OfficeMax 2006 Annual Report Download - page 91

Download and view the complete annual report

Please find page 91 of the 2006 OfficeMax annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

87
OfficeMax, Contract distributes a broad line of items for the office, including office supplies and
paper, technology products and solutions and office furniture.OfficeMax, Contract sells directly to
large corporate and government offices, as well as small and medium-sized offices in the United
States, Canada, Australia and New Zealand. This segment markets and sells through field
salespeople, outbound telesales, catalogs, the Internet and in some markets, including Canada,
Hawaii,Australia and New Zealand through office products stores. Substantially all products sold by
OfficeMax, Contract are purchased from third-party manufacturers or industry wholesalers, except
office papers. OfficeMax, Contract purchases office papers primarily from the paper operations of
Boise Cascade, L.L.C., under a 12-year paper supply contract entered into at the time of the Sale.
(See Note 18,Commitments and Guarantees, for additional information related to the paper supply
contract.)
OfficeMax, Retail is a retail distributor of office supplies and paper, print and document services,
technology products and solutions and office furniture. OfficeMax, Retail has operations in the United
States, Puerto Rico and the U.S. Virgin Islands. OfficeMax, Retail office supply stores feature
OfficeMax ImPress, an in-store module devoted to print-for-pay and related services. The retail
segment also operates office supply stores in Mexico through a 51%-owned joint venture.
Substantially all productssold by OfficeMax, Retail arepurchased from third-party manufacturers or
industry wholesalers, except office papers. OfficeMax, Retail purchases office papers primarilyfrom
the paper operations of Boise Cascade, L.L.C., under a 12-year paper supply contract entered into at
the time of the Sale. (See Note 18,Commitmentsand Guarantees,for additional information related to
the paper supply contract.)
Boise Building Solutions was a major producer of plywood, lumberand particleboard.This
segment also manufactured engineered wood products, including laminated veneer lumber, wood I-
joists and laminated beams.Most ofthe production was sold to independent wholesalers and dealers
or through the segment’sbuildingmaterials distribution outlets for use in housing, industrial
construction and a variety of manufactured products. Substantially all of the assets of t his segment
were included in the Sale. The Company retained ownership of a facility near Elma, Washington, that
manufactures integrated wood-polymer building materials. In December 2004, the board of directors
authorized management to pursue the divestiture of this facility. (See Note 3, Discontinued Operations
for additional information related to the Elma, Washington facility.) The following segment tables have
been adjusted for this discontinued operation.
Boise Paper Solutions manufactured and sold uncoated free sheet papers, containerboard,
corrugated containers, newsprint and market pulp. Substantiallyall of the assets ofthissegment were
included inthe Sale.
Corporate and Other includes corporate support staff services and related assets and liabilities.
Management evaluates the segments based on operating profits before interestexpense, income
taxes, minority interest, extraordinaryitems and cumulative effect ofaccounting changes. The income
and expense related to certain assets and liabilities that are reported in the Corporateand Other
segment have been allocated to the Contract and Retail segments.Certain expenses that
management considers unusual ornon-recurring are not allocated to the segments.
The segments follow the accountingprinciples described in Note 1, Summary of Significant
Accounting Policies. Sales between segments are recorded primarily at market prices.
No single customer accounts for 10% or more of consolidated tradesales. Export sales toforeign
unaffiliated customers were $104.0 million in 2004. There were no such sales in 2006 and 2005.
OfficeMax, Contract has foreign operations in Canada, Australia and New Zealand. OfficeMax,
Retail hasforeign operations in Mexico through a 51%-owned joint venture. Boise Building Solutions