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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

FORM 10-K

Annual Report Pursuant to Sections 13 or 15(d)
of the Securities Exchange Act of 1934

ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 27, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                                  toCommission File Number: 1-5057


OFFICEMAX INCORPORATED(Exact name of registrant as specified in its charter)

Delaware

82-0100960(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)263 Shuman Boulevard, Naperville, Illinois

60563(Address of principal executive offices)

(Zip Code)(630) 438-7800(Registrant's telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each class

Name of each exchange on which registeredCommon Stock, $2.50 par value

New York Stock ExchangeAmerican & Foreign Power Company Inc.
Debentures, 5% Series due 2030

New York Stock Exchange


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ý No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment to
this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý    Accelerated
filer o    Non-accelerated filer o    Smaller reporting
company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act.) Yes o No ý

The aggregate market value of the voting common stock held by nonaffiliates of the registrant, computed by reference to the price at which the common stock was
sold as of the close of business on June 28, 2008, was $785,721,723. Registrant does not have any nonvoting common equity securities.

Indicate
the number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date.

Class

Shares Outstanding
as of February 20, 2009Common Stock, $2.50 par value

76,287,724


Document incorporated by reference

Portions of the registrant's proxy statement relating to its 2009 annual meeting of shareholders to be held on April 15, 2009 ("OfficeMax Incorporated's
proxy statement") are incorporated by reference into Part III of this Form 10-K.



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PART IItem 1.

Business

1Item 1A.

Risk Factors

4Item 1B.

Unresolved Staff Comments

9Item 2.

Properties

9Item 3.

Legal Proceedings

11Item 4.

Submission of Matters to a Vote of Security Holders

12PART IIItem 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

13Item 6.

Selected Financial Data

15Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

17Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

42Item 8.

Financial Statements and Supplementary Data

43Item 9.

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

94Item 9A.

Controls and Procedures

94Item 9B.

Other Information

94PART IIIItem 10.

Directors and Executive Officers of the Registrant

95Item 11.

Executive Compensation

96Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

96Item 13.

Certain Relationships and Related Transactions, and Director Independence

97Item 14.

Principal Accountant Fees and Services

97PART IVItem 15.

Exhibits and Financial Statement Schedules

98Signatures

99Index to Exhibits

101


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PART I



ITEM 1.   BUSINESS

As used in this 2008 Annual Report on Form 10-K, the terms "OfficeMax," the "Company," and "we" include OfficeMax Incorporated
and its consolidated subsidiaries and predecessors. Our Securities and Exchange Commission ("SEC") filings, which include this Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and all related amendments, are available free of charge on our website at www.officemax.com and can be found by clicking
on "About us," "Investors" and then "SEC filings." Our SEC filings are available as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Last
year, we filed our annual Chief Executive Officer certification, without qualification, dated May 16, 2008 with the New York Stock Exchange. Attached as exhibits to this
Form 10-K you will find certifications of our Chief Executive Officer and Chief Financial Officer required under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.

General Overview

OfficeMax is a leader in both business-to-business and retail office products distribution. We provide 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 retail stores. Our common stock trades on the New York Stock Exchange under the ticker symbol OMX, and our corporate
headquarters is in Naperville, Illinois.

OfficeMax
Incorporated (formerly Boise Cascade Corporation) was organized as Boise Payette Lumber Company, a Delaware corporation, in 1931 as a successor to an Idaho corporation formed
in 1913. In 1957, the Company's name was changed to Boise Cascade Corporation. On December 9, 2003, Boise Cascade Corporation acquired 100% of the voting securities of OfficeMax, Inc.
That acquisition more than doubled the size of our office products distribution business and expanded that business into the U.S. retail channel. In connection with the sale of our paper, forest
products and timberland assets described below, the Company's name was changed from Boise Cascade Corporation to OfficeMax Incorporated, and the names of our office products segments were changed from
Boise Office Solutions, Contract and Boise Office Solutions, Retail to OfficeMax, Contract and OfficeMax, Retail. The Boise Cascade Corporation and Boise Office Solutions names were used in documents
furnished to or filed with the SEC prior to the sale of our paper, forest products and timberland assets.

On
October 29, 2004, we sold our paper, forest products and timberland assets to affiliates of Boise Cascade, L.L.C., a new company formed by Madison Dearborn Partners LLC
(the "Sale"). With the
Sale, we completed the Company's transition, begun in the mid-1990s, from a predominately commodity manufacturing-based company to an independent office products distribution company. On
October 29, 2004, as part of the Sale, we invested $175 million in the securities of affiliates of Boise Cascade, L.L.C.

We
present information pertaining to each of our segments and the geographic areas in which they operate in Note 15, Segment Information, of the Notes to Consolidated Financial
Statements in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K.

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Change in Fiscal Year-End

Effective March 11, 2005, the Company amended its bylaws to make its fiscal year-end the last Saturday in December. Prior to
this change, all of the Company's businesses except for our U.S. retail operations had a December 31 fiscal year-end. 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
and fiscal year 2008 ended on December 27, 2008. Each of the past three years has included 52 weeks for all reportable segments and businesses.

OfficeMax, Contract

We distribute a broad line of items for the office, including office supplies and paper, technology products and solutions and office furniture
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 and New Zealand. This segment markets and sells through field salespeople, outbound telesales, catalogs, the Internet and, primarily in foreign markets, through office products stores.
Substantially all products sold by this segment are purchased from outside manufacturers or from industry wholesalers, except office papers. We purchase office papers primarily from the paper
operations of Boise Cascade, L.L.C., under a 12-year paper supply contract entered into at the time of the Sale. (See "Note 16. Commitments and Guarantees", of the Notes to
Consolidated Financial Statements in
"Item 8. Financial Statements and Supplementary Data" of this Form 10-K for additional information related to the paper supply contract.)

As
of January 24, 2009, OfficeMax, Contract operated 47 distribution centers and 6 customer service and outbound telesales centers. OfficeMax, Contract also operated 60 office
products stores in Canada, Hawaii, Australia and New Zealand.

OfficeMax,
Contract sales for 2008, 2007 and 2006 were $4.3 billion, $4.8 billion and $4.7 billion, respectively.

OfficeMax, Retail

OfficeMax, Retail is a retail distributor of office supplies and paper, print and document services, technology products and solutions and office
furniture. Our retail segment has operations in the United States, Puerto Rico and the U.S. Virgin Islands. Our retail office supply stores feature OfficeMax ImPress, an in-store module
devoted to print-for-pay and related services. Our retail segment also operates office products stores in Mexico through a 51% owned joint venture. Substantially all products
sold by this segment are purchased from outside manufacturers or from industry wholesalers, except office papers. As described above, we purchase office papers primarily from the paper operations of
Boise Cascade, L.L.C., under a 12-year paper supply contract we entered into at the time of the Sale.

As
of January 24, 2009, our Retail segment operated 1,024 stores in the U.S. and Mexico, three large distribution centers in the U.S., and two small distribution centers in
Mexico. Each store offers approximately 10,500 stock keeping units (SKUs) of name-brand and OfficeMax private-branded merchandise and a variety of business services targeted at serving the
small business customer, including OfficeMax ImPress. In addition to our in-store ImPress capabilities, our Retail segment operated six OfficeMax ImPress print on demand facilities with
enhanced fulfillment capabilities as of January 24, 2009. These 8,000 square foot operations are located within some of our contract distribution centers, and serve the print and document needs
of our large contract customers in

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addition
to supporting our retail stores by providing services that cannot be deployed at every retail store.

OfficeMax,
Retail sales for 2008, 2007 and 2006 were $4.0 billion, $4.3 billion and $4.3 billion, respectively.

Competition

Domestic and international office products 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,
wholesale clubs, computer and electronics superstores, Internet merchandisers, direct-mail distributors, discount retailers, drugstores, supermarkets and thousands of local and regional
contract stationers. In addition, an increasing number of manufacturers of computer hardware, software and peripherals, including some of our suppliers, have expanded their own direct marketing
efforts. The other large office supply superstores have increased their presence in close proximity to our stores in recent years and are expected to continue to do so in the future. In addition, many
of our competitors have expanded their office products assortment, and we expect they will continue to do so. We anticipate increasing competition from our two domestic office supply superstore
competitors and various other competitors, for print-for-pay and related services. Print-for-pay and related services have historically been a key point
of difference for OfficeMax stores. Any or all of our competitors may become even more aggressive in the future. Increased competition in the office products markets, together with increased
advertising, has heightened price awareness among end-users. Such heightened price awareness has led to margin pressure on office products and impacted the results of both our Retail and
Contract segments. In addition to price, competition is also based on customer service, the quality and breadth of product selection, and convenient locations. Some of our competitors are larger than
us and have greater financial resources, which affords them greater purchasing power, increased financial flexibility and more capital resources for expansion and improvement, which may enable them to
compete more effectively.

We
believe our excellent customer service and the efficiency and convenience for our customers of our combined contract and retail distribution channels gives our OfficeMax, Contract
segment a competitive advantage among business-to-business office products distributors. Our ability to network our distribution centers into an integrated system enables us to
serve large national accounts that rely on us to deliver consistent products, prices and services to multiple locations as well as medium and small businesses at a competitive cost.

We
believe our OfficeMax, Retail segment competes favorably based on the quality of our customer service, our innovative store formats, the breadth and depth of our merchandise offering
and our everyday low prices, along with our specialized service offerings, including OfficeMax ImPress.

Seasonal Influences

The Company's business is seasonal, with OfficeMax, Retail showing a more pronounced seasonal trend than OfficeMax, Contract. Sales in the second
quarter and summer months are historically the slowest of the year. Sales are stronger during the first, third and fourth quarters that include the important new-year office supply
restocking month of January, the back-to-school period and the holiday selling season, respectively.

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Environmental Matters

Our discussion of environmental matters is presented under the caption "Environmental" in "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" of this Form 10-K. In addition, certain environmental matters are discussed under "Item 3. Legal Proceedings" of this
Form 10-K.

Capital Investment

Information concerning our capital expenditures is presented under the caption "Investment Activities" and in the table entitled "2008 Capital
Investment by Segment" in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Form 10-K.

Acquisitions and Divestitures

We engage in acquisition and divestiture discussions with other companies and make acquisitions and divestitures from time to time. It is our
policy to review our operations periodically and to dispose of assets that do not meet our criteria for return on investment.

Geographic Areas

Our discussion of financial information by geographic area is presented in Note 15. "Segment Information", of the Notes to Consolidated
Financial Statements in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K.

Identification of Executive Officers

Information with respect to our executive officers is set forth in "Item 10. Directors and Executive Officers of the Registrant" of this
Form 10-K.

Employees

On December 27, 2008, we had approximately 33,000 employees, including approximately 11,000 part-time employees.

ITEM 1A.   RISK FACTORS

Cautionary and Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements. Statements that are not historical or current
facts, including statements about our expectations, anticipated financial results and future business prospects, are forward-looking statements. You can identify these statements by our use of words
such as "may," "will," "expect," "believe," "should," "plan," "anticipate" and other similar expressions. You can find examples of these statements throughout this report, including "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Form 10-K. We cannot guarantee that our actual results will be consistent with the
forward-looking statements we make in this report. We have listed below some of the inherent risks and uncertainties that could cause our actual results to differ materially from those we project. We
do not assume an obligation to update any forward-looking statement.

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Current macroeconomic conditions, the current credit crisis and related turmoil in the global financial system have had and may continue to have an impact on our business and our
financial condition.Economic conditions, both domestically and abroad, directly influence our operating results. Current and future economic conditions that
affect consumer and business spending, including the level of unemployment, energy costs, inflation, availability of credit, and the financial condition and growth prospects of our customers may
adversely affect our business and the results of our operations. We may face significant challenges if macroeconomic conditions do not improve or continue to worsen.

The
impact of the credit crisis on our customers could adversely impact the overall demand for our products and services, which would have a negative effect on our revenues, as well as
impact our customers' ability to pay their obligations, which could have a negative effect on our bad debt expense and cash flows. In addition, we are currently attempting to restructure our private
label credit card program as the current card program terminates on May 31, 2009. A new program may not be done on terms acceptable to us, or at all. Also, our ability to access the capital
markets may
be severely restricted at a time when we would like, or need, to do so, which could have an impact on our flexibility to react to changing economic and business conditions, including if we were to
experience reduced availability in our Amended and Restated Loan and Security Agreement ("Loan Agreement") due to lower secured assets. In September 2008, Lehman Brothers Holdings Inc. ("Lehman"), a
guarantor under a portion of our timber installment notes, filed for bankruptcy. As a result, in the third quarter we recorded an impairment charge of $735.8 million on the timber installment
note guaranteed by Lehman, which reduced net income by $449.5 million. The credit crisis could have additional adverse impact on our business and financial condition if Wachovia Corporation
(acquired by Wells Fargo & Co. in 2008), the other timber notes guarantor, is unable to perform its obligations under the other timber installment notes, which would result in a significant
accelerated tax and impairment impact, or if parties to our Loan Agreement are forced to file for bankruptcy or are otherwise unable to perform their obligations.

In
addition, we sponsor noncontributory defined benefit pension plans covering certain terminated employees, vested employees, retirees, and some active employees (the "Pension Plans").
At the end of 2008, the Pension Plans were underfunded by $435 million, largely as a result of the significantly diminished value of the plan assets due to the negative return on plan assets
experienced in 2008. We will be required to make large contributions in years subsequent to 2009 ($50 to $70 million in the near term) in order to maintain required funding levels under the
Pension Plans which will have an adverse impact on our cash flows and our financial results. Financial market performance could materially change these expected payments.

Our business may be adversely affected by the actions of and risks associated with our third-party vendors.Some of our vendors
have credit insurance
to protect against non-payment of amounts due to them. If we continue to experience declining operating performance, or if we experience liquidity challenges, credit insurers may curtail
or eliminate coverage to the vendors and vendors may demand accelerated payment of amounts due to them or require advance payments or letters of credit before goods are shipped to us. These demands
could have a significant adverse impact on our operating cash flow and result in a severe drain on our liquidity. In addition, it is possible that vendors may reduce our credit limits, which could
affect our ability to obtain products and could have an adverse effect on our business, financial conditions and results of operations. We use and resell manufacturers' branded items and services and
are therefore dependent on the availability and pricing of key products and services including ink, toner, paper and technology products. As a reseller, we cannot control the supply, design, function
or cost of many of the products we offer for sale. Disruptions in the availability of these products or the products and services we consume may adversely affect our sales and result in customer
dissatisfaction. Many of our vendors are small or medium sized businesses which are being

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significantly
impacted by current macroeconomic conditions, both in the U.S. and Asia, including little or no access to credit. We may have no warning before a vendor fails, which may have an adverse
effect on our business and results of operations. Further, we cannot control the cost of manufacturers' products, and cost increases must either be passed along to our customers or will result in
erosion of our earnings. Failure to identify desirable products and make them available to
our customers when desired and at attractive prices could have an adverse effect on our business and results of operations.

Intense competition in our markets could harm our ability to maintain profitability.Domestic and international office products
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, wholesale clubs, computer and electronics superstores, Internet merchandisers, direct-mail distributors,
discount retailers, drugstores, supermarkets and thousands of local and regional contract stationers. In addition, an increasing number of manufacturers of computer hardware, software and peripherals,
including some of our suppliers, have expanded their own direct marketing efforts. The other large office supply superstores have increased their presence in close proximity to our stores in recent
years and are expected to continue to do so in the future. In addition, many of our competitors have expanded their office products assortment, and we expect they will continue to do so. We anticipate
increasing competition from our two domestic office supply superstore competitors and various other competitors for print-for-pay and related services. Print and documents
services, or print-for-pay, and related services have historically been a key point of difference for OfficeMax stores. Any or all of our competitors may become even more
aggressive in the future. Increased competition in the office products markets, together with increased advertising, has heightened price awareness among end-users. Such heightened price
awareness has led to margin pressure on office products and impacted the results of both our Retail and Contract segments. In addition to price, competition is also based on customer service,
differentiation from competitors, the quality and breadth of product selection, and convenient locations. Some of our competitors are larger than us and have greater financial resources, which affords
them greater purchasing power, increased financial flexibility and more capital resources for expansion and improvement, which may enable them to compete more effectively.

We may be unable to open stores successfully and our store closures may accelerate.Our long-term success depends, in part, on
our
ability to open new stores in a manner that achieves appropriate returns on our capital invested. This is particularly challenging as we introduce different store designs, formats and sizes or enter
into new market areas. In particular, the "Advantage" prototype store format we intend to utilize for new stores was new in 2006 and there can be no assurance as to whether or to what extent that
format will be successful. If we are unable to generate the required sales or profit levels, as a result of macroeconomic or operational challenges, we will not open new stores and our future
financial performance could be materially and adversely affected. Similarly, we will only continue to operate existing stores if they meet required sales or profit levels. In the current macroeconomic
environment, the results of our existing stores are impacted not only by a reduced sales environment, but by a number of things that are not within our control, such as loss of traffic resulting from
store closures by significant other retailers in the stores' immediate vicinity. If we are required to close stores, we will be subject to costs and impairment charges that may adversely affect our
financial results.

Our international operations expose us to the unique risks inherent in foreign operations.Our foreign operations encounter
risks similar to those
faced by our U.S. operations, as well as risks inherent in foreign operations, such as local customs and regulatory constraints, foreign trade

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policies,
competitive conditions, foreign currency fluctuations and unstable political and economic conditions.

Our quarterly operating results are subject to fluctuation.Our quarterly operating results have fluctuated in the past and are
likely to do so in
the future. Factors that may contribute to these quarter-to-quarter fluctuations could include the effects of seasonality, severe weather, our level of advertising and
marketing, new store openings, changes in product mix and competitors' pricing. Most of our operating expenses do not vary depending on the level of sales; if we are unable to reduce these expenses
commensurately with the reduced sales then these quarterly fluctuations could have an adverse effect on both our financial results and the price of our common stock.

Expense reductions may impact our ability to compete and execute our strategic initiatives.We have reduced our expenses
significantly in response to
the recent declines in consumer and business spending. Expense reductions have occurred throughout the organization and include reduced capital projects, staffing, advertising expenditures, repair and
maintenance activities, and training. Management believes these reductions are reasonable, but there can be no assurance that they will not impact our ability to compete.

We may be unable to attract and retain qualified associates.We attempt to attract and retain an appropriate level of personnel
in both field
operations and corporate functions. We face many external risks and internal factors in meeting our labor needs, including competition for qualified personnel, prevailing wage rates, as well as rising
employee benefit costs, including insurance costs and compensation programs. Failure to attract and retain sufficient qualified personnel could interfere with our ability to adequately provide
services to customers.

Our expanded offering of proprietary branded products may not improve our financial performance and may expose us to product liability claims.Our
product offering includes many proprietary branded products. While we have focused on the quality of our proprietary branded products, we rely on third-party manufacturers for these products. Such
third-party manufacturers may prove to be unreliable, the quality of our globally sourced products may not meet our expectations or such products may not meet applicable regulatory requirements.
Furthermore, economic and political conditions in areas of the world where we source such products may adversely affect the availability and cost of such products. In addition, our proprietary branded
products compete with other manufacturers' branded items that we offer. As we continue to increase the number and types of proprietary branded products that we sell, we may adversely affect our
relationships with our vendors, who may decide to reduce their product offerings through OfficeMax and increase their product offerings through our competitors. Finally, if any of our customers are
harmed by our proprietary branded products, they may bring product liability and other claims against us. Any of these circumstances could have an adverse effect on our business and financial
performance.

We are more leveraged than some of our competitors, which could adversely affect our business plans.A relatively greater
portion of our cash flow is
used to service debt and other 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.

Fluctuations in our effective tax rate may adversely affect our business and results of operations.We are a multi-national,
multi-channel provider
of office products and services. As a

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result,
our effective tax rate is derived from a combination of applicable tax rates in the various countries, states and other jurisdictions in which we operate. Our effective tax rate may be lower
or higher than our tax rates have been in the past due to numerous factors, including the 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 and to
estimates of the amount of business likely to be done in any given jurisdiction. The loss of one or more agreements with taxing jurisdictions, a change in the mix of our business from year to year and
from country to country, changes in rules related to accounting for income taxes, changes in tax laws in any of the multiple jurisdictions in which we operate or adverse outcomes from tax audits that
we may be subject to in any of the jurisdictions in which we operate could result in an unfavorable change in our effective tax rate. This unfavorable change could have an adverse effect on our
business and results of our operations.

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.At the time of our acquisition of OfficeMax,
 Inc., in December
2003, we partially integrated the systems of the two companies. Integrating these systems was complex and we have no current plans to complete the integration. This may constrain for some time our
ability to provide the level of service our customers demand and could cause us to operate inefficiently. Failure to complete the integration of these systems or install necessary updates could have
an adverse effect on our business and results of our operations.

