Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 26, 2022 | Apr. 27, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 26, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ODP | |
Entity Registrant Name | The ODP Corporation | |
Entity Central Index Key | 0000800240 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 49,196,849 | |
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 | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Income Statement [Abstract] | ||
Sales | $ 2,178 | $ 2,174 |
Cost of goods and occupancy costs | 1,694 | 1,679 |
Gross profit | 484 | 495 |
Selling, general and administrative expenses | 396 | 401 |
Asset impairments | 2 | 12 |
Merger, restructuring and other operating expenses, net | 10 | 13 |
Operating income | 76 | 69 |
Other income (expense): | ||
Interest income | 1 | |
Interest expense | (5) | (7) |
Other income, net | 2 | 11 |
Income from continuing operations before income taxes | 74 | 73 |
Income tax expense | 19 | 10 |
Net income from continuing operations | 55 | 63 |
Discontinued operations, net of tax | (10) | |
Net income | $ 55 | $ 53 |
Basic earnings (loss) per share | ||
Continuing operations | $ 1.14 | $ 1.17 |
Discontinued operations | (0.18) | |
Net basic earnings per share | 1.14 | 0.99 |
Diluted earnings (loss) per share | ||
Continuing operations | 1.09 | 1.12 |
Discontinued operations | (0.17) | |
Net diluted earnings per share | $ 1.09 | $ 0.95 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 55 | $ 53 |
Other comprehensive income (loss), net of tax, where applicable: | ||
Foreign currency translation adjustments | (1) | 5 |
Reclassification of foreign currency translation adjustments realized upon disposal of business | 6 | |
Total other comprehensive income, net of tax, where applicable | 5 | 5 |
Comprehensive income | $ 60 | $ 58 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 26, 2022 | Dec. 25, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 557 | $ 514 |
Receivables, net | 572 | 495 |
Inventories | 866 | 859 |
Prepaid expenses and other current assets | 58 | 52 |
Current assets held for sale | 469 | |
Total current assets | 2,053 | 2,389 |
Property and equipment, net | 466 | 477 |
Operating lease right-of-use assets | 899 | 936 |
Goodwill | 464 | 464 |
Other intangible assets, net | 52 | 54 |
Deferred income taxes | 209 | 219 |
Other assets | 386 | 326 |
Total assets | 4,529 | 4,865 |
Current liabilities: | ||
Trade accounts payable | 975 | 950 |
Accrued expenses and other current liabilities | 959 | 994 |
Income taxes payable | 14 | 11 |
Short-term borrowings and current maturities of long-term debt | 18 | 20 |
Current liabilities held for sale | 290 | |
Total current liabilities | 1,966 | 2,265 |
Deferred income taxes and other long-term liabilities | 155 | 159 |
Pension and postretirement obligations, net | 21 | 22 |
Long-term debt, net of current maturities | 181 | 228 |
Operating lease liabilities | 714 | 753 |
Total liabilities | 3,037 | 3,427 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock — authorized 80,000,000 shares of $0.01 par value; issued shares — 65,357,585 at March 26, 2022 and 64,704,979 at December 25, 2021; outstanding shares — 49,092,644 at March 26, 2022 and 48,455,951 at December 25, 2021 | 1 | 1 |
Additional paid-in capital | 2,687 | 2,692 |
Accumulated other comprehensive loss | (1) | (6) |
Accumulated deficit | (562) | (617) |
Treasury stock, at cost — 16,264,941 shares at March 26, 2022 and 16,249,028 shares at December 25, 2021 | (633) | (632) |
Total stockholders' equity | 1,492 | 1,438 |
Total liabilities and stockholders’ equity | $ 4,529 | $ 4,865 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 26, 2022 | Dec. 25, 2021 |
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 | 65,357,585 | 64,704,979 |
Common stock, shares, outstanding | 49,092,644 | 48,455,951 |
Treasury stock, shares | 16,264,941 | 16,249,028 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 55 | $ 53 |
Loss from discontinued operations, net of tax | (10) | |
Net income from continuing operations | 55 | 63 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 34 | 38 |
Charges for losses on receivables and inventories | 6 | 7 |
Asset impairments | 2 | 12 |
Gain on disposition of assets, net | (3) | |
Compensation expense for share-based payments | 9 | 10 |
Deferred income taxes and deferred tax asset valuation allowances | 10 | 6 |
Changes in working capital and other operating activities | (83) | (33) |
Net cash provided by operating activities of continuing operations | 30 | 103 |
Net cash used in operating activities of discontinued operations | (17) | |
Net cash provided by operating activities | 30 | 86 |
Cash flows from investing activities: | ||
Capital expenditures | (21) | (12) |
Businesses acquired, net of cash acquired | (28) | |
Proceeds from disposition of assets | 6 | 1 |
Settlement of company-owned life insurance policies | 1 | 7 |
Net cash used in investing activities of continuing operations | (14) | (32) |
Net cash provided by (used in) investing activities of discontinued operations | 67 | (1) |
Net cash provided by (used in) investing activities | 53 | (33) |
Cash flows from financing activities: | ||
Net payments on long and short-term borrowings | (6) | (6) |
Debt retirement | (43) | |
Share purchases for taxes, net of proceeds from employee share-based transactions | (14) | (23) |
Other financing activities | (1) | (1) |
Net cash used in financing activities of continuing operations | (64) | (30) |
Effect of exchange rate changes on cash and cash equivalents | 1 | 1 |
Net increase in cash and cash equivalents | 20 | 24 |
Cash and cash equivalents at beginning of period | 537 | 729 |
Cash and cash equivalents at end of period – continuing operations | 557 | 753 |
Supplemental information on non-cash investing and financing activities | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | 35 | 10 |
Business acquired in exchange for common stock issuance | $ 35 | |
Other current receivable obtained from disposition of discontinued operations | 30 | |
Promissory note receivable obtained from disposition of discontinued operations | 55 | |
Earn-out receivable obtained from disposition of discontinued operations | $ 9 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Millions | Total | BuyerQuest Acquisition | Common Stock | Common StockBuyerQuest Acquisition | Additional Paid-in Capital | Additional Paid-in CapitalBuyerQuest Acquisition | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock |
Balance at Dec. 26, 2020 | $ 1,880 | $ 1 | $ 2,675 | $ (32) | $ (409) | $ (355) | |||
Balance, Shares at Dec. 26, 2020 | 62,551,255 | ||||||||
Net income | 53 | 53 | |||||||
Other comprehensive income | 5 | 5 | |||||||
Exercise and release of incentive stock (including income tax benefits and withholding) | (23) | (23) | |||||||
Exercise and release of incentive stock (including income tax benefits and withholding) (in shares) | 1,225,876 | ||||||||
Amortization of long-term incentive stock grants | 10 | 10 | |||||||
Common stock issuance related to the BuyerQuest acquisition | $ 35 | $ 35 | |||||||
Common stock issuance related to the BuyerQuest acquisition, (in shares) | 827,498 | ||||||||
Balance at Mar. 27, 2021 | 1,960 | $ 1 | 2,697 | (27) | (356) | (355) | |||
Balance, Shares at Mar. 27, 2021 | 64,604,629 | ||||||||
Balance at Dec. 25, 2021 | 1,438 | $ 1 | 2,692 | (6) | (617) | (632) | |||
Balance, Shares at Dec. 25, 2021 | 64,704,979 | ||||||||
Net income | 55 | 55 | |||||||
Other comprehensive income | 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 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 26, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The ODP Corporation, including its consolidated subsidiaries (“ODP” or the “Company”), At March 26, 2022, the Company had two reportable segments (or “Divisions”): Business Solutions Division and Retail Division. The Company’s CompuCom Division was sold through a single disposal group on December 31, 2021. The Company has reclassified the financial results of the CompuCom Division to Discontinued operations, net of tax in the Condensed Consolidated Statements of Operations for all periods presented. The Company also reclassified the related assets and liabilities as assets and liabilities held for sale on the accompanying Condensed Consolidated Balance Sheet s a s of December 25, 2021, and presented cash flows from the Company’s discontinued operations in the Condensed Consolidated Statements of Cash Flows for all periods. The Condensed Consolidated Financial Statements as of March 26, 2022, and for the 13-week period ended March 26, 2022 (also referred to as the “first quarter of 2022”) and March 27, 2021 (also referred to as the “first quarter of 2021”) are unaudited. However, in management’s opinion, these Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature necessary to provide a fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. Business acquisitions in 2021 are included prospectively from the date of acquisition, thus affecting the comparability of the Company’s financial statements for the periods presented in this report on Form 10-Q. The Company has prepared the Condensed Consolidated Financial Statements included herein pursuant to the rules and regulations of the SEC. Some information and note disclosures, which would normally be included in comprehensive annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), have been condensed or omitted pursuant to those SEC rules and regulations. The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. For a better understanding of the Company and its Condensed Consolidated Financial Statements, the Company recommends reading these Condensed Consolidated Financial Statements in conjunction with the audited financial statements, which are included in the Company’s 2021 Form 10-K. These interim results are not necessarily indicative of the results that should be expected for the full year. PLANNED SEPARATION OF CONSUMER BUSINESS In May 2021, the Company’s Board of Directors unanimously approved a plan to pursue a separation of the Company into two independent, publicly traded companies representing its B2B and consumer businesses, which was planned to be achieved through a spin-off of its consumer business. On January 14, 2022, the Company announced that its Board of Directors determined to delay the previously announced public company separation to evaluate a potential sale of the Company’s consumer business and that it had received a non-binding proposal from another third party, in addition to the previously received proposal from USR Parent, Inc., to acquire the Company’s consumer business. The Company’s Board of Directors is carefully reviewing both proposals with the assistance of its financial and legal advisors to determine the course of action that it believes is in the best interests of the Company and its shareholders. While the Company has previously been focusing on completing the public company separation during the first half of 2022, it has determined to delay further work on the spin-off while it focuses on a potential sale of the consumer business. There can be no assurance that a sale of the consumer business will take place and the terms of any such sale. 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 at March 26, 2022 are presented in Trade accounts payable and Accrued expenses and other current liabilities, and $1 million at December 25, 2021 are presented in Current liabilities held for sale. At March 26, 2022 and December 25, 2021, cash and cash equivalents held outside the United States amounted to $121 million and $108 million, respectively. At December 25, 2021, there was $17 million cash and cash equivalents held outside the United States included in Current assets held for sale. |
MERGER, RESTRUCTURING AND OTHER
MERGER, RESTRUCTURING AND OTHER ACTIVITY | 3 Months Ended |
Mar. 26, 2022 | |
Merger Restructuring And Other Activity [Abstract] | |
