of Earnings Per Common Share | The following table represents the calculation of earnings per common share – basic and diluted: Third Quarter Year-to-Date (In millions, except per share amounts) 2023 2022 2023 2022 Basic Earnings Per Share Numerator: Net income from continuing operations $ 70 $ 67 $ 176 $ 142 Income from discontinued operations, net of tax — — — 7 Net income $ 70 $ 67 $ 176 $ 149 Denominator: Weighted-average shares outstanding 38 48 39 49 Basic earnings per share Continuing operations $ 1.83 $ 1.39 $ 4.52 $ 2.92 Discontinued operations — ( 0.01 ) — 0.14 Net basic earnings per share $ 1.83 $ 1.38 $ 4.52 $ 3.06 Diluted Earnings Per Share Numerator: Net income from continuing operations $ 70 $ 67 $ 176 $ 142 Income from discontinued operations, net of tax — — — 7 Net income $ 70 $ 67 $ 176 $ 149 Denominator: Weighted-average shares outstanding 38 48 39 49 Effect of dilutive securities: Stock options and restricted stock 1 1 1 1 Diluted weighted-average shares outstanding 39 49 40 50 Diluted earnings per share Continuing operations $ 1.79 $ 1.36 $ 4.38 $ 2.84 Discontinued operations — ( 0.01 ) — 0.13 Net diluted earnings per share $ 1.79 $ 1.35 $ 4.38 $ 2.97 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 31, 2022 $ ( 39 ) $ ( 38 ) $ ( 77 ) Other comprehensive income activity — ( 44 ) ( 44 ) Balance at September 30, 2023 $ ( 39 ) $ ( 82 ) $ ( 121 ) |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [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: Third Quarter Year-to-Date (In millions) 2023 2022 2023 2022 Service cost $ — $ — $ — $ — Interest cost 8 5 24 16 Expected return on plan assets ( 8 ) ( 6 ) ( 25 ) ( 19 ) Amortization of gain ( 2 ) — ( 5 ) — Net periodic pension benefit $ ( 2 ) $ ( 1 ) $ ( 6 ) $ ( 3 ) The components of net periodic pension benefit for the Company’s pension plan in the United Kingdom (“UK”) are as follows: Third Quarter Year-to-Date (In millions) 2023 2022 2023 2022 Service cost $ — $ — $ — $ — Interest cost 2 1 5 3 Expected return on plan assets ( 2 ) ( 1 ) ( 5 ) ( 5 ) Net periodic pension benefit $ — $ — $ — $ ( 2 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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. September 30, December 31, 2023 2022 Carrying Fair Carrying Fair (In millions) Amount Value Amount Value Financial assets: Company-owned life insurance $ 137 $ 137 $ 138 $ 138 Financial liabilities: Long-term debt: New Facilities loans under the Third Amended Credit 2025 53 53 57 57 Revenue bonds, due in varying amounts periodically 2029 75 76 75 76 American & Foreign Power Company, Inc. 5 % debentures, 2030 16 14 15 14 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 24, 2022 Segment | Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) Division | Sep. 30, 2023 USD ($) Segment | Sep. 24, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of reportable segments | 4 | 4 | 4 | |||
Accounts payable and accrued expenses and other current liabilities not yet presented for payment | $ 9 | $ 9 | $ 9 | $ 16 | ||
Cash and cash equivalents | 384 | 384 | 384 | 403 | ||
Restricted cash | 3 | 3 | 3 | 1 | ||
Revenue recognition included in short-term contract liabilities | 24 | $ 23 | ||||
Non-US | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Cash and cash equivalents | 101 | $ 101 | $ 101 | $ 113 | ||
CANADA | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Cash repatriated | 25 | |||||
Cash and cash equivalents repatriation cost | $ 1 |
Summary of Receivables, Contrac
Summary of Receivables, Contract Assets and Contract Liabilities from Contracts with Customers (Detail) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | ||
Trade receivables, net | $ 435 | $ 412 |
Short-term contract assets | 5 | 8 |
Long-term contract assets | 1 | 2 |
Short-term contract liabilities | $ 33 | $ 41 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) | 1 Months Ended | ||
Jan. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 468,000,000 | $ 464,000,000 | |
January 2023 Acquisition | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 4,000,000 | ||