We retained responsibility for certain liabilities of the sold paper, forest products and timberland businesses.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. Finally, the Company has various outstanding industrial revenue bonds. Certain of
those bonds received a preliminary adverse determination regarding the exempt status of interest on the bonds from the Internal Revenue Service ("IRS"). The Company has appealed the proposed IRS
determination. If the adverse determination is upheld, the Company will call the bonds and will be subject to certain other payment obligations, which will adversely impact our cash flows and
financial results. There can be no assurance that

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some
or all of the Company's other outstanding revenue bonds will not be subject to similar IRS determination.

Our investment in Boise Cascade, 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 affiliates of Boise Cascade, L.L.C. Through our investment in Boise Cascade, L.L.C., we also hold an indirect interest in
Boise Inc., the former paper manufacturing business of Boise Cascade, L.L.C. This continuing interest in Boise Cascade, L.L.C. subjects us to market risks associated with the paper and forest
products industry. These industries are subject to cyclical market pressures. Historical prices for products have been volatile, and industry participants have limited influence over the timing and
extent of price changes. The relationship between supply and demand in these industries significantly affects product pricing. Demand for building products is driven mainly by factors such as new
construction and remodeling rates, business and consumer credit availability, interest rates and weather. The recent falloff in U.S. housing starts has resulted in lower building products shipments
and prices. The supply of paper and building products fluctuates based on manufacturing capacity. Excess manufacturing capacity, both domestically and abroad, can result in significant variations in
product prices. Our ability to realize the carrying value of our equity interest in affiliates of Boise Cascade, L.L.C. is dependent upon many factors, including the operating performance of Boise
Cascade, L.L.C. and Boise Inc. and other market factors that may not be specific to Boise Cascade, L.L.C. or Boise Inc., due in part to the fact that there is not a liquid market for our
equity interest. Our exposure to these risks could decrease our ability to compete effectively with our competitors, who typically are not subject to such risks.

Our obligation to purchase paper from Boise Inc. concentrates our supply of an important product primarily with a single supplier.When we
sold our paper, forest products and timberland
assets, we agreed to purchase substantially all of our requirements of paper for resale from Boise Cascade, L.L.C., or its affiliates or assigns, 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 limits our ability to take advantage of spot purchase opportunities and exposes
us to potential interruptions in supply, which could impact our ability to compete effectively with our competitors, who would not typically be restricted in this way.

We have substantial business operations in states in which the regulatory environment is particularly challenging.Our
operations in California and
other heavily regulated states with relatively more aggressive enforcement efforts expose us to a particularly challenging regulatory environment, including, without limitation, consumer protection
laws, advertising regulations, escheat, and employment and wage and hour regulations. This regulatory environment requires the Company to maintain a heightened compliance effort and exposes us to
defense costs, possible fines and penalties, and liability to private parties for monetary recoveries and attorneys' fees, any of which could have an adverse effect on our business and results of
operations.

ITEM 1B.   UNRESOLVED STAFF COMMENTS

None.

ITEM 2.   PROPERTIES

The majority of OfficeMax facilities are rented under operating leases. (For more information about our operating leases, see Note 8.
"Leases", of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K.) Our properties are in good operating
condition and are suitable and adequate for the operations for

9

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Table of Contents

which
they are used. We constantly evaluate the real estate market to determine the best locations for new stores. We analyze our existing stores to determine which stores will benefit from being
remodeled. We examine each store and market on a case by case basis, and, in 2009, plan no remodels and no net new store openings.

We
conduct regular reviews of our real estate portfolio to identify underperforming facilities, and close those facilities that are no longer strategically or economically viable.
Presented below is a list of our facilities by segment. During 2006, we consolidated our corporate headquarters from Itasca, Illinois, and our retail operations from Shaker Heights, Ohio, to a single
headquarters facility located in Naperville, Illinois.

OfficeMax, Contract

As of January 24, 2009, OfficeMax, Contract operated 47 distribution centers in 24 states, Puerto Rico, Canada, Australia and New Zealand.
The following table sets forth the locations of these facilities.

Arizona


1

Maryland


1

Texas


2California


2

Massachusetts


1

Utah


1Colorado


1

Michigan


1

Washington


1Florida


1

Minnesota


1

Wisconsin


1Georgia


1

New Jersey


1

Puerto Rico


1Hawaii


1

North Carolina


1

Canada


7Illinois


1

Ohio


1

Australia


10Indiana


1

Oregon


1

New Zealand


3Kansas


1

Pennsylvania


1Maine


1

Tennessee


1




10

---



Table of Contents

OfficeMax, Retail

As of January 24, 2009, OfficeMax, Retail operated 1,024 stores in 48 states, Puerto Rico, the U.S. Virgin Islands and Mexico. The
following table sets forth the locations of these facilities.

Alabama


11

Louisiana


2

Oklahoma


1Alaska


3

Maine


1

Oregon


13Arizona


45

Maryland


1

Pennsylvania


28Arkansas


2

Massachusetts


9

Rhode Island


1California


85

Michigan


43

South Carolina


6Colorado


30

Minnesota


42

South Dakota


4Connecticut


3

Mississippi


5

Tennessee


18Delaware


1

Missouri


29

Texas


74Florida


67

Montana


3

Utah


14Georgia


29

Nebraska


10

Virginia


25Hawaii


7

Nevada


14

Washington


24Idaho


7

New Jersey


4

West Virginia


2Illinois


62

New Mexico


9

Wisconsin


33Indiana


14

New York


31

Wyoming


2Iowa


9

North Carolina


28

Puerto Rico


12Kansas


12

North Dakota


3

U.S. Virgin Islands


2Kentucky


6

Ohio


55

Mexico(a)


83




ITEM 3.   LEGAL PROCEEDINGS

OfficeMax Incorporated and certain of its subsidiaries are named as defendants in a number of lawsuits, claims and proceedings arising out of the
operation of the paper and forest products assets prior to the closing of the Sale, for which OfficeMax agreed to retain responsibility. Also, as part of the Sale, we agreed to retain responsibility
for all pending or threatened proceedings and future proceedings alleging asbestos-related injuries arising out of the operation of the paper and forest products assets prior to the closing of the
Sale. We do not believe any of these retained proceedings are material to our business.

We
have been notified that we are a "potentially responsible party" under the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA") or similar federal and state
laws, or have received a claim from a private party, with respect to certain sites where hazardous substances or other contaminants are or may be located. These sites relate to operations either no
longer owned by the Company or unrelated to its ongoing operations. For sites where a range of potential liability can be determined, we have established appropriate reserves. We cannot predict with
certainty the total response and remedial costs, our share of the total costs, the extent to which contributions will be available from other parties or the amount of time necessary to complete the
cleanups. Based on our investigations; our experience with respect to cleanup of hazardous substances; the fact that expenditures will, in many cases, be incurred over extended periods of time; and in
some cases, the number of solvent potentially responsible parties, we do not believe that the known actual and potential response costs will, in the aggregate, materially affect our financial
position, our results of operations or our cash flows.

11

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Table of Contents

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. The claims vary widely and often are not specific about the plaintiffs' contacts with the Company. None of the claimants seeks damages from
us individually, and we are generally one of numerous defendants. Many of the cases filed against us have been voluntarily dismissed, although we have settled some cases. The settlements we have paid
have been covered mostly by insurance, and we believe any future settlements or judgments in these cases would be similarly covered. To date, no asbestos case against us has gone to trial, and the
nature of these cases makes any prediction as to the outcome of pending litigation inherently subjective. At this time, however, we believe our involvement in asbestos litigation is not material to
our financial position, our results of operations or our cash flows.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

12

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Table of Contents

---

PART II



ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is listed on the New York Stock Exchange (the "Exchange"). The Exchange requires each listed company to distribute an annual
report 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 for our common
stock, as well as the frequency and amount of dividends paid on such stock, are included in Note 18, Quarterly Results of Operations (unaudited), of the Notes to Consolidated Financial
Statements in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K. As a result of the current economic crisis and to conserve cash, we suspended our cash
dividends in the fourth quarter of 2008. See the discussion of dividend payment limitations under "Financing Arrangements" in "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations" of this Form 10-K. The approximate number of common shareholders, based upon actual recordholders on February 20, 2009, was 14,185.

We
maintain a corporate governance page on our website that includes key information about our corporate governance initiatives. That information includes our Corporate Governance
Guidelines, Code of Ethics and charters for our Audit, Executive Compensation and Governance and Nominating Committees, as well as our Committee of Outside Directors. The corporate governance page can
be found at www.officemax.com, by clicking on "About us," "Investors" and then "Corporate Governance." You also may obtain copies of these policies, charters and codes by contacting our Investor
Relations Department, 263 Shuman Boulevard, Naperville, Illinois 60563, or by calling (630) 864-6800.

Information
concerning securities authorized for issuance under our equity compensation plans is included in "Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters" of this Form 10-K.

Stock Repurchases

Information concerning our stock repurchases during the three months-ended December 27, 2008 is presented below. All stock was withheld to
satisfy minimum statutory tax withholding obligations upon vesting of restricted stock awards.

Period

Total Number
of Shares
Purchased

Average Price
Paid per Share

Total Number
of Shares
Purchased as Part
of Publicly
Announced Plans
or Programs

Maximum Number
of Shares That May Yet
Be Purchased Under
the Plans or ProgramsSeptember 28-October 25


337

$
6.17





October 26-November 22


4,725

$
4.93





November 23-December 27


814

$
5.82








13

---



Table of Contents

---

Performance Graph



The following graph compares the five-year cumulative total return (assuming dividend reinvestment) for the Standard & Poor's
500 Index, the Standard & Poor's 500 Specialty Retail Index, the Standard & Poor's SmallCap 600 Index and OfficeMax. The Company added a
comparison to the Small Cap 600 Index this year because Standard & Poor's transferred the Company into that Index from the Standard & Poor's 500 Index in 2008.

GRAPHIC

ANNUAL RETURN PERCENTAGE
Years Ending

Company\Index Name

Dec 04

Dec 05

Dec 06

Dec 07

Dec 08OfficeMax Incorporated


-2.81


-17.54


98.80


-57.62


-62.75S&P 500 Index


10.88


4.91


15.79


5.49


-39.12S&P Small Cap 600 Index


22.65


7.68


15.12


-0.30


-34.26S&P 500 Specialty Retail Index


12.28


2.86


6.64


-20.27


-25.37


INDEXED RETURNS
Years Ending

Company\Index Name

Base Period
Dec 03

Dec 04

Dec 05

Dec 06

Dec 07

Dec 08OfficeMax Incorporated

$
100

$
97.19

$
80.14

$
159.32

$
67.52

$
25.15S&P 500 Index


100


110.88


116.33


134.70


142.10


86.51S&P Small Cap 600 Index


100


122.65


132.07


152.04


151.59


99.65S&P 500 Specialty Retail Index


100


112.28


115.50


123.17


98.20


73.28


14

---



Table of Contents

ITEM 6.   SELECTED FINANCIAL DATA

The following table sets forth our selected financial data for the years indicated and should be read in conjunction with the disclosures in
"Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Item 8. Financial Statements and Supplementary Data" of this
Form 10-K.

2008(a)

2007(b)

2006(c)

2005(d)

2004(e)(millions, except per-share amounts)AssetsCurrent assets

$
1,855

$
2,205

$
2,097

$
1,942

$
3,241Property and equipment, net


491


581


580


535


541Goodwill





1,217


1,216


1,218


1,165Timber notes receivable


899


1,635


1,635


1,635


1,635Other


929


646


688


942


1,055$
4,174

$
6,284

$
6,216

$
6,272

$
7,637Liabilities and shareholders' equityCurrent liabilities

$
1,197

$
1,371

$
1,529

$
1,588

$
1,857Long-term debt, less current portion


290


349


384


407


585Timber notes securitized


1,470


1,470


1,470


1,470


1,470Other


905


783


817


1,044


1,091Minority interest


22


32


30


27


23Shareholders' equity


290


2,279


1,986


1,736


2,611$
4,174

$
6,284

$
6,216

$
6,272

$
7,637Net sales

$
8,267

$
9,082

$
8,966

$
9,158

$
13,270Income (loss) from:Continuing operations

$
(1,658
)
$
207

$
99

$
(41
)
$
234Discontinued operations








(7
)

(33
)

(61
)Net income (loss)

$
(1,658
)
$
207

$
92

$
(74
)
$
173Basic income (loss) per common share:Continuing operations

$
(21.90
)
$
2.70

$
1.30

$
(0.58
)
$
2.55Discontinued operations








(0.10
)

(0.41
)

(0.70
)Basic income (loss) per common share(f)

$
(21.90
)
$
2.70

$
1.20

$
(0.99
)
$
1.85Diluted income (loss) per common share:Continuing operations

$
(21.90
)
$
2.66

$
1.29

$
(0.58
)
$
2.44Discontinued operations








(0.10
)

(0.41
)

(0.67
)Diluted income (loss) per common share(f)

$
(21.90
)
$
2.66

$
1.19

$
(0.99
)
$
1.77Cash dividends declared per common share

$
0.45

$
0.60

$
0.60

$
0.60

$
0.60


---

See notes on following page.

15

---



Table of Contents

Notes to Financial Statements





16

---





Table of Contents

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion contains statements about our future financial performance. These statements are only predictions. Our actual results may
differ materially from these predictions. In evaluating these statements, you should review "Item 1A. Risk Factors" of this Form 10-K, including "Cautionary and
Forward-Looking Statements."

Overall Summary

Sales for 2008 were $8.3 billion, compared to $9.1 billion for 2007 and $9.0 billion for 2006. We recorded a net loss of
$1,657.9 million or ($21.90) per diluted share in 2008. Net income for 2007
was $207.4 million, or $2.66 per diluted share, compared to $91.7 million, or $1.19 per diluted share, for 2006.

Results of Operations, Consolidated

($ in millions)

2008

2007

2006Sales

$
8,267.0

$
9,082.0

$
8,965.7Gross profit


2,054.4


2,310.3


2,309.2Operating and selling expenses


1,555.6


1,633.6


1,641.2General and administrative expenses


306.9


332.5


355.9Goodwill and other asset impairments


2,100.2





Other operating net


27.9





146.2Operating income (loss)


(1,936.2
)

344.2


165.9Income (loss) from continuing operations


(1,657.9
)

207.4


99.1(percentage of sales)Gross profit margin


24.9
%

25.4
%

25.8
%Operating and selling expenses


18.8
%

18.0
%

18.3
%General and administrative expenses


3.7
%

3.7
%

4.0
%


Our results for 2008 were influenced significantly by the following items:



These
items are described in more detail in the sections that follow.

17

---



Table of Contents

As
of December 27, 2008, we had total debt of $354.4 million, excluding $1,470.0 million of timber securitization notes, which have recourse limited to the timber
installment notes receivable and related guarantees. As of December 27, 2008, we had $170.8 million in cash and cash equivalents, and $547 million in available (unused) borrowing
capacity under our $700 million revolving credit facility, which is committed through July 12, 2012. Our unused borrowing capacity as of December 27, 2008 reflects an available
borrowing base of $614 million, no outstanding borrowings, and $67 million of standby letters of credit issued under the revolving credit facility.

For
the full year 2008, we generated $223.7 million of cash from operations reflecting our focus on working capital management, which yielded reduced collection days outstanding for
accounts receivable, as well as a decrease in inventory per location while maintaining the same accounts payable leverage as last year.

Outlook

Given the projected weak economic outlook, we are cautious in our expectations for 2009. We expect sales to decline in 2009 on a
year-over-year basis as a result of the difficult economic environment. As a result, we expect the effects of deleveraging of costs and expenses as a result of lower sales to
continue in 2009.

Despite
the challenging economic environment, we remain committed to managing OfficeMax for the long-term and positioning the Company for growth when the economic environment
improves. We are placing a premium on maintaining positive operating cash flow through tight cost controls and conservative working capital management in the near term. We expect cash flow from
operations to exceed capital expenditures in 2009. We also believe that our needs to access our revolving line of credit will be limited to seasonal periods, and expect to have little or no borrowings
outstanding under the facility at year end.

2008 Compared with 2007

Sales for 2008 decreased 9.0% to $8,267.0 million from $9,082.0 million for 2007. The year-over-year sales decreases were
largely influenced by the weaker
global economic environment and by our more disciplined, analysis-driven approach to sales generation and retention. The year-over-year sales decrease occurred in both our
Contract and Retail segments and reflects a 10.7% decrease in comparable sales. The amount of sales percentage decline compared to the prior year increased in each quarter of 2008. Foreign exchange
rate changes late in the year had an adverse impact on sales. For the year, sales increased $9.4 million due to the impact of foreign exchange rates, but the trend has reversed and sales were
reduced by $81.1 million due to the effect of foreign exchange rates in the fourth quarter.

Gross
profit margin decreased by 0.5% of sales to 24.9% of sales in 2008 compared to 25.4% of sales in 2007. The gross profit margins declined in our Retail segment compared to the
previous year but improved for our Contract segment. The Retail decline was primarily due to deleveraging of fixed costs, resulting from the lower sales, as well as new stores which have not ramped up
to mature sales volume 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 primarily to a higher margin customer mix resulting from our more disciplined approach to contractual sales generation and retention.

Operating
and selling expenses increased by 0.8% of sales to 18.8% of sales in 2008 from 18.0% of sales a year earlier. The increases in operating and selling expenses as a percent of
sales were primarily the result of deleveraging fixed costs due to lower sales, which were partially offset by reduced incentive compensation expense and targeted cost reductions, including reduced

18

---



Table of Contents

selling
expenses in the Contract segment and reduced store payroll in the Retail segment resulting from the management reorganizations completed in the first and second quarters of 2008.

General
and administrative expenses were 3.7% of sales for both 2008 and 2007. The effect of deleveraging of expense resulting from lower sales was offset primarily by a reduction in
incentive compensation.

As
noted above, our results for 2008 include several significant items, as follows:



Interest
expense was $113.6 million in 2008 compared to $121.3 million for 2007. The year-over-year decrease in interest expense was a result of
lower average borrowings and the curtailment of interest accruals on certain of the timber securitization notes payable after the default

19

---



Table of Contents

on
the timber installment note guaranted by Lehman on October 29, 2008 due to the Lehman bankruptcy. Interest expense includes interest related to the affected timber securitization notes
payable of approximately $73.5 million and $80.5 million for 2008 and 2007, respectively. Per the timber note agreements, the interest expense related to the timber securitization notes
payable is to be offset by interest income earned on the timber installment notes receivable. However, at the time of the Lehman bankruptcy in September 2008, the Company reversed interest accrued on
the installment note guaranteed by Lehman from the date of the last payment (April 29, 2008), and has not recognized any additional interest income on this installment note. We did, however,
continue to record the ongoing interest expense on the related timber securitization notes payable until the default date, October 29, 2008 resulting in $20.4 million of additional
interest expense that will only be paid if the corresponding interest income is collected. Total timber note related interest income was $53.9 million in 2008. In 2007, the timber note related
interest expense was offset by timber note related interest income of $82.5 million.

Excluding
the interest income earned on the timber notes receivable, interest income was $3.7 million and $5.4 million for the years ended December 27, 2008 and
December 29, 2007, respectively.

For
2008, we recognized an income tax benefit of $306.5 million on our $1,972.4 million pre-tax loss (effective tax benefit rate of 15.5%) compared to income tax expense of
$125.3 million on $337.5 million in pretax income (effective tax rate of 37.1%) for 2007. Income taxes for all periods were affected by the impact of state income taxes,
non-deductible expenses and the mix of domestic and foreign sources of income.

In
the first quarter of 2008, the Company 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 $1.4 billion impacted the
rate significantly as the book basis was higher than the amortizable tax basis and resulted in a $63.2 million tax benefit in the provision or approximately 4.6% of the tax charge. The Company
also reviewed the realizability of state net operating loss carryforwards and foreign tax credits given the acceleration of the capital gain tax in 2008, resulting in approximately $1.3 million
of tax benefit recorded in 2008.

As
a result of the foregoing factors, we reported a net loss of $1,657.9 million from continuing operations or $(21.90) per diluted share, for 2008. Included in the loss was
expense of
$1,756.7 million, or $23.13 per diluted share for goodwill and other asset impairments, expense of $17.5 million, or $0.23 per diluted share for personnel reorganizations and other
items, primarily severance costs, and a gain of $12.5 million or $0.16 per diluted share, related to a distribution from Boise Cascade, L.L.C.

2007 Compared with 2006

Sales for 2007 increased 1.3% to $9,082.0 million from $8,965.7 million for 2006 primarily due to growth in our international businesses, largely
influenced by fluctuations in foreign currency exchange rates, offset by volume declines due to a weaker domestic economic environment in the second half of 2007 and our more disciplined focus on
profitable sales growth. Comparable sales increased 0.5% year-over-year primarily as a result of higher sales in our Contract segment, partially offset by a reduction in our
Retail segment for the year.

