OfficeMax 2009 Annual Report Download - page 55

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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 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 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
(‘‘Contract segment’’ or ‘‘Contract’’); OfficeMax, Retail (‘‘Retail segment’’ or ‘‘Retail’’); and Corporate
and Other. OfficeMax, Contract markets and sells office supplies and paper, technology products
and solutions, print and document services, 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. Management reviews the performance of the
Company based on these segments. We present information pertaining to our segments in
Note 14, Segment Information.
Consolidation
The consolidated financial statements include the accounts of OfficeMax and all majority owned
subsidiaries, except our 90%-owned subsidiary in Cuba which is accounted for as an investment
due to various asset restrictions. We also consolidate the 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 maintain December 31 year-ends, with our
majority-owned joint venture in Mexico reporting one month in arrears. Fiscal year 2009 ended on
December 26, 2009, fiscal year 2008 ended on December 27, 2008 and fiscal year 2007 ended on
December 29, 2007. 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
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