OfficeMax 2009 Annual Report Download - page 12

financial obligations including leases and the potential Pension Plans’ funding discussed previously.
This reduces the funds we have available for working capital, capital expenditures, acquisitions, new
stores, store remodels and other purposes and, given current credit constriction, may make it more
difficult for us to make borrowings in the future. Similarly, our relatively greater leverage increases
our vulnerability to, and limits our flexibility in planning for, adverse economic and industry
conditions and creates other competitive disadvantages compared with other companies with
relatively less leverage.
Compromises 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 and interact with us. We also gather and retain information about our
associates in the normal course of business. We may share information about such persons with
vendors that assist with certain aspects of our business. Despite instituted safeguards for the
protection of such information, we cannot be certain that all of our systems are entirely free from
vulnerability to attack. Computer hackers may attempt to penetrate our networks or our vendors’
network security and, if successful, misappropriate confidential customer or business information. In
addition, a Company employee, contractor or other third party with whom we do business may
attempt to circumvent our security measures in order to obtain such information or inadvertently
cause a breach involving such information. Loss of customer or business information could disrupt
our operations and expose us to claims from customers, financial institutions, payment card
associations and other persons, which could have a material adverse effect on our business,
financial condition and results of operations.
We cannot ensure systems and technology will be fully integrated or updated. We cannot
ensure our systems and technology will be successfully updated. We have current plans to update
the financial reporting platform as well as the technology in our call centers. We will be
implementing these technical upgrades in 2010 which is a complicated and difficult endeavor.
Failure to successfully complete these upgrades could have an adverse impact on our business
and results of operations. In addition, at the time of our acquisition of OfficeMax, Inc., we partially
integrated the systems of the two companies. If we do not ultimately integrate our systems, it may
constrain our ability to provide the level of service our customers’ demand which could thereby
cause us to operate inefficiently.
We retained responsibility for certain liabilities of the sold paper, forest products and
timberland businesses. In connection with the Sale, we agreed to assume responsibility for
certain liabilities of the businesses we sold. These obligations include liabilities related to
environmental, health and safety, tax, litigation and employee benefit matters. Some of these
retained liabilities could turn out to be significant, which could have an adverse effect on our results
of operations. Our exposure to these liabilities could harm our ability to compete with other office
products distributors, who would not typically be subject to similar liabilities. In particular, we are
exposed to risks arising from our ability to meet the funding obligations of our Pension Plans and
withdrawal requests from participants pursuant to legacy benefit plans, each of which could require
cash to be redirected and adversely impact our cash flows and financial results.
Our investment in Boise Cascade Holdings, L.L.C. subjects us to the risks associated with
the paper and forest products industry. When we sold our paper, forest products and timberland
assets, we purchased an equity interest in Boise Cascade Holdings, L.L.C. Through our investment
in Boise Cascade Holdings, L.L.C., we also hold an indirect interest in Boise Inc., including its
wholly-owned subsidiary Boise White Paper, L.L.C., the paper manufacturing business of Boise
Cascade Holdings, L.L.C. This continuing interest in Boise Cascade Holdings, L.L.C. subjects us to
market risks associated with the paper and forest products industry. These industries are subject to
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