Gross
profit margin decreased by 0.4% of sales to 25.4% of sales in 2007 compared to 25.8% of sales in 2006. The gross profit margin decrease was driven by pricing pressure and the
impact of new and renewing accounts in our Contract segment, partially offset by a slight improvement in our Retail segment from its changes in promotional strategies.

20

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Table of Contents

Operating
and selling expenses decreased by 0.3% of sales to 18.0% of sales in 2007 from 18.3% of sales a year earlier. The improvement in operating and selling expenses as a percent of
sales was the result of targeted cost reduction programs, including lower promotion and marketing costs and delivery expenses in the Contract segment, and reduced store labor and marketing costs in
our Retail segment, as well as reduced incentive compensation expense.

General
and administrative expenses were 3.7% of sales for 2007 compared to 4.0% of sales for 2006. The year-over-year decrease in general and administrative
expenses as a percentage of sales was due primarily to a decrease in incentive compensation expense.

In
2007, we recognized pre-tax income of $32.5 million and received cash payments from Boise Cascade L.L.C. of $32.5 million related to the Additional
Consideration Agreement that was entered into in connection with the 2004 sale of our paper, forest products and timberland assets (the "Sale"). This amount was included in "Other income (expense),
net." Also, during 2007,
we incurred a loss from the sale of OfficeMax, Contract's operations in Mexico to Grupo OfficeMax, our 51% owned joint venture, which resulted in a $1.1 million increase in minority interest,
net of income tax. Grupo OfficeMax's results of operations are included in our consolidated results of operations.

In
2006, we recorded pre-tax charges of $89.5 million related to the closing of 109 underperforming, domestic retail stores, $10.3 million primarily related to
the reorganization of our contract segment and $46.4 million primarily related to the consolidation of our corporate headquarters. These charges were included in "Other operating, net" in the
Consolidated Statements of Income (Loss). During 2006, we reduced the liability related to the Additional Consideration Agreement that was entered into in connection with the Sale, which resulted in a
credit to Other income (expense), net non-operating of $48.0 million. We also recorded an $18.0 million pre-tax charge for the closure of our Elma, Washington
manufacturing facility which was reflected in Discontinued operations in the Consolidated Statements of Income (Loss).

Interest
expense was $121.3 million in 2007 compared to $123.1 million in 2006. The year-over-year decrease in interest expense was a result of
lower average borrowings. Interest expense includes interest related to the timber securitization notes of approximately $80.5 million for 2007 and 2006. The interest expense associated with
the timber securitization notes is offset by interest income earned on the timber notes receivable of approximately $82.5 million for both 2007 and 2006. The interest income on the timber notes
receivable is included in interest income and is not netted against the related interest expense in our Consolidated Statements of Income (Loss).

Excluding
the interest income earned on the timber notes receivable, interest income was $5.4 million and $7.2 million for the years ended December 29, 2007 and
December 30, 2006, respectively.

Our
effective tax rate attributable to continuing operations was 37.1% in 2007 and 40.0% in 2006. Income taxes for both periods were affected by the impact of state income taxes,
non-deductible expenses and the mix of domestic and foreign sources of income. The effective rate for 2007 was also impacted by the closure of certain prior year audits, which reduced the
effective rate. In 2006, we increased our valuation allowance for certain state net operating loss carryforwards by $6.5 million.

As
a result of the foregoing factors, we reported income from continuing operations of $207.4 million, or $2.66 per diluted share, for 2007, compared to $99.1 million, or
$1.29 per diluted share, for 2006. We reported net income for 2007 of $207.4 million, or $2.66 per diluted share compared with net income of $91.7 million, or $1.19 per diluted share in
2006.

21

---



Table of Contents

Segment Discussion

We report our results using three reportable segments: OfficeMax, Contract; OfficeMax, Retail; and Corporate and Other.

OfficeMax,
Contract distributes a broad line of items for the office, including office supplies and paper, technology products and solutions 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. This segment markets and sells through
field salespeople, outbound telesales, catalogs, the Internet and in some markets, including Canada, Australia and New Zealand, through office products stores.

OfficeMax,
Retail is a retail distributor of office supplies and paper, print and document services, technology products and solutions and office furniture. Our retail segment has
operations in the United States, Puerto Rico and the U.S. Virgin Islands. Our retail segment's office supply stores feature OfficeMax ImPress, an in-store module devoted to
print-for-pay and related services. Our retail segment also operates office products stores in Mexico through a 51% owned joint venture.

Corporate
and Other includes support staff services and the related assets and liabilities as well as certain other expenses not fully allocated to the segments.

Management
evaluates the segments based on operating profit before interest expense, income taxes and minority interest, extraordinary items and cumulative effect of accounting changes.
The income and expense related to certain assets and liabilities that are reported in the Corporate and Other segment have been allocated to the Contract and Retail segments.

22

---





Table of Contents

OfficeMax, Contract

($ in millions)

2008

2007

2006Sales

$
4,310.0

$
4,816.1

$
4,714.5Gross profit


948.1


1,050.9


1,062.8Gross profit margin


22.0
%

21.8
%

22.5
%Operating, selling and general and administrative expenses


780.8


843.0


854.8Percentage of sales


18.1
%

17.5
%

18.1
%Goodwill and other asset impairments


815.5





Other operating expenses


9.3





10.3Total operating expenses


1,605.6


843.0


865.1Segment income (loss)

$
(657.5
)
$
207.9

$
197.7Sales by Product LineOffice supplies and paper

$
2,518.7

$
2,696.3

$
2,568.9Technology products


1,299.2


1,535.1


1,551.9Office furniture


492.1


584.7


593.7Sales by GeographyUnited States

$
3,035.0

$
3,518.9

$
3,559.8International


1,275.0


1,297.2


1,154.7Sales GrowthTotal sales growth


(10.5
)%

2.2
%

1.9
%


2008 Compared With 2007

Contract segment sales for 2008 decreased 10.5% to $4,310.0 million, from $4,816.1 million for 2007, reflecting a U.S. sales decline of 13.8% and an
international sales decline of 1.7% in U.S. dollars, or 2.4% in local currencies. U.S. sales declined in 2008 compared to the prior year primarily due to: a) decreased sales from existing
corporate accounts of 9%, b) our continued discipline in account acquisition and retention which resulted in lower 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 that have operations in European countries and Asia through Lyreco, and allows Lyreco to supply global customers that have operations in the United States and
Mexico through OfficeMax.

Contract
segment gross profit margin increased 0.2% of sales to 22.0% of sales for 2008 compared to 21.8% of sales in the previous year. The year-over-year
increase was primarily due to improved account profitability for existing and new customers which was partially offset by deleveraging fixed delivery and occupancy costs from lower sales. Targeted
cost controls helped to reduce the impact of deleveraging. These targeted cost controls included year-over-year reductions in our delivery fleet, resulting from optimizing
delivery routes, which helped to reduce the impact of increased fuel costs.

Contract
segment operating, selling and general and administrative expenses increased 0.6% of sales to 18.1% of sales for 2008 from 17.5% of sales a year earlier. The increase was
primarily due to the deleveraging of fixed expenses from lower sales, including higher fixed marketing and account administration costs, partially offset by targeted cost controls, including reduced
selling expenses and lower compensation costs as a result of fewer personnel in our customer fulfillment centers and customer service centers, as well as reduced incentive compensation expense. We

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also
cycled on operating expense improvements that we started generating in the second half of 2007.

Total
Contract segment operating expenses for 2008 included a non-cash charge of $815.5 million related to impairment of the Contract segment's goodwill balance. Other
operating expense of $9.3 million included employee severance costs in our U.S and international operations and the costs to consolidate manufacturing facilities in New Zealand. For more
information regarding impairment charges, see discussion of "Goodwill and other asset impairments" in this section.

The
Contract segment's reported segment income decreased $865.4 million to a loss of $657.5 million, or 15.2% of sales for 2008, compared to segment income of
$207.9 million, or 4.3% of sales, for 2007.

2007 Compared With 2006

Contract segment sales for 2007 increased 2.2% to $4,816.1 million, from $4,714.5 million for 2006, reflecting a U.S. sales decline of 1.2%, offset
by international sales growth of 12.3% in U.S. dollars, or 2.8% in local currencies. The U.S. sales decline reflects a weaker economic environment in the second half of 2007, as well as our initiative
to terminate existing unprofitable contracts and be more disciplined in new account acquisition.

Contract
segment gross profit margin decreased 0.7% of sales to 21.8% of sales for 2007 compared to 22.5% of sales in the previous year. The year-over-year
decrease was primarily due to the continued impact of new and renewing accounts with lower gross margin rates and the impact of paper price increases throughout the year.

Contract
segment operating, selling and administrative expenses decreased 0.6% of sales to 17.5% of sales for 2007 from 18.1% of sales a year earlier. The
year-over-year improvement in operating expenses as a percentage of sales is the result of targeted cost controls, including the reorganization of the Contract segment that we
began in the fourth quarter of 2006, lower incentive compensation expense and lower promotion and marketing costs.

Other
operating expense for the Contract segment in 2006 was $10.3 million, and consisted of costs primarily related to severance due to the Contract segment reorganization.

Contract
segment income increased $10.2 million to $207.9 million, or 4.3% of sales for 2007, compared to $197.7 million, or 4.2% of sales, for 2006.

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OfficeMax, Retail

($ in millions)

2008

2007

2006Sales

$
3,957.0

$
4,265.9

$
4,251.2Gross profit


1,106.3


1,259.5


1,246.3Gross profit margin


28.0
%

29.5
%

29.3
%Operating, selling and general and administrative expenses


1,045.1


1,085.8


1,070.5Percentage of sales


26.5
%

25.4
%

25.2
%Goodwill and other asset impairments


548.9





Other operating expense


17.4





89.5Total operating expenses


1,611.4


1,085.8


1,160.0Segment income (loss)

$
(505.1
)
$
173.7

$
86.3Sales by Product LineOffice supplies and paper

$
1,541.5

$
1,610.6

$
1,627.5Technology products


2,060.5


2,235.5


2,212.5Office furniture


355.0


419.8


411.2Sales by GeographyUnited States

$
3,693.5

$
4,030.0

$
4,057.4International


263.5


235.9


193.8Sales GrowthTotal sales growth


(7.2
)%

0.3
%

(6.1
)%Same-location sales growth


(10.8
)%

(1.2
)%

0.1
%


2008 Compared With 2007

Retail segment sales for 2008 decreased by 7.2% to $3,957.0 million from $4,265.9 million for 2007, reflecting a same-store sales
decrease of 10.8%, partially offset by sales from new
stores. The weaker U.S. consumer and small business spending was evidenced by lower store traffic and weaker back-to-school and holiday seasons than in the previous year.
Retail same-store sales for 2008 declined across all major product categories, compared to the prior year. Declines were greatest 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, our new
small-format stores, ending the year with 939 retail stores in the U.S. Our majority owned joint-venture in Mexico opened 17 stores during 2008, ending the year with 83 stores.

Retail
segment gross profit margin declined 1.5% of sales to 28.0% of sales for 2008, compared to 29.5% of sales in the previous year. The gross margin decline was primarily due to the
deleveraging of fixed occupancy costs, which has continued since late-2007, as well as increased inventory shrinkage cost. For the 2008 back-to-school and holiday seasons,
which are always an aggressive pricing environment, we adjusted our advertising strategies to drive traffic in the stores without sacrificing overall gross margin levels, and we continued to
rationalize and refine our marketing mix through various media, not just circular advertising. The impact of deleveraging of fixed-occupancy costs and increased inventory shrinkage costs was partially
offset by increased merchandise margins and a sales-mix shift towards higher-margin office supplies category sales. Increased fuel prices were mostly offset by fulfillment improvement
programs and flexible delivery scheduling that resulted in fewer miles driven.

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Retail
segment operating, selling and general and administrative expenses increased 1.1% of sales to 26.5% of sales for 2008 from 25.4% of sales a year earlier, primarily due to
deleveraging of expenses from the same-store sales volume decrease, as well as new stores which have not ramped up to mature sales volumes, partially offset by reduced incentive
compensation expense and targeted cost controls, including the benefits from the reorganization of our Retail store management in the second quarter and Retail field and ImPress management undertaken
in the first quarter.

The
Retail segment total operating expenses were impacted by a number of charges during 2008. The segment recorded impairment charges of $548.9 million, consisting of
$386 million for impairment of goodwill, $107.1 million for impairment of trade names and $55.8 million for impairment of store fixed assets, consisting primarily of leasehold
improvements. The segment also recorded a $12.7 million charge for headcount reductions primarily for the reorganization of our Retail field and store management and $4.7 million of
charges related to site and store lease terminations. For more information regarding impairment charges, see the discussion of "Goodwill and Other Asset Impairments" that follows.

Retail
segment operating loss was $505.1 million, or 12.8% of sales, for 2008 compared to income of $173.7 million, or 4.1% of sales, for 2007.

2007 Compared With 2006

Retail segment sales for 2007 increased by 0.3% to $4,265.9 million from $4,251.2 million for 2006. Retail segment same-location sales
decreased 1.2% year-over-year during 2007.

Adjusted
for the Company's initiative to eliminate mail-in rebates, and to provide instant rebates in lieu of national, vendor-sponsored mail-in rebates,
same-store sales decreased 0.5% during 2007. During the fourth quarter of 2007, Retail segment same-store sales decreased 7.3% year-over-year due to
weakness in consumer and small business spending and the Company's reduced promotional activity during the holiday season. The fourth quarter same-store sales decrease offset same store
sales increases realized during the first three quarters of 2007. During 2007, we opened 59 new retail stores in the U.S., ending the year with 908 retail stores in the U.S. Our majority owned
joint-venture in Mexico opened 15 stores during 2007, ending the year with 68 stores.

Retail
segment gross profit margin improved 0.2% of sales to 29.5% of sales for 2007, compared to 29.3% of sales in the previous year. The gross margin improvement was primarily due to
the segment's improved promotional and advertising strategies, primarily during the holiday season, partially offset by occupancy costs for new stores.

Retail
segment operating expenses increased 0.2% of sales to 25.4% in 2007 compared to 25.2% of sales for 2006. The year-over-year increase was primarily due to
expense deleveraging from new store openings and the same-store sales decrease, partially offset by reduced incentive compensation expense.

During
2006, the Retail segment incurred pre-tax charges of $89.5 million related to lease termination costs and severance from the closure of 109 underperforming
retail stores.

Retail
segment operating income was $173.7 million, or 4.1% of sales, for 2007 and $86.3 million, or 2.0% of sales, for 2006.

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Corporate and Other

Corporate and Other expenses were $773.6 million for 2008 compared to $37.4 million for 2007. 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 charge related to a fourth quarter reduction in force at our
corporate headquarters and a $3.1 million gain, primarily related to the release of a warranty escrow established at the time of sale of our legacy Voyageur Panel business in 2004. Reduced
bonus expense in 2008 offset growth in corporate spending and unfavorable impacts from legacy items.

During
2006, total corporate expenses were $118.0 million, which included expenses related to the headquarters consolidation in the Corporate and Other segment totaling
$46.4 million.

Discontinued Operations

In December 2004, our board of directors authorized management to pursue the divestiture of a facility near Elma, Washington that manufactured
integrated wood-polymer building materials. The Company recorded the facility's assets as held for sale on the Consolidated Balance Sheets and reported the results of its operations as
discontinued operations in 2004. During 2005, the Company experienced unexpected difficulties in achieving anticipated levels of production at the facility, which delayed the process of identifying
and qualifying a buyer for the business. We concluded that we would be unable to attract a buyer in the near term and elected to cease operations at the facility during the first quarter of 2006, at
which time we recorded pre-tax expenses of $18.0 million for contract termination and other closure costs. These charges and expenses were reflected within discontinued operations
in the Consolidated Statements of Income (Loss). As of December 27, 2008, the Company has not identified a buyer for the facility.

Goodwill and Other Asset Impairments

During 2008, we recorded non-cash impairment charges associated with goodwill, intangible assets and other long-lived
assets of $1,364.4 million before taxes. After adjusting for taxes and an impact to minority interest, these charges reduced net income by $1,294.7 million after-tax or
$17.05 per diluted share. These non-cash charges consisted of $1,201.5 million of goodwill impairment in both the Contract ($815.5 million) and Retail ($386.0 million)
segments; $107.1 million of impairment of trade names in our Retail segment and $55.8 million of impairment related to fixed assets in our Retail segment. These charges resulted in a
full impairment of our goodwill balances.

We
are required for accounting purposes to assess the carrying value of goodwill and other intangible assets annually or whenever circumstances indicate that a decline in value may have
occurred. For other long-lived assets we are also required to assess the carrying value when circumstances indicate that a decline in value may have occurred. In the second quarter of
2008, based on our sustained low stock price and reduced market capitalization relative to the book value of equity, macroeconomic factors impacting industry business conditions, actual recent results
and forecasted operating performance, and continued tightening of the credit markets, along with other factors, we determined that indicators of potential impairment were present and that an interim
test for impairment was required as of the end of the second quarter. In the fourth quarter of 2008, due to a further decline in our market capitalization in relation to the book value of equity, a
worsening economic environment, increasing unemployment and a decline in results and forecasted operating performance, we concluded that indicators of potential impairment were again present and that
a new interim test for impairment was required as of the end of the fourth quarter.

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As
a result of these tests, impairment charges were recorded in both the second and fourth quarters. In the second quarter, we recorded an estimated impairment charge of
$935.3 million, before taxes, and reported that the final analysis of the second quarter impairment would be completed by year-end. The $935.3 million in second quarter
impairment charges included $850.0 million related to goodwill, $80.0 million related to trade names and $5.3 million related to fixed assets. During the fourth quarter, we
completed the final analysis of the second quarter impairment and recorded an additional non-cash pre-tax impairment charge of $103.8 million ($98.8 million
related to goodwill and $5.0 million related to trade names) to adjust the estimate we recorded in the second quarter. Also during the fourth quarter, we recorded non-cash
pre-tax charges of $325.3 million associated with the test for impairment that we completed in the fourth quarter. This consisted of $252.7 million of goodwill,
$22.1 million of trade names, and $50.5 million of fixed assets that were impaired. There is
no goodwill remaining on the Company's consolidated balance sheet and therefore there will be no future annual assessment of goodwill. The impairment charges related to goodwill, intangibles and other
long-lived assets are included in the caption "Goodwill and other asset impairments" in the Consolidated Statements of Income (Loss).

Also
during 2008, due to the Lehman bankruptcy, we recorded a pre-tax impairment charge of $735.8 million on the timber installment note guaranteed by Lehman in the
Corporate and Other segment. This impairment charge is also included in the caption "Goodwill and other asset impairments" in the Consolidated Statements of Income. For more information regarding the
timber note impairment, see the discussion of timber notes under the heading "Timber Notes" in this section.

Integration Activities and Facility Closure

In September 2005, the board of directors approved a plan to relocate and consolidate our retail headquarters in Shaker Heights, Ohio and existing
corporate headquarters in Itasca, Illinois into a new facility in Naperville, Illinois. We began the consolidation and relocation process in the latter half of 2005 and completed it during the second
half of 2006. In 2006, we recognized $46.4 million related to this effort. We also announced the reorganization of our Contract segment in 2006 and recorded a pre-tax charge of
$7.3 million for employee severance related to the reorganization. The Contract segment also recorded an additional $3.0 million of costs during 2006, primarily related to a facility
closure and employee severance.

We
conduct regular reviews of our real estate portfolio to identify underperforming facilities, and close those facilities that are no longer strategically or economically viable. We
record a liability for the cost associated with a facility closure at its estimated fair value in the period in which the liability is incurred, which is the location's cease-use date.
Upon closure, unrecoverable costs are included in facility closure reserves on the Consolidated Balance Sheets, and include provisions for the present value of future lease obligations, less
contractual or estimated sublease income. Accretion expense is recognized over the life of the payments.

During
2006, we closed 109 underperforming, domestic retail stores and recorded a pre-tax charge of $89.5 million, comprised of $11.3 million for employee
severance, asset write-off and impairment and other closure costs and $78.2 million of estimated future lease obligations.

In
the second quarter of 2008, we recorded $3.1 million of charges principally to close five stores and reduced rent and severance accruals by $3.4 million relating to
prior closed stores. In the fourth quarter of 2008, we recorded $8.7 million of charges related to four domestic retail stores where we have signed lease commitments, but have decided not to
open the stores due to the current
economic environment. This charge was partially offset by reduced rent accruals of $4.0 million on other store lease obligations.

