OfficeMax 2005 Annual Report Download - page 7

in the United States, Puerto Rico and the U.S. Virgin Islands. Our retail office supply stores feature
OfficeMax Print and Document Services, an in-store module devoted to print-for-pay and related
services. Our retail segment also operates office products stores in Mexico through a 51%-owned
joint venture. Substantially all products sold by this segment are purchased from outside
manufacturers or from industry wholesalers, except office papers. As described above, we purchase
office papers primarily from the paper operations of Boise Cascade, L.L.C., under a 12-year paper
supply contract we entered into as part of the Sale.
As of February 25, 2006, our Retail segment operated 970 stores, 3 large distribution centers,
and one small distribution center. Each store offers approximately 8,000 stock keeping units (SKUs)
of name-brand and OfficeMax private-branded merchandise and a variety of business services
targeted at serving the small business customer, including OfficeMax Print and Document Services.
OfficeMax, Retail sales for 2005 and 2004 were $4.5 billion and $4.5 billion, respectively. Sales
for the period from December 10, 2003, the date of the OfficeMax, Inc. acquisition to December 27,
2003, the last day of our retail segment’s 2003 fiscal year, were $283 million.
Boise Building Solutions
Substantially all of the assets of this segment were included in the Sale. Boise Building
Solutions was a major producer of plywood, lumber and particleboard. This segment also
manufactured engineered wood products, including laminated veneer lumber (LVL), which is a
high-strength engineered structural lumber product, wood I-joists and laminated beams. Most of the
production was sold to independent wholesalers and dealers or through the segment’s building
materials distribution outlets. Building materials manufactured by this business are used primarily in
housing, industrial construction and a variety of manufactured products.
Boise Building Solutions operated 28 building materials distribution facilities as of October 28,
2004. These operations marketed a wide range of building materials, including lumber, plywood,
oriented strand board, particleboard, decking, engineered wood products, paneling, drywall,
builders’ hardware and metal products. These products were distributed to retail lumber dealers,
home centers specializing in the do-it-yourself market and industrial customers. Through
October 28, 2004, approximately 25% of the lumber, panels and engineered wood products
purchased by the distribution operations were provided by this segment’s manufacturing facilities,
with the balance purchased from outside sources. Segment sales for January 1 through
October 28, 2004, were $3.3 billion. Sales for the year ended December 31, 2003 were $2.9 billion.
Boise Paper Solutions
Substantially all of the assets of this segment were included in the Sale. Boise Paper Solutions
manufactured and sold uncoated free sheet papers, containerboard, corrugated containers,
newsprint and market pulp. Boise Paper Solutions sales for the period from January 1 through
October 28, 2004, were $1.7 billion. Sales for 2003 were $1.9 billion.
About 46% of this segment’s uncoated free sheet paper, including about 83% of its office
papers, was sold through the OfficeMax, Contract and OfficeMax, Retail segments during the period
from January 1 through October 28, 2004. As described above, OfficeMax purchases office papers
primarily from the paper operations of Boise Cascade L.L.C., under a 12-year paper supply contract
we entered into as part of the Sale.
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