MERGER, RESTRUCTURING AND OTHER ACTIVITY | NOTE 2. 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 First Quarter (In millions) 2022 2021 Merger and transaction related expenses Transaction and integration $ — $ 1 Total Merger and transaction related expenses — 1 Restructuring expenses Severance — 1 Professional fees — 1 Facility closure, contract termination, and other expenses, net 1 9 Total Restructuring expenses, net 1 11 Other operating expenses Professional fees 9 1 Total Other operating expenses 9 1 Total Merger, restructuring and other operating expenses, net $ 10 $ 13 MERGER AND TRANSACTION RELATED EXPENSES In the first quarter of 2022, the Company did not incur any transaction and integration expenses. In the first quarter of 2021, the Company incurred transaction and integration expenses of $1 million, primarily related to its acquisition of BuyerQuest Holdings, Inc. (“BuyerQuest”), which is part of its Varis Division. RESTRUCTURING EXPENSES Maximize B2B Restructuring Plan In May 2020, the Company’s Board of Directors approved a restructuring plan to realign the Company’s operational focus to support its “business-to-business” solutions and IT services business units and improve costs (“Maximize B2B Restructuring Plan”). Implementation of the Maximize B2B Restructuring Plan is expected to be substantially completed by the end of 2023. The Maximize B2B Restructuring Plan aims to generate savings through optimizing the Company’s retail footprint, removing costs that directly support the Retail business and additional measures to implement a company-wide low-cost business model, which will then be invested in accelerating the growth of the Company’s business-to-business platform. The plan is broader than restructuring programs the Company has implemented in the past and includes closing and/or consolidating retail stores and distribution facilities and the reduction of up to 13,100 employee positions by the end of 2023. The Company is evaluating the number and timing of retail store and distribution facility closures and/or consolidations. However, it is generally understood that closures will approximate the store’s lease termination date. The Company closed 6 retail stores during the first quarter of 2022, 111 retail stores in 2021, and (a) severance costs of approximately $49 million; (b) facility closure costs of approximately $34 million, which are mainly related to retail stores; and (c) other costs, including contract termination costs, to facilitate the execution of the Maximize B2B Restructuring Plan of approximately $28 million. The total costs of up to $111 million above are less than the Company’s estimate of total costs for this restructuring plan when it commenced, mainly as a result of the reduction in the number of expected retail store and distribution facility closures based upon the Company’s most recent evaluation of economic factors that influence expected store closures. There could be further fluctuations in the estimate of total expected costs in the future and timing of such costs as a result of an assessment of general market conditions and changes in the Company’s business strategy, including the potential sale of the consumer business or the Separation described in Note 1 above. In addition, the reduction of employee positions may also be impacted as a result of fewer retail store closures and the changes in the Company’s business strategy. The $ million of total costs are expected to be incurred as cash expenditures through 2023 and funded primarily with cash on hand and cash from operations. The Company incurred $ 96 million in restructuring expenses to implement the Maximize B2B Restructuring Plan since its inception in 2020 and through the first quarter of 202 2 , of which $ million were cash expenditures. In the first quarter of 2022, the Company incurred $1 million, net, in restructuring expenses associated with the Maximize B2B Restructuring Plan, which consisted of facility closure and other costs. The Company had $2 million of cash expenditures in the first quarter of 2022 associated with the Maximize B2B Restructuring Plan. In the first quarter of 2021, the Company incurred $ 11 m illion in restructuring expenses associated with the Maximize B2B Restructuring Plan, which consisted of $ 1 million in employee severance, $ 1 million in third-party professional fees, and $ 9 million of retail store and facility closure costs, contract termination and other that were mainly related to closure accruals, gains and losses on asset dispositions, and accelerated depreciation. Of these amounts , $ 4 million was cash expenditures in the first quarter of 2021. OTHER OPERATING EXPENSES In May 2021, the Company’s Board of Directors unanimously approved a plan to pursue a separation of the Company into two independent, publicly traded companies, through a spin-off of its consumer business. Since then, the Company has incurred costs related to activities to separate its consumer business, which included third-party professional fees, as well as costs associated with the operational separation of the two companies, such as those related to human resources, brand management, real estate and IT infrastructure. As described in Note 1 above, on January 14, 2022, the Company announced that its Board of Directors determined to delay the previously announced public company separation to evaluate a potential sale of the Company’s consumer business and that it had received a non-binding proposal from another third party, in addition to the previously received proposal from USR Parent, Inc., to acquire the Company’s consumer business. The Company’s Board of Directors is carefully reviewing these proposals with the assistance of its financial and legal advisors to determine the course of action that it believes is in the best interests of the Company and its shareholders. The Company incurred $9 million in third party professional fees in the first quarter of 2022 related to separation activities. The Company had incurred $32 million in third-party professional fees associated with separation activities in 2021. Other operating expenses of $1 million in the first quarter of 2021 represent third-party professional fees incurred related to the evaluation of USR Parent, Inc.’s proposals received during the first quarter of 2021. MERGER, RESTRUCTURING AND OTHER ACCRUALS The activity in the merger, restructuring and other accruals in the first quarter of 2022 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 25, Charges (credits) Cash March 26, (In millions) 2021 Incurred Payments 2022 Termination benefits: Maximize B2B Restructuring Plan 19 — — 19 Lease and contract obligations, accruals for facilities closures and other costs: Maximize B2B Restructuring Plan 6 1 (2 ) 5 Comprehensive Business Review 1 — — 1 Planned separation of consumer business 2 9 (5 ) 6 Total $ 28 $ 10 $ (7 ) $ 31 The short-term and long-term components of these liabilities are included in Accrued expenses and other current liabilities and Deferred income taxes and other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheets. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 26, 2022 | |
Revenue From Contract With Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 3. REVENUE RECOGNITION REVENUE As a result of the CompuCom Division’s presentation as discontinued operations, the Company’s level of service revenue is below 10% of the Company’s total revenue for all periods presented. Accordingly, revenues and cost of sales from services and products are not separately disclosed in the Company’s Condensed Consolidated Statements of Operations. The Company updated its major revenue categories disclosed herein according to this presentation, and prior period amounts have been reclassified to conform to the current period presentation. The following table provides information about disaggregated revenue from continuing operations by Division, and major revenue categories. First Quarter of 2022 (In millions) Business Solution Division Retail Division Other Total Major revenue categories Supplies $ 697 $ 351 $ 1 $ 1,049 Technology 287 383 2 672 Furniture and other 184 126 1 311 Copy and print 63 83 — 146 Total $ 1,231 $ 943 $ 4 $ 2,178 First Quarter of 2021 (In millions) Business Solution Division Retail Division Other Total Major revenue categories Supplies $ 581 $ 366 $ 2 $ 949 Technology 310 452 1 763 Furniture and other 177 144 5 326 Copy and print 59 77 — 136 Total $ 1,127 $ 1,039 $ 8 $ 2,174 Revenue includes the sale of: • Supplies such as paper, writing instruments, office supplies, cleaning and breakroom items, personal protective equipment, and product subscriptions; • Technology-related products such as toner and ink, printers, computers, tablets and accessories, electronic storage and sales of third-party software, as well as technology support services offerings provided in the Company’s retail stores, such as installation and repair; • Furniture and other products such as desks, seating, luggage, gift cards and warranties; and • Copy and print services, including managed print and fulfillment services. The Company sells its supplies, technology, furniture and other products through its Business Solutions and Retail Divisions. Customers can purchase products through the Company’s call centers, electronically through its Internet websites, or through its retail stores. Revenues from supplies, technology, and furniture and other product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer. Furniture and other products also include arrangements where customers can make special furniture interior design and installation orders that are customized to their needs. The performance obligations related to these arrangements are satisfied over time. Substantially all of the Company’s copy and print and technology support services offerings are satisfied at a point in time and revenue is recognized as such. The majority of copy and print offerings, which includes printing, copying, and digital imaging, are fulfilled through retail stores and the related performance obligations are satisfied within a short period of time (generally within the same day). REVENUE RECOGNITION AND SIGNIFICANT JUDGMENTS Revenue is recognized upon transfer of control of promised products or services to customers for an amount that reflects the consideration the Company is entitled to receive in exchange for those products or services. For product sales, transfer of control occurs at a point in time, typically upon delivery to the customer. For service offerings, the transfer of control and satisfaction of the performance obligation is either over time or at a point in time. When performance obligations are satisfied over time, the Company evaluates the pattern of delivery and progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Revenue is recognized net of allowance for returns and net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Shipping and handling costs are considered fulfillment activities and are recognized within the Company’s cost of goods sold. Contracts with customers could include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Determining the standalone selling price also requires judgment. The Company did not have significant revenues generated from such contracts in the first quarters of 2022 and 2021. Products are generally sold with a right of return and the Company may provide other incentives, such as rebates and coupons, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The Company estimates returns and incentives at contract inception and includes the amount in the transaction price for which significant reversal is not probable. These estimates are updated at the end of each reporting period as additional information becomes available. The Company offers a customer loyalty program that provides customers with rewards that can be applied to future purchases or other incentives. Loyalty rewards are accounted for as a separate performance obligation and deferred revenue is recorded in the amount of the transaction price allocated to the rewards, inclusive of the impact of estimated breakage. The estimated breakage of loyalty rewards is based on historical redemption rates experienced under the loyalty program. Revenue is recognized when the loyalty rewards are redeemed or expire. As of March 26, 2022 and December 25, 2021, the Company had $10 million and $12 million of deferred revenue related to the loyalty program, respectively, which is included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. The Company recognizes revenue in certain circumstances before product delivery occurs (commonly referred to as bill-and-hold transactions). Revenue from bill-and-hold transactions is recognized when all specific requirements for transfer of control under a bill-and-hold arrangement have been met which include, among other things, a request from the customer that the product be held for future scheduled delivery. For these bill-and-hold arrangements, the associated product inventory is identified separately as belonging to the customer and is ready for physical transfer. CONTRACT BALANCES The timing of revenue recognition may differ from the timing of invoicing to customers. A receivable is recognized in the period the Company delivers goods or provides services, and is recorded at the invoiced amount, net of an allowance for doubtful accounts. A receivable is also recognized for unbilled services where the Company’s right to consideration is unconditional, and is recorded based on an estimate of time and materials. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 20 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the contracts do not include a significant financing component. The primary purpose of the Company’s invoicing terms is to provide customers with simplified and predictable ways of purchasing its products and services. The Company receives payments from customers based upon contractual billing schedules. Contract assets include amounts related to deferred contract acquisition costs (refer to the section “Costs to Obtain a Contract” below) and if applicable, the Company’s conditional right to consideration for completed performance under a contract. The short- and long-term components of contract assets in the table below are included in Prepaid expenses and other current assets, and Other assets, respectively, in the Condensed Consolidated Balance Sheets. Contract liabilities include payments received in advance of performance under the contract, which are recognized as revenue when the performance obligation is completed under the contract, as well as accrued contract acquisition costs, liabilities related to the Company’s loyalty program and gift cards. The short- and long-term components of contract liabilities in the table below are included in Accrued expenses and other current liabilities, and Deferred income taxes and other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheets. The following table provides information about receivables, contract assets and contract liabilities from contracts with customers: March 26, December 25, (In millions) 2022 2021 Trade receivables, net $ 399 $ 353 Short-term contract assets 14 16 Long-term contract assets 5 8 Short-term contract liabilities 39 52 Long-term contract liabilities — 2 In the first quarters of 2022 and 2021, the Company did not There were no contract assets and liabilities that were recognized in the first quarter of 2022 as a result of business combinations. recognized A majority of the purchase orders and statements of work related to contracts with customers require delivery of the product or service within one year or less. For certain service contracts that exceed one year, the Company recognizes revenue at the amount to which it has the right to invoice for services performed. Accordingly, the Company has applied the optional exemption provided by the current revenue recognition standard relating to unsatisfied performance obligations and does not disclose the value of unsatisfied performance obligations for its contracts. COSTS TO OBTAIN A CONTRACT The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company has determined that certain rebate incentive programs meet the requirements to be capitalized. These costs are periodically reviewed for impairment, and are amortized on a straight-line basis over the expected period of benefit. As of March 26, 2022 and December 25, 2021, short-term contract assets and long-term contract assets in the table above represent capitalized acquisition costs. In the first quarters of 2022 and 2021, amortization expense was $5 million and $6 million, respectively. The Company had no asset impairment charges related to contract assets in the periods presented herein. T here is uncertainty regarding the continued impacts of COVID-19 on the global and national economies, which could negatively affect the Company’s customers and result in future impairments of contract assets. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 26, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 4. SEGMENT INFORMATION A t March 26, 2022, the Company had two reportable segments: Business Solutions Division and Retail Division. The Business Solutions Division sells nationally branded as well as the Company’s private branded office supply and adjacency products and services to customers in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada. Business Solutions Division customers are served through a dedicated sales force, catalogs, telesales, and electronically through the Company’s Internet websites. The Retail Division includes a chain of retail stores in the United States, Puerto Rico and the U.S. Virgin Islands, which sell office supplies, technology products and solutions, business machines and related supplies, cleaning, breakroom and facilities products, personal protective equipment, and office furniture as well as offer business services including copying, printing, digital imaging, mailing, shipping and technology support services. In addition, the print needs for retail and business customers are also facilitated through the Company’s regional print production centers. The Company sold its CompuCom Division through a single disposal group on December 31, 2021, which is presented as discontinued operations for all periods presented. Refer to Note 12 for additional information. The retained global sourcing operations previously included in the former International Division and the operating results of the Varis Division, which is the Company’s new digital platform technology business, are not significant and have been presented as Other. The products and services offered by the Business Solutions Division and the Retail Division are similar. These two operating segments are the Company’s two reportable segments. The Business Solutions Division and the Retail Division are managed separately as they represent separate channels in the way the Company serves its customers. The accounting policies for each segment are the same as those described in Note 1 of the 202 1 Form 10-K . Division operating income is determined based on the measure of performance reported internally to manage the business and for resource allocation. This measure charges to the respective Divisions those expenses considered directly or closely related to their operations and allocates support costs. Certain operating expenses and credits are not allocated to the Business Solutions Division or the Retail Division , including asset impairments and merger , restructuring and other operating expenses, as well as expenses and credits retained at the Corporate level, including certain management costs and legacy pension and environmental matters. Other companies may charge more or less of these items to their segments and results may not be comparable to similarly titled measures used by other entities. In addition, the Company regularly evaluates the appropriateness of the reportable segments based on how the business is managed, including decision-making about resources allocation and assessing performance of the segments, particularly in light of organizational changes, merger and acquisition activity and changing laws and regulations. Therefore, the current reportable segments may change in the future. The following is a summary of sales and operating income (loss) by each of the Divisions and Other, reconciled to consolidated totals. Sales First Quarter (In millions) 2022 2021 Business Solutions Division $ 1,231 $ 1,127 Retail Division 943 1,039 Other 4 8 Total $ 2,178 $ 2,174 Division Operating Income (Loss) First Quarter (In millions) 2022 2021 Business Solutions Division $ 33 $ 17 Retail Division 89 100 Other (14 ) (2 ) Total $ 108 $ 115 A reconciliation of the measure of Division operating income to Consolidated income from continuing operations before income taxes is as follows: First Quarter (In millions) 2022 2021 Total Divisions operating income $ 108 $ 115 Add/(subtract): Asset impairments (2 ) (12 ) Merger, restructuring and other operating expenses, net (10 ) (13 ) Unallocated expenses (20 ) (21 ) Interest income 1 — Interest expense (5 ) (7 ) Other income, net 2 11 Income from continuing operations before income taxes $ 74 $ 73 The components of goodwill by segment are provided in the following table: Business Solutions Retail (In millions) Division Division Other Total Balance as of December 25, 2021 $ 318 $ 78 $ 68 $ 464 Balance as of March 26, 2022 $ 318 $ 78 $ 68 $ 464 Goodwill and indefinite-lived intangible assets are tested for impairment annually as of the first day of fiscal December or more frequently when events or changes in circumstances indicate that impairment may have occurred. The most recent annual impairment assessment was performed during the fourth quarter of 202 1 , using a quantitative assessment for the Contract and Varis reporting units , and qualitative assessments for the Direct and Retail reporting units . The quantitative assessment combined the income approach and the market approach valuation methodologies and concluded that the fair value of the Contract and Varis reporting units exceed their carrying amounts. The margin of passage for the Contract reporting unit was %. The Contract reporting unit is a component of the Business Solutions Division segment , and the Varis reporting unit, which is presented in Other . The CompuCom reporting unit is classified as discontinued operations; refer to Note 1 2 for further information. The Company is monitoring the performance of its Contract reporting unit, which had been negatively impacted by COVID-19, and has experienced partial recovery as the impacts of the pandemic on its business customers have begun to recede in 2021. The Contract reporting units’ operating performance and future outlook are in line with the Company’s forecasts used in determining the fair value estimates in the most recent quantitative annual impairment test. Accordingly, there are no impairment indicators identified for this reporting unit as of March 26, 2022. The Company also did not identify indicators of impairment related to its other reporting units, which have been performing in accordance with forecasts. The Company will continue to evaluate the recoverability of goodwill at the reporting unit level on an annual basis and whenever events or changes in circumstances indicate there may be a potential impairment. If the operating results of the Company’s reporting units deteriorate in the future, it may cause the fair value of one or more of the reporting units to fall below their carrying amount, resulting in goodwill impairment charges. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 26, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 5. INCOME TAXES During 2022 and 2021, the mix of income and losses across jurisdictions, although still applicable, has become less of a factor in influencing the Company’s effective tax rates due to limited international operations and improved operating results. The Company’s effective tax rates were 26% for the first quarter of 2022 and 14% for the first quarter 2021, respectively. In the first quarter of 2022, the Company’s effective rate was primarily impacted by the recognition of a tax benefit associated with stock-based compensation awards year-to-date. This 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%. In the first quarter of 2021, the Company’s effective rate was primarily impacted by the recognition of a large tax benefit associated with stock-based compensation awards year-to-date and recognition of tax benefits due to an agreement reached with the IRS related to a prior tax position. 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 sale of CompuCom resulted in the Company recognizing a capital loss of approximately $210 million, tax effected. A portion of this capital loss, approximately $20 million, is available to be carried back in several jurisdictions. The tax benefit of these carry back claims was reflected in the discontinued operations income tax expense at December 25, 2021. The Company has determined that it is more likely than not that the benefit from the excess capital loss of $190 million will not be realized at this time. In recognition of this risk, the Company has provided a full valuation allowance against the excess capital loss not carried back. 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 | 3 Months Ended |