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At December 27, 2008, the integration and facility closure reserve was $48.9 million with $14.3 million included in current liabilities, and
$34.6 million included in long-term liabilities. The vast majority of the reserve represents future lease obligations of $106 million, net of anticipated sublease income of
approximately $57 million. Cash payments relating to the integration and facility closures were $35.2 million, $48.3 million and $116.5 million in 2008, 2007, and 2006,
respectively.

Liquidity and Capital Resources

As of December 27, 2008, we had $170.8 million of cash and cash equivalents and $354.4 million of short-term and
long-term debt, excluding the $1,470 million of timber securitization notes. The maximum aggregate borrowing amount available under our revolver was $613.7 million as of
December 27, 2008. Excess availability under the revolving credit facility totaled $546.9 million as of December 27, 2008. The amount available reflects issued standby letters of
credit which reduce the Company's borrowing capacity. As of December 27, 2008, the Company was in compliance with all covenants under the revolving credit facility agreement which expires on
July 12, 2012.

Our
primary ongoing cash requirements relate to working capital, expenditures for property and equipment, lease obligations, pension funding and debt service. We expect to fund these
requirements through a combination of cash, cash flow from operations and seasonal borrowings under our revolving credit facility. The sections that follow discuss in more detail our operating,
investing, and financing activities, as well as our financing arrangements.

Operating Activities

Our operating activities generated cash of $223.7 million, $70.6 million and $375.6 million in 2008, 2007 and
2006, respectively. The cash provided by operating activities in 2008 reflected our focus on working capital management, which yielded reduced collection days outstanding for accounts receivable as
well as a decrease in inventory per location while maintaining the same accounts payable leverage as last year. The results of these efforts more than offset the decline in cash generated from lower
earnings versus 2007. In 2007, cash used by working capital changes included the effect of terminating our accounts receivable securitization program and the resulting increase in accounts receivable,
and a reduction in the accounts payable-to-inventory leverage. These changes were partially offset by the monetization of certain Company-owned life insurance assets.

We
sponsor noncontributory defined benefit pension plans covering certain terminated employees, vested employees, retirees, and some active OfficeMax, Contract employees. Pension expense
was $4.2 million, $10.0 million and $13.7 million for the years ended December 27, 2008, December 29, 2007 and December 30, 2006, respectively. In 2008, 2007
and 2006, we made contributions to our pension plans totaling $13.1 million, $19.1 million and $9.6 million, respectively. The minimum required funding contribution in 2009 is
approximately $6.7 million and the expense is projected to be $25.7 million compared to expense of $4.2 million in 2008. However, we may elect to make additional voluntary
contributions. See "Critical Accounting Estimates" in this Management's Discussion and Analysis of Financial Condition and Results of Operations for more information.

Investment Activities

Our investing activities used cash of $112.1 million in 2008, $138.9 million in 2007 and $163.9 million in 2006.

Our
principal investing activities are related to capital expenditures. Our capital spending in 2008 primarily related to leasehold improvements, new and remodeled stores, quality and
efficiency

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projects
and replacement projects. Details of the capital investment by segment are included in the table below:

Capital Investment2008

2007

2006(millions)OfficeMax, Contract

$
34.2

$
42.5

$
81.2OfficeMax, Retail


109.8


98.3


93.6144.0


140.8


174.8


We expect our capital investments in 2009 to total between $50 million and $70 million. Our capital spending in 2009 will be for
leasehold improvements, new stores, and replacement and maintenance projects. In 2009, we expect to open up to 13 new stores, mostly in existing markets.

Financing Activities

Our financing activities used cash of $86.1 million in 2008, $62.6 million in 2007 and $1.9 million in 2006.
Common and preferred dividend payments totaled $47.5 million in 2008, $49.1 million in 2007, and $47.6 million in 2006. In all three years, our quarterly cash dividend was 15
cents per common share. Due to the challenging economic environment, and to conserve cash, our quarterly cash dividend was suspended in December 2008.

In
2008, we paid down debt of $40.0 million, net of additional borrowings, primarily by Grupo OfficeMax, our 51% owned joint venture in Mexico. Given the low market price of the
Company's stock throughout 2008, there were no stock option exercises. We received $2.7 million and $130.0 million in cash proceeds from stock option exercises in 2007 and 2006,
respectively.

Financing Arrangements

We lease our store space and certain other property and equipment under operating leases. These operating leases are not included in debt;
however, they represent a significant commitment. Obligations under operating leases are shown in the "Contractual Obligations" section of this Management's Discussion and Analysis of Financial
Condition and Results of Operations.

Our
debt structure consists of credit agreements, note agreements, and other borrowings as described below. For more information, see "Contractual Obligations" and "Disclosures of
Financial Market Risks" sections of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Credit Agreements

On July 12, 2007, we entered into an Amended and Restated Loan and Security Agreement (the "Loan Agreement") with a group of
banks. The Loan Agreement amended the Company's existing revolving credit facility and replaced our accounts receivable securitization program. The Loan Agreement permits the Company to borrow up to a
maximum of $700 million, subject to a borrowing base calculation that limits availability to a percentage of eligible accounts receivable plus a percentage of the value of eligible inventory
less certain reserves. The revolving credit facility may be increased (up to a maximum of $800 million) at the Company's request or reduced from time to time, in each case according to terms
detailed in the Loan Agreement. There were no borrowings outstanding under the Company's revolving credit facility as of December 27, 2008 or December 29, 2007. There were no borrowings
under the revolving credit facility during 2008. The maximum amount outstanding under the revolving credit facility was $103.0 million during 2007. The average amount outstanding under the
revolving credit facility was $6.8 million during 2007.

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Letters
of credit, which may be issued under the revolving credit facility up to a maximum of $250 million, reduce available borrowing capacity under the revolving credit facility. Standby
letters of credit issued under the revolving credit facility totaled $66.7 million as of December 27, 2008 and $85.5 million as of December 29, 2007. As of
December 27, 2008, the maximum aggregate borrowing amount available under the revolver was $613.7 million and excess availability under the revolving credit facility totaled
$546.9 million. As of December 29, 2007, the maximum aggregate borrowing amount available under the revolver was $700 million and excess availability under the revolving credit
facility totaled $614.5 million. At December 27, 2008, the Company was in compliance with all covenants under the Loan Agreement. The Loan Agreement allows the payment of dividends,
subject to availability restrictions and if no default has occurred. The Loan Agreement expires on July 12, 2012.

Borrowings
under the revolving credit facility bear interest at rates based on either the prime rate or the London Interbank Offered Rate ("LIBOR"). Margins are applied to the applicable
borrowing rates and letter of credit fees under the revolving credit facility depending on the level of average excess availability. Fees on letters of credit issued under the revolving credit
facility were charged at a weighted average rate of 0.875% during the year ended December 27, 2008. The Company is also charged an unused line fee of 0.25% on the amount by which the maximum
available credit exceeds the average daily outstanding borrowings and letters of credit.

As
of December 27, 2008, Grupo OfficeMax, our 51% owned joint venture in Mexico, had total borrowings of $22.9 million. This included $11.2 million under an
installment loan agreement that Grupo OfficeMax entered into during the third quarter of 2008. The joint venture is not in compliance with its debt covenants relating to the installment loan
agreement, but anticipates that the lending institution will provide a waiver of the covenant violations. The installment loan is due in 60 monthly payments beginning in the second quarter of
2009. The joint venture also has $11.7 million of short term borrowings of which $4.9 million was refinanced in the first quarter of 2009. The remaining $6.8 million of short term
borrowings is a simple revolving loan. The financing for Grupo OfficeMax is unsecured with no recourse against the Company.

During
2008, the Company made a $6.7 million capital contribution to Grupo OfficeMax, commensurate with our ownership percentage in the joint venture. The Company may need to make
additional capital contributions in the future.

Timber Notes

In October 2004, as part of the Sale, we sold our timberlands in exchange for $15 million in cash plus credit-enhanced timber
installment notes in the amount of $1,635 million (the "Installment Notes") issued in two equal $817.5 million tranches. The Installment Note issuers transferred a total of
$1,635 million in cash ($817.5 million each) to Lehman Brothers Holdings Inc. ("Lehman") and Wachovia Corporation ("Wachovia") (which was later purchased by Wells Fargo & Co.).
Lehman and Wachovia guaranteed the respective Installment Notes. The note structure allowed us to defer recognition of the capital gain and payment of the related taxes on the Sale until 2019, the
scheduled maturity date of the Installment Notes.

In
December 2004, we completed a securitization transaction in which the interests in the Installment Notes and related guarantees were transferred to our wholly-owned bankruptcy remote
subsidiaries ("OMXSPEs") and pledged as security for securitization notes issued in the amount of $1,470 million (the "Securitization Notes"), with $735 million through the structure
supported by
Lehman and $735 million through the structure supported by Wachovia. Recourse on the Securitization Notes is limited to the applicable pledged Installment Notes and underlying Lehman and
Wachovia guarantees.

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As
a result of these transactions, we received $1,470 million ($735 million from investors in the Securitization Notes guaranteed by Lehman) in cash and over
15 years we expected to earn approximately $82.5 million per year in interest income on the Installment Notes receivable ($41.8 million from interest on the Lehman guaranteed
Installment Note) and expected to incur annual interest expense of approximately $80.5 million on the Securitization Notes ($40.7 million from interest on the Securitization Notes
guaranteed by Lehman). The pledged Installment Notes receivable and Securitization Notes were scheduled to mature in 2020 and 2019, respectively. The Securitization Notes have an initial term that is
approximately three months shorter than the Installment Notes. We expected to refinance our ownership of the Installment Notes in 2019 with a short-term secured borrowing to bridge the
period from initial maturity of the Securitization Notes to the maturity of the Installment Notes.

On
September 15, 2008, Lehman, the guarantor of half of the Installment Notes and the Securitization Notes, filed a petition in the United States Bankruptcy Court for the Southern
District of New York seeking relief under chapter 11 of the United States Bankruptcy Code. On September 17, 2008, the OMXSPE delivered notices to the trustee for the affected
Securitization Note holders, the issuer of the affected Installment Notes and to Lehman, which stated that as a result of Lehman's bankruptcy filing, an event of default had occurred under the
$817.5 million Installment Note guaranteed by Lehman (the "Lehman Guaranteed Installment Note").

After
evaluating the situation, we concluded in late October 2008 that due to the uncertainty of collection of the Lehman Guaranteed Installment Note as a result of the Lehman
bankruptcy, the carrying value of the Lehman Guaranteed Installment Note was impaired. Accordingly, we recorded a non-cash pre-tax impairment charge of $735.8 million in
the third quarter of 2008. We are required for accounting purposes to assess the carrying value of assets whenever circumstances indicate that a decline in value may have occurred. However, under
current generally accepted accounting principles, we are required to continue to recognize the liability related to the Securitization Notes guaranteed by Lehman until such time as the liability has
been "extinguished", under the guidance in paragraph 16 of SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities", which will occur
when the Lehman Guaranteed Installment Note and the guaranty are transferred to and accepted by the note holders. We expect that this will occur no later than the date when the assets of Lehman are
distributed and the bankruptcy is finalized. Accordingly, the non-cash charge is expected to be followed by a non-cash gain in a later period when the liability is legally extinguished.

On
October 29, 2008, Lehman failed to pay the $21.5 million interest payment due to the Installment Note issuer, which in turn did not make the $20.9 million
interest payment due the OMXSPE. As a result, the OMXSPE did not make the interest payment due to the holders of the Securitization Notes guaranteed by Lehman because it is only obligated to make
interest payments on the Securitization Notes to the extent it receives interest payments on the related Installment Notes. We stopped accruing interest income on the Lehman Guaranteed Installment
Note as of the last payment date April 29, 2008. However, we recorded the ongoing interest expense on the Lehman guaranteed portion of the Securitization Notes until the default date,
October 29, 2008. This resulted in $20.4 million of additional interest expense that will only be paid if the corresponding interest income is collected.

At
the time of the Sale, we generated a tax gain and recognized the related deferred tax liability. The timber note structure allowed the Company to defer the resulting tax liability of
$543 million until 2019, the maturity date for the Installment Notes. Due to the impairment, approximately half of this tax gain was accelerated into 2008 and the related taxes were due. We had
available alternative minimum tax credits, a portion of which resulted from prior tax payments related to the Sale, which were used to reduce the cash tax payment triggered by the Lehman

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default.
As a result, the cash taxes due were approximately $30 million, which we paid before year-end.

As
recourse under the Securitization Notes is limited to the applicable pledged Installment Note and guaranty, we do not expect to make further cash payments on the Lehman guaranteed
portion of the Securitization Notes. With regards to the Securitization Notes guaranteed by Wachovia, we are not currently experiencing any disruption in the notes structure.

Note Agreements

In November 2008, we repurchased all of the $19.1 million of 7.0% senior notes outstanding by using proceeds relating to
restricted investments that were pledged for this debt.

Other

We have various unsecured debt outstanding, including approximately $189.9 million of revenue bonds due in varying amounts
through 2029. Approximately $69.2 million of these obligations may be called in the near future due to a preliminary potential adverse determination regarding the exempt status of interest on
the bonds from the Internal Revenue Service ("IRS"). We have appealed the proposed IRS determination. The $69.2 million of debt is classified as long-term debt in the Consolidated
Balance Sheets as we intend to utilize funds available under our existing long-term revolving credit facility to fund any required payment.

Cash Paid for Interest

Cash payments for interest, net of interest capitalized and including interest payments related to the timber securitization notes,
were $90.0 million in 2008, $116.6 million in 2007 and $124.1 million in 2006.

Contractual Obligations

In the table below, we set forth our contractual obligations as of December 27, 2008. Some of the figures we include in this table are
based on management's estimates and assumptions about these obligations, including their duration, the possibility of renewal, anticipated actions by third parties and other factors. Because these
estimates and assumptions are necessarily subjective, the amounts we will actually pay in future periods may vary from those reflected in the table.

Payments Due by Period2009

2010-2011

2012-2013

Thereafter

Total(millions)Debt

$
64.5

$
19.2

$
41.8

$
229.5

$
355.0Timber notes securitized











1,470.0


1,470.0Operating leases


377.8


641.9


439.7


520.7


1,980.1Purchase obligations


25.5


5.6


0.4


0.4


31.9Pension obligations (estimated payments)


7.6


116.2


151.8


168.2


443.8$
475.4

$
782.9

$
633.7

$
2,388.8

$
4,280.8


Debt includes amounts owed on our note agreements, revenue bonds and credit agreements assuming the debt is held to maturity. The amounts above
include both current and non-current liabilities. There are $69.2 million of revenue bonds maturing after 2013 that may be called in the near future depending upon a final
determination from the IRS. Obligations related to interest on

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debt
are not included in the table above because the timing and amount of any required payments cannot be reasonably estimated. However, the table under the heading Financial Instruments in this
section presents principal cash flows and related weighted average interest rates by expected maturity dates. For obligations with variable interest rates, the table sets forth payout amounts based on
rates as of December 27, 2008 and does not attempt to project future rates.

The
securitized timber notes payable have recourse limited to the applicable pledged installment note receivable and underlying guarantees. The debt remains outstanding until it is
legally extinguished, which will be when the Installment note and guaranty are transferred to and accepted by the securitized note holders.

We
enter into operating leases in the normal course of business. We lease our retail store space as well as certain other property and equipment under operating leases. Some of our
retail store leases require percentage rentals on sales above specified minimums and contain escalation clauses. These minimum lease payments do not include contingent rental expense. Some lease
agreements provide us with the option to renew the lease or purchase the leased property. Our future operating lease obligations would change if we exercised these renewal options and if we entered
into additional operating lease agreements. For more information, see Note 8, Leases, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary
Data" in this Form 10-K. Lease obligations for closed facilities are included in operating leases and a liability equal to the fair value of these obligations is included in the
Company's Consolidated Balance Sheets. For more information, see Note 5, Integration Activities and Facility Closures, of the Notes to Consolidated Financial Statements in "Item 8.
Financial Statements And Supplementary Data" in this Form 10-K.

Our
Consolidated Balance Sheet as of December 27, 2008 includes $502.4 million of liabilities associated with our retirement and benefit plans and $222.1 million of
other long-term liabilities. Certain of these amounts have been excluded from the above table as either the amounts are fully or partially funded, or the timing and/or the amount of any
cash payment is uncertain. Actuarially-determined liabilities related to pension and postretirement benefits are recorded based on estimates and assumptions. Key factors used in developing estimates
of these liabilities include assumptions related to discount rates, rates of return on investments, future compensation costs, healthcare cost trends, benefit payment patterns and other factors.
Changes in assumptions related to the measurement of funded status could have a material impact on the amount reported.

In
accordance with an amended and restated joint venture agreement, the minority owner of our subsidiary in Mexico, Grupo OfficeMax, can elect to put its remaining 49% interest in the
subsidiary to OfficeMax if earnings targets are achieved. Earnings targets are calculated quarterly on a rolling four-quarter basis. Accordingly, the targets can be achieved in one quarter
but not in the next. If the earnings targets are achieved and the minority owner elects to put its ownership interest, the purchase price would be equal to fair value, calculated based on both the
subsidiary's earnings for the last four quarters before interest, taxes and depreciation and amortization, and the current market multiples of similar companies. At December 27, 2008, Grupo
OfficeMax did not meet the earnings targets.

In
addition to the contractual obligations quantified in the table above, we have other obligations for goods and services entered into in the normal course of business. These 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 16, Commitments and Guarantees," of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in
this Form 10-K describes the nature

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of
our guarantees, including the approximate terms of the guarantees, how the guarantees arose, the events or circumstances that would require us to perform under the guarantees and the maximum
potential undiscounted amounts of future payments we could be required to make.

Seasonal Influences

Our business is seasonal, with OfficeMax, Retail showing a more pronounced seasonal trend than OfficeMax, Contract. Sales in the second quarter and summer months
are historically the slowest of the year. Sales are stronger during the first, third and fourth quarters that include the important new-year office supply restocking month of January, the
back-to-school period and the holiday selling season, respectively.

Disclosures of Financial Market Risks

Financial Instruments

Our debt is predominantly fixed-rate. At December 27, 2008, the estimated current fair value of our debt, based on
quoted market prices when available or then-current interest rates for similar obligations with like maturities, including the timber notes, was approximately $769.7 million less
than the amount of debt reported in the Consolidated Balance Sheet. Our timber notes receivable also bear interest at a fixed rate. At December 27, 2008, the estimated fair value of these
instruments was $15.6 million lower than their carrying amount.

The
securitized timber notes payable have recourse limited to the applicable pledged installment notes receivable and underlying guarantees. The Lehman portion of the debt remains
outstanding until it is legally extinguished, which will be when the installment note and guaranty are transferred to and accepted by the securitized note holders. The Company expects that this will
occur no later than the date when the assets of Lehman are distributed and the bankruptcy is finalized. The estimated fair values of our other financial instruments, including cash and cash
equivalents and receivables are the same as their carrying values. In the opinion of management, we do not have any significant concentration of credit risks. Concentration of credit risks with
respect to trade receivables is limited due to the wide variety of vendors, customers and channels to and through which our products are sourced and sold, as well as their dispersion across many
geographic areas.

Changes
in interest and currency rates expose us to financial market risk. In the past we have used derivative financial instruments, such as interest rate swaps, rate hedge agreements,
forward purchase contracts and forward exchange contracts, to hedge underlying debt obligations or anticipated transactions. We do not use them for trading purposes. The table below provides
information about our financial instruments outstanding at December 27, 2008 that are sensitive to changes in interest rates. For debt obligations, the table presents principal cash flows and
related weighted average interest rates by expected maturity dates. There are $69.2 million of revenue bonds maturing after 2013 that may be called in the near future, depending upon a final
determination from the IRS. For obligations with variable interest rates, the table sets forth payout amounts based on rates as of December 27, 2008 and does not attempt to project future
rates.

The
table below does not include our obligations for pension plans and other post retirement benefits, although market risk also arises within our defined benefit pension plans to the
extent that the obligations of the pension plans are not fully matched by assets with determinable cash flows. We sponsor noncontributory defined benefit pension plans covering certain terminated
employees, vested employees, retirees, and some active OfficeMax employees. As our plans were frozen in 2003, our active employees and all inactive participants who are covered by the plans are no
longer accruing additional benefits. However, the pension plan obligations are still subject to change due to fluctuations in long-term interest rates as well as factors impacting
actuarial

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valuations,
such as retirement rates and pension members living longer. In addition to changes in pension plan obligations, the amount of 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 U.S. equities, international equities, global equities and fixed-income securities, the cash flows
of which change as equity prices and interest rates vary. The risk is that market movements in equity prices and interest rates could result in assets that are insufficient over time to cover the
level of projected obligations. This in turn could result in significant changes in pension expense and funded status, further impacting future required contributions. Management, together with the
trustees who act on behalf of the pension plan beneficiaries, assess the level of this risk using reports prepared by independent external actuaries and take action, where appropriate, in terms of
setting investment strategy and agreed contribution levels.

