OfficeMax 2008 Annual Report Download - page 52

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Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Nature of Operations
OfficeMax Incorporated (‘‘OfficeMax,’’ the ‘‘Company’’ or ‘‘we’’) is a leader in both
business-to-business and retail office products distribution. The Company provides office supplies
and paper, print and document services, technology products and solutions and furniture to large,
medium and small businesses, government offices, and consumers. OfficeMax customers are
served by approximately 33,000 associates through direct sales, catalogs, the Internet and a
network of retail stores located throughout the United States, Canada, Australia, New Zealand and
Mexico. The Company’s common stock is traded on the New York Stock Exchange under the ticker
symbol OMX. The Company’s corporate headquarters is located in Naperville, Illinois, and the
OfficeMax website address is www.officemax.com.
The Company manages its business using three reportable segments: OfficeMax, Contract;
OfficeMax, Retail; and Corporate and Other. OfficeMax, Contract markets and sells office supplies
and paper, technology products and solutions and office furniture directly to large corporate and
government offices, as well as to small and medium-sized offices through field salespeople,
outbound telesales, catalogs, the Internet and, primarily in foreign markets, through office products
stores. OfficeMax, Retail markets and sells office supplies and paper, print and document services,
technology products and solutions and office furniture to small and medium-sized businesses and
consumers through a network of retail stores.
Consolidation
The consolidated financial statements include the accounts of OfficeMax and all majority owned
subsidiaries as well as those of variable interest entities in which the Company is the primary
beneficiary. All significant intercompany balances and transactions have been eliminated in
consolidation.
Fiscal Year
The Company’s fiscal year-end is the last Saturday in December. Due primarily to statutory
requirements, the Company’s international businesses have maintained their
December 31 year-ends. Fiscal year 2006 ended on December 30, 2006, fiscal year 2007 ended on
December 29, 2007, while fiscal year 2008 ended on December 27, 2008. Each of the past three
years has included 52 weeks for all reportable segments and businesses.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosures about
contingent assets and liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual results are likely to differ from those
estimates, but management does not believe such differences will materially affect the Company’s
financial position, results of operations or cash flows. Significant items subject to such estimates
and assumptions include the recognition of vendor rebates and allowances; the carrying amount of
intangibles and goodwill; inventories and deferred income tax assets; facility closure reserves and
environmental liabilities; and assets and obligations related to employee benefits.
48