Mar. 26, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 6. EARNINGS PER SHARE The following table represents the calculation of earnings (loss) per common share – basic and diluted: First Quarter (In millions, except per share amounts) 2022 2021 Basic Earnings (Loss) Per Share Numerator: Net income from continuing operations $ 55 $ 63 Loss from discontinued operations, net of tax — (10 ) Net income $ 55 $ 53 Denominator: Weighted-average shares outstanding 49 53 Basic earnings (loss) per share: Continuing operations $ 1.14 $ 1.17 Discontinued operations — (0.18 ) Net basic earnings per share $ 1.14 $ 0.99 Diluted Earnings (Loss) Per Share Numerator: Net income from continuing operations $ 55 $ 63 Loss from discontinued operations, net of tax — (10 ) Net income $ 55 $ 53 Denominator: Weighted-average shares outstanding 49 53 Effect of dilutive securities: Stock options and restricted stock 2 3 Diluted weighted-average shares outstanding 51 56 Diluted earnings (loss) per share: Continuing operations $ 1.09 $ 1.12 Discontinued operations — (0.17 ) Net diluted earnings per share $ 1.09 $ 0.95 Awards of stock options and nonvested shares representing additional shares of outstanding common stock less than 1 million in the first quarter of 2022 and less than 1 million in the first quarter of 2021 were not included in the computation of diluted weighted-average shares outstanding because their effect would have been antidilutive. |
DEBT
DEBT | 3 Months Ended |
Mar. 26, 2022 | |
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 provides for a $1.2 billion asset-based revolving credit facility and a $100 million asset-based first-in, last-out term loan facility (the “FILO Term Loan Facility”), for an aggregate principal amount of up to $1.3 billion (the “New Facilities”). The New Facilities mature on April 17, 2025. The Third Amended Credit Agreement replaced the Company’s then existing amended and restated credit agreement that was due to mature in May 2021. 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. As provided by the Third Amended Credit Agreement, available amounts that can be borrowed at any given time are based on percentages of certain outstanding accounts receivable, credit card receivables, inventory, cash value of company-owned life insurance policies, and certain specific real estate of the Company. At March 26, 2022, the Company had no revolving loans outstanding, $57 million of outstanding FILO Term Loan Facility loans, $47 million of outstanding standby letters of credit, and $874 million of available credit under the Third Amended Credit Agreement. The Company was in compliance with all applicable covenants at March 26, 2022. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 26, 2022 | |
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 25, 2021 $ (27 ) $ 21 $ (6 ) Other comprehensive loss activity before reclassifications (1 ) — (1 ) Reclassification of foreign currency translation adjustments realized upon disposal of business 6 — 6 Balance at March 26, 2022 $ (22 ) $ 21 $ (1 ) TREASURY STOCK The Board of Directors reviewed the Company’s existing capital allocation programs in connection with the sale of CompuCom, and on December 31, 2021, authorized an additional $200 million for share repurchases under the existing stock repurchase program, for a total authorization of $650 million. On November 16, 2021, the Company entered into an accelerated share repurchase agreement (“ASR”) to repurchase shares of the Company’s common stock in exchange for an up-front payment $150 million. The repurchase period runs through June 9, 2022. The Company did not purchase any shares of its common stock in the first quarter of 2022. As of March 26, 2022, $342 million remains available for additional repurchases under the current stock repurchase program. At March 26, 2022, there were 16 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 Company’s compliance with covenants. DIVIDENDS ON COMMON STOCK In May 2020, in order to preserve liquidity during the COVID-19 pandemic and in light of the uncertainties as to its duration and economic impact, the Company’s Board of Directors suspended the Company’s quarterly cash dividend beginning in the second quarter of 2020. There was no quarterly cash dividend declared and paid in the first quarter of 2022. The Company’s quarterly cash dividend remains suspended. Refer to Note 7 for additional information about the Company’s compliance with covenants. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Mar. 26, 2022 | |
Compensation And Retirement Disclosure [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: First Quarter (In millions) 2022 2021 Service cost $ — $ — Interest cost 5 5 Expected return on plan assets (6 ) (7 ) Net periodic pension benefit $ (1 ) $ (2 ) The North American qualified pension plan is in a net asset position and included in Other assets in the Condensed Consolidated Balance Sheets at March 26, 2022 and December 25, 2021. The North American nonqualified pension plan is in a net liability position and included in Pension and postretirement obligations, net in the Condensed Consolidated Balance Sheets at March 26, 2022 and December 25, 2021. During the first quarter of 2022, $1 million of cash contributions were made to the North America pension plans. The Company expects to make additional cash contributions of approximately 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: First Quarter (In millions) 2022 2021 Service cost $ — $ — Interest cost 1 1 Expected return on plan assets (2 ) (1 ) Net periodic pension benefit $ (1 ) $ — The UK pension plan is in a net asset position and included in Other assets in the Condensed Consolidated Balance Sheets at March 26, 2022 and December 25, 2021. During the first quarter of 2022, cash contributions of $1 million were made to the UK pension plan. The Company is not required to make any additional cash contributions to the UK pension plan in the remainder of 2022. Net periodic pension benefits for the North America and UK pension plans and other postretirement benefit plans (the “Plans”) are recorded at the Corporate level. The service cost for the Plans are reflected in Selling, general and administrative expenses, and the other components of net periodic pension benefits are reflected in Other income, net, in the Condensed Consolidated Statements of Operations. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 26, 2022 | |
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 first quarter of 2022. 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 first quarter of 2022, the Company recognized asset impairment charges of $ The Company regularly reviews retail store assets for impairment indicators at the individual store level, as this represents the lowest level of identifiable cash flows. When indicators of impairment are present, a recoverability analysis is performed which considers the estimated undiscounted cash flows over the retail store’s remaining life and uses input from retail operations and accounting and finance personnel. These inputs include management’s best estimates of retail store-level sales, gross margins, direct expenses, exercise of future lease renewal options when reasonably certain to be exercised, and resulting cash flows that can naturally include judgments about how current initiatives will impact future performance. The assumptions used within the recoverability analysis for the retail stores were updated to consider current quarter retail store operational results and formal plans for future retail store closures as part of the Company’s restructuring programs, including the probability of closure at the retail store level. While it is generally understood that closures will approximate the store’s lease termination date, it is possible that changes in store performance or other conditions could result in future changes in assumptions utilized. These assumptions reflected declining sales over the forecast period, and gross margin and operating cost assumptions that are consistent with recent actual results and consider plans for future initiatives. The Company also analyzed the impact of the COVID-19 pandemic on store asset recoverability. Due to the nature of products sold, the retail stores were considered to be essential by most local jurisdictions and as a result, the substantial majority of these retail stores have remain ed open and operational with the appropriate safety measures in place since the beginning of the COVID-19 outbreak , including a curbside pickup option . Since l ate in the first quarter of 2020, the Company has reduce d retail location hours by one to two hours daily , which continues to be in effect at the majority of its retail locations. The Company’s recoverability assessment included evaluating the impact of these developments. If the undiscounted cash flows of a retail store cannot support the carrying amount of its assets, the assets are impaired if necessary and written down to estimated fair value. The fair value of retail store assets is determined using a discounted cash flow analysis which uses Level 2 unobservable inputs that are corroborated by market data such as independent real estate valuation opinions. Specifically, the analysis uses assumptions of potential rental rates for each retail store location which are based on market data for comparable locations. These estimated cash flows used in the first quarter of 2022 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 is uncertainty regarding the impact of the COVID-19 pandemic on the future results of operations, including the forecast period used in the recoverability analysis. To the extent that forward-looking sales and operating assumptions are not achieved and are subsequently reduced, additional impairment charges may result. However, at the end of the first quarter of 2022, 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, which were negatively impacted by the COVID-19 pandemic. The Company did not identify any impairment indicators for these long-lived assets as of March 26 2022, and as a result, there were no associated impairment charges. OTHER FAIR VALUE DISCLOSURES The fair values of cash and cash equivalents, receivables, trade accounts payable and accrued expenses and other current liabilities approximate their carrying values because of their short-term nature. The following table presents information about financial instruments at the balance sheet dates indicated. March 26, December 25, 2022 2021 Carrying Fair Carrying Fair (In millions) Amount Value Amount Value Financial assets: Company-owned life insurance 136 136 137 137 Financial liabilities: Long-term debt: New Facilities loans under the Third Amended Credit Agreement, due 2025 57 57 100 100 Revenue bonds, due in varying amounts periodically through 2029 75 76 75 76 American & Foreign Power Company, Inc. 5% debentures, due 2030 15 15 15 16 The following methods and assumptions were used to estimate the fair value of each class of financial instruments: • Company-owned life insurance : In connection with the 2013 OfficeMax merger, the Company acquired company-owned life insurance policies on certain former employees. The fair value of the company-owned life insurance policies is derived using determinable net cash surrender value, which is the cash surrender value less any outstanding loans (Level 2 measure). • Long-term debt : Long-term debt, for which there were no transactions on the measurement date, was valued based on quoted market prices near the measurement date when available or by discounting the future cash flows of each instrument using rates based on the most recently observable trade or using rates currently offered to the Company for similar debt instruments of comparable maturities (Level 2 measure). The carrying amount of the New Facilities loans under the Third Amended Credit Agreement approximates fair value because the interest rates vary with market interest rates. Refer to Note 7 for additional information about the Third Amended Credit Agreement. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 26, 2022 | |