(in millions except rates)

Year Ended2008

2007Expected PaymentsThere-
after



Fair
Value



Fair
Value2009

2010

2011

2012

2013

Total

TotalDebtFixed-rate debt payments

$
51.1

$
14.0

$
0.8

$
35.4

$
1.9

$
228.9

$
332.1

$
214.6

$
384.2

$
382.4Average interest rates


8.9
%

6.5
%

8.0
%

7.9
%

8.4
%

6.4
%

6.9
%


%

6.9
%


%Variable-rate debt payments

$
13.4

$
2.2

$
2.2

$
2.2

$
2.3

$
0.6

$
22.9

$
22.1

$
14.2

$
14.2Average interest rates


11.9
%

9.5
%

9.5
%

9.5
%

9.5
%

9.5
%

10.9
%


%

9.0
%


%Timber notes securitizedWachovia

$


$


$


$


$


$
735.0

$
735.0

$
736.8

$
735.0

$
790.9Average interest rates



%


%


%


%


%

5.4
%

5.4
%


%

5.4
%


%Lehman

$


$


$


$


$


$
735.0

$
735.0

$
81.8

$
735.0

$
790.9Average interest rates



%


%


%


%


%

5.5
%

5.5
%


%

5.5
%


%


2008

2007Carrying amount

Fair value

Carrying amount

Fair value(millions)Financial assets:Timber notes receivableWachovia

$
817.5

$
801.9

$
817.5

$
881.8Lehman


81.8


81.8


817.5


881.8Restricted investments


2.1


2.1


22.4


21.8


Additional Consideration Agreement

Pursuant to an Additional Consideration Agreement between OfficeMax and Boise Cascade, L.L.C. entered into in connection with
the Sale, we may have been required to make substantial cash payments to, or entitled to receive substantial cash payments from, Boise Cascade, L.L.C. In February 2008, Boise Cascade, L.L.C. sold a
majority interest in its paper and packaging and newsprint businesses to Aldabra 2 Acquisition Corp. As a result of this transaction, the Additional Consideration Agreement terminated and no further
payments will be required of either party. Prior to the termination of the Additional Consideration Agreement, we recorded changes in the fair value of the Additional Consideration Agreement in net
income (loss) in the period they occurred; however, any potential payments from Boise Cascade, L.L.C. to us were not recorded in net income (loss) until all contingencies had been satisfied, which was
generally at the end of a 12-month measurement period ending on September 30. Due to increases in actual and projected paper prices, the change in the estimated fair value of this
agreement resulted in the recognition of non-operating income in our Consolidated Statement of Income (Loss) of $32.5 million in 2007 and $48.0 million in 2006.

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Environmental

As an owner and operator of real estate, we may be liable under environmental laws for the cleanup of past and present spills and releases of hazardous or toxic
substances on or from our properties and operations. We can be found liable under these laws if we knew of, or were responsible for, the presence of such substances. In some cases, this liability may
exceed the value of the property itself.

Environmental
liabilities that relate to the operation of the paper and forest products assets prior to the closing of the Sale continue to be our liabilities. We have been notified that
we are a "potentially responsible party" under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) or similar federal and state laws, or have received a claim from a
private party, with respect to certain sites where hazardous substances or other contaminants are or may be located. These sites relate to operations either no longer owned by the Company or unrelated
to its ongoing operations. For sites where a range of potential liability can be determined, we have established appropriate reserves. We cannot predict with certainty the total response and remedial
costs, our share of the total costs, the extent to which contributions will be available from other parties, or the amount of time necessary to complete the cleanups. Based on our investigations; our
experience with respect to cleanup of hazardous substances; the fact that expenditures will, in many cases, be incurred over extended periods of time; and in some cases the number of solvent
potentially responsible parties, we do not believe that the known actual and potential response costs will, in the aggregate, materially affect our financial position, our results of operations or our
cash flows.

Critical Accounting Estimates

The Securities and Exchange Commission defines critical accounting estimates as those that are most important to the portrayal of our financial condition and
results. These estimates require management's most difficult, subjective or complex judgments, often as a result of the need to estimate matters that are inherently uncertain. We reviewed the
development, selection and disclosure of the following critical accounting estimates with the Audit Committee of our board of directors. The accounting estimates that we currently consider critical
are as follows:

Vendor Rebates and Allowances

We participate in various cooperative advertising and other marketing programs with our vendors. We also participate in volume purchase
rebate programs, some of which provide for tiered rebates based on defined levels of purchase volume. These arrangements enable us to receive reimbursement for costs incurred 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 the vendor arrangement and estimates of qualifying purchases during the rebate program period. These estimates are reviewed
on a quarterly basis and adjusted for changes in anticipated product sales and expected purchase levels. Volume-based rebates and allowances earned are initially recorded as a reduction in the cost of
merchandise inventories and are included in operations (as a reduction of cost of goods sold) in the period the related product is sold. Amounts received under other promotional programs are generally
event-based and are recognized at the time of the event as a reduction of cost of goods sold or inventory, as appropriate, based on the nature of the promotion and the terms of the vendor agreement.
Advertising and other allowances that represent reimbursements of specific, incremental and identifiable costs incurred to promote vendors' products are recorded as a reduction of operating and
selling expenses in the period the expense is incurred.

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Amounts
owed to us under these arrangements are subject to credit risk. In addition, the terms of the contracts covering these programs can be complex and subject to interpretations,
which can potentially result in disputes. We provide an allowance for uncollectible accounts and to cover disputes in the event that our interpretation of the contract terms differ from our vendors'
and our vendors seek to recover some of the consideration from us. These allowances are based on the current financial condition of our vendors, specific information regarding disputes and historical
experience. If we used different assumptions to estimate the amount of vendor receivables that will not be collected due to either credit default or a dispute regarding the amounts owed, our
calculated allowance would be different and the difference could be material. In addition, if actual losses are different than those estimated, adjustments to the recorded allowance may be required.

Merchandise Inventories

Inventories consist of office products merchandise and are stated at the lower of weighted average cost or net realizable value. We
estimate the realizable value of inventory using assumptions about future demand, market conditions and product obsolescence. If the estimated realizable value is less than cost, the inventory value
is reduced to its estimated realizable value. If expectations regarding future demand and market conditions are inaccurate or unexpected changes in technology or other factors affect demand, we could
be exposed to additional losses.

Throughout
the year, we perform physical inventory counts at all of our locations. For periods subsequent to each location's last physical inventory count, an allowance for estimated
shrinkage is provided based on historical shrink results and current business trends. If actual losses as a result of inventory shrinkage are different than management's estimates, adjustments to the
allowance for inventory shrinkage may be required.

Pensions and Other Postretirement Benefits

The Company sponsors noncontributory defined benefit pension plans covering certain terminated employees, vested employees, retirees,
and some active OfficeMax, Contract employees. We account for pension expense in accordance with SFAS No. 87, "Employer's Accounting for Pensions." This statement requires us to calculate our
pension expense and liabilities using actuarial assumptions, including a discount rate assumption and a long-term asset return assumption. We base our discount rate assumption on the rates
of return on high-quality bonds currently available and expected to be available during the period to maturity of the pension benefits. We base our long-term asset return
assumption on the average rate of earnings expected on invested funds. We believe that the accounting estimate related to pensions is a critical accounting estimate because it is highly susceptible to
change from period to period, based on the performance of plan assets, actuarial
valuations and changes in interest rates, and the effect on our financial position and results of operations could be material.

For
2009, our discount rate assumption used in the measurement of our net periodic benefit cost was 6.20%, and our expected return on plan assets was 7.50%. Using these assumptions, our
2009 pension expense will be approximately $25.7 million. If we were to decrease our estimated discount rate assumption used in the measurement of our net periodic benefit cost to 5.95% and our
expected return on plan assets to 7.25%, our 2009 pension expense would be approximately $30.0 million. If we were to increase our discount rate assumption used in the measurement of our net
periodic benefit cost to 6.45% and our expected return on plan assets to 7.75%, our 2009 pension expense would be approximately $21.5 million.

We
recognize the funded status of the defined benefit plan in the statement of financial position, and changes in the funded status are recognized through other comprehensive income
("OCI"), net of tax, in the year in which the changes occur. Actuarially-determined liabilities related

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to
pension and postretirement benefits are also recorded based on estimates and assumptions. Key factors used in developing estimates of these liabilities include assumptions related to discount
rates, rates of return on investments, future compensation costs, healthcare cost trends, benefit payment patterns and other factors. At December 27, 2008, the funded status of our defined
benefit pension and other postretirement benefit plans was a liability of $452.6 million. Changes in assumptions related to the measurement of funded status could have a material impact on the
amount reported.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The
Company is subject to tax audits in numerous jurisdictions in the U.S. and around the world. Tax audits by their very nature are often complex and can require several years to
complete. In the normal course of business, the Company is subject to challenges from the IRS and other tax
authorities regarding amounts of taxes due. These challenges may alter the timing or amount of taxable income or deductions, or the allocation of income among tax jurisdictions. We recognize the
benefits of tax positions that are more likely than not of being sustained upon audit based on the technical merits of the tax position in the consolidated financial statements; positions that do not
meet this threshold are not recognized. For tax positions that are at least more likely than not of being sustained upon audit, the largest amount of the benefit that is more likely than not of being
sustained is recognized in the consolidated financial statements.

Accruals
for income tax exposures, including penalties and interest, expected to be settled within the next year are included in accrued expenses and other current liabilities with the
remainder 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 Income (Loss).

The
determination of the Company's provision for income taxes requires significant judgment, the use of estimates, and the interpretation 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 facilities
that are no longer strategically or economically viable. A liability for the cost associated with such a closure is recorded at its fair value in the period in which it is incurred. These costs are
included in facility closure reserves in our Consolidated Balance Sheets and include provisions for the present value of future lease obligations, less estimated sublease income. At
December 29, 2008, the vast majority of the reserve represents future lease obligations of $106 million, net of anticipated sublease income of approximately $57 million. For each
closed location, we estimate future sublease income based on current real estate trends by market and location-specific factors, including the age and quality of the location, as well as our
historical experience with similar locations. If we had used different assumptions to estimate future sublease income our reserves would be different and the difference could be material. In addition,
if actual

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sublease
income is different than our estimates, adjustments to the recorded reserves may be required.

Environmental Remediation

We are subject to a variety of environmental laws and regulations. We account for environmental remediation liabilities in accordance
with the Statement of Position (SOP) 96-1, "Environmental Remediation Liabilities." We record liabilities on an undiscounted basis when assessments and/or remedial efforts are probable and
the cost can be reasonably estimated. We estimate our environmental liabilities based on various assumptions and judgments, as we cannot predict with certainty the total response and remedial costs,
our share of total costs, the extent to which contributions will be available from other parties or the amount of time necessary to complete any remediation. In making these judgments and assumptions,
we consider, among other things, the activity to date at particular sites, information obtained through consultation with applicable regulatory authorities and third-party consultants and contractors
and our historical experience at other sites that are judged to be comparable. Due to the number of uncertainties and variables associated with these assumptions and judgments and the effects of
changes in governmental regulation and environmental technologies, the precision of the resulting estimates of the related liabilities is subject to uncertainty. We regularly monitor our estimated
exposure to our environmental liabilities. As additional information becomes known, our estimates may change.

Environmental
liabilities that relate to the operation of the paper and forest products assets prior to the closing of the Sale continue to be liabilities of OfficeMax, in addition to
the liabilities related to certain sites referenced in Note 17, Legal Proceedings and Contingencies, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements
and Supplementary Data" in this Form 10-K.

Goodwill, Indefinite-Lived Intangibles and Other Long-Lived Assets Impairment

SFAS No. 142, "Goodwill and Other Intangible Assets," requires us to assess goodwill for impairment at least annually in the
absence of an indicator of possible impairment and immediately upon an indicator of possible impairment. In assessing impairment, the statement requires us to make estimates of the fair values of our
reporting units. If we determine the fair values are less than the carrying amount of goodwill recorded on our Consolidated Balance Sheet, we must recognize an impairment loss in our financial
statements. SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," requires us to assess our long-lived assets for impairment whenever an
indicator of possible impairment exists. In assessing impairment, the statement requires us to make estimates of the fair value of the assets. If we determine the fair values are less than the
carrying value of the assets, we must recognize an impairment loss in our financial statements. At the end of 2007 and 2006, we conducted our annual assessment of goodwill and no impairment was
indicated.

Based
on our sustained low stock price and reduced market capitalization relative to the book value of equity, macroeconomic factors impacting industry business conditions, actual recent
results and forecasted operating performance, and continued tightening of the credit markets, along with other factors, we determined that indicators of potential impairment were present in 2008. As a
result, management assessed the carrying value of acquired goodwill and intangible assets with indefinite lives as well as other long-lived assets for impairment.

During
2008, we recorded pre-tax impairment charges of $1,364.4 million related to goodwill and other assets in both our Contract and Retail segments. These
non-cash charges consisted of $1,201.5 million of goodwill impairment in both the Contract ($815.5 million) and Retail ($386.0 million) segments; $107.1 million
of estimated impairment of trade names in our Retail

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segment
and $55.8 million of impairment related to fixed assets in our Retail segment. The measurement of impairment of goodwill and indefinite life intangibles includes estimates and
assumptions which are inherently subject to significant uncertainties. In testing for impairment, we measured the estimated fair value of our reporting units, intangibles and fixed assets based upon
discounted future operating cash flows using a discount rate reflecting a market-based, weighted average cost of capital. In estimating future cash flows, we used our internal budgets and operating
plans, which include assumptions about retail store openings and closures, the consolidation of our distribution networks and improvements in our supply chain, and future growth prospects. Differences
in assumptions used in projecting future operating cash flows and in selecting an appropriate discount rate could have a significant impact on the determination of fair value and impairment amounts.
As a result of these impairment charges, there is no goodwill remaining in the Company's consolidated financial statements at December 27, 2008.

Recently Issued or Newly Adopted Accounting Standards

Following are summaries of recently issued accounting pronouncements that have either been recently adopted or that may become
applicable to the preparation of our consolidated financial statements in the future.

In
September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). This Standard defines fair value,
establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS 157 is effective for fiscal years
beginning after November 15, 2007 for financial assets and liabilities, as well as for any other assets and liabilities that are carried at fair value on a recurring basis in financial
statements. In November 2007, the FASB provided a one year deferral for the implementation of SFAS 157 for other nonfinancial assets and liabilities. The
Company adopted the provisions of SFAS 157 for financial assets and liabilities effective at the beginning of fiscal year 2008. The provisions of SFAS 157 had no impact on our financial
statements. We do not anticipate that adoption of SFAS 157 for non-financial assets and liabilities will have a material impact on our financial condition, results of operations or
cash flows.

In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilitiesincluding an amendment of SFAS 115"
("SFAS 159"). SFAS 159 allows entities to choose, at specific election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be
measured at fair value. If a company elects the fair value option for an eligible item, changes in that item's fair value in subsequent reporting periods must be recognized in current earnings. The
Company did not elect to adopt the fair value option provided under SFAS 159.

In
December 2007, the FASB issued SFAS No. 141R, "Business Combinations" ("SFAS 141R"). This statement amends SFAS 141 and provides revised guidance for recognizing
and measuring assets acquired and liabilities assumed in a business combination. This statement also requires that transaction costs in a business combination be expensed as incurred. SFAS 141R
applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.
SFAS 141R will impact the accounting for business combinations completed on or after December 28, 2008.

In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements" ("SFAS 160"). This statement requires noncontrolling
interests (previously referred to as minority interests) to be treated as a separate component of equity, not as a liability or other item outside of permanent equity. SFAS 160 applies to the
accounting for noncontrolling interests and transactions with noncontrolling interest holders in consolidated financial statements and is effective for periods beginning on or after
December 15, 2008. Earlier application is

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prohibited.
SFAS 160 will be applied prospectively to all noncontrolling interests, including those that arose before the effective date, except that comparative prior period information must
be recast to classify noncontrolling interests in equity and provide other disclosures required by SFAS 160. The Company anticipates that adoption of SFAS 160 will affect the
presentation of certain elements of the Company's financial statements, but that these changes in presentation will not have a material impact on the financial statements.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information concerning quantitative and qualitative disclosures about market risk is included under the caption "Disclosures of Financial Market
Risks" in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-K and is incorporated by reference herein.

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ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

OfficeMax Incorporated and SubsidiariesConsolidated Statements of Income (Loss)

Fiscal Year EndedDecember 27,
2008

December 29,
2007

December 30,
2006(thousands, except per-share amounts)Sales

$
8,267,008

$
9,081,962

$
8,965,707Cost of goods sold and occupancy costs


6,212,591


6,771,657


6,656,497Gross profit


2,054,417


2,310,305


2,309,210Operating expensesOperating and selling


1,555,615


1,633,606


1,641,147General and administrative


306,940


332,528


355,945Goodwill and other asset impairments


2,100,212





Other operating, net


27,851





146,216Operating income (loss)


(1,936,201
)

344,171


165,902Interest expense


(113,641
)

(121,271
)

(123,082
)Interest income


57,564


87,940


89,723Other income (expense), net


19,878


26,687


39,335Income (loss) from continuing operations before income taxes and minority interest


(1,972,400
)

337,527


171,878Income tax benefit (expense)


306,481


(125,282
)

(68,741
)Income (loss) from continuing operations before minority interest


(1,665,919
)

212,245


103,137Minority interest, net of income tax


7,987


(4,872
)

(4,083
)Income (loss) from continuing operations


(1,657,932
)

207,373


99,054Discontinued operationsOperating loss








(17,972
)Income tax benefit








10,639Loss from discontinued operations








(7,333
)Net income (loss)


(1,657,932
)

207,373


91,721Preferred dividends


(3,663
)

(3,961
)

(4,037
)Net income (loss) applicable to common shareholders

$
(1,661,595
)
$
203,412

$
87,684Basic income (loss) per common shareContinuing operations

$
(21.90
)
$
2.70

$
1.30Discontinued operations








(0.10
)Basic income (loss) per common share

$
(21.90
)
$
2.70

$
1.20Diluted income (loss) per common shareContinuing operations

$
(21.90
)
$
2.66

$
1.29Discontinued operations








(0.10
)Diluted income (loss) per common share

$
(21.90
)
$
2.66

$
1.19


See accompanying notes to consolidated financial statements

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Table of Contents

OfficeMax Incorporated and SubsidiariesConsolidated Balance Sheets

December 27,
2008

December 29,
2007(thousands, except share and
per-share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
170,779

$
152,637Receivables, net


561,509


714,951Related party receivables


5,337


5,927Inventories


949,401


1,088,312Deferred income taxes and receivables


105,140


185,070Other current assets


62,850


57,804Total current assets


1,855,016


2,204,701Property and equipment:Land and land improvements


38,720


44,737Buildings and improvements


473,188


441,989Machinery and equipment


777,371


792,883Total property and equipment


1,289,279


1,279,609Accumulated depreciation


(798,551
)

(698,954
)Net property and equipment


490,728


580,655Goodwill





1,216,804Intangible assets, net


81,793


199,720Investments in affiliates


175,000


175,000Timber notes receivable


899,250


1,635,000Restricted investments


2,125


22,377Deferred income taxes


436,182


Other non-current assets


233,489


249,511Total assets

$
4,173,583

$
6,283,768


See accompanying notes to consolidated financial statements

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Table of Contents

OfficeMax Incorporated and SubsidiariesConsolidated Balance Sheets

December 27,
2008

December 29,
2007(thousands, except share and
per-share amounts)LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Current portion of debt

$
64,452

$
49,024Accounts payable:Trade


727,424


831,101Related parties


28,373


30,184Income tax payable


18,288


33,887Accrued expenses and other current liabilities:Compensation and benefits


112,041


125,983Other


231,339


285,110Liabilities related to assets held for sale


15,554


15,420Total current liabilities


1,197,471


1,370,709Long-term debt:Long-term debt, less current portion


289,922


349,421Timber notes securitized


1,470,000


1,470,000Total long-term debt


1,759,922


1,819,421Other long-term obligations:Compensation and benefits


502,447


200,283Deferred gain on sale of assets


179,757


179,757Deferred income taxes





154,362Other long-term obligations


222,112


248,622Total other long-term obligations


904,316


783,024Minority interest


21,871


32,042Commitments and contingent liabilitiesShareholders' equity:Preferred stockno par value; 10,000,000 shares authorized; Series D ESOP: $.01 stated value; 945,899 and 1,110,867 shares
outstanding


42,565


49,989Common stock$2.50 par value; 200,000,000 shares authorized; 75,977,152 and 75,397,094 shares outstanding


189,943


188,481Additional paid-in capital


925,328


922,414Retained earnings (accumulated deficit)


(600,095
)

1,095,950Accumulated other comprehensive income (loss)


