OfficeMax 2007 Annual Report Download - page 22

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for a legal settlement with the Department of Justice related to allegations that the Company
submitted false claims when it sold office supply products manufactured in countries not
permitted by the Trade Agreements Act to U.S. government agencies. We incurred
$14.4 million of costs related to our early retirement of debt, and recorded a $28.2 million
pre-tax charge for the write-down of impaired assets at our Elma, Washington manufacturing
facility, which is accounted for as a discontinued operation.
We evaluate our results of operations both before and after certain gains and losses that
management believes are not indicative of our core operating activities, such as the items
described above. We believe our presentation of financial measures before, or excluding, these
items, which are non-GAAP measures, enhances our investors’ overall understanding of the impact
of the Company’s restructuring activities and our recurring operational performance and provides
useful information to both investors and management to evaluate the ongoing operations and
prospects of the Company by providing better comparisons and information regarding significant
trends and variability in our earnings. Whenever we use non-GAAP financial measures, we
designate those measures as ‘‘adjusted’’ and provide a reconciliation of non-GAAP financial
measures to the most closely applicable GAAP financial measure. Investors are encouraged to
review the related GAAP financial measures and the reconciliation of those non-GAAP financial
measures to their most directly comparable GAAP financial measure.
Although we believe the non-GAAP financial measures enhance an investors’ understanding of
our performance, our management does not itself, nor does it suggest that investors should,
consider such non-GAAP financial measures in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP. The non-GAAP financial measures we use may not
be consistent with the presentation of similar companies in our industry. However, we present such
non-GAAP financial measures in reporting our financial results to provide investors with an
additional tool to evaluate our operating results in a manner that focuses on what we believe to be
our ongoing business operations. In addition, use of the non-GAAP measures that exclude certain
gains and losses is not intended to suggest that our future financial results will not be impacted by
additional unusual items.
The following table summarizes the impact of the gains and losses described above on our
results of operations for 2007, 2006 and 2005, and provides a reconciliation of our non-GAAP
measures to the corresponding GAAP measure. Both GAAP and non-GAAP measures are used
throughout this Management’s Discussion and Analysis.
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