Office Depot 2010 Annual Report Download - page 66

A reconciliation of the measure of Division operating profit to consolidated earnings from continuing operations
before income taxes follows.
(Dollars in thousands) 2010 2009 2008
Division operating profit ............................ $334,759 $ 323,309 $ 247,777
(Add)/subtract:
Charges (see Note D) ............................... —253,383 1,468,684
Unallocated general, administrative and corporate expenses
(excluding Charges) .............................. 372,050 334,931 324,134
Interest expense ................................... 58,498 65,628 68,286
Interest income .................................... (4,663) (2,396) (10,013)
Miscellaneous income, net ........................... (34,451) (17,085) (23,666)
Earnings (loss) before income taxes .................... $ (56,675) $(311,152) $(1,579,648)
As of December 25, 2010, we sold to customers in 53 countries throughout North America, Europe, Asia and
Latin America. We operate wholly-owned entities, majority-owned entities or participate in other ventures
covering 41 countries and have alliances in an additional 12 countries. There is no single country outside of the
United States in which we generate 10% or more of our total revenues. Geographic financial information relating
to our business is as follows (in thousands).
Sales Property and Equipment
2010 2009 2008 2010 2009
United States ........ $ 8,189,642 $ 8,476,404 $10,083,984 $ 980,426 $1,059,236
International ........ 3,443,452 3,668,063 4,411,560 176,587 218,419
Total ............ $11,633,094 $12,144,467 $14,495,544 $1,157,013 $1,277,655
NOTE Q — DISPOSITIONS AND ACQUISITIONS
In December 2010, the company sold the stock of its operating entities in Israel and Japan and entered into
licensing agreements with the respective buyers of those companies. A loss on disposition of approximately $11
million has been reflected in the operating income of the International Division and included in store and
warehouse operating and selling expenses in the Consolidated Statement of Operations. Additionally in
December 2010, the company entered into an amended shareholders’ agreement related to its venture in India
such that financial and operating policies are now shared and equity capital balances are equal. The revenues and
expenses of these entities have been included through the date of sale or deconsolidation in the Consolidated
Statement of Operations and the assets and liabilities of each of these entities have been removed from the year
end Consolidated Balance Sheet. The investment in India will now be accounted for under the equity method,
with our share of results being presented in Miscellaneous income, net in future periods.
During 2010, the company acquired the remaining noncontrolling interests of an entity operating in Sweden.
During 2008, the company acquired a majority interest in that entity, as well as remaining noncontrolling interest
shares of our joint ventures in Israel and China.
NOTE R — INVESTMENT IN UNCONSOLIDATED JOINT VENTURE
Since 1994, we have participated in a joint venture in Latin America, Office Depot de Mexico. Because we
participate equally in this business with a partner, we account for this investment using the equity method. Our
proportionate share of Office Depot de Mexico’s net income or loss is presented in miscellaneous income, net in
the Consolidated Statements of Operations. During the first quarter of 2009, we received a $13.9 million
dividend from this venture. Our investment balance at year end 2010 and 2009 of $205.8 million and $168.6
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