(267,738
)

21,738Total shareholders' equity


290,003


2,278,572Total liabilities and shareholders' equity

$
4,173,583

$
6,283,768


See accompanying notes to consolidated financial statements

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Table of Contents

OfficeMax Incorporated and SubsidiariesConsolidated Statements of Cash Flows

Fiscal Year EndedDecember 27, 2008

December 29,
2007

December 30,
2006(thousands)Cash provided by (used for) operations:Net income (loss)

$
(1,657,932
)
$
207,373

$
91,721Items in net income (loss) not using (providing) cash:Earnings from affiliates and minority interest, net of income tax


(7,705
)

(1,193
)

(1,790
)Depreciation and amortization


142,896


131,573


127,812Non-cash impairment charges


2,114,044





Non-cash deferred taxes on impairment charges


(357,313
)




Pension and other postretirement benefits expense


1,874


8,159


13,239Other


329


32,096


39,114Changes other than from acquisition of business:Receivables


119,133


(139,120
)

29,126Inventories


98,111


(3,585
)

43,001Accounts payable and accrued liabilities


(137,716
)

(228,269
)

8,662Current and deferred income taxes


(40,698
)

(11,521
)

58,683Other


(51,346
)

75,091


(33,929
)Cash provided by operations


223,677


70,604


375,639Cash provided by (used for) investment:Expenditures for property and equipment


(143,968
)

(140,843
)

(174,769
)Acquisition of businesses and facilities, net of cash acquired





(1,325
)

(1,500
)Proceeds from sale of restricted investments


20,252





Proceeds from sales of assets


11,592


3,234


12,333Other








Cash used for investment


(112,124
)

(138,934
)

(163,936
)Cash used for financing:Cash dividends paid:Common stock


(45,474
)

(45,142
)

(43,509
)Preferred stock


(2,003
)

(3,961
)

(4,037
)(47,477
)

(49,103
)

(47,546
)Short-term borrowings (repayments), net


(1,974
)

14,197


(18,666
)Payments of long-term debt


(53,944
)

(25,751
)

(65,610
)Borrowings of long-term debt


15,928





Purchase of Series D preferred stock


(7,376
)

(4,621
)

Proceeds from exercise of stock options





2,653


129,966Other


8,709





(33
)Cash used for financing


(86,134
)

(62,625
)

(1,889
)Effect of exchange rates on cash and cash equivalents


(7,277
)

1,522


58Increase (decrease) in cash and cash equivalents


18,142


(129,433
)

209,872Balance at beginning of the year


152,637


282,070


72,198Balance at end of the year

$
170,779

$
152,637

$
282,070


See accompanying notes to consolidated financial statements

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Table of Contents

OfficeMax Incorporated and SubsidiariesConsolidated Statements of Shareholders' Equity

For the Fiscal Years ended December 27, 2008, December 29, 2007 and December 30, 2006Common
Shares
Outstanding



Preferred
Stock

Common
Stock

Additional
Paid-In
Capital

Retained
Earnings
(Accumulated
Deficit)

Accumulated
Other
Comprehensive
Income (Loss)

Total
Share-
holders'
Equity(thousands, except share amounts)70,804,612

Balance at December 31, 2005

$
54,735

$
176,977

$
747,805

$
898,283

$
(142,121
)
$
1,735,679Comprehensive incomeNet income











91,721





91,721Other comprehensive incomeCumulative foreign currency translation adjustment














11,581


11,581Minimum pension liability adjustment, net of tax














26,634


26,634Other comprehensive income














38,215


38,215Comprehensive income
















$
129,936Adjustment from initial adoption of SFAS No. 158,
net of tax














11,911


11,911Cash dividends declaredCommon stock











(44,136
)




(44,136
)Preferred stock











(4,037
)




(4,037
)Restricted stock








24,116








24,11646,940

Restricted stock vested





117


(117
)







3,993,857

Stock options exercised





9,985


119,982








129,967(907
)
Treasury stock cancellations





(2
)

(31
)







(33
)58,718

Other





149


2,093


(1
)




2,24174,903,220

Balance at December 30, 2006

$
54,735

$
187,226

$
893,848

$
941,830

$
(91,995
)
$
1,985,644Comprehensive incomeNet income











207,373





207,373Other comprehensive incomeCumulative foreign currency translation adjustment














59,977


59,977Minimum pension liability adjustment, net of tax














53,756


53,756Other comprehensive income














113,733


113,733Comprehensive income (loss)
















$
321,106Adjustment from initial adoption of FIN 48











(3,959
)




(3,959
)Cash dividends declaredCommon stock











(45,333
)




(45,333
)Preferred stock











(3,961
)




(3,961
)Restricted stock








26,437








26,437301,443

Restricted stock vested





767


(767
)







187,843

Stock options exercised





470


5,447








5,9174,588

Other


(4,746
)

18


(2,551
)







(7,279
)75,397,094

Balance at December 29, 2007

$
49,989

$
188,481

$
922,414

$
1,095,950

$
21,738

$
2,278,572Comprehensive income (loss)Net income











(1,657,932
)




(1,657,932
)Other comprehensive incomeCumulative foreign currency translation adjustment














(83,758
)

(83,758
)Minimum pension liability adjustment, net of tax














(205,718
)

(205,718
)Other comprehensive income














(289,476
)

(289,476
)Comprehensive income (loss)
















$
(1,947,408
)Cash dividends declaredCommon stock











(34,220
)




(34,220
)Preferred stock











(3,663
)




(3,663
)Restricted stock








93








93571,727

Restricted stock vested





1,436


(1,436
)







8,331

Other


(7,424
)

26


4,257


(230
)




(3,371
)75,977,152

Balance at December 27, 2008

$
42,565

$
189,943

$
925,328

$
(600,095
)
$
(267,738
)
$
290,003


See accompanying notes to consolidated financial statements

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Table of Contents

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.

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Foreign Currency Translation

Local currencies are considered the functional currencies for the Company's operations outside the United States. Assets and
liabilities of foreign operations are translated into U.S. dollars at the rate of exchange in effect at the balance sheet date with the related translation adjustments reported in stockholders' equity
as a component of accumulated other comprehensive income (loss). Revenues and expenses are translated into U.S. dollars at average monthly exchange rates prevailing during the year. Foreign currency
transaction gains and losses related to assets and liabilities that are denominated in a currency other than the functional currency are reported in the Consolidated Statements of Income (Loss) in the
period they occur.

Revenue Recognition

Revenue from the sale of products is recognized at the time both title and the risk of ownership are transferred to the customer, which
generally occurs upon 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 and other sales incentives.

Revenue
from transactions in which the Company acts as an agent or broker is reported on a commission basis. Revenue from the sale of extended warranty contracts is reported on a
commission basis at the time of sale, except in a limited number of states where state law specifies the Company as the legal obligor. In such states, the revenue from the sale of extended warranty
contracts is recorded at the gross amount and recognized ratably over the contract period. The performance obligations and risk of loss associated with extended warranty contracts sold by the Company
are assumed by an unrelated third party. Costs associated with these contracts are recognized in the same period as the related revenue.

Fees
for shipping and handling charged to customers in connection with sale transactions are included in sales. Costs related to shipping and handling are included in cost of goods sold
and occupancy costs. Taxes collected from customers are accounted for on a net basis and are excluded from sales.

Cash and Cash Equivalents

Cash equivalents include short-term debt instruments that have an original maturity of three months or less at the date of
purchase. The Company's banking arrangements allow the Company to fund outstanding checks when presented to the financial institution for payment. This cash management practice frequently results in a
net cash overdraft position for accounting purposes, which occurs when total issued checks exceed available cash balances at a single financial institution. The Company records its outstanding checks
in Accounts payableTrade in the Consolidated Balance Sheets, and the net change in overdrafts in the Accounts payableTrade line item within the cash flows from operating
activities section of the Consolidated Statements of Cash Flows.

Accounts Receivable

Accounts receivable relate primarily to amounts owed by customers for trade sales of products and services and amounts due from vendors
under volume purchase rebate, cooperative advertising and various other marketing programs. An allowance for doubtful accounts is recorded to provide for estimated losses resulting from uncollectible
accounts, and is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable. Management believes that the Company's exposure to credit risk
associated
with accounts receivable is limited due to the size and diversity of its customer and vendor base, which extends across many different industries and geographic regions.

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The
Company has an agreement with a third-party service provider that manages the Company's private label credit card program and directly extends credit to customers. We are currently
attempting to restructure our private label credit card program as the current card program terminates on May 31, 2009. A new program may not be done on terms acceptable to us, or at all.

At
December 27, 2008 and December 29, 2007, the Company had allowances for doubtful accounts of $11.2 million and $14.5 million, respectively.

Vendor Rebates and Allowances

The Company participates in various cooperative advertising and other marketing programs with its vendors. The Company also
participates in volume purchase rebate programs, some of which provide for tiered rebates based on defined levels of purchase volume. These arrangements enable the Company to receive reimbursement for
costs incurred 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 the vendor arrangement and estimates of qualifying purchases during the rebate
program period. These estimates are reviewed on a quarterly basis and adjusted for changes in anticipated product sales and expected purchase levels. Volume-based rebates and allowances earned are
initially recorded as a reduction in the cost of merchandise inventories and are included in operations (as a reduction in cost of goods sold) in the period the related product is sold. Amounts
received under other promotional programs are generally event-based and are recognized at the time of the event as a reduction of cost of goods sold or inventory, as appropriate, based on the nature
of the promotion and the terms of the vendor agreement. Advertising and other allowances that represent reimbursements of specific, incremental and identifiable costs incurred to promote vendors'
products are recorded as a reduction of operating and selling expenses in the period the expense is incurred.

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 and product obsolescence. If the estimated realizable value is less than cost, the
inventory value is reduced to its estimated realizable value.

Throughout
the year, the Company performs physical inventory counts at all locations. For periods subsequent to each location's last physical inventory count, an allowance for estimated
shrinkage is provided based on historical shrink results and current business trends.

Property and Equipment

Property and equipment are recorded at cost. The Company calculates depreciation using the straight-line method over the
estimated useful lives of the assets or the terms of the related leases. The estimated useful lives of depreciable assets are generally as follows: building and improvements, 5 to 40 years;
furniture and equipment, 1.5 to 5 years; and machinery, equipment and delivery trucks, 5 to 10 years. Leasehold improvements are amortized over the lesser of the term of the lease,
including any option periods that management believes are probable of exercise, or the estimated lives of the improvements, which generally range from 5 to 15 years.

Long-Lived Asset Impairment

In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets," long-lived assets, such as property, plant, and equipment, capitalized software costs and purchased intangibles subject to amortization, are

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reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company determined that in 2008 there were
indicators of impairment and completed tests for impairment in the second and fourth quarters of the year. Recoverability of assets to be held and used is measured by a comparison of the carrying
amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment
charge is recognized equal to the amount by which the carrying amount of the asset exceeds the fair value of the asset, which is estimated based on discounted cash flows.

Goodwill and Intangible Assets

The Company accounts for goodwill and other indefinite life intangible assets in accordance with SFAS No. 142, "Goodwill and
Other Intangible Assets." Goodwill represents the excess of purchase price and related direct costs over the value assigned to the net tangible and identifiable intangible assets of businesses
acquired. Goodwill and intangible assets with indefinite lives are not amortized, but are tested for impairment at least annually, or more frequently if events and circumstances indicate that the
asset might be impaired, using a fair-value-based approach. The Company's annual impairment testing date is January 1. In 2008, indicators of impairment were present and the Company tested
for impairment in the second and fourth quarters of the year. An impairment loss is recognized to the extent that the carrying amount exceeds the asset's fair value. This determination is made at the
reporting unit level and consists of two steps. First, the Company determines the fair value of a reporting unit and compares it to its carrying amount. Second, if the carrying amount of a reporting
unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit's goodwill over the implied fair value of that goodwill. The implied fair
value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation in accordance with SFAS No. 141, "Business Combinations."
The residual fair value after this allocation is the implied fair value of the reporting unit goodwill.

Intangible
assets represent the values assigned to trade names, customer lists and relationships, noncompete agreements and exclusive distribution rights of businesses acquired. Trade
name assets have an indefinite life and are not amortized. All other intangible assets are amortized on a straight-line basis over their expected useful lives, which range from three to
20 years. (See Note 4, "Goodwill, Intangible Assets and Other Long-Lived Assets" for additional information related to goodwill and intangible assets.)

Investments in Affiliates

Investments in affiliated companies are accounted for under the cost method if the Company does not exercise significant influence over
the affiliated company. At December 27, 2008 and December 29, 2007, the Company held an investment in affiliates of Boise
Cascade, L.L.C., which is accounted for under the cost method. (See Note 10, "Investments in Affiliates," for additional information related to the Company's investments in affiliates.)

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 amortized using the straight-line method over the expected life of the software, which is typically three to five years. Deferred charges in the
Consolidated Balance Sheets include unamortized capitalized software costs of $37.9 million and $45.6 million at December 27, 2008 and December 29, 2007, respectively.
Amortization of capitalized software costs totaled $18.7 million, $15.2 million and $17.7 million in 2008, 2007 and 2006, respectively.

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Software
development costs that do not meet the criteria for capitalization are expensed as incurred.

Pension and Other Postretirement Benefits

The Company sponsors noncontributory defined benefit pension plans covering certain terminated employees, vested employees, retirees,
and some active OfficeMax, Contract employees. The Company also sponsors various retiree medical benefit plans. The type of retiree medical benefits and the extent of coverage vary based on employee
classification, date of retirement, location, and other factors. The Company explicitly reserves the right to amend or terminate its retiree medical plans at any time, subject only to constraints, if
any, imposed by the terms of collective bargaining agreements. Amendment or termination may significantly affect the amount of expense incurred.

The
Company recognizes the funded status of its defined benefit pension, retiree healthcare and other postretirement plans in the Consolidated Balance Sheets, with changes in the funded
status recognized through accumulated other comprehensive income (loss), net of tax, in the year in which the changes occur. Actuarially-determined liabilities related to pension and postretirement
benefits are recorded based on estimates and assumptions. Key factors used in developing estimates of these liabilities include assumptions related to discount rates, rates of return on investments,
future compensation costs, healthcare cost trends, benefit payment patterns and other factors.

The
Company measures changes in the funded status of its plans using actuarial models that use an attribution approach that generally spreads recognition of the effects of individual
events over the estimated service lives of the employees in the plan. The attribution approach assumes that employees render service over their service lives on a relatively smooth basis and as such,
presumes that the income statement effects of pension or postretirement benefit plans should follow the same pattern. Net pension and postretirement benefit income or expense is also determined using
assumptions which include expected long-term rates of return on plan assets and discount rates. The Company bases the discount rate assumption on the rates of return on
high-quality bonds currently available and expected to be available during the period to maturity of the pension benefits. The long-term asset return assumption is based on the
average rate of earnings expected on invested funds, and considers several factors including the asset allocation, actual historical rates of return, expected rates of return and external data.

The
Company's policy is to fund its pension plans based upon actuarial recommendations and in accordance with applicable laws and income tax regulations. Pension benefits are primarily
paid through trusts funded by the Company. All of the Company's postretirement medical plans are unfunded. The Company pays postretirement benefits directly to the participants.

Facility Closure Reserves

The Company conducts regular reviews of its real estate portfolio to identify underperforming facilities, and closes those facilities
that are no longer strategically or economically viable. The Company accounts for facility closure costs that are not related to a purchase business combination in accordance with SFAS No. 146,
"Accounting for Costs Associated with Exit or Disposal Activities." In accordance with SFAS No. 146, the Company records a liability for the cost associated with a facility closure at its fair
value in the period in which the liability is incurred, which is the location's cease-use date. Upon closure, unrecoverable costs are included in facility closure reserves on the
Consolidated Balance Sheets and include provisions for the present value of future lease obligations, less contractual or estimated sublease income. Accretion expense is recognized over the life of
the payments.

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Environmental Matters

In accounting for landfill closure costs related to the sold paper, forest products and timberland assets following the guidance is
SFAS No. 143, "Accounting for Asset Retirement Obligations," the Company records legal obligations associated with the retirement of long-lived assets at their fair value at the
time the obligations are incurred. Upon initial recognition of a liability, that cost is capitalized as part of the related long-lived asset and depreciated on a straight-line
basis over the remaining estimated useful life of the asset. The asset retirement obligation for estimated closure and closed-site monitoring costs recorded on the Company's Consolidated
Balance Sheet was $4.2 million for both December 27, 2008 and December 29, 2007. These obligations are related to assets held for sale.

Environmental
liabilities that relate to the operation of the sold paper, forest products and timberland assets prior to the closing of the Sale transaction were retained by the Company.
These environmental obligations are not within the scope of SFAS No. 143, and the Company accrues for losses associated with these types of environmental remediation obligations when such
losses are probable and reasonably estimable according to the guidance in SOP 96-1, "Environmental Remediation Liabilities." The liabilities for environmental obligations are not
discounted to their present value. (See Note 17, Legal Proceedings and Contingencies, for additional information.)

Self-insurance

The Company is self-insured for certain losses related to workers' compensation and medical claims as well as general and
auto liability. The expected ultimate cost for claims incurred is recognized as a liability in the Consolidated Balance Sheets. The expected ultimate cost of claims incurred is estimated based
principally on analysis of historical claims data and actuarial estimates of claims incurred but not reported. Losses are accrued and charged to operations when it is probable that a loss has been
incurred and the amount can be reasonably estimated.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The
Company is subject to tax audits in numerous jurisdictions in the U.S. and around the world. Tax audits by their very nature are often complex and can require several years to
complete. In the normal course of business, the Company is subject to challenges from the IRS and other tax authorities regarding amounts of taxes due. These challenges may alter the timing or amount
of taxable income or deductions, or the allocation of income among tax jurisdictions. The benefits of tax positions that are more likely than not of being sustained upon audit based on the technical
merits of the tax position are recognized in the consolidated financial statements; positions that do not meet this threshold are not recognized. For tax positions that are at least more likely than
not of being sustained upon audit, the largest amount of the benefit that is more likely than not of being sustained is recognized in the consolidated financial statements. (See "Note 7, Income
Taxes," for a discussion of the adoption impact of FIN 48.)

Accruals
for income tax exposures, including penalties and interest, expected to be settled within the next year are included in accrued expenses and other current liabilities with the
remainder included in other long-term obligations in the Consolidated Balance Sheets. Interest and

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penalties
related to income tax exposures are recognized as incurred and included in income tax expense in the Consolidated Statements of Income (Loss).

Advertising and Catalog Costs

Advertising costs are either expensed the first time the advertising takes place or, in the case of direct-response advertising,
capitalized and charged to expense in the periods in which the related sales occur. Advertising expense was $232.1 million in 2008, $242.6 million in 2007 and $240.4 million in
2006, and is recorded in operating and selling expenses in the Consolidated Statements of Income (Loss). Capitalized catalog costs, which are included in other current assets in the Consolidated
Balance Sheets, totaled $10.4 million at December 27, 2008, and $7.6 million at December 29, 2007.

Pre-Opening Expenses

The Company incurs certain non-capital expenses prior to the opening of a store. These pre-opening expenses
consist primarily of straight-line rent from the date of possession, store payroll, and supplies and are expensed as incurred and reflected in operating and selling expenses. In 2008, 2007
and 2006, the Company recorded approximately $10.0 million, $10.2 million and $5.6 million in pre-opening costs, respectively.

Leasing Arrangements

The Company conducts a substantial portion of its business in leased properties. Some of the Company's leases contain escalation
clauses and renewal options. In accordance with SFAS No. 13, "Accounting for Leases," as amended by SFAS No. 29, "Determining Contingent Rentals," and Financial Accounting Standards
Board (FASB) Technical Bulletin 85-3, "Accounting for Operating Leases with Scheduled Rent Increases," the Company recognizes rental expense for leases that contain predetermined fixed
escalation clauses on a straight-line basis over the expected term of the lease. The difference between the amounts charged to expense and the contractual minimum lease payment is recorded
in other long-term liabilities in the Consolidated Balance Sheets. At December 27, 2008 and December 29, 2007, other long-term liabilities included approximately
$74.3 million and $73.7 million, respectively, related to these future escalation clauses.

The
expected term of a lease is calculated from the date the Company first takes possession of the facility, including any periods of free rent and any option or renewal periods
management believes are probable of exercise. This expected term is used in the determination of whether a lease is capital or operating and in the calculation of straight-line rent
expense. Rent abatements and escalations are considered in the calculation of minimum lease payments in the Company's capital lease tests and in determining straight-line rent expense for
operating leases. Straight-line rent expense is also adjusted to reflect any allowances or reimbursements provided by the lessor.