January 2023 Acquisition | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Business combination consideration transferred | 5,000,000 | ||
January 2023 Acquisition | Maximum | |||
Business Acquisition [Line Items] | |||
Business combination consideration transferred | $ 15,000,000 |
Summary of Major Components of
Summary of Major Components of Merger and Restructuring Expenses, Net (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
Merger and transaction related expenses | ||||
Transaction and integration | $ (7) | $ (7) | ||
Total Merger and transaction related expenses | (7) | (7) | ||
Restructuring expenses | ||||
Severance | (1) | (2) | ||
Facility closure, contract termination, and other expenses, net | $ 1 | 2 | $ 2 | 4 |
Total Restructuring expenses, net | 1 | 1 | 2 | 2 |
Other operating expenses | ||||
Professional fees | 14 | 47 | ||
Total Other operating expenses | 14 | 47 | ||
Total Merger, restructuring and other operating expenses, net | $ 1 | $ 8 | $ 2 | $ 42 |
Merger, Restructuring and Oth_3
Merger, Restructuring and Other Activity - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 33 Months Ended | 36 Months Ended | |||||
May 31, 2020 USD ($) | Sep. 30, 2023 USD ($) Store | Sep. 24, 2022 USD ($) Segment | Sep. 30, 2023 Division | Sep. 30, 2023 USD ($) | Sep. 30, 2023 Store | Sep. 30, 2023 Segment | Sep. 24, 2022 USD ($) | Sep. 30, 2023 USD ($) | Dec. 31, 2022 Facility Store | |
Merger Restructuring And Other Activity [Line Items] | ||||||||||
Merger transaction income impact of earnout adjustments on acquisition | $ 7,000,000 | |||||||||
Transaction and integration expenses | $ 0 | |||||||||
Costs to implement restructuring plan | $ 4,000,000 | |||||||||
Restructuring cash expenditure | 9,000,000 | |||||||||
Number of reportable segments | 4 | 4 | 4 | |||||||
Maximum | ||||||||||
Merger Restructuring And Other Activity [Line Items] | ||||||||||
Transaction and integration expenses | 1,000,000 | |||||||||
Maximize B2B Restructuring Plan | ||||||||||
Merger Restructuring And Other Activity [Line Items] | ||||||||||
Costs to implement restructuring plan | $ 1,000,000 | $ 2,000,000 | 2,000,000 | 4,000,000 | $ 83,000,000 | |||||
Number of retail stores closed | Store | 4 | 30 | 237 | |||||||
Number of distribution facilities closed | Facility | 2 | |||||||||
Restructuring cash expenditure | $ 3,000,000 | 2,000,000 | 7,000,000 | 5,000,000 | ||||||
Maximize B2B Restructuring Plan | Cash Expenditures | ||||||||||
Merger Restructuring And Other Activity [Line Items] | ||||||||||
Costs to implement restructuring plan | 68,000,000 | |||||||||
Maximize B2B Restructuring Plan | Severance Costs | ||||||||||
Merger Restructuring And Other Activity [Line Items] | ||||||||||
Costs to implement restructuring plan | 1,000,000 | 2,000,000 | ||||||||
Maximize B2B Restructuring Plan | Other Costs Including Contract Termination Costs | ||||||||||
Merger Restructuring And Other Activity [Line Items] | ||||||||||
Costs to implement restructuring plan | 4,000,000 | |||||||||
Restructuring cash expenditure | $ 4,000,000 | |||||||||
Maximize B2B Restructuring Plan | Maximum | ||||||||||
Merger Restructuring And Other Activity [Line Items] | ||||||||||
Costs to implement restructuring plan | $ 95,000,000 | |||||||||
Planned Separation of Consumer Business | Third-Party Professional Fees | ||||||||||
Merger Restructuring And Other Activity [Line Items] | ||||||||||
Costs to implement restructuring plan | $ 33,000,000 | |||||||||
Re-alignment | Third-Party Professional Fees | ||||||||||
Merger Restructuring And Other Activity [Line Items] | ||||||||||
Costs to implement restructuring plan | $ 14,000,000 |
Severance and Facility Closure
Severance and Facility Closure Costs (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 33 Months Ended | ||
Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | |
Restructuring Cost and Reserve [Line Items] | |||||
Beginning Balance | $ 12 | ||||
Charges (credits) Incurred | 4 | ||||
Cash Payments | (9) | ||||
Ending Balance | $ 7 | 7 | $ 7 | ||
