Note L — Segment Information

Office Depot operates in three reportable segments: North American Retail Division, Business Services Group (“BSG”), and International Division. Each of these segments is managed separately primarily because it serves different customer groups. The accounting policies of our segments are the same as those described in the summary of significant accounting policies (see Note A).

Senior management evaluates the performance of each business segment based on operating income, which is defined as income before income taxes, interest income and expense, goodwill amortization, merger and restructuring costs, facility closure costs, general and administrative expenses, and pre-opening expenses.

The following is a summary of our significant accounts and balances by segment, reconciled to our consolidated totals.

* Amounts included in ‘ Eliminations and Other’ consist of the following:

Sales consist of inter-segment sales, which are generally recorded at the cost to the selling entity.

Earnings Before Income Taxes are primarily associated with corporate activities and are detailed in the following table:

Capital Expenditures, Depreciation and Amortization, and Assets included in ‘ Eliminations and Other’ are also related primarily to our corporate activities.