Derivative Instruments and Hedging Activities

The Company accounts for derivatives and hedging activities in accordance with SFAS No. 133, "Accounting for Derivative
Instruments and Certain Hedging Activities," as amended, which requires that all derivative instruments be recorded on the balance sheet at fair value. Changes in the fair value of derivative
instruments are recorded in current earnings or deferred in accumulated other comprehensive income (loss), depending on whether a derivative is designated as, and is effective as, a hedge and on the
type of hedging transaction. Changes in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive income (loss) until the underlying hedged
transactions are recognized in earnings, at which time any deferred hedging gains or losses are also recorded in earnings. If a derivative

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instrument
is designated as a fair value hedge, changes in the fair value of the instrument are reported in current earnings and offset the change in fair value of the hedged assets, liabilities or
firm commitments. The ineffective portion of an instrument's change in fair value is immediately recognized in earnings. Instruments that do not meet the criteria for hedge accounting and contracts
for which the Company has not elected hedge accounting, are marked to fair value with unrealized gains or losses reported in earnings. The Company has no significant outstanding hedge activity at
year-end.

Recently Issued or Newly Adopted Accounting Standards

Following are summaries of recently issued accounting pronouncements that have either been recently adopted or that may become
applicable to the preparation of our consolidated financial statements in the future.

In
September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). This Standard defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007 for financial
assets and liabilities, as well as for any other assets and liabilities that are carried at fair value on a recurring basis in financial statements. In November 2007, the FASB provided a one year
deferral for the implementation of SFAS 157 for other nonfinancial assets and liabilities. The Company adopted the provisions of SFAS 157 for financial assets and liabilities effective
at the beginning of fiscal year 2008. The provisions of SFAS 157 had no impact on our financial statements. We do not anticipate that the adoption of SFAS 157 for
non-financial assets and liabilities will have a material impact on our financial condition, results of operations or cash flows.

In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilitiesincluding an amendment of SFAS 115"
("SFAS 159"). SFAS 159 allows entities to choose, at specific election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be
measured at fair value. If a company elects the fair value option for an eligible item, changes in that item's fair value in subsequent reporting periods must be recognized in current earnings. The
Company did not elect to adopt the fair value option provided under SFAS 159.

In
December 2007, the FASB issued SFAS No. 141R, "Business Combinations" ("SFAS 141R"). This statement amends SFAS 141 and provides revised guidance for recognizing
and measuring assets acquired and liabilities assumed in a business combination. This statement also requires that transaction costs in a business combination be expensed as incurred. SFAS 141R
applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.
SFAS 141R will impact the accounting for business combinations completed on or after December 28, 2008.

In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements" ("SFAS 160"). This statement requires noncontrolling
interests (previously referred to as minority interests) to be treated as a separate component of equity, not as a liability or other item outside of permanent equity. SFAS 160 applies to the
accounting for noncontrolling interests and transactions with noncontrolling interest holders in consolidated financial statements and is effective for periods beginning on or after
December 15, 2008. Earlier application is prohibited. SFAS 160 will be applied prospectively to all noncontrolling interests, including those that arose before the effective date, except
that comparative prior period information must be recast to classify noncontrolling interests in equity and provide other disclosures required by SFAS 160. The Company anticipates that adoption
of SFAS 160 will affect the presentation of certain elements of the Company's financial statements, but these changes in presentation will not have a material impact on our financial
statements.

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Prior Period Revisions

Certain amounts included in the prior year financial statements have been revised to conform with the current year presentation. In the
current year, amounts for the sub-components of property and equipment in the Consolidated Balance Sheet were revised to correct the amounts reported within each sub-component.
As a result,
land and land improvements and buildings and improvements increased by $6.5 million and $48.0 million, respectively, while machinery and equipment decreased by $54.5 million from
the amounts previously reported. There was no change to total property and equipment. Also in the current year, amounts related to earnings from affiliates, previously recorded as "Other operating,
net" in the Consolidated Statements of Income (Loss), were reclassified into general and administrative expenses due to their immateriality. The effect of these revisions on the amounts reported for
2007 and 2006 was not material.

2.    Significant Charges and Credits

Other Operating, Net

The components of Other operating, net in the Consolidated Statements of Income (Loss) are as follows:

2008

2007

2006(thousands)Integration activities and facility closure costs, net (see Note 5)

$
4,691

$


$
135,932Severance, reorganization and other related activities


26,260





10,284Gain related to Voyageur Panel


(3,100
)




$
27,851

$


$
146,216


During 2008, we recorded a $23.9 million pre-tax severance charge related to various sales and field reorganizations 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 year-end) and $2.4 million related to the
consolidation of the Contract segment's manufacturing facilities in New Zealand. In 2008 we also recorded $8.7 million of charges related to four domestic retail stores where we have signed
lease commitments but have decided not to open the stores due to the current economic environment. This charge was offset by a $4.0 million favorable adjustment relating to our other lease
obligations. We also recorded a $3.1 million pre-tax gain primarily related to the release of a warranty escrow established at the time of sale of our legacy Voyageur Panel business
in 2004.

During
2006, we closed 109 underperforming, domestic retail stores and recorded a pre-tax charge of $89.5 million, comprised of $11.3 million for employee
severance, asset write-off and impairment and other closure costs and $78.2 million of estimated future lease obligations. In September 2005, the board of directors approved a plan
to relocate and consolidate our corporate headquarters in Naperville, Illinois. We began the consolidation and relocation process in the latter half of 2005, and in 2006 we expensed
$46.4 million related to the effort. The consolidation and relocation process was completed during the second half of 2006. We also announced the reorganization of our Contract segment in 2006
and recorded a pre-tax charge of $7.3 million for employee severance related to the reorganization. The Contract segment also recorded an additional $3.0 million of costs
during 2006, primarily related to a facility closure and employee severance.

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Other Income (Expense), Net

The components of "Other income (expense), net" in the Consolidated Statements of Income (Loss) are as follows:

2008

2007

2006(thousands)Distribution from affiliates (see Note 10)

$
20,480

$
(824
)
$
Additional Consideration Agreement





32,542


48,048Receivable securitization program costs





(5,562
)

(10,626
)Other


(602
)

531


1,913$
19,878

$
26,687

$
39,335


In 2008, we recorded $20.5 million of pre-tax income related to a distribution received from affiliates of Boise Cascade,
L.L.C. We receive distributions from Boise Cascade, L.L.C. for the income tax liability associated with allocated earnings of Boise Cascade, L.L.C. The distribution received in 2008 was primarily
related to the income tax liability associated with the allocated gain on the sale by Boise Cascade, L.L.C. of a majority interest in its paper and packaging and newsprint businesses.

In
2007 and 2006, we recognized pre-tax income and received cash payments from Boise Cascade L.L.C. of $32.5 million and $48.0 million, respectively, related to
the Additional Consideration Agreement that was entered into in connection with the 2004 sale of our paper, forest products and timberland assets (the "Sale").

Prior
to July of 2007, the Company sold an undivided interest in a defined pool of receivables and continued to service the sold receivables. The expense above relates primarily to the
loss on sale of receivables and the discount on retained interests, as well as facility fees and professional fees associated with the program.

3.    Timber Notes

In October 2004, as part of the Sale, we sold our timberland assets in exchange for $15 million in cash plus credit-enhanced timber installment notes in
the amount of $1,635 million (the "Installment Notes"). The Installment Notes were issued by single-member limited liability companies formed by Boise Cascade, L.L.C. (the "Note Issuers"). The
Installment Notes are 15-year
non-amortizing obligations and were issued in two equal $817.5 million tranches bearing interest at 5.11% and 4.98%, respectively. In order to support the issuance of the
Installment Notes, at the time of the Sale, Boise Cascade, L.L.C. transferred a total of $1,635 million in cash ($817.5 million each) to Lehman Brothers Holdings Inc. ("Lehman")
and Wachovia Corporation ("Wachovia")(which was later purchased by Wells Fargo & Co.). Lehman and Wachovia issued collateral notes (the "Collateral Notes") to the Note Issuers. The Collateral Notes
were substantially similar to the Installment Notes, except that the Collateral Notes pay interest quarterly and the Installment Notes pay interest semi-annually. The only assets of the
Note Issuers are the Collateral Notes. There is a spread between the interest rates on the Collateral Notes and the Installment Notes to cover the operating expenses of the Note Issuers and the cost
of the guarantees discussed below. Concurrently with the issuance of the Installment and Collateral Notes, Lehman and Wachovia guaranteed the respective Installment Notes and the Note Issuers pledged
the Collateral Notes as security for the performance of the Installment Note obligations. The note structure allowed us to defer recognition of the capital gain and payment of the related taxes on the
Sale until 2019, the scheduled maturity date of the Installment Notes.

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In
December 2004, we completed a securitization transaction in which the Company's interests in the Installment Notes and related guarantees were transferred to wholly-owned bankruptcy
remote subsidiaries, OMX Timber Finance Investments I, L.L.C. ("OMX Timber I") and OMX Timber Finance Investments II, L.L.C. ("OMX Timber II") (collectively the "OMXSPEs") that were originally
intended to be qualifying special purpose entities. The OMXSPEs subsequently failed to qualify and are currently variable interest entities. The OMXSPEs pledged the Installment Notes and related
guarantees and issued Securitization Notes in the amount of $1,470 million ($735 million through the structure supported by the Lehman guaranty and $735 million through the
structure supported by the Wachovia guaranty). Recourse on the Securitization Notes is limited to the applicable pledged Installment Notes and underlying Lehman and Wachovia guarantees. 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.

As
a result of these transactions, we received $1,470 million ($735 million from investors in the Securitization Notes guaranteed by Lehman) in cash from the OMXSPEs, and
over 15 years the OMXSPEs were expected to earn approximately $82.5 million per year in interest income on the Installment Notes receivable ($41.8 million from interest on the
Lehman guaranteed Installment Note) and expected to incur annual interest expense of approximately $80.5 million on the Securitization Notes ($40.7 million from interest on the
Securitization Notes guaranteed by Lehman). The pledged Installment Notes receivable and Securitization Notes payable were scheduled to mature in 2020 and 2019, respectively. The Securitization Notes
have an initial term that is approximately three months shorter than the Installment Notes. We expected to refinance our ownership of the Installment Notes in 2019 with a short-term
secured borrowing to bridge the period from initial maturity of the Securitization Notes to the maturity of the Installment Notes.

The
Note Issuers are variable-interest entities (the "VIEs") under FASB Interpretation 46R, "Consolidation of Variable Interest Entities." The OMXSPEs are considered to be the
primary beneficiary of the Note Issuers, and therefore, the VIEs are required to be consolidated with the OMXSPEs, which are also the issuers of the Securitization Notes. The accounts of the OMXSPEs
have been consolidated into those of their ultimate parent, OfficeMax. The effect of our consolidation of the OMXSPEs is that the securitization transaction is treated as a financing, and both the
Installment Notes receivable and the Securitization Notes payable are reflected in our Consolidated Balance Sheets.

On
September 15, 2008, Lehman, guarantor of half of the Installment Notes and the Securitization Notes, filed a petition in the United States Bankruptcy Court for the Southern
District of New York seeking relief under chapter 11 of the United States Bankruptcy Code. On September 17, 2008, attorneys for OMX Timber II delivered notices to the trustee
under the indenture applicable to the Securitization Notes guaranteed by Lehman, to the issuer of the Installment Notes and to Lehman, which stated that as a result of Lehman's bankruptcy filing, an
event of default had occurred under the $817.5 million in Installment Note guaranteed by Lehman (the "Lehman Guaranteed Installment Note"). These notices stated that OMX Timber II was
assessing all rights and remedies available to it, was not waiving or agreeing to forbear in the exercise of any of its rights, and reserved the right to exercise any rights available to it in the
future. OMX Timber II does not believe the events described in its notices constituted an event of default under the indenture.

We
concluded in late October that due to the uncertainty of collection of the Lehman Guaranteed Installment Note as a result of the Lehman bankruptcy, the carrying value of the Lehman
Guaranteed Installment Note was impaired. Accordingly, we recorded a non-cash impairment charge of $735.8 million in the third quarter of 2008. We are required for accounting
purposes to assess the carrying value of assets whenever circumstances indicate that a decline in value may have occurred. However, under current generally accepted accounting principles, we are

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required
to continue to recognize the liability related to the Securitization Notes guaranteed by Lehman (the "Lehman Guaranteed Securitization Notes") until such time as the liability has been
"extinguished", under the guidance in paragraph 16 of SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities," which will be when the
Lehman Guaranteed Installment Note and the guaranty are transferred to and accepted by the note holders. We expect that this will occur no later than the date when the assets of Lehman are distributed
and the bankruptcy is finalized. Accordingly, the non-cash charge is expected to be followed by a non-cash gain in a later period when the liability is legally extinguished.

On
October 29, 2008, Lehman failed to pay the $21.5 million interest payment due to the Note Issuer. The Note Issuer did not make the $20.9 million interest payment
due to OMX Timber II, and, in turn, OMX Timber II did not make its $20.4 million interest payment due to the holders of the Securitization Notes guaranteed by Lehman because OMX
Timber II is only obligated to make such payments to the extent it receives payments on the related Installment Notes. We stopped accruing interest income on the Lehman Guaranteed Installment
Notes as of the last payment date, April 29, 2008.
However, we recorded the ongoing interest expense on the Securitization Notes guaranteed by Lehman, as required until the default date, October 29, 2008. This resulted in $20.4 million
of additional interest expense that will only be paid if the corresponding interest income is collected.

At
the time of the Sale, we generated a tax gain and recognized the related deferred tax liability. The timber note structure allowed the Company to defer the resulting tax liability of
$543 million until 2019, the maturity date for the Installment Notes. Due to the impairment, approximately half of this tax gain was accelerated into 2008 and the related taxes were due. We had
available alternative minimum tax credits, a portion of which resulted from prior tax payments related to the Sale, which were used to reduce the cash tax payment triggered by the Lehman default. As a
result, the net cash taxes due relating to the accelerated recognition of the triggered gain was approximately $30 million, which we paid prior to year-end.

Finally,
per the timber note agreements, the OMXSPE was expected to receive approximately $41 million in interest annually under the Lehman Guaranteed Installment Note. This
interest income was to fund approximately $40 million in interest payable annually to holders of the Securitization Notes guaranteed by Lehman, which would have resulted in net interest income
to us of approximately $1 million. Continued nonpayment under the installment note guaranteed by Lehman or the related Lehman guaranty will result in a loss of this $1 million of annual
net interest income.

4.    Goodwill, Intangible Assets and Other Long-lived Assets

Impairment

During 2008, the Company recorded non-cash impairment charges associated with goodwill, intangible assets and other
long-lived assets of $1,364.4 million before taxes. After adjusting for taxes and a favorable impact to minority interest, the reduction in net income was $1,294.7 million
after-tax or $17.05 per diluted share. These charges were recognized in the second and fourth quarters, and were measured and recognized following the guidance in SFAS No. 142,
"Goodwill and Other Intangible Assets," ("SFAS 142") and SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," ("SFAS 144") which require
that the carrying value of long-lived assets be tested for impairment whenever circumstances indicate that impairment may exist. During the second quarter, the Company recorded an
estimated impairment charge of $935.3 million, before taxes, and reported that the final analysis of second quarter impairment would be completed by year-end. During the fourth
quarter, the Company completed the final analysis of the second quarter impairment and recorded an additional non-cash pre-tax impairment charge of $103.8 million.
During the fourth quarter, the Company recorded non-cash pre-tax charges of $325.3 million, associated with the interim impairment test performed in that period. These
non-cash charges consisted of $1,201.5 million of goodwill impairment in both the Contract ($815.5 million)

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and
Retail ($386.0 million) segments; $107.1 million of impairment of trade names in our Retail segment; and $55.8 million of impairment related to fixed assets in our Retail
segment. The impairment charges related to goodwill, intangibles and other long-lived assets are included in the caption "Goodwill and other asset impairments" in the Consolidated
Statements of Income (Loss). These charges resulted in a full impairment of our goodwill balances and, as a result, there will be no future annual assessment of goodwill.

In
the second quarter of 2008, management concluded that indicators of potential impairment were present and that an evaluation of the carrying values of goodwill, intangibles and other
long-lived assets was therefore required. Management reached the conclusion that an impairment test was required to be performed during the second quarter based on its assessment of the
conditions that contributed to the Company's sustained low stock price and reduced market capitalization relative to the book value of its equity, including generally weak economic conditions,
macroeconomic factors impacting industry business conditions, recent and forecasted operating performance, and continued tightening of the credit markets, along with other factors. These conditions
had resulted in lower levels of consumer and business spending, intense competition and industry consolidation. Weighing all of these factors, management determined that indicators of potential
impairment had occurred and an interim test for impairment was required as of the end of the second quarter of 2008.

In
the fourth quarter of 2008, due to a further decline in our market capitalization in relation to the book value of equity, a worsening economic environment, increasing unemployment
and a decline in actual results and forecasted operating performance, management concluded that indicators of potential impairment were again present and that a new interim test for impairment was
required as of the end of the fourth quarter.

Under
SFAS 142, the measurement of impairment of goodwill consists of two steps. In the first step, the Company compares the fair value of each reporting unit to its carrying
value. If the results of the first test indicate that the fair value of the reporting unit is less than the carrying value, SFAS 142 requires the Company to perform a second step, which is to
determine the implied fair value of each reporting unit's goodwill, and to compare it to the carrying value of the reporting unit's goodwill. An impairment loss is recognized for the excess of
carrying value over the implied fair value of reporting unit goodwill. In the second quarter, the Company determined that the fair value of both of the Company's reporting units was less than their
corresponding carrying values, thereby requiring the second step to be performed for both reporting units. The activities in the second step include hypothetically valuing all of the tangible and
intangible assets of the impaired reporting unit as if the reporting unit had been acquired in a business combination. Due to the extensive work involved in performing these valuations, management
initially recognized an estimated impairment loss in the second quarter and indicated that the final impairment measurement would be completed by year-end. As noted above, the Company
completed the second step of the second quarter impairment test and recorded an additional non-cash impairment change in the fourth quarter. As a result of the final second quarter
impairment work, the goodwill of the Retail reporting unit was fully impaired, while the goodwill of the Contract reporting unit was partially impaired. During the fourth quarter, the Company
performed new impairment tests for the remaining Contract goodwill, which resulted in the recording of an additional non-cash pre-tax impairment charge of
$252.7 million. As a result of the fourth quarter impairment, the Contract goodwill was fully impaired.

Under
SFAS 142, the measurement of impairment of indefinite-lived intangible assets consists of calculating the implied fair value and comparing that value to the intangible
asset's carrying value. The implied fair value is calculated based on the estimated future discounted cash flows associated with the intangible asset. In the second quarter, the Company recorded
estimated impairment of the trade names in the Retail reporting unit of $80.0 million, before taxes. Upon

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completion
of the second quarter impairment test in the fourth quarter, the Company recorded an additional $5.0 million non-cash, pre-tax impairment charge for the Retail trade
names. During the fourth quarter, the Company performed an additional review of the carrying value of the remaining Retail trade name and recognized a non-cash, pre-tax
impairment charge of $22.1 million.

In
addition, as required under SFAS 144, interim impairment tests of the Company's long-lived assets were also performed in both the second and fourth quarters.
Impairment testing under SFAS No. 144 is also a two-step process. In the first step ("the recoverability test"), a determination of potential impairment is made based on a
comparison
of the estimated future undiscounted cash flows derived from the asset to its carrying amount. If estimated future undiscounted cash flows are less than the carrying value of the asset, then the
second step is completed and the impairment loss is measured as the excess of the carrying value over the fair value of the asset, with fair value determined based on estimated future discounted cash
flows. The Company performed the recoverability test for all the long-lived assets of each reporting unit, in aggregate. The recoverability test did not identify potential impairment for
these asset groups. The Company also performed the recoverability test for the assets of individual retail stores ("store assets" or "stores"), which consist primarily of leasehold improvements and
fixtures. The recoverability test did identify potential impairment at certain stores. As a result we completed the second step and concluded that $50.5 million of store assets were required to
be written-off.

As
a result of these reviews for the full year of 2008, the Company recorded non-cash pre-tax impairment charges consisting of $1,201.5 million for goodwill,
$107.1 million for trade names and $55.8 million for fixed assets. Of these charges, $548.9 million were recorded in the Retail segment and $815.5 million were recorded in
the Contract segment. The impairment charge included a portion of goodwill that was not deductible for tax purposes, resulting in a tax benefit of $63.2 million, or approximately 4.6% of the
pre-tax charge amount.

