OfficeMax 2009 Annual Report Download

Download and view the complete annual report

Please find the complete 2009 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 116

  • 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

Table of contents

  • Page 1

  • Page 2

  • Page 3
    ... period from Commission File Number: 1-5057 OFFICEMAX INCORPORATED (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 263 Shuman Boulevard, Naperville, Illinois (Address of principal executive offices) (630) 438-7800...

  • Page 4
    ... Securities ...Selected Financial Data ...Management's Discussion and Analysis of Financial Condition and Results of Operations ...Quantitative and Qualitative Disclosures About Market Risk ...Financial Statements and Supplementary Data ...Changes In and Disagreements With Accountants on Accounting...

  • Page 5
    ... supplies and paper, print and document services, technology products and solutions and office furniture to large, medium and small businesses, government offices and consumers. OfficeMax customers are served by approximately 31,000 associates through direct sales, catalogs, the Internet and retail...

  • Page 6
    ... and solutions, office furniture and print and document services through our OfficeMax, Contract segment. OfficeMax, Contract sells directly to large corporate and government offices, as well as to small and medium-sized offices in the United States, Canada, Australia, New Zealand and Puerto Rico...

  • Page 7
    ... markets are highly and increasingly competitive. Customers have many options when purchasing office supplies and paper, print and document services, technology products and solutions and office furniture. We compete with worldwide contract stationers, office supply superstores, mass merchandisers...

  • Page 8
    ...Management's Discussion and Analysis of Financial Condition and Results of Operations'' of this Form 10-K. In addition, certain environmental matters are discussed in Note 16, ''Legal Proceedings and Contingencies,'' of the Notes to Consolidated Financial Statements in ''Item 8. Financial Statements...

  • Page 9
    ...of key products and services including ink, toner, paper and technology products. As a reseller, we cannot control the supply, design, function, cost or vendor-required conditions of sale of many of the products we offer for sale. Disruptions in the availability of these products or the products and...

  • Page 10
    ... markets are highly and increasingly competitive. Customers have many options when purchasing office supplies and paper, print and document services, technology products and solutions and office furniture. We compete with worldwide contract stationers, office supply superstores, mass merchandisers...

  • Page 11
    ...area within the store where our products appear, we have no control over store marketing, staffing or any other aspects of our retail partners' operations. Although we frequently test new store designs, formats, sizes and market areas, if we are unable to generate the required sales or profit levels...

  • Page 12
    ... of our information security may adversely affect our business. Through our sales and marketing activities, we collect and store certain personal information that our customers provide to purchase products or services, enroll in promotional programs, register on our website, or otherwise communicate...

  • Page 13
    ... of paper for resale from Boise Cascade, L.L.C., or its affiliates or assigns, currently Boise White Paper L.L.C., on a long term basis. The price we pay for this paper is market based and therefore subject to fluctuations in the supply and demand for the products. Our purchase obligation...

  • Page 14
    ...sources of our income, any agreements we may have with taxing authorities in various jurisdictions, and the tax filing positions we take in various jurisdictions. We base our estimate of an effective tax rate at any given point in time upon a calculated mix of the tax rates applicable to our company...

  • Page 15
    ... New Jersey North Carolina Ohio Pennsylvania 1 1 1 1 1 1 1 1 Tennessee Texas Utah Washington Puerto Rico Canada Australia New Zealand 1 2 1 1 1 7 10 3 OfficeMax, Contract also operated 55 office products stores in Hawaii (2), Canada (31), Australia (4) and New Zealand (18) and five customer service...

  • Page 16
    ... Nevada New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma 1 1 10 42 41 5 29 3 10 14 4 9 31 28 3 53 1 Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Virginia Washington West Virginia Wisconsin Wyoming Puerto Rico U.S. Virgin Islands Mexico...

  • Page 17
    ... 2005. He also served as vice president, finance for Best Buy Co., Inc., a retailer of consumer electronics, home office products, entertainment software, appliances and related services, from 2002 to 2005. On November 10, 2008, Circuit City Stores, Inc. filed a voluntary petition for reorganization...

  • Page 18
    ... stock is listed on the New York Stock Exchange (the ''Exchange''). The Exchange requires each listed company to make an annual report available to its shareholders. We are making this Form 10-K available to our shareholders in lieu of a separate annual report. The reported high and low sales prices...