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 March 26, 2022, the Company has made provision for environmental liabilities with respect to certain sites where hazardous substances or other contaminants are or may be located. For these liabilities, the Company’s estimated range of reasonably possible losses was approximately $15 million to $25 million. The Company regularly monitors its estimated exposure to these liabilities. As additional information becomes known, these estimates may change, however, the Company does not believe any of these OfficeMax retained proceedings are material to the Company’s financial position, results of operations, or cash flows. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 26, 2022 | |
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 (3) 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. CompuCom was presented as held for sale as of December 25, 2021, and the loss from classification to held for sale was measured at the lower of its carrying amount or estimated fair value less costs to sell and was included in the valuation allowance of current assets held for sale as of December 25, 2021. The estimated fair value of CompuCom was based on the terms of the SPA, and amounted to $190 million, which included $126 million for cash purchase price after adjusting for cash, debt and working capital, $55 million for the promissory note, and $9 million for the earn-out. Of the cash purchase price, $30 million is related to adjustments for cash, debt and working capital, and is a current receivable as of March 26, 2022. The promissory note and the earn-out are non-current receivables as of March 26, 2022. 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. The resulting loss from classification to held for sale was $170 million in the fourth quarter of 2021. During the first quarter of 2022, the Company incurred further loss on disposal of $1 million in third party professional fees related to the sale of CompuCom. Merger and restructuring expenses incurred by the former CompuCom Division, that were previously presented as Corporate expenses, are included in the measurement and presentation of discontinued operations in all periods presented. The following table represents a reconciliation of the major components of discontinued operations, net of tax presented in the Condensed Consolidated Statements of Operations. First Quarter (In millions) 2022 2021 Major components of discontinued operations before income taxes: Sales $ — $ 192 Cost of goods and occupancy costs: — 153 Gross profit — 39 Selling, general and administrative expenses — 51 Merger, restructuring and other operating expenses, net — 2 Operating loss — (14 ) Other income (expense): Other income, net — — Loss from major components of discontinued operations before income taxes — (14 ) Loss on disposal of discontinued operations (1 ) — Loss from discontinued operations before income taxes (1 ) (14 ) Income tax benefit (1 ) (4 ) Discontinued operations, net of tax $ — $ (10 ) The following table represents the major classes of assets and liabilities of the disposal group classified as held for sale presented in the Condensed Consolidated Balance Sheets as of December 25, 2021. The Company completed the sale of CompuCom on December 31, 2021, and therefore no assets or liabilities are included in discontinued operations as of March 26, 2022. December 25, (In millions) 2021 Major classes of assets included in discontinued operations: Cash and cash equivalents $ 23 Receivables, net 221 Inventories 20 Prepaid expenses and other current assets 15 Property and equipment, net 25 Operating lease right-of-use assets 66 Other intangible assets, net 255 Other assets 14 Less: valuation allowance (170 ) Total assets of the disposal group classified as held for sale $ 469 Major classes of liabilities included in discontinued operations: Trade accounts payable $ 83 Accrued expenses and other current liabilities 86 Deferred income taxes and other long-term liabilities 75 Operating lease liabilities 46 Total liabilities of the disposal group classified as held for sale $ 290 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 26, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The ODP Corporation, including its consolidated subsidiaries (“ODP” or the “Company”), At March 26, 2022, the Company had two reportable segments (or “Divisions”): Business Solutions Division and Retail Division. The Company’s CompuCom Division was sold through a single disposal group on December 31, 2021. The Company has reclassified the financial results of the CompuCom Division to Discontinued operations, net of tax in the Condensed Consolidated Statements of Operations for all periods presented. The Company also reclassified the related assets and liabilities as assets and liabilities held for sale on the accompanying Condensed Consolidated Balance Sheet s a s of December 25, 2021, and presented cash flows from the Company’s discontinued operations in the Condensed Consolidated Statements of Cash Flows for all periods. The Condensed Consolidated Financial Statements as of March 26, 2022, and for the 13-week period ended March 26, 2022 (also referred to as the “first quarter of 2022”) and March 27, 2021 (also referred to as the “first quarter of 2021”) are unaudited. However, in management’s opinion, these Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature necessary to provide a fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. Business acquisitions in 2021 are included prospectively from the date of acquisition, thus affecting the comparability of the Company’s financial statements for the periods presented in this report on Form 10-Q. The Company has prepared the Condensed Consolidated Financial Statements included herein pursuant to the rules and regulations of the SEC. Some information and note disclosures, which would normally be included in comprehensive annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), have been condensed or omitted pursuant to those SEC rules and regulations. The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. For a better understanding of the Company and its Condensed Consolidated Financial Statements, the Company recommends reading these Condensed Consolidated Financial Statements in conjunction with the audited financial statements, which are included in the Company’s 2021 Form 10-K. These interim results are not necessarily indicative of the results that should be expected for the full year. |
Planned Separation of Consumer Business | PLANNED SEPARATION OF CONSUMER BUSINESS In May 2021, the Company’s Board of Directors unanimously approved a plan to pursue a separation of the Company into two independent, publicly traded companies representing its B2B and consumer businesses, which was planned to be achieved through a spin-off of its consumer business. On January 14, 2022, the Company announced that its Board of Directors determined to delay the previously announced public company separation to evaluate a potential sale of the Company’s consumer business and that it had received a non-binding proposal from another third party, in addition to the previously received proposal from USR Parent, Inc., to acquire the Company’s consumer business. The Company’s Board of Directors is carefully reviewing both proposals with the assistance of its financial and legal advisors to determine the course of action that it believes is in the best interests of the Company and its shareholders. While the Company has previously been focusing on completing the public company separation during the first half of 2022, it has determined to delay further work on the spin-off while it focuses on a potential sale of the consumer business. There can be no assurance that a sale of the consumer business will take place and the terms of any such sale. |
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 at March 26, 2022 are presented in Trade accounts payable and Accrued expenses and other current liabilities, and $1 million at December 25, 2021 are presented in Current liabilities held for sale. At March 26, 2022 and December 25, 2021, cash and cash equivalents held outside the United States amounted to $121 million and $108 million, respectively. At December 25, 2021, there was $17 million cash and cash equivalents held outside the United States included in Current assets held for sale. |
Revenue Recognition | REVENUE As a result of the CompuCom Division’s presentation as discontinued operations, the Company’s level of service revenue is below 10% of the Company’s total revenue for all periods presented. Accordingly, revenues and cost of sales from services and products are not separately disclosed in the Company’s Condensed Consolidated Statements of Operations. The Company updated its major revenue categories disclosed herein according to this presentation, and prior period amounts have been reclassified to conform to the current period presentation. The following table provides information about disaggregated revenue from continuing operations by Division, and major revenue categories. First Quarter of 2022 (In millions) Business Solution Division Retail Division Other Total Major revenue categories Supplies $ 697 $ 351 $ 1 $ 1,049 Technology 287 383 2 672 Furniture and other 184 126 1 311 Copy and print 63 83 — 146 Total $ 1,231 $ 943 $ 4 $ 2,178 First Quarter of 2021 (In millions) Business Solution Division Retail Division Other Total Major revenue categories Supplies $ 581 $ 366 $ 2 $ 949 Technology 310 452 1 763 Furniture and other 177 144 5 326 Copy and print 59 77 — 136 Total $ 1,127 $ 1,039 $ 8 $ 2,174 Revenue includes the sale of: • Supplies such as paper, writing instruments, office supplies, cleaning and breakroom items, personal protective equipment, and product subscriptions; • Technology-related products such as toner and ink, printers, computers, tablets and accessories, electronic storage and sales of third-party software, as well as technology support services offerings provided in the Company’s retail stores, such as installation and repair; • Furniture and other products such as desks, seating, luggage, gift cards and warranties; and • Copy and print services, including managed print and fulfillment services. The Company sells its supplies, technology, furniture and other products through its Business Solutions and Retail Divisions. Customers can purchase products through the Company’s call centers, electronically through its Internet websites, or through its retail stores. Revenues from supplies, technology, and furniture and other product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer. Furniture and other products also include arrangements where customers can make special furniture interior design and installation orders that are customized to their needs. The performance obligations related to these arrangements are satisfied over time. Substantially all of the Company’s copy and print and technology support services offerings are satisfied at a point in time and revenue is recognized as such. The majority of copy and print offerings, which includes printing, copying, and digital imaging, are fulfilled through retail stores and the related performance obligations are satisfied within a short period of time (generally within the same day). |