Maximize B2B Restructuring Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charges (credits) Incurred | 1 | $ 2 | 2 | $ 4 | 83 |
Cash Payments | (3) | $ (2) | (7) | $ (5) | |
Termination Benefits | Maximize B2B Restructuring Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Beginning Balance | 5 | ||||
Cash Payments | (3) | ||||
Ending Balance | 2 | 2 | 2 | ||
Lease and contract obligations, accruals for facilities closures and other costs | Maximize B2B Restructuring Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Beginning Balance | 4 | ||||
Charges (credits) Incurred | 4 | ||||
Cash Payments | (4) | ||||
Ending Balance | 4 | 4 | 4 | ||
Lease and contract obligations, accruals for facilities closures and other costs | Comprehensive Business Review | |||||
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 | Previously Planned Separation of Consumer Business and Realignment | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Beginning Balance | 2 | ||||
Cash Payments | $ (2) |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | |||
Sep. 24, 2022 Segment | Sep. 30, 2023 Division | Sep. 30, 2023 Segment | Sep. 30, 2023 Location | Sep. 30, 2023 | |
Segment Reporting [Abstract] | |||||
Number of reportable segments | 4 | 4 | 4 | ||
Number of office depot and officemax retail locations | 938 | ||||
Percentage of fair value exceeded carrying amount of goodwill | 21% |
Reconciliation of Revenue from
Reconciliation of Revenue from Segments to Consolidated (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 2,009 | $ 2,172 | $ 6,025 | $ 6,385 |
Division operating income (loss) | 115 | 123 | 309 | 308 |
External | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 2,009 | 2,172 | 6,025 | 6,385 |
Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Sales | (1,334) | (1,492) | (4,082) | (4,455) |
Eliminations | Internal | ||||
Segment Reporting Information [Line Items] | ||||
Sales | (1,334) | (1,492) | (4,082) | (4,455) |
ODP Business Solutions Division | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,000 | 1,035 | 3,012 | 3,019 |
Division operating income (loss) | 56 | 48 | 140 | 103 |
ODP Business Solutions Division | Operating Segments | External | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 996 | 1,030 | 3,001 | 3,004 |
ODP Business Solutions Division | Operating Segments | Internal | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 4 | 5 | 11 | 15 |
Office Depot Division | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,010 | 1,143 | 3,018 | 3,383 |
Division operating income (loss) | 66 | 83 | 186 | 228 |
Office Depot Division | Operating Segments | External | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,000 | 1,133 | 2,991 | 3,358 |
Office Depot Division | Operating Segments | Internal | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 10 | 10 | 27 | 25 |
Veyer Division | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,331 | 1,484 | 4,072 | 4,433 |
Division operating income (loss) | 10 | 9 | 31 | 25 |
Veyer Division | Operating Segments | External | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 11 | 7 | 28 | 18 |
Veyer Division | Operating Segments | Internal | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,320 | 1,477 | 4,044 | 4,415 |
Varis Division | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 2 | 2 | 5 | 5 |
Division operating income (loss) | (17) | (17) | (48) | (48) |
Varis Division | Operating Segments | External | ||||
Segment Reporting Information [Line Items] | ||||
Sales | $ 2 | $ 2 | $ 5 | $ 5 |
Reconciliation of Measure of Di
Reconciliation of Measure of Division Operating Income to Consolidated Income (Loss) from Continuing Operations Before Income Taxes (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
Segment Reporting [Abstract] | ||||
Total Divisions operating income | $ 115 | $ 123 | $ 309 | $ 308 |
Asset impairments | (3) | (3) | (13) | (8) |
Merger, restructuring and other operating expenses, net | (1) | (8) | (2) | (42) |
Unallocated expenses | (20) | (28) | (62) | (70) |
Interest income | 3 | 1 | 7 | 3 |
Interest expense | (5) | (1) | (15) | (10) |
Other income, net | 3 | 5 | 8 | 9 |