  • Page 19
    ... all of 2009. 300 OfficeMax Incorporated 250 200 DOLLARS 150 100 50 0 2004 2005 2006 2007 2008 2009 15FEB201023071886 S&P SmallCap 600 Index S&P 500 Specialty Retail Index S&P 600 Specialty Retail Index ANNUAL RETURN PERCENTAGE Years Ending Company\Index Name OfficeMax Incorporated ...S&P SmallCap...

  • Page 20
    ... of Financial Condition and Results of Operations'' and ''Item 8. Financial Statements and Supplementary Data'' of this Form 10-K. 2009(a) 2008(b) 2007(c) 2006(d) 2005(e) (millions, except per-share amounts) Assets Current assets ...Property and equipment, net Goodwill ...Timber notes receivable...

  • Page 21
    ... from a paper agreement with affiliates of Boise Cascade Holdings, L.L.C. we entered (e) 2005 included the following pre-tax items: $25.0 million charge related to the relocation and consolidation of our corporate headquarters. $31.9 million charge primarily for one-time severance payments...

  • Page 22
    ... and store closures offset in part by gains related to legacy activities and the reversal of a tax reserve. If we eliminate these items, our adjusted operating income for 2009 was $62.9 million compared to $191.9 million for 2008. The reported net loss available to OfficeMax common shareholders...

  • Page 23
    ... income (loss) shareholders common share (millions, except per-share amounts) As reported ...Goodwill and other asset impairment charge ...Timber note impairment charge ...Total impairment charges ...Store closure and severance charges ...Boise Cascade Holdings, L.L.C. distribution ...As adjusted...

  • Page 24
    ... its balance sheet, cash position and liquidity greatly during 2009. At year-end, we had outstanding recourse debt of $297.1 million (both current and long-term) and non-recourse obligations of $1,470.0 million related to the timber securitization notes. There is no recourse against OfficeMax on the...

  • Page 25
    ... share. • We recorded $31.2 million of charges in our Retail segment related to store closures. We also recorded $18.1 million of severance and other charges, principally related to reorganizations of our U.S. and Canadian Contract sales forces, customer fulfillment centers and customer service...

  • Page 26
    ... the related securitization notes payable. On October 29, 2008, Lehman failed to pay the semi-annual interest payment due on the timber note receivable that it guarantees. Because we are only obligated to make interest payments on the securitization notes supported by the timber note receivable and...

  • Page 27
    ... well as the impact of opening new stores which require several years to ramp up to mature sales volumes and higher inventory shrinkage results. The decline was partially offset by a sales-mix shift towards higher-margin office supplies category sales. The Contract segment margin improvement was due...

  • Page 28
    ... effectively settled an audit with the Federal government for all tax years through 2005. As a result of the settlement and other related filings, the Company recognized a $6.8 million benefit in its tax provision for 2008. The goodwill, trade names and other long-lived assets impairment charge of...

  • Page 29
    ... office supplies and paper, technology products and solutions, office furniture, and print and document services. OfficeMax, Contract sells directly to large corporate and government offices, as well as to small and medium-sized offices in the United States, Canada, Australia and New Zealand...

  • Page 30
    ... asset impairments ...Other operating expenses ...Operating income (loss) ...Sales by Product Line Office supplies and paper Technology products ...Office furniture ...Sales by Geography United States ...International ...Sales Growth Total sales growth ... $ (657.5) $ 207.9 ... $2,138.5 1,174.0 344...

  • Page 31
    ... sales to new and retained customers and c) lower sales from small market public website and catalog business customers. Early in the fourth quarter of 2008, we entered into an alliance with Lyreco to service our respective global customers. This agreement allows OfficeMax to supply global customers...

  • Page 32
    ......Operating income (loss) ...Sales by Product Line Office supplies and paper . . Technology products ...Office furniture ...Sales by Geography United States ...International ...Sales Growth Total sales growth ...Same-location sales growth . 2009 Compared with 2008 ... (6.0) $ (505.1) $ 173.7 $1,541...

  • Page 33
    ... in the higher-priced, discretionary furniture and technology product categories, which resulted in decreased average tickets. During 2008, we opened 43 new retail stores in the U.S., including three Ink-Paper-Scissors stores (a smaller format store), ending the year with 939 retail stores in the...