Revenue Recognition and Significant Judgments | REVENUE RECOGNITION AND SIGNIFICANT JUDGMENTS Revenue is recognized upon transfer of control of promised products or services to customers for an amount that reflects the consideration the Company is entitled to receive in exchange for those products or services. For product sales, transfer of control occurs at a point in time, typically upon delivery to the customer. For service offerings, the transfer of control and satisfaction of the performance obligation is either over time or at a point in time. When performance obligations are satisfied over time, the Company evaluates the pattern of delivery and progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Revenue is recognized net of allowance for returns and net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Shipping and handling costs are considered fulfillment activities and are recognized within the Company’s cost of goods sold. Contracts with customers could include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Determining the standalone selling price also requires judgment. The Company did not have significant revenues generated from such contracts in the first quarters of 2022 and 2021. Products are generally sold with a right of return and the Company may provide other incentives, such as rebates and coupons, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The Company estimates returns and incentives at contract inception and includes the amount in the transaction price for which significant reversal is not probable. These estimates are updated at the end of each reporting period as additional information becomes available. The Company offers a customer loyalty program that provides customers with rewards that can be applied to future purchases or other incentives. Loyalty rewards are accounted for as a separate performance obligation and deferred revenue is recorded in the amount of the transaction price allocated to the rewards, inclusive of the impact of estimated breakage. The estimated breakage of loyalty rewards is based on historical redemption rates experienced under the loyalty program. Revenue is recognized when the loyalty rewards are redeemed or expire. As of March 26, 2022 and December 25, 2021, the Company had $10 million and $12 million of deferred revenue related to the loyalty program, respectively, which is included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. The Company recognizes revenue in certain circumstances before product delivery occurs (commonly referred to as bill-and-hold transactions). Revenue from bill-and-hold transactions is recognized when all specific requirements for transfer of control under a bill-and-hold arrangement have been met which include, among other things, a request from the customer that the product be held for future scheduled delivery. For these bill-and-hold arrangements, the associated product inventory is identified separately as belonging to the customer and is ready for physical transfer. |
Contract Balances | CONTRACT BALANCES The timing of revenue recognition may differ from the timing of invoicing to customers. A receivable is recognized in the period the Company delivers goods or provides services, and is recorded at the invoiced amount, net of an allowance for doubtful accounts. A receivable is also recognized for unbilled services where the Company’s right to consideration is unconditional, and is recorded based on an estimate of time and materials. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 20 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the contracts do not include a significant financing component. The primary purpose of the Company’s invoicing terms is to provide customers with simplified and predictable ways of purchasing its products and services. The Company receives payments from customers based upon contractual billing schedules. Contract assets include amounts related to deferred contract acquisition costs (refer to the section “Costs to Obtain a Contract” below) and if applicable, the Company’s conditional right to consideration for completed performance under a contract. The short- and long-term components of contract assets in the table below are included in Prepaid expenses and other current assets, and Other assets, respectively, in the Condensed Consolidated Balance Sheets. Contract liabilities include payments received in advance of performance under the contract, which are recognized as revenue when the performance obligation is completed under the contract, as well as accrued contract acquisition costs, liabilities related to the Company’s loyalty program and gift cards. The short- and long-term components of contract liabilities in the table below are included in Accrued expenses and other current liabilities, and Deferred income taxes and other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheets. The following table provides information about receivables, contract assets and contract liabilities from contracts with customers: March 26, December 25, (In millions) 2022 2021 Trade receivables, net $ 399 $ 353 Short-term contract assets 14 16 Long-term contract assets 5 8 Short-term contract liabilities 39 52 Long-term contract liabilities — 2 In the first quarters of 2022 and 2021, the Company did not There were no contract assets and liabilities that were recognized in the first quarter of 2022 as a result of business combinations. recognized A majority of the purchase orders and statements of work related to contracts with customers require delivery of the product or service within one year or less. For certain service contracts that exceed one year, the Company recognizes revenue at the amount to which it has the right to invoice for services performed. Accordingly, the Company has applied the optional exemption provided by the current revenue recognition standard relating to unsatisfied performance obligations and does not disclose the value of unsatisfied performance obligations for its contracts. |
Costs to Obtain a Contract | COSTS TO OBTAIN A CONTRACT The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company has determined that certain rebate incentive programs meet the requirements to be capitalized. These costs are periodically reviewed for impairment, and are amortized on a straight-line basis over the expected period of benefit. As of March 26, 2022 and December 25, 2021, short-term contract assets and long-term contract assets in the table above represent capitalized acquisition costs. In the first quarters of 2022 and 2021, amortization expense was $5 million and $6 million, respectively. The Company had no asset impairment charges related to contract assets in the periods presented herein. T here is uncertainty regarding the continued impacts of COVID-19 on the global and national economies, which could negatively affect the Company’s customers and result in future impairments of contract assets. |
MERGER, RESTRUCTURING AND OTH_2
MERGER, RESTRUCTURING AND OTHER ACTIVITY (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
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. First Quarter (In millions) 2022 2021 Merger and transaction related expenses Transaction and integration $ — $ 1 Total Merger and transaction related expenses — 1 Restructuring expenses Severance — 1 Professional fees — 1 Facility closure, contract termination, and other expenses, net 1 9 Total Restructuring expenses, net 1 11 Other operating expenses Professional fees 9 1 Total Other operating expenses 9 1 Total Merger, restructuring and other operating expenses, net $ 10 $ 13 |
Facility Closure and Severance Costs | The activity in the merger, restructuring and other accruals in the first quarter of 2022 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 25, Charges (credits) Cash March 26, (In millions) 2021 Incurred Payments 2022 Termination benefits: Maximize B2B Restructuring Plan 19 — — 19 Lease and contract obligations, accruals for facilities closures and other costs: Maximize B2B Restructuring Plan 6 1 (2 ) 5 Comprehensive Business Review 1 — — 1 Planned separation of consumer business 2 9 (5 ) 6 Total $ 28 $ 10 $ (7 ) $ 31 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Disaggregated Revenue from Continuing Operations by Division, Major Product and Service Categories | The following table provides information about disaggregated revenue from continuing operations by Division, and major revenue categories. First Quarter of 2022 (In millions) Business Solution Division Retail Division Other Total Major revenue categories Supplies $ 697 $ 351 $ 1 $ 1,049 Technology 287 383 2 672 Furniture and other 184 126 1 311 Copy and print 63 83 — 146 Total $ 1,231 $ 943 $ 4 $ 2,178 First Quarter of 2021 (In millions) Business Solution Division Retail Division Other Total Major revenue categories Supplies $ 581 $ 366 $ 2 $ 949 Technology 310 452 1 763 Furniture and other 177 144 5 326 Copy and print 59 77 — 136 Total $ 1,127 $ 1,039 $ 8 $ 2,174 |
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: March 26, December 25, (In millions) 2022 2021 Trade receivables, net $ 399 $ 353 Short-term contract assets 14 16 Long-term contract assets 5 8 Short-term contract liabilities 39 52 Long-term contract liabilities — 2 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Segment Reporting [Abstract] | |
Summary of Significant Accounts and Balances by Each Divisions and Other | The following is a summary of sales and operating income (loss) by each of the Divisions and Other, reconciled to consolidated totals. Sales First Quarter (In millions) 2022 2021 Business Solutions Division $ 1,231 $ 1,127 Retail Division 943 1,039 Other 4 8 Total $ 2,178 $ 2,174 Division Operating Income (Loss) First Quarter (In millions) 2022 2021 Business Solutions Division $ 33 $ 17 Retail Division 89 100 Other (14 ) (2 ) Total $ 108 $ 115 |
Reconciliation of Measure of Division Operating Income to Consolidated Income (Loss) from Continuing Operations Before Income Taxes | A reconciliation of the measure of Division operating income to Consolidated income from continuing operations before income taxes is as follows: First Quarter (In millions) 2022 2021 Total Divisions operating income $ 108 $ 115 Add/(subtract): Asset impairments (2 ) (12 ) Merger, restructuring and other operating expenses, net (10 ) (13 ) Unallocated expenses (20 ) (21 ) Interest income 1 — Interest expense (5 ) (7 ) Other income, net 2 11 Income from continuing operations before income taxes $ 74 $ 73 |
Schedule of Goodwill by Segment | The components of goodwill by segment are provided in the following table: Business Solutions Retail (In millions) Division Division Other Total Balance as of December 25, 2021 $ 318 $ 78 $ 68 $ 464 Balance as of March 26, 2022 $ 318 $ 78 $ 68 $ 464 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Earnings Per Share [Abstract] | |
Calculation of Earnings (Loss) Per Common Share | The following table represents the calculation of earnings (loss) per common share – basic and diluted: First Quarter (In millions, except per share amounts) 2022 2021 Basic Earnings (Loss) Per Share Numerator: Net income from continuing operations $ 55 $ 63 Loss from discontinued operations, net of tax — (10 ) Net income $ 55 $ 53 Denominator: Weighted-average shares outstanding 49 53 Basic earnings (loss) per share: Continuing operations $ 1.14 $ 1.17 Discontinued operations — (0.18 ) Net basic earnings per share $ 1.14 $ 0.99 Diluted Earnings (Loss) Per Share Numerator: Net income from continuing operations $ 55 $ 63 Loss from discontinued operations, net of tax — (10 ) Net income $ 55 $ 53 Denominator: Weighted-average shares outstanding 49 53 Effect of dilutive securities: Stock options and restricted stock 2 3 Diluted weighted-average shares outstanding 51 56 Diluted earnings (loss) per share: Continuing operations $ 1.09 $ 1.12 Discontinued operations — (0.17 ) Net diluted earnings per share $ 1.09 $ 0.95 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
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 25, 2021 $ (27 ) $ 21 $ (6 ) Other comprehensive loss activity before reclassifications (1 ) — (1 ) Reclassification of foreign currency translation adjustments realized upon disposal of business 6 — 6 Balance at March 26, 2022 $ (22 ) $ 21 $ (1 ) |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Pension Benefit | The components of net periodic pension benefit for the Company’s North America pension plans are as follows: First Quarter (In millions) 2022 2021 Service cost $ — $ — Interest cost 5 5 Expected return on plan assets (6 ) (7 ) Net periodic pension benefit $ (1 ) $ (2 ) The components of net periodic pension benefit for the Company’s pension plan in the United Kingdom (“UK”) are as follows: First Quarter (In millions) 2022 2021 Service cost $ — $ — Interest cost 1 1 Expected return on plan assets (2 ) (1 ) Net periodic pension benefit $ (1 ) $ — |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