Income from continuing operations before income taxes | $ 92 | $ 89 | $ 232 | $ 190 |
Summary of Disaggregated Revenu
Summary of Disaggregated Revenue from Major Sales Categories (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 2,009 | $ 2,172 | $ 6,025 | $ 6,385 |
Products, Supplies | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,013 | 1,080 | 3,012 | 3,106 |
Products, Technology | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 531 | 597 | 1,674 | 1,871 |
Products, Furniture and Other | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 297 | 336 | 846 | 948 |
Services, Copy and Print | ||||
Segment Reporting Information [Line Items] | ||||
Sales | $ 168 | $ 159 | $ 493 | $ 460 |
Schedule of Goodwill by Segment
Schedule of Goodwill by Segment (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Line Items] | |
Balance as of December 31, 2022 | $ 464 |
Balance as of September 30, 2023 | 468 |
Operating Segments | |
Goodwill [Line Items] | |
Balance as of December 31, 2022 | 464 |
Acquisitions | 4 |
Balance as of September 30, 2023 | 468 |
ODP Business Solutions Division | Operating Segments | |
Goodwill [Line Items] | |
Balance as of December 31, 2022 | 142 |
Acquisitions | 4 |
Balance as of September 30, 2023 | 146 |
Office Depot Division | Operating Segments | |
Goodwill [Line Items] | |
Balance as of December 31, 2022 | 219 |
Balance as of September 30, 2023 | 219 |
Veyer Division | Operating Segments | |
Goodwill [Line Items] | |
Balance as of December 31, 2022 | 35 |
Balance as of September 30, 2023 | 35 |
Varis Division | Operating Segments | |
Goodwill [Line Items] | |
Balance as of December 31, 2022 | 68 |
Balance as of September 30, 2023 | $ 68 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
Income Taxes [Line Items] | ||||
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 21% | |||
Effective tax rate | 24% | 25% | 24% | 25% |
Unrecognized tax benefits, material tax positions | $ 1 |
Calculation of Earnings Per Com
Calculation of Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Sep. 24, 2022 | Jun. 25, 2022 | Mar. 26, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
Basic Earnings Per Share | ||||||||
Net income from continuing operations | $ 70 | $ 67 | $ 176 | $ 142 | ||||
Income from discontinued operations, net of tax | 7 | |||||||
Net Income (Loss) | $ 70 | $ 34 | $ 72 | $ 67 | $ 27 | $ 55 | $ 176 | $ 149 |
Weighted-average shares outstanding | 38 | 48 | 39 | 49 | ||||
Continuing operations | $ 1.83 | $ 1.39 | $ 4.52 | $ 2.92 | ||||
Discontinued operations | (0.01) | 0.14 | ||||||
Net basic earnings per share | $ 1.83 | $ 1.38 | $ 4.52 | $ 3.06 | ||||
Diluted Earnings Per Share | ||||||||
Net income from continuing operations | $ 70 | $ 67 | $ 176 | $ 142 | ||||
Income from discontinued operations, net of tax | 7 | |||||||
Net Income (Loss) | $ 70 | $ 34 | $ 72 | $ 67 | $ 27 | $ 55 | $ 176 | $ 149 |
Weighted-average shares outstanding | 38 | 48 | 39 | 49 | ||||
Stock options and restricted stock | 1 | 1 | 1 | 1 | ||||
Diluted weighted-average shares outstanding | 39 | 49 | 40 | 50 | ||||
Continuing operations | $ 1.79 | $ 1.36 | $ 4.38 | $ 2.84 | ||||
Discontinued operations | (0.01) | 0.13 | ||||||
Net diluted earnings per share | $ 1.79 | $ 1.35 | $ 4.38 | $ 2.97 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - Nonvested Stock Options and Shares - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Shares excluded from computation of diluted earnings per share | 1,000,000 | |||
Maximum | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Shares excluded from computation of diluted earnings per share | 1,000,000 | 1,000,000 | 1,000,000 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Apr. 17, 2020 | Sep. 30, 2023 | Mar. 26, 2022 | Sep. 30, 2023 | Nov. 02, 2022 | Oct. 31, 2022 | |
Debt Instrument [Line Items] | ||||||
Stock repurchase program, authorized amount | $ 600,000,000 | |||||
Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Stock repurchase program, authorized amount | $ 1,000,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | |||