  • Page 34
    ...and pension costs more than offset reduced payroll expense resulting from reductions in staff at the corporate headquarters in late 2008. Expenses recorded in 2008 included a $735.8 million charge related to the impairment of the timber installment note guaranteed by Lehman, a $4.3 million severance...

  • Page 35
    ... the credit agreements, both of which expire on July 12, 2012. As of December 26, 2009, we had $297.1 million of short-term and long-term debt and $1,470 million of non-recourse timber securitization notes outstanding. Our primary ongoing cash requirements relate to working capital, expenditures...

  • Page 36
    ... be primarily for technology enhancements such as an upgrade to our financial systems platform and improvements in the telephony software and hardware used by our call centers. We will also invest in leasehold improvements and replacement maintenance projects. In 2010, we expect store openings to be...

  • Page 37
    ...rate of 0.875% during 2009. We are charged an unused line fee at an annual rate of 0.25% on the amount by which the maximum available credit exceeds the average daily outstanding borrowings and letters of credit. On September 30, 2009, Grand & Toy Limited, the Company's wholly owned subsidiary based...

  • Page 38
    ..., pre-tax, in the third quarter of 2008. We based our estimate of the recoverable amount of the Lehman Guaranteed Installment Note on a variety of factors, including consultations with financial advisors and review of the trading prices on outstanding Lehman debt instruments with similar contractual...

  • Page 39
    ...Guaranteed Installment Notes, the notes are stated in our Consolidated Balance Sheet at their original principal amount of $817.5 million. Wachovia exhibited signs of financial distress in the fourth quarter of 2008 and was acquired by Wells Fargo & Company in a stock transaction. The current credit...

  • Page 40
    ... Statements in ''Item 8. Financial Statements and Supplementary Data'' in this Form 10-K. Our Consolidated Balance Sheet as of December 26, 2009 includes $277.2 million of liabilities associated with our retirement and benefit and other compensation plans and $245.0 million of other long-term...

  • Page 41
    ... contracts, however, are either not enforceable or legally binding or are subject to change based on our business decisions. Off-Balance-Sheet Activities and Guarantees Note 15, ''Commitments and Guarantees,'' of the Notes to Consolidated Financial Statements in ''Item 8. Financial Statements and...

  • Page 42
    ...plan assets available to pay benefits, contribution levels and expense are also impacted by the return on the pension plan assets. The pension plan assets include OfficeMax common stock, U.S. equities, international equities, global equities and fixedincome securities, the cash flows of which change...

  • Page 43
    ... stores. During 2008, based on our sustained low stock price and reduced market capitalization relating to the book value of equity as well as the macroeconomic factors impacting industry business conditions, actual and forecasted operating performance and continued tightening of the credit markets...

  • Page 44
    ...in our Retail segment related to the closing of 21 underperforming stores prior to the end of their lease terms, of which sixteen were in the U.S. and five were in Mexico. In 2008, we recorded $3.1 million of charges related principally to the closure of five stores and we reduced rent and severance...

  • Page 45
    ... to promote the sale of vendor products, or to earn rebates that reduce the cost of merchandise purchased. Vendor rebates and allowances are accrued as earned. Rebates and allowances received as a result of attaining defined purchase levels are accrued over the incentive period based on the terms of...

  • Page 46
    ... discount rate assumption on the rates of return for a theoretical portfolio of high-grade corporate bonds (rated Aa1 or better) with cash flows that generally match our expected benefit payments in future years. We base our long-term asset return assumption on the average rate of earnings expected...

  • Page 47
    ... and application of complex tax laws. Significant judgment is also required in assessing the timing and amounts of deductible and taxable items. Facility Closure Reserves The Company conducts regular reviews of its real estate portfolio to identify underperforming facilities, and closes those...

  • Page 48
    ... releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. This statement is not intended to change existing GAAP and as such did not have an impact on the consolidated financial statements of the Company. The Company has updated its...

  • Page 49
    ... accounting change and the retrospective impact of the required presentation and disclosure changes on the Company's prior year financial statements was immaterial. In December 2008, the FASB issued updated guidance related to an employer's disclosures about plan assets of a defined benefit pension...