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. March 26, December 25, 2022 2021 Carrying Fair Carrying Fair (In millions) Amount Value Amount Value Financial assets: Company-owned life insurance 136 136 137 137 Financial liabilities: Long-term debt: New Facilities loans under the Third Amended Credit Agreement, due 2025 57 57 100 100 Revenue bonds, due in varying amounts periodically through 2029 75 76 75 76 American & Foreign Power Company, Inc. 5% debentures, due 2030 15 15 15 16 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Major Component of Discontinued Operations, Net of Tax and Major Classes of Assets and Liabilities of Disposal Group Classified as Held for Sale | The following table represents a reconciliation of the major components of discontinued operations, net of tax presented in the Condensed Consolidated Statements of Operations. First Quarter (In millions) 2022 2021 Major components of discontinued operations before income taxes: Sales $ — $ 192 Cost of goods and occupancy costs: — 153 Gross profit — 39 Selling, general and administrative expenses — 51 Merger, restructuring and other operating expenses, net — 2 Operating loss — (14 ) Other income (expense): Other income, net — — Loss from major components of discontinued operations before income taxes — (14 ) Loss on disposal of discontinued operations (1 ) — Loss from discontinued operations before income taxes (1 ) (14 ) Income tax benefit (1 ) (4 ) Discontinued operations, net of tax $ — $ (10 ) The following table represents the major classes of assets and liabilities of the disposal group classified as held for sale presented in the Condensed Consolidated Balance Sheets as of December 25, 2021. The Company completed the sale of CompuCom on December 31, 2021, and therefore no assets or liabilities are included in discontinued operations as of March 26, 2022. December 25, (In millions) 2021 Major classes of assets included in discontinued operations: Cash and cash equivalents $ 23 Receivables, net 221 Inventories 20 Prepaid expenses and other current assets 15 Property and equipment, net 25 Operating lease right-of-use assets 66 Other intangible assets, net 255 Other assets 14 Less: valuation allowance (170 ) Total assets of the disposal group classified as held for sale $ 469 Major classes of liabilities included in discontinued operations: Trade accounts payable $ 83 Accrued expenses and other current liabilities 86 Deferred income taxes and other long-term liabilities 75 Operating lease liabilities 46 Total liabilities of the disposal group classified as held for sale $ 290 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | 3 Months Ended | |||
Mar. 26, 2022USD ($)StoreSegment | Dec. 25, 2021USD ($) | Sep. 25, 2021USD ($) | Dec. 26, 2020USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of retail stores | Store | 1,032 | |||
Number of reportable segments | Segment | 2 | |||
Accounts payable and accrued expenses and other current liabilities not yet presented for payment | $ 9 | |||
Cash and cash equivalents | $ 557 | $ 514 | ||
Non-US | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Cash and cash equivalents | $ 121 | $ 108 | ||
Non-US | Current Asset Held For Sales | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Cash and cash equivalents | $ 17 |
Summary of Major Components of
Summary of Major Components of Merger and Restructuring Expenses, Net (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Merger and transaction related expenses | ||
Transaction and integration | $ 1 | |
Total Merger and transaction related expenses | 1 | |
Restructuring expenses | ||
Severance | 1 | |
Professional fees | 1 | |
Facility closure, contract termination, and other expenses, net | $ 1 | 9 |
Total Restructuring expenses, net | 1 | 11 |
Other operating expenses | ||
Professional fees | 9 | 1 |
Total Other operating expenses | 9 | 1 |
Total Merger, restructuring and other operating expenses, net | $ 10 | $ 13 |
Merger, Restructuring and Oth_3
Merger, Restructuring and Other Activity - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 23 Months Ended | |||
May 31, 2021USD ($)Company | May 31, 2020USD ($)Employee | Mar. 26, 2022USD ($)Store | Mar. 27, 2021USD ($) | Dec. 25, 2021USD ($)Store | Dec. 26, 2020StoreFacility | Mar. 26, 2022USD ($) | |
Merger Restructuring And Other Activity [Line Items] | |||||||
Transaction and integration expenses | $ 0 | $ 1,000,000 | |||||
Costs to implement restructuring plan | 10,000,000 | ||||||
Restructuring cash expenditure | 7,000,000 | ||||||
Professional fees | 1,000,000 | ||||||
USR Parent, Inc. | |||||||
Merger Restructuring And Other Activity [Line Items] | |||||||
Professional fees | 1,000,000 | ||||||
Maximize B2B Restructuring Plan | |||||||
Merger Restructuring And Other Activity [Line Items] | |||||||
Costs to implement restructuring plan | $ 1,000,000 | 11,000,000 | $ 96,000,000 | ||||
Number of retail stores closed | Store | 6 | 111 | 70 | ||||
Number of distribution facilities closed | Facility | 2 | ||||||
Restructuring cash expenditure | $ 2,000,000 | 4,000,000 | |||||
Maximize B2B Restructuring Plan | Cash Expenditures | |||||||
Merger Restructuring And Other Activity [Line Items] | |||||||
Costs to implement restructuring plan | 55,000,000 | ||||||
Maximize B2B Restructuring Plan | Severance Costs | |||||||
Merger Restructuring And Other Activity [Line Items] | |||||||
Costs to implement restructuring plan | $ 49,000,000 | 1,000,000 | |||||
Maximize B2B Restructuring Plan | Retail Store and Facility Closure Costs | |||||||
Merger Restructuring And Other Activity [Line Items] | |||||||
Costs to implement restructuring plan | 34,000,000 | 9,000,000 | |||||
Maximize B2B Restructuring Plan | Other Costs Including Contract Termination Costs | |||||||
Merger Restructuring And Other Activity [Line Items] | |||||||
Costs to implement restructuring plan | $ 28,000,000 | 1,000,000 | |||||
Restructuring cash expenditure | 2,000,000 | ||||||
Maximize B2B Restructuring Plan | Third-Party Professional Fees | |||||||
Merger Restructuring And Other Activity [Line Items] | |||||||
Costs to implement restructuring plan | $ 1,000,000 | ||||||
Maximize B2B Restructuring Plan | Maximum | |||||||
Merger Restructuring And Other Activity [Line Items] | |||||||
Number of expected reduction in employee position | Employee | 13,100 | ||||||
Costs to implement restructuring plan | $ 111,000,000 | ||||||
Maximize B2B Restructuring Plan | Maximum | Cash Expenditures | |||||||
Merger Restructuring And Other Activity [Line Items] | |||||||
Costs to implement restructuring plan | $ 111,000,000 | $ 111,000,000 | |||||
Planned Separation of Consumer Business | |||||||
Merger Restructuring And Other Activity [Line Items] | |||||||
Estimated additional costs | 100,000,000 | $ 100,000,000 | |||||
Number of independent company | Company | 2 | ||||||
Planned Separation of Consumer Business | Other Costs Including Contract Termination Costs | |||||||
Merger Restructuring And Other Activity [Line Items] | |||||||
Costs to implement restructuring plan | 9,000,000 | ||||||
Restructuring cash expenditure | 5,000,000 | ||||||
Planned Separation of Consumer Business | Third-Party Professional Fees | |||||||
Merger Restructuring And Other Activity [Line Items] | |||||||
Costs to implement restructuring plan | $ 9,000,000 | $ 32,000,000 |
Severance and Facility Closure
Severance and Facility Closure Costs (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 23 Months Ended | |
May 31, 2020 | Mar. 26, 2022 | Mar. 27, 2021 | Mar. 26, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | $ 28 | |||
Charges (credits) Incurred | 10 | |||
Cash Payments | (7) | |||
Ending Balance | 31 | $ 31 | ||
Maximize B2B Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges (credits) Incurred | 1 | $ 11 | 96 | |
Cash Payments | (2) | $ (4) | ||
Termination Benefits | Maximize B2B Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | 19 | |||
Ending Balance | 19 | 19 | ||
Lease and contract obligations, accruals for facilities closures and other costs | Maximize B2B Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | 6 | |||
Charges (credits) Incurred | $ 28 | 1 | ||
Cash Payments | (2) | |||
Ending Balance | 5 | 5 | ||
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 | ||
Lease and contract obligations, accruals for facilities closures and other costs | Planned Separation of Consumer Business | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | 2 | |||
Charges (credits) Incurred | 9 | |||
Cash Payments | (5) | |||
Ending Balance | $ 6 | $ 6 |
Summary of Disaggregated Revenu
Summary of Disaggregated Revenue from Continuing Operations by Division, major revenue Categories (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Disaggregation Of Revenue [Line Items] | ||
Sales | $ 2,178 | $ 2,174 |
Products, Supplies | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 1,049 | 949 |
Products, Technology | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 672 | 763 |
Products, Furniture and Other | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 311 | 326 |
Services, Copy and Print | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 146 | 136 |
Operating Segments | Business Solution Division | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 1,231 | 1,127 |
Operating Segments | Business Solution Division | Products, Supplies | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 697 | 581 |
Operating Segments | Business Solution Division | Products, Technology | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 287 | 310 |
Operating Segments | Business Solution Division | Products, Furniture and Other | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 184 | 177 |
Operating Segments | Business Solution Division | Services, Copy and Print | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 63 | 59 |
Operating Segments | Retail Division | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 943 | 1,039 |
Operating Segments | Retail Division | Products, Supplies | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 351 | 366 |
Operating Segments | Retail Division | Products, Technology | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 383 | 452 |
Operating Segments | Retail Division | Products, Furniture and Other | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 126 | 144 |
Operating Segments | Retail Division | Services, Copy and Print | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 83 | 77 |
Other | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 4 | 8 |
Other | Products, Supplies | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 1 | 2 |
Other | Products, Technology | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | 2 | 1 |
Other | Products, Furniture and Other | ||
Disaggregation Of Revenue [Line Items] | ||
Sales | $ 1 | $ 5 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | |
Revenue From Contract With Customer [Line Items] | |||
Short-term contract liabilities | $ 39,000,000 | $ 52,000,000 | |
Revenue recognition included in short-term contract liabilities | 13,000,000 | $ 22,000,000 | |
Recognition of contract assets as a result of business combination | 0 | 0 | |
Recognition of contract liabilities as a result of business combination | 0 | 2,000,000 | |
Significant adjustment to revenue from performance obligations | 0 | 0 | |
Contract with customer, asset, reclassified to receivable | 0 | 0 | |
Short-term contract assets | 14,000,000 | 16,000,000 | |
Long-term contract assets | 5,000,000 | 8,000,000 | |
Long-term contract liabilities | 2,000,000 | ||
Capitalized contract cost, amortization | 5,000,000 | 6,000,000 | |
Impairment charges related to contract assets | 2,000,000 | 12,000,000 | |
Contract Assets | |||
Revenue From Contract With Customer [Line Items] | |||
Impairment charges related to contract assets | 0 | $ 0 | |
CompuCom Division | |||
Revenue From Contract With Customer [Line Items] | |||
Short-term contract liabilities | 10,000,000 | ||
Short-term contract assets | 1,000,000 | ||
Long-term contract assets | 2,000,000 | ||
Long-term contract liabilities | 2,000,000 | ||
Accrued Expenses and Other Current Liabilities | |||
Revenue From Contract With Customer [Line Items] | |||
Short-term contract liabilities | $ 10,000,000 | $ 12,000,000 |
Summary of Receivables, Contrac
Summary of Receivables, Contract Assets and Contract Liabilities from Contracts with Customers (Detail) - USD ($) $ in Millions | Mar. 26, 2022 | Dec. 25, 2021 |
Contract With Customer Asset And Liability [Abstract] | ||
Trade receivables, net | $ 399 | $ 353 |
Short-term contract assets | 14 | 16 |
Long-term contract assets | 5 | 8 |
Short-term contract liabilities | $ 39 | 52 |
Long-term contract liabilities | $ 2 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Millions | 3 Months Ended | |
Mar. 26, 2022USD ($)Segment | Dec. 25, 2021USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 2 | |
Number of operating segments | 2 | |