Third Amended and Restated Credit Agreement | ||||||
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 | 771,000,000 | 771,000,000 | ||||
Drawings under credit agreement | 200,000,000 | |||||
Revolving loans outstanding | 0 | 0 | ||||
Third Amended and Restated Credit Agreement | Asset-based Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity under credit facility | $ 1,200,000,000 | |||||
Third Amended and Restated Credit Agreement | Asset-based First-in, Last-out Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity under credit facility | $ 100,000,000 | |||||
Retirement of term loan facility | 4,000,000 | $ 43,000,000 | ||||
Borrowing under credit facility | 53,000,000 | 53,000,000 | ||||
Third Amended and Restated Credit Agreement | Standby Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing under credit facility | $ 38,000,000 | $ 38,000,000 | ||||
Third Amended and Restated Credit Agreement | Minimum [Member] | Asset-based Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, increase (decrease), net | 200,000,000 | |||||
Third Amended and Restated Credit Agreement | Maximum | Asset-based Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, increase (decrease), net | $ 1,000,000,000 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss Activity, Net of Tax (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | $ 1,287 |
Balance | 1,155 |
Foreign Currency Translation Adjustments | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | (39) |
Balance | (39) |
Change in Deferred Pension and Other | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | (38) |
Other comprehensive income activity | (44) |
Balance | (82) |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | (77) |
Other comprehensive income activity | (44) |
Balance | $ (121) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Nov. 01, 2023 | Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | Nov. 02, 2022 | Oct. 31, 2022 | |
Shareholders Equity [Line Items] | |||||||||
Stock repurchase program, authorized amount | $ 600,000,000 | ||||||||
Stock repurchase program, shares purchased | 659,000 | 6,000,000 | |||||||
Stock repurchase program, shares purchased at cost | $ 32,000,000 | $ 31,000,000 | $ 202,000,000 | $ 69,000,000 | $ 266,000,000 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 583,000,000 | $ 583,000,000 | |||||||
Treasury stock, shares | 29,068,982 | 29,068,982 | 23,422,969 | ||||||
Treasury Stock | |||||||||
Shareholders Equity [Line Items] | |||||||||
Stock repurchase program, shares purchased at cost | $ 32,000,000 | $ 31,000,000 | $ 202,000,000 | $ 69,000,000 | |||||
Treasury stock, shares | 29,000,000 | 29,000,000 | |||||||
Maximum | |||||||||
Shareholders Equity [Line Items] | |||||||||
Stock repurchase program, authorized amount | $ 1,000,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | ||||||
Subsequent Event | |||||||||
Shareholders Equity [Line Items] | |||||||||
Stock repurchase program, shares purchased | 249,000 | ||||||||
Stock repurchase program, shares purchased at cost | $ 11,000,000 | ||||||||
HG Vora | |||||||||
Shareholders Equity [Line Items] | |||||||||
Stock repurchase program, shares purchased | 2,000,000 | ||||||||
Stock repurchase program, shares purchased at cost | $ 89,000,000 |
Components of Net Periodic Pens
Components of Net Periodic Pension Benefit (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
North America | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 8 | 5 | 24 | 16 |
Expected return on plan assets | (8) | (6) | (25) | (19) |
Amortization of gain | (2) | 0 | (5) | 0 |
Net periodic pension benefit | (2) | (1) | (6) | (3) |
United Kingdom | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 2 | 1 | 5 | 3 |
Expected return on plan assets | (2) | (1) | (5) | (5) |
Net periodic pension benefit | $ 0 | $ 0 | $ 0 | $ (2) |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension valuation adjustments | $ 43,000,000 | $ 3,000,000 | $ 44,000,000 | $ 5,000,000 |
North America | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension and other postretirement contributions, current period | 2,000,000 | |||