  • Page 50
    ... 26, 2009 Sales ...Cost of goods sold and occupancy costs ...Gross profit...OfficeMax . . Preferred dividends ...Net income (loss) available to OfficeMax common shareholders ...Net income (loss) per common share Basic ...Diluted ... $ $ $ See accompanying notes to consolidated financial statements...

  • Page 51
    ......Accumulated depreciation ...Net property and equipment Intangible assets, net ...Investments in affiliates ...Timber notes receivable ...Deferred income taxes ...Other non-current assets ... Total assets ... $ 4,069,531 $ 4,173,583 See accompanying notes to consolidated financial statements 47

  • Page 52
    OfficeMax Incorporated and Subsidiaries Consolidated Balance Sheets December 26, 2009 December 27, 2008 (thousands, except share and per-share amounts) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of debt ...Accounts payable: Trade ...Related parties ...Income tax ...

  • Page 53
    ... ...Inventories ...Accounts payable and accrued liabilities ...Current and deferred income taxes ...Other ...Cash provided by operations ...Cash provided by (used for) investment: Expenditures for property and equipment ...Distribution from escrow account ...Withdrawal from insurance policies...

  • Page 54
    ... Fiscal Years ended December 26, 2009, December 27, 2008 and December 29, 2007 Accumulated Retained Other Additional Earnings Comprehensive Preferred Common Paid-In (Accumulated Income Stock Stock Capital Deficit) (Loss) Total OfficeMax Shareholders' Equity Common Shares Outstanding Noncontrolling...

  • Page 55
    ... businesses, government offices and consumers. OfficeMax customers are served by approximately 31,000 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...

  • Page 56
    ... delivery to the customer or third-party delivery service for contract, catalog and Internet sales, and at the point of sale for retail transactions. Service revenue is recognized as the services are rendered. Revenue is reported less an appropriate provision for returns and net of coupons, rebates...

  • Page 57
    ...the terms of the vendor agreement. Merchandise Inventories Inventories consist of office products merchandise and are stated at the lower of weighted average cost or net realizable value. The Company estimates the realizable value of inventory using assumptions about future demand, market conditions...

  • Page 58
    ...those affiliates, our investment is currently in Boise Cascade Holdings, L.L.C. (the ''Boise Investment''). Capitalized Software Costs The Company capitalizes certain costs related to the acquisition and development of internal use software that is expected to benefit future periods. These costs are...

  • Page 59
    ... expected long-term rates of return on plan assets. The Company bases the discount rate assumption on the rates of return for a theoretical portfolio of high-grade corporate bonds (rated Aa1 or better) with cash flows that generally match our expected benefit payments in future years. The long-term...

  • Page 60
    ... included in other long-term obligations in the Consolidated Balance Sheets. Interest and penalties related to income tax exposures are recognized as incurred and included in income tax expense in the Consolidated Statements of Operations. Advertising and Catalog Costs Advertising costs are either...

  • Page 61
    ... the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB statement establishing the ASC is not intended to change existing GAAP and as such did not have an impact on the consolidated financial statements of the Company. The Company has...

  • Page 62
    ... accounting change and the retrospective impact of the required presentation and disclosure changes on the Company's prior year financial statements was immaterial. In December 2008, the FASB issued updated guidance related to an employer's disclosures about plan assets of a defined benefit pension...

  • Page 63
    ..., in the Consolidated Statements of Operations. Facility closure reserve account activity during 2009, 2008 and 2007, including activity related to the reorganization of the Contract segment, retail store closures and headquarters consolidation was as follows: Lease\ Contract Terminations Balance at...

  • Page 64
    ... in our Retail and Contract segments as well as a significant reduction in force at the corporate headquarters (of which $15 million was paid by the 2008 year-end) and a $2.4 million charge related to the consolidation of the Contract segment's manufacturing facilities in New Zealand. These items...

  • Page 65
    ... recourse against OfficeMax. The Securitization Notes are 15-year non-amortizing, and were issued in two equal $735 million tranches paying interest of 5.54% and 5.42%, respectively. The Securitization Notes are reported as non-recourse debt in the Company's Consolidated Balance Sheets. As a result...

  • Page 66
    ...Wachovia Guaranteed Installment Notes. The Wachovia Guaranteed Installment Notes are stated in our Consolidated Balance Sheet at their original principal amount of $817.5 million. 5. Goodwill, Intangible Assets and Other Long-lived Assets Impairment Reviews and Charges In 2008, management concluded...

