OfficeMax 2015 Annual Report Download - page 76

Table of Contents
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Merger and integration costs are accounted for as expenses in the period in which the costs are incurred. Transaction-related expenses are included in the
Merger, restructuring, and other operating expenses, net line in the Consolidated Statements of Operations. Refer to Note 3 for additional information about
the costs incurred and Note 9 for discussion of the income tax impacts of the Merger.
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During the first quarter of 2015, the Company acquired an interior furniture business for $9 million. The business supports the contract channel of the North
American Business Solutions Division. Fair value of assets acquired and liabilities assumed are included in the balance sheet since acquisition and include
certain amortizing intangible assets and tax-deductible goodwill. Supplemental pro forma financial information is not provided based on materiality
considerations.
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Grupo OfficeMax
In August 2014, the Company completed the sale of its 51% capital stock interest in Grupo OfficeMax, the former OfficeMax business in Mexico, to its joint
venture partner for net cash proceeds of $43 million. The loss associated with the disposed business amounted to $2 million, which resulted primarily from
the release of the net foreign currency remeasurement differences from investment to the disposition date recorded in other comprehensive income
(cumulative translation adjustment) and fees incurred to complete the transaction. The loss on disposition is included in Merger, restructuring, and other
operating expenses, net in the Consolidated Statements of Operations. This disposition did not have a major effect on the Company’s operations and
financial results and, therefore, is not presented as discontinued operations.
The amounts included in the 2014 Consolidated Statements of Operations for this business through the date of sale are as follows:
(In millions)
Sales $155
Income before income taxes 6
Income attributable to Office Depot, before income taxes 4
Office Depot de Mexico
From 1994 through the third quarter of 2013, the Company participated in a joint venture that sold office products and services in Mexico and Central and
South America. In the third quarter of 2013, the Company sold its 50 percent investment in Office Depot de Mexico, S.A. de C.V. (“Office Depot de Mexico”)
to its joint venture partner, Grupo Gigante, S.A.B. de C.V. (“Grupo Gigante”). The transaction generated cash proceeds of the Mexican Peso amount of 8,777
million in cash ($680 million at then-current exchange rates). A pretax gain of $382 million was recognized in 2013 as Gain on the disposition of joint
venture in Other income (expense) in the Consolidated Statements of Operations. The gain is net of third party fees, as well as recognition of $39 million of
cumulative translation losses released from Other comprehensive income because the subsidiary holding the joint venture investment was substantially
liquidated following the disposition. The investment in this joint venture was accounted for under the equity method of accounting. For periods prior to the
sale, the Company’s proportionate share of Office Depot de Mexico’s net income is presented in Other income (expense), net in the Consolidated Statements
of Operations and totaled $13 million through the date of sale in 2013.
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