Goodwill | $ | $ 464 | $ 464 |
Contract Reporting Unit | ||
Segment Reporting Information [Line Items] | ||
Carrying value in excess of fair value for reporting unit, percentage | 16.00% |
Reconciliation of Revenue from
Reconciliation of Revenue from Segments to Consolidated (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Segment Reporting Information [Line Items] | ||
Sales | $ 2,178 | $ 2,174 |
Operating Segments | Business Solutions Division | ||
Segment Reporting Information [Line Items] | ||
Sales | 1,231 | 1,127 |
Operating Segments | Retail Division | ||
Segment Reporting Information [Line Items] | ||
Sales | 943 | 1,039 |
Other | ||
Segment Reporting Information [Line Items] | ||
Sales | $ 4 | $ 8 |
Division Operating Income (Loss
Division Operating Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Division Operating Income (Loss) | $ 108 | $ 115 |
Operating Segments | Business Solutions Division | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Division Operating Income (Loss) | 33 | 17 |
Operating Segments | Retail Division | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Division Operating Income (Loss) | 89 | 100 |
Other | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Division Operating Income (Loss) | $ (14) | $ (2) |
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 | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Segment Reporting [Abstract] | ||
Total Divisions operating income | $ 108 | $ 115 |
Asset impairments | (2) | (12) |
Merger, restructuring and other operating expenses, net | (10) | (13) |
Unallocated expenses | (20) | (21) |
Interest income | 1 | |
Interest expense | (5) | (7) |
Other income, net | 2 | 11 |
Income from continuing operations before income taxes | $ 74 | $ 73 |
Schedule of Goodwill by Segment
Schedule of Goodwill by Segment (Detail) $ in Millions | Mar. 26, 2022USD ($) |
Goodwill [Line Items] | |
Balance as of December 25, 2021 | $ 464 |
Balance as of March 26, 2022 | 464 |
Operating Segments | Business Solutions Division | |
Goodwill [Line Items] | |
Balance as of December 25, 2021 | 318 |
Balance as of March 26, 2022 | 318 |
Operating Segments | Retail Division | |
Goodwill [Line Items] | |
Balance as of December 25, 2021 | 78 |
Balance as of March 26, 2022 | 78 |
Other | |
Goodwill [Line Items] | |
Balance as of December 25, 2021 | 68 |
Balance as of March 26, 2022 | $ 68 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Income Taxes [Line Items] | ||
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 21.00% | 21.00% |
Effective tax rate | 26.00% | 14.00% |
Decrease related to current year tax positions | $ 1 | |
CompuCom | ||
Income Taxes [Line Items] | ||
Tax effected capital loss recognized | 210 | |
Capital loss available to be carried back | 20 | |
Unrealized benefit from excess capital loss | $ 190 |
Calculation of Earnings (Loss)
Calculation of Earnings (Loss) Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Basic Earnings (Loss) Per Share | ||
Net income from continuing operations | $ 55 | $ 63 |
Loss from discontinued operations, net of tax | (10) | |
Net income | $ 55 | $ 53 |
Weighted-average shares outstanding | 49 | 53 |
Continuing operations | $ 1.14 | $ 1.17 |
Discontinued operations | (0.18) | |
Net basic earnings per share | $ 1.14 | $ 0.99 |
Diluted Earnings (Loss) Per Share | ||
Net income from continuing operations | $ 55 | $ 63 |
Loss from discontinued operations, net of tax | (10) | |
Net income | $ 55 | $ 53 |
Weighted-average shares outstanding | 49 | 53 |
Stock options and restricted stock | 2 | 3 |
Diluted weighted-average shares outstanding | 51 | 56 |
Continuing operations | $ 1.09 | $ 1.12 |
Discontinued operations | (0.17) | |
Net diluted earnings per share | $ 1.09 | $ 0.95 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Nonvested Stock Options and Shares | Maximum | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Shares excluded from computation of diluted earnings per share | 1 | 1 |
Debt - Additional Information (
Debt - Additional Information (Detail) - Third Amended and Restated Credit Agreement - USD ($) | Apr. 17, 2020 | Mar. 26, 2022 |
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 | $ 874,000,000 | |
Revolving loans outstanding | 0 | |
Asset-based Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity under credit facility | $ 1,200,000,000 | |
Asset-based First-in, Last-out Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity under credit facility | $ 100,000,000 | |
Retirement of term loan facility | 43,000,000 | |
Borrowing under credit facility | 57,000,000 | |
Standby Letter of Credit | ||
Debt Instrument [Line Items] | ||
Borrowing under credit facility | 47,000,000 | |
Minimum [Member] | Asset-based Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Line of credit facility, increase (decrease), net | 200,000,000 | |
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 | 3 Months Ended |
Mar. 26, 2022USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | $ 1,438 |
Balance | 1,492 |
Foreign Currency Translation Adjustments | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | (27) |
Other comprehensive loss activity before reclassifications | (1) |
Reclassification of foreign currency translation adjustments realized upon disposal of business | 6 |
Balance | (22) |
Change in Deferred Pension and Other | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | 21 |
Balance | 21 |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance | (6) |
Other comprehensive loss activity before reclassifications | (1) |
Reclassification of foreign currency translation adjustments realized upon disposal of business | 6 |
Balance | $ (1) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Millions | Nov. 16, 2021 | Mar. 26, 2022 | Sep. 25, 2021 | Dec. 31, 2021 | Dec. 25, 2021 |
Shareholders Equity [Line Items] | |||||
Stock repurchase program, additional authorized amount | $ 200 | ||||
Stock repurchase program, authorized amount | $ 650 | ||||
Treasury stock, shares | 16,264,941 | 16,249,028 | |||
Dividends payable, temporarily suspended month and year | 2020-05 | ||||
Accelerated Share Repurchase Agreement | |||||
Shareholders Equity [Line Items] | |||||
Up-front payment in exchange for common stock in repurchase shares | $ 150 | ||||
Stock repurchase program, shares purchased | 0 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 342 |
Components of Net Periodic Pens
Components of Net Periodic Pension Benefit (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
North America | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 0 | $ 0 |
Interest cost | 5 | 5 |
Expected return on plan assets | (6) | (7) |
Net periodic pension benefit | (1) | (2) |
United Kingdom | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | 0 |
Interest cost | 1 | 1 |
Expected return on plan assets | (2) | $ (1) |
Net periodic pension benefit | $ (1) |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 26, 2022USD ($) | |
North America | |
Defined Benefit Plan Disclosure [Line Items] | |
Pension and other postretirement contributions, current period | $ 1 |
Pension and other postretirement contributions, remainder of fiscal year | 1 |
United Kingdom | |
Defined Benefit Plan Disclosure [Line Items] | |
Pension and other postretirement contributions, current period | 1 |
Pension and other postretirement contributions, remainder of fiscal year | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative financial instruments | $ 0 | |
Asset impairment charges | $ 2 | $ 12 |
Impairment of operating lease ROU assets | $ 10 | |
Retail Stores | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Percentage used for analysis | 8.00% |
Schedule of Fair Value of Asset
Schedule of Fair Value of Assets and Liabilities (Detail) - USD ($) $ in Millions | Mar. 26, 2022 | Dec. 25, 2021 |
Carrying Amount | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Company-owned life insurance | $ 136 | $ 137 |
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 | 57 | 100 |
Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Company-owned life insurance | 136 | 137 |
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 | 57 | 100 |
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 | 15 | 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 | $ 15 | $ 16 |
Schedule of Fair Value of Ass_2
Schedule of Fair Value of Assets and Liabilities (Parenthetical) (Detail) - Long-Term Debt | 3 Months Ended | 12 Months Ended |
Mar. 26, 2022 | Dec. 25, 2021 | |
Carrying Amount | New Facilities loans Under Third Amended Credit Agreement due 2025 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2025 | 2025 |
Carrying Amount | Revenue bonds, due in varying amounts periodically through 2029 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2029 | 2029 |
Carrying Amount | American & Foreign Power Company, Inc. 5% debentures, due 2030 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2030 | 2030 |
Long-term debt, interest rate | 5.00% | 5.00% |
Fair Value | New Facilities loans Under Third Amended Credit Agreement due 2025 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2025 | 2025 |
Fair Value | Revenue bonds, due in varying amounts periodically through 2029 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2029 | 2029 |
Fair Value | American & Foreign Power Company, Inc. 5% debentures, due 2030 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt, due date | 2030 | 2030 |
Long-term debt, interest rate | 5.00% | 5.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 26, 2022USD ($) | |
Minimum [Member] | |
Commitments And Contingencies Disclosure [Line Items] | |
Losses for environmental liabilities | $ 15 |
Maximum | |
Commitments And Contingencies Disclosure [Line Items] | |
Losses for environmental liabilities | $ 25 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - Securities Purchase Agreement - CompuCom Division - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 26, 2022 | Dec. 25, 2021 | Dec. 25, 2021 | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Cash purchase price | $ 125 | $ 125 | |
Interest bearing promissory note | 55 | ||
Provision for payment | $ 125 | ||
Accrues interest of promissory note | 6.00% | ||
Capital investment percentage | 15.00% | ||
Dividend percentage | 50.00% | ||
Aggregate sale proceeds | $ 125 | ||
Estimated fair value | 190 | 190 | |
Cash purchase price | $ 30 | 126 | 126 |
Earnout payment | $ 9 | ||
Loss from classification to held for sale | $ 1 | $ 170 | |
Minimum [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Purchase period | 3 months | ||
Maximum | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Purchase period | 12 months |
Major Component of Discontinued
Major Component of Discontinued Operations, Net of Tax (Detail) - Discontinued Operations, Held-for-Sale - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Major components of discontinued operations before income taxes: | ||
Sales | $ 192 | |
Cost of goods and occupancy costs: | 153 | |
Gross profit | 39 | |
Selling, general and administrative expenses | 51 | |
Merger, restructuring and other operating expenses, net | 2 | |
Operating loss | (14) | |
Other income (expense): | ||
Loss from major components of discontinued operations before income taxes | (14) | |
Loss on disposal of discontinued operations | $ (1) | |
Loss from discontinued operations before income taxes | (1) | (14) |
Income tax benefit | $ (1) | (4) |
Discontinued operations, net of tax | $ (10) |
Major Classes of Assets and Lia
Major Classes of Assets and Liabilities of Disposal Group Classified as Held for Sale (Detail) - CompuCom Division - Discontinued Operations, Held-for-Sale $ in Millions | Dec. 25, 2021USD ($) |
Major classes of assets included in discontinued operations: | |
Cash and cash equivalents | $ 23 |
Receivables, net | 221 |
Inventories | 20 |
Prepaid expenses and other current assets | 15 |
Property and equipment, net | 25 |
Operating lease right-of-use assets | 66 |
Other intangible assets, net | 255 |
Other assets | 14 |
Less: valuation allowance | (170) |
Total assets of the disposal group classified as held for sale | 469 |
Major classes of liabilities included in discontinued operations: | |
Trade accounts payable | 83 |
Accrued expenses and other current liabilities | 86 |
Deferred income taxes and other long-term liabilities | 75 |
Operating lease liabilities | 46 |
Total liabilities of the disposal group classified as held for sale | $ 290 |