  • Page 67
    ... based on the estimated future discounted cash flows associated with the intangible asset. In 2008, the Company recorded estimated impairment of the trade names in the Retail reporting unit of $107.1 million, before taxes. Based on the Company's assessment and testing, no impairment of indefinite...

  • Page 68
    ... amount, December 26, 2009 ...6. Net Income (Loss) Per Common Share Basic net income (loss) per share is calculated using net earnings available to holders of our common stock divided by the weighted-average number of shares of common stock outstanding during the year. Diluted net income (loss...

  • Page 69
    ... average market price during the year. 7. Income Taxes The income tax (provision) benefit attributable to income (loss) from continuing operations as shown in the Consolidated Statements of Operations includes the following components: 2009 Current income tax (provision) benefit Federal ...State...

  • Page 70
    ... of the following: 2009 Tax (provision) benefit at statutory rate ...State taxes, net of federal effect ...Foreign tax provision differential ...Impact of goodwill impairment ...Net operating loss valuation allowance and credits . Change in tax contingency liability ...Tax settlement, net of other...

  • Page 71
    .... Accordingly, we appropriately modified our position as we finalized the 2008 tax return, and have received refunds of taxes paid in 2008 from the federal and state government. Accordingly, in the Consolidated Balance Sheets as of December 26, 2009, the Company has reestablished both the deferred...

  • Page 72
    ...years before 2003. The Company recognizes accrued interest and penalties associated with uncertain tax positions as part of income tax expense. As of December 26, 2009, the Company had $2.1 million of accrued interest and penalties associated with uncertain tax positions. Income tax benefit for 2009...

  • Page 73
    ... sale of the paper, forest products and timberland assets in 2004, the Company invested $175 million in the Boise Investment. A portion of the securities received in exchange for the Company's investment carry no voting rights. This investment is accounted for under the cost method as Boise Cascade...

  • Page 74
    ... dividend receivable was $22.9 million at December 26, 2009, and was recorded in other non-current assets in the Consolidated Balance Sheets. The Company receives distributions on the Boise Investment for the income tax liability associated with its share of allocated earnings. During 2009 and 2008...

  • Page 75
    ...line fee of 0.25% on the amount by which the maximum available credit exceeds the average daily outstanding borrowings and letters of credit. On September 30, 2009, Grand & Toy Limited, the Company's wholly owned subsidiary in Canada, entered into a Loan and Security Agreement (the ''Canadian Credit...

  • Page 76
    ...Company's other public debt. In November 2008, we repurchased all of the outstanding 7.00% senior notes using proceeds from pledged instruments that matured in October 2008, which had been reported as restricted investments in the Consolidated Balance Sheets. Other At the end of the fiscal year 2009...

  • Page 77
    ...on quoted market prices when available or by discounting the future cash flows of each instrument at rates currently offered to the Company for similar debt instruments of comparable maturities (Level 2 inputs). • Timber securitization notes: The fair value of the Securitization Notes supported by...

  • Page 78
    ..., the benefits of eligible OfficeMax, Contract participants were frozen. Under the terms of the Company's plans, the pension benefit for salaried employees was based primarily on the employees' years of service and highest five-year average compensation. The pension benefit for hourly employees was...

  • Page 79
    ... during 2009 and 2008, as well as the funded status of the Company's plans at December 26, 2009 and December 27, 2008 were as follows: Pension Benefits 2009 2008 (thousands) Other Benefits 2009 2008 Change in benefit obligation: Benefit obligation at beginning of year Service cost ...Interest cost...

  • Page 80
    ... in the Consolidated Balance Sheets related to the Company's defined benefit pension and other postretirement benefit plans at year-end: Pension Benefits 2009 2008 Noncurrent assets ...Current liabilities ...Noncurrent liabilities ...Net amount recognized ...$ Other Benefits 2009 2008 (thousands...

  • Page 81
    ... the assumptions used in the measurement of net periodic benefit cost: Pension Benefits 2009 Weighted average assumptions: Discount rate ...Expected long-term return on plan assets ... 2008 2007 Other Benefits United States Canada 2009 2008 2007 2009 2008 2007 6.20% 7.50% 6.30% 8.00% 5.80% 8.00...