North America | Maximum | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension and other postretirement contributions, remainder of fiscal year | $ 1,000,000 | 1,000,000 | ||
United Kingdom | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension and other postretirement contributions, current period | $ 0 | |||
pension plan coverage percentage | 100% | 100% | ||
Pension valuation adjustments | $ 44,000,000 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Apr. 06, 2023 | Sep. 30, 2023 | Sep. 24, 2022 | Sep. 30, 2023 | Sep. 24, 2022 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Asset impairment charges | $ 3,000,000 | $ 3,000,000 | $ 13,000,000 | $ 8,000,000 | |
Impairment of operating lease ROU assets | 2,000,000 | 8,000,000 | |||
Sale price of asset held for sale | $ 104,000,000 | ||||
Gain or loss on sale of asset | $ 0 | $ 0 | |||
Carrying Amount | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Assets held for sale | $ 104,000,000 | $ 104,000,000 | |||
Retail Stores | Level 2 | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Percentage used for analysis | 8% |
Schedule of Fair Value of Asset
Schedule of Fair Value of Assets and Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Carrying Amount | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Company-owned life insurance | $ 137 | $ 138 |
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 | 53 | 57 |
Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Company-owned life insurance | 137 | 138 |
Fair Value | 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 | 53 | 57 |
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 | 75 | 75 |
Revenue bonds, due in varying amounts periodically through 2029 | Fair Value | Long-Term Debt | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 76 | 76 |
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 | 16 | 15 |
American & Foreign Power Company, Inc. 5% debentures, due 2030 | Fair Value | Long-Term Debt | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 14 | $ 14 |
Schedule of Fair Value of Ass_2
Schedule of Fair Value of Assets and Liabilities (Parenthetical) (Detail) - Long-Term Debt | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
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% | 5% |
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% | 5% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Minimum [Member] | |
Commitments And Contingencies Disclosure [Line Items] | |
Losses for environmental liabilities | $ 15,000,000 |
Maximum | |
Commitments And Contingencies Disclosure [Line Items] | |
Losses for environmental liabilities | $ 25,000,000 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Feb. 28, 2023 | Apr. 01, 2023 | Sep. 30, 2023 | Sep. 24, 2022 | Dec. 25, 2021 | Dec. 31, 2022 | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||||
Promissory note receivable obtained from disposition of discontinued operations | $ 59 | $ 55 | |||||
Securities Purchase Agreement | CompuCom Division | |||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||||
Cash purchase price | $ 125 | $ 104 | |||||
Interest bearing promissory note | 55 | ||||||
Provision for payment | $ 125 | ||||||
Accrues interest of promissory note | 6% | ||||||
Capital investment percentage | 15% | ||||||
Dividend percentage | 50% | ||||||
Aggregate sale proceeds | $ 95 | $ 5 | $ 125 | ||||
Receivables, net | $ 9 | ||||||
Non-current receivable | $ 4 | ||||||
Promissory note receivable obtained from disposition of discontinued operations | 59 | ||||||
Earnout payment | $ 9 | ||||||
Gain (loss) on disposal of discontinued operations | 7 | ||||||
Loss from classification to held for sale | 1 | ||||||
Income tax benefit on discontinued operations | $ 1 | ||||||
Minimum [Member] | Securities Purchase Agreement | CompuCom Division | |||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||||
Purchase period | 3 months | ||||||
Maximum | Securities Purchase Agreement | CompuCom Division | |||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||||
Purchase period | 12 months |