  • Page 82
    ... prior years, we matched our expected future benefit payments to a hypothetical zero coupon discount curve derived from high quality corporate bonds. The theoretical portfolio with matching cash flows is a more precise method for developing a plan specific rate. The expected long-term rate of return...

  • Page 83
    ... position of the plans and market risks. Occasionally, the Company may utilize futures or other financial instruments to alter the pension trust's exposure to various asset classes in a lower-cost manner than trading securities in the underlying portfolios. In 2009, we contributed 8,331,722 shares...

  • Page 84
    ...to make additional voluntary contributions. Qualified pension benefit payments are paid from the assets held in the plan trust, while nonqualified pension and other benefit payments are paid by the Company. Future benefit payments by year are estimated to be as follows: Pension Benefits 2010 ...2011...

  • Page 85
    ... 26, 2009 ...Share-Based Payments The Company sponsors several share-based compensation plans, which are described below. The Company recognizes compensation expense from all share-based payment transactions with employees in the consolidated financial statements at fair value. Compensation costs...

  • Page 86
    ...over the vesting periods based on the closing prices of the Company's common stock on the grant dates. If these awards contain performance criteria the grant date fair value is set assuming performance at target, and management periodically reviews actual performance against the criteria and adjusts...

  • Page 87
    ... to the stock unit accounts. Stock Options The Company's stock options generally are issued at a price equal to fair market value on the grant date and typically expire within seven years of the grant date. Stock options granted under the OfficeMax Incentive and Performance Plan generally vest...

  • Page 88
    ...$17.5 million for outstanding stock options and $0.1 million for exercisable stock options. The aggregate intrinsic value represents the total pre-tax intrinsic value (i.e. the difference between the Company's closing stock price on the last trading day of the fourth quarter of 2009 and the exercise...

  • Page 89
    ...including office supplies and paper, technology products and solutions, print and document services and office furniture. OfficeMax, Contract sells directly to large corporate and government offices, as well as to small and medium-sized offices in the United States, Canada, Australia and New Zealand...

  • Page 90
    Segment sales to external customers by product line are as follows: 2009 OfficeMax, Contract Office supplies and paper ...Technology products ...Office furniture ...OfficeMax, Retail Office supplies and paper ...Technology products ...Office furniture ...Total OfficeMax Office supplies and paper ......

  • Page 91
    ... of business. As previously disclosed, we have liabilities associated with retirement and benefit plans. In connection with the sale of our paper, forest products and timberland assets in 2004, the Company entered into a paper supply contract with a former affiliate of Boise Cascade, L.L.C., Boise...

  • Page 92
    ...financial position, results of operations or cash flows. Over the past several years and continuing in 2009, we have been named a defendant in a number of cases where the plaintiffs allege asbestos-related injuries from exposure to asbestos products or exposure to asbestos while working at job sites...

  • Page 93
    ... consolidation of the Contract segment's manufacturing facilities in New Zealand, a $1.8 million pre-tax charge related to restructuring the Retail field and ImPress print and document services management organization, and a gain of $20.5 million related to a tax distribution on the Boise Investment...

  • Page 94
    ... of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was...

  • Page 95
    ... all material respects, effective internal control over financial reporting as of December 26, 2009, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. KPMG LLP Chicago, Illinois February 22, 2010 91

  • Page 96
    ... controls and procedures were effective in alerting them in a timely manner to material information that the Company is required to disclose in its filings with the Securities and Exchange Commission. (b) Management's Report on Internal Control over Financial Reporting OfficeMax's management is...

  • Page 97
    ... Reporting Compliance'' in our proxy statement and is incorporated herein by reference. We have adopted a Code of Ethics that applies to all OfficeMax employees and directors, including our senior financial officers. Copies of the Code are available, free of charge, on our website at www.officemax...

  • Page 98
    ... Director Stock Compensation Plan (the ''DSCP'') and the 2003 OfficeMax Incentive and Performance Plan (the ''2003 Plan''), formerly the Boise Incentive and Performance Plan. These plans are designed to further align our directors' and management's interests with the Company's long-term performance...

  • Page 99
    ... AND FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as a part of this Form 10-K: (1) Consolidated Financial Statements. The Consolidated Financial Statements, the Notes to Consolidated Financial Statements and the Report of Independent Registered Public Accounting Firm are...

  • Page 100
    ... /s/ RAKESH GANGWAL Rakesh Gangwal /s/ FRANCESCA RUIZ DE Chief Executive Officer Executive Vice President, Chief Financial Officer and Chief Administrative Officer Senior Vice President, Finance and Chief Accounting Officer /s/ WARREN F. BRYANT Warren F. Bryant /s/ SAM K. DUNCAN Sam K. Duncan...

  • Page 101
    ...the three-year period ended December 26, 2009, and the effectiveness of internal control over financial reporting as of December 26, 2009, which report appears in the December 26, 2009 annual report on Form 10-K of OfficeMax Incorporated. /s/ KPMG LLP KPMG LLP Chicago, Illinois February 22, 2010 97

  • Page 102
    ... Number Number Date 001-05057 2 7/28/2004 Filed Herewith Exhibit Description Asset Purchase Agreement dated July 26, 2004, between Boise Cascade Corporation (now OfficeMax Incorporated), Boise Southern Company, Minidoka Paper Company and Forest Products Holdings, L.L.C., and Boise Land & Timber...

  • Page 103
    ... October 29, 2004 Registration Rights Agreement among Boise Cascade Corporation (now OfficeMax Incorporated), Forest Products Holdings, L.L.C., and Boise Cascade Holdings, L.L.C. dated October 29, 2004 Form 10-Q Incorporated by Reference File Exhibit Filing Number Number Date 001-05057 10.4 11...

  • Page 104
    ... Executive Savings Deferral Plan 2005 Directors Deferred Compensation Plan Directors Compensation Summary Sheet Form of OfficeMax Incorporated Nonstatutory Stock Option Agreement Executive Life Insurance Program Officer Annual Physical Program Financial Counseling Program Executive Officer Mandatory...

  • Page 105
    ...-35,000 units Restricted Stock Unit Award 8-K Agreement between OfficeMax Incorporated and Sam Duncan dated April 18, 2005-15,000 units Amended and Restated Going Public Agreement dated as of May 17, 2005 Amendment to the OfficeMax Incorporated 2003 Director Stock Compensation Plan 8-K 001-05057...

  • Page 106
    ... Performance Plan as amended and restated effective April 23, 2008 Form of 2008 Director Restricted Stock Unit Award Agreement Form of Amendment to OfficeMax Incorporated 2007 Restricted Stock Unit Award Agreement granted to Sam Martin Executive Officer Severance Pay Policy Form of Executive Officer...

  • Page 107
    ... 23, 2008 Form of Amendment of OfficeMax Incorporated Executive Savings Deferral Plan Form of 2009 Annual Incentive Award Agreement Sam Duncan Waiver and Ratification dated February 12, 2009 Form of 2009 Restricted Stock Unit Award Agreement (Performance Based) Form of 2009 Nonqualified Stock Option...

  • Page 108
    ... Company of New York) was filed as exhibit 99.2 in our Current Report on Form 8-K filed on December 10, 2001. The Fourth Supplemental Indenture dated October 21, 2003, between Boise Cascade Corporation and U.S. Bank Trust National Association was filed as exhibit 4.1 in our Current Report on Form...

  • Page 109
    ...as follows: State or Other Jurisdiction of Incorporation or Organization Picabo Holdings, Inc...OfficeMax Nevada Company ...Grand & Toy Limited ...OfficeMax Australia Limited ...OfficeMax Southern Company ...OfficeMax New Zealand Limited ...OfficeMax North America, Inc...OMX Timber Finance Holdings...

  • Page 110
    ... and report financial information; and any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/ SAM K. DUNCAN Sam K. Duncan Chief Executive Officer b. Date: February 22, 2010

  • Page 111
    ... and report financial information; and any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/ BRUCE BESANKO Bruce Besanko Chief Financial Officer b. Date: February 22, 2010

  • Page 112
    ... AND CHIEF FINANCIAL OFFICER OF OFFICEMAX INCORPORATED We are providing this Certificate pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C., Section 1350. It accompanies OfficeMax Incorporated's annual report on Form 10-K (the ''Report'') for the fiscal year ended December 26, 2009...

  • Page 113
    (This page has been left blank intentionally.)

  • Page 114
    (This page has been left blank intentionally.)

  • Page 115

  • Page 116