Goodwill

Changes in the carrying amount of goodwill by segment are as follows:

OfficeMax,
Contract

OfficeMax,
Retail

TotalBalance at December 30, 2006(1)

$
802,009

$
414,023

$
1,216,032Effect of foreign currency translation


28,032





28,032Businesses acquired


763





763Purchase accounting adjustments(2)





(28,023
)

(28,023
)Balance at December 29, 2007


830,804


386,000


1,216,804Effect of foreign currency translation


(15,322
)




(15,322
)Impairment charges


(815,482
)

(386,000
)

(1,201,482
)Balance at December 27, 2008

$


$


$



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Acquired Intangible Assets

Intangible assets represent the values assigned to trade names, customer lists and relationships, noncompete agreements and exclusive
distribution rights of businesses acquired. The trade name assets have an indefinite life and are not amortized. As discussed above, the carrying values of trade names were reviewed in connection with
the Company's interim impairment reviews in 2008, and approximately $107.1 million was written off in 2008 as part of the impairment charges described above. No other impairments of intangible
assets were required or recorded in 2008, 2007 or 2006. All other intangible assets are amortized on a straight-line basis over their expected useful lives. Customer lists and
relationships are amortized over three to 20 years, noncompete agreements over their terms, which are generally three to five years, and exclusive distribution rights over ten years. Intangible
assets consisted of the following at year-end:

2008Gross Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount(thousands)Trade names

$
66,000

$


$
66,000Customer lists and relationships


34,767


(21,848
)

12,919Noncompete agreements


12,844


(12,844
)

Exclusive distribution rights


5,255


(2,381
)

2,874$
118,866

$
(37,073
)
$
81,793




2007Gross Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount(thousands)Trade names

$
173,150

$


$
173,150Customer lists and relationships


43,381


(23,072
)

20,309Noncompete agreements


12,884


(10,842
)

2,042Exclusive distribution rights


6,977


(2,758
)

4,219$
236,392

$
(36,672
)
$
199,720


Intangible asset amortization expense totaled $5.4 million in 2008, $7.0 million in 2007 and $7.3 million in 2006. The
estimated amortization expense is $1.6 million in 2009 and 2010, $1.3 million in 2011 and $1.2 million in 2012 to 2014.

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The
changes in intangible gross carrying amounts from December 29, 2007 to December 27, 2008 were as follows:

2007 Gross
Carrying Amount

Impairment
Charges

Effect of
Foreign
Currency
Translation

2008 Gross
Carrying AmountTrade names

$
173,150

$
107,150

$


$
66,000Customer lists and relationships


43,381





8,614


34,767Noncompete agreements


12,884





40


12,844Exclusive distribution rights


6,977





1,722


5,255$
236,392

$
107,150

$
10,376

$
118,866


5.    Integration Activities and Facility Closures

The Company conducts regular reviews of its real estate portfolio to identify underperforming facilities, and closes those facilities that are no longer
strategically or economically viable. The Company records a liability for the cost associated with a facility closure at its fair value in the period in which the liability is incurred, which is the
location's cease-use date. Upon closure, unrecoverable costs are included in facility closure reserves on the Consolidated Balance Sheets and include provisions for the present value of
future lease obligations, less contractual or estimated sublease income. Accretion expense is recognized over the life of the payments.

During
2006, the Company closed 109 underperforming domestic retail stores and recorded a pre-tax charge of $89.5 million, comprised of $11.3 million for
employee severance, asset write-off and impairment and other closure costs and $78.2 million of estimated future lease obligations. In September 2005, the board of directors
approved a plan to relocate and
consolidate our retail headquarters in Shaker Heights, Ohio and existing corporate headquarters in Itasca, Illinois into a new facility in Naperville, Illinois. We began the consolidation and
relocation process in the latter half of 2005 and throughout 2006, we incurred expenses of $46.4 million. The consolidation and relocation process was completed during the second half of 2006.
We also announced the reorganization of our Contract segment in 2006 and recorded a pre-tax charge of $7.3 million for employee severance related to the reorganization. The Contract
segment also recorded an additional $3.0 million of costs during 2006, primarily related to a facility closure and employee severance.

In
the second quarter of 2008, the Company recorded $3.1 million of charges principally to close five stores and reduced rent and severance accruals by $3.4 million
relating to prior closed stores. In the fourth quarter of 2008, the Company recorded $8.7 million of charges related to four domestic retail stores where we have signed lease commitments, but
have decided not to open the stores due to the current economic environment. This charge was partially offset by reduced rent accruals of $4.0 million on other store lease obligations.

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Integration
and facility closure reserve account activity during 2008, 2007 and 2006, including activity related to the reorganization of the Contract segment, retail store closures and
headquarters consolidation was as follows:

Lease\
Contract
Terminations

Severance\
Retention

Asset
Write-off and
Impairment

Other

Total(thousands)Balance at December 31, 2005

$
91,455

$
21,502

$


$
739

$
113,696Charges to income


89,934


19,407


9,543


27,332


146,216Change in goodwill


(11,000
)










(11,000
)Changes to estimated costs included in income





(1,080
)







(1,080
)Cash payments


(68,596
)

(28,991
)




(18,951
)

(116,538
)Non-cash charges








(9,543
)

(5,978
)

(15,521
)Accretion


6,031











6,031Balance at December 30, 2006

$
107,824

$
10,838

$


$
3,142

$
121,804Cash payments


(38,196
)

(8,424
)




(1,725
)

(48,345
)Accretion


3,603











3,603Balance at December 29, 2007

$
73,231

$
2,414

$


$
1,417

$
77,062Charges to income


11,774


79








11,853Changes to estimated costs included in income


(5,982
)

(1,414
)







(7,396
)Cash payments


(33,227
)

(1,068
)




(934
)

(35,229
)Accretion


2,643











2,643Balance at December 27, 2008

$
48,439

$
11

$


$
483

$
48,933


At December 27, 2008, approximately $14.3 million of the reserve liability was included in accrued liabilities, other, and
$34.6 million was included in other long-term liabilities. At December 29, 2007, approximately $22.2 million of the reserve liability was included in accrued
liabilities, other, and $54.9 million was included in other long-term liabilities. At December 27, 2008, the integration activities and facility closures reserve included
approximately $106 million for estimated future lease obligations, net of anticipated sublease income of approximately $57 million.

6.    Net Income (Loss) Per Common Share

Basic net income (loss) per share is calculated using net earnings available to common stockholders divided by the weighted-average number of shares of common
stock outstanding during the year. Diluted net income (loss) per share is similar to basic net income (loss) per share except that the weighted-average number of shares of common stock outstanding is
increased to include, if their inclusion is dilutive, the number of additional shares of common stock that would have been outstanding assuming the issuance of all potentially dilutive shares, such as
common stock to be issued upon exercise of options and non-vested restricted shares, and the conversion

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of
outstanding preferred stock. Net income (loss) per common share was determined by dividing net income (loss), as adjusted, by weighted average shares outstanding as follows:

2008

2007

2006(thousands, except per-share amounts)Basic income (loss) per common share:Income (loss) from continuing operations

$
(1,657,932
)
$
207,373

$
99,054Preferred dividends


(3,663
)

(3,961
)

(4,037
)Basic income (loss) from continuing operations


(1,661,595
)

203,412


95,017Loss from discontinued operations








(7,333
)Basic income (loss)

$
(1,661,595
)
$
203,412

$
87,684Average sharesbasic


75,862


75,274


73,142Basic income (loss) per common share:Continuing operations

$
(21.90
)
$
2.70

$
1.30Discontinued operations








(0.10
)Basic income (loss) per common share

$
(21.90
)
$
2.70

$
1.20Diluted income (loss) per common share:Basic income (loss) from continuing operations

$
(1,661,595
)
$
203,412

$
95,017Diluted income (loss) from continuing operations(a)


(1,661,595
)

203,412


95,017Loss from discontinued operations








(7,333
)Diluted income (loss)

$
(1,661,595
)
$
203,412

$
87,684Average sharesbasic(a)


75,862


75,274


73,142Restricted stock, stock options and other(b)





1,100


571Average sharesdiluted


75,862


76,374


73,713Diluted income (loss) per common share:Continuing operations

$
(21.90
)
$
2.66

$
1.29Discontinued operations








(.10
)Diluted income (loss) per common share

$
(21.90
)
$
2.66

$
1.19


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7.    Income Taxes

The income tax (provision) benefit attributable to income (loss) from continuing operations as shown in the Consolidated Statements of Income (Loss) includes the
following components:

2008

2007

2006(thousands)Current income tax (provision) benefitFederal

$
(10,111
)
$
(25,710
)
$
(10,014
)State


(24,166
)

(11,380
)

(4,079
)Foreign


(23,282
)

(24,582
)

(17,816
)(57,559
)

(61,672
)

(31,909
)Deferred income tax (provision) benefitFederal


274,376


(61,882
)

(31,521
)State


76,129


(4,785
)

(6,428
)Foreign


13,535


3,057


1,117364,040


(63,610
)

(36,832
)$
306,481

$
(125,282
)
$
(68,741
)


There was no impact due to discontinued operations during 2008 and 2007. Income tax benefit attributable to loss from discontinued operations was
$10.6 million for 2006.

During
2008, 2007 and 2006, the Company made cash payments for income taxes, net of refunds received, of $91.5 million, $89.5 million and $0.6 million, respectively.

The
income tax provision attributable to income (loss) from continuing operations for the years ended December 27, 2008, December 29, 2007 and December 30, 2006
differed from the amounts computed by applying the statutory U.S. Federal income tax rate of 35% to pre-tax income (loss) from continuing operations as a result of the following:

2008

2007

2006(thousands)Tax (provision) benefit at statutory rate

$
690,340

$
(118,184
)
$
(60,157
)State taxes, net of federal effect


29,041


(11,030
)

(5,907
)Foreign tax provision differential


(3,283
)

106


(5,262
)Impact of goodwill impairment


(418,920
)




NOL valuation allowance and credits


1,291


434


(6,498
)Change in tax contingency liability


(3,394
)

755


1,925Tax settlement, net of other charges


6,830


1,582


5,240ESOP dividend deduction


1,166


1,317


1,413Other, net


3,410


(262
)

505$
306,481

$
(125,282
)
$
(68,741
)


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The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at
year-end are presented below.

2008

2007(thousands)Current deferred tax assets (liabilities) attributable toAccrued expenses

$
38,229

$
50,045Net operating loss carryforwards


3,561


7,213Allowances for receivables and rebates


18,219


29,605Compensation and benefits


7,627


23,397Inventory


11,863


3,780Property and equipment


13,911


16,754Alternative minimum tax and other credit carryforwards





53,919Other


5,858


357Total current net deferred tax assets

$
99,268

$
185,070Noncurrent deferred tax assets (liabilities) attributable toTimberland installment gain


(266,798
)

(543,763
)Deferred gain on Boise Cascade, LLC Investment


69,925


69,925Alternative minimum tax and other credit carryforwards


28,303


188,033Impaired Lehman note receivable


286,207


Compensation and benefits


212,418


103,065Net operating loss carryforwards


24,239


40,381Reserves


20,734


24,864Investments


23,413


6,399Goodwill


9,774


(30,802
)Other non-current liabilities


9,938


5,179Undistributed earnings


(4,606
)

(4,955
)Deferred charges


2,268


2,086Property and equipment


33,988


15,505Other temporary differences


12


21449,815


(124,062
)Less: Valuation allowance


(13,633
)

(30,300
)Total noncurrent net deferred tax assets (liabilities)

$
436,182

$
(154,362
)


As discussed in Note 3, "Timber Notes Receivable", as part of the Sale, the Company sold its timberlands for cash and credit enhanced
installment notes. The note structure allowed the Company to defer recognition of the capital gain and payment of the related taxes (approximately $543 million) on the sale until 2019, the
scheduled maturity date of the installment notes. On September 15, 2008, Lehman, the guarantor of one half of the installment notes, filed a bankruptcy petition seeking relief under
chapter 11 of the United States Bankruptcy Code. Therefore, approximately half of the deferred tax gain was accelerated and the related taxes became due and payable in 2008. The Company had
available alternative minimum tax credits, a portion which resulted from tax payments related to the Sale, which were used to reduce the cash taxes triggered by the Lehman bankruptcy. All cash tax
payments due related to the installment note have been made as of December 27, 2008. The Company has an income tax receivable balance of $5.9 million as of December 27, 2008.

In
assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during

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the
periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning
strategies in making the assessment of whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management believes it is more likely than not that
the Company will realize the benefits of these deductible differences, except for certain state net operating losses as noted below. The amount of the deferred tax assets considered realizable,
however, could be reduced if estimates of future taxable income during the carryforward period are reduced.

The
Company has a deferred tax asset related to net operating loss carryforwards for Federal income tax purposes of $3.5 million which expire in 2014, and alternative minimum tax
credit carryforwards of approximately $27.7 million, which are available to reduce future regular Federal income taxes, if any, over an indefinite period. The Company also has deferred tax
assets related to
various state net operating losses of $10.6 million, net of the valuation allowance, that expire between 2009 and 2025.

The
Company has established a valuation allowance related to net operating loss carryforwards in jurisdictions where the Company has substantially reduced operations because management
believes it is more likely than not that these items will expire before the Company is able to realize their benefits. The valuation allowance was $13.6 million and $30.3 million at
December 27, 2008 and December 29, 2007, respectively. As a result of the recognition of the gain from the Lehman bankruptcy and default on the installment notes during 2008, the Company
was able to release a portion of its valuation allowance to offset the state income taxes due. The valuation allowance was also reduced due to expiration of certain carryforwards for which a valuation
allowance had been established in prior years, and the impact of recognizing the state effects of the Federal audit settled during 2008. Periodically, the valuation allowance is reviewed and adjusted
based on management's assessments of realizable deferred tax assets. In addition during 2008, the Company realized that its ability to utilize its Federal Foreign Tax Credit carry forward could result
in it expiring before being realized.

Pre-tax
income (loss) related to continuing operations from domestic and foreign sources is as follows:

2008

2007

2006(thousands)Domestic

$
(1,953,946
)
$
272,169

$
124,643Foreign


(18,454
)

65,358


47,235Total pre-tax income (loss)

$
(1,972,400
)
$
337,527

$
171,878


As of December 27, 2008, the Company had undistributed earnings and profits of foreign operations of approximately $269 million. The
Company has not provided any U.S. income tax related to jurisdictions for which it has determined that it has permanently reinvested its earnings. The Company has provided for $4.6 million in
Federal income taxes related to the anticipated repatriation of earnings from its investment in a Mexican joint venture, net of foreign tax credit.

The
Company adopted FASB Interpretation ("FIN") No. 48, "Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109" effective at
the beginning of fiscal year 2007. This Interpretation clarifies the accounting for uncertainty in income taxes recognized in accordance with SFAS No. 109, "Accounting for Income Taxes." The
Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It
also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods,

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disclosure
and transition. As of December 27, 2008, the Company had $20.4 million of total gross unrecognized tax benefits. The reconciliation of the beginning and ending gross
unrecognized tax benefits is as follows:

Amount(thousands)Balance at December 29, 2007

$
33,128Increase related to prior year tax positions


2,147Decrease related to prior year tax positions


(4,123
)Increase related to current year tax positions


2,775Settlements


(13,547
)Balance at December 27, 2008

$
20,380


The total gross unrecognized tax benefits at December 27, 2008, represent the amount of unrecognized tax benefits that, if recognized,
would favorably affect the effective income tax rate in future periods. Any adjustments would result from the effective settlement of tax positions with various tax authorities. The effective tax rate
for 2008 benefited from the recognition of $6.8 million in previously unrecognized tax benefits due to the settlement of a federal income tax audit through the 2005 tax year.

The
Company or its subsidiaries file income tax returns in the U.S. Federal jurisdiction, and multiple state and foreign jurisdictions. Years prior to 2006 are no longer subject to U.S.
Federal income tax examination. The Company is no longer subject to state income tax examinations by tax authorities in its major state jurisdictions for years before 2002.

The
Company recognizes accrued interest and penalties associated with uncertain tax positions as part of income tax expense. As of December 27, 2008, the Company had
$2.3 million of accrued interest and penalties associated with uncertain tax positions. Income tax benefit for 2008 includes a benefit of $3.1 million related to interest and penalties,
reflecting interest accrued less the effect of adjustments on settlement.

8.    Leases

The Company leases its retail stores as well as certain other property and equipment under operating leases. These leases are noncancelable and generally contain
multiple renewal options for periods ranging from three to five years, and require the Company to pay all executory costs such as maintenance and insurance. Rental payments include minimum rentals
plus, in some cases, contingent rentals based on a percentage of sales above specified minimums. Rental expense for operating leases included the following components:

2008

2007

2006(thousands)Minimum rentals

$
360,294

$
341,067

$
343,203Contingent rentals


886


908


763Sublease rentals


(1,013
)

(1,258
)

(1,660
)$
360,167

$
340,717

$
342,306


For operating leases with remaining terms of more than one year, the minimum lease payment requirements are: $377.8 million for 2009,
$342.8 million for 2010, $299.1 million for 2011, $244.2 million for 2012, $195.5 million for 2013 and $520.7 million thereafter. These minimum lease payments do not
include contingent rental payments that may be due based on a percentage of sales in excess of stipulated amounts. These future minimum lease payment requirements have not

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been
reduced by $45.1 million of minimum sublease rentals due in the future under noncancelable subleases. These sublease rentals include amounts related to closed stores and other facilities
that are accounted for in the integration activities and facility closures reserve. See "Note 5, Integration Activities and Facility Closures."

The
Company capitalizes lease obligations for which it assumes substantially all property rights and risks of ownership. The Company did not have any material capital leases during any
of the periods presented.

9.    Discontinued Operations

In December 2004, our board of directors authorized management to pursue the divestiture of a facility near Elma, Washington that manufactured integrated
wood-polymer building materials. As a result, the Company recorded the facility's assets as held for sale on the Consolidated Balance Sheets and reported the results of its operations as
discontinued operations beginning in 2004. During 2005, the Company experienced unexpected difficulties in achieving anticipated levels of production at the facility, which delayed the process of
identifying and qualifying a buyer for the business. During the first quarter of 2006, the Company ceased operations at the facility and recorded a pre-tax charge of $18.0 million
for contract termination and other closure costs. These charges and expenses were reflected within
discontinued operations in the Consolidated Statements of Income (Loss). As of December 27, 2008, the Company has not identified a buyer for the facility.

The
liabilities of the wood-polymer building materials facility near Elma, Washington, are included in current liabilities ($15.6 million at December 27, 2008
and $15.4 million at December 29, 2007, respectively) in the Consolidated Balance Sheets. The assets related to this facility were fully impaired in 2006, so that there is no value
recorded on the Consolidated Balance Sheets at December 27, 2008 or December 29, 2007.

10.    Investments in Affiliates

In connection with the sale of the paper, forest products and timberland assets in 2004 (the "Sale"), the Company invested $175 million in the equity units
of affiliates of the buyer, Boise Cascade, L.L.C. A portion (approximately $66 million) of the equity units received in exchange for the Company's investment carry no voting rights. This
investment is accounted for under the cost method as Boise Cascade, L.L.C. does not maintain separate ownership accounts for its members, and the Company does not have the ability to significantly
influence its operating and financial policies. This investment is included in investments in affiliates in the Consolidated Balance Sheets.

The
Boise Cascade, L.L.C. non-voting equity units accrue dividends daily at the rate of 8% per annum on the liquidation value plus accumulated dividends. Dividends accumulate
semiannually to the extent not paid in cash on the last day of June and December. The Company recognized dividend income on this investment of $6.2 million in 2008, $6.1 million in 2007
and $5.9 million in 2006. These amounts were recorded as a reduction of general and administrative expenses in the Consolidated Statements of Income (Loss).

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The Company receives distributions from affiliates of Boise Cascade, L.L.C. for the income tax liability associated with allocated earnings of Boise Cascade,
L.L.C. The portion of the tax distributions received related to non-voting equity units is recorded in the Consolidated Balance Sheets as a reduction in dividends receivable. The portion
associated with voting equity units is recorded as income in other income (expense), net (non-operating) in the Consolidated Statements of Income (Loss). During 2008 and 2007, the Company
received distributions of $23.0 million and $2.8 million, respectively. The distribution received in 2008 included an amount related to the income tax liability associated with the
allocated gain on the sale by Boise Cascade, L.L.C. of a majority interest in its paper and packaging and newsprint businesses during the first quarter of 2008.

We
review the carrying value of this investment whenever events or circumstances indicate that its fair value may be less than its carrying amount. During 2008, the Company requested and
reviewed financial information of Boise Cascade, L.L.C. and determined that there was no impairment of this investment as of December 27, 2008. The Company will continue to monitor and assess
this investment for impairment indicators.

The
investment in Boise Cascade represented a continuing involvement in the operations of the sold company. Therefore, approximately $180 million of gain realized from the sale
was deferred. This gain is expected to be recognized in earnings as the Company's investment is reduced.

11.    Debt

Debt, almost all of which is unsecured, consists of the following at year-end:

2008

2007(thousands)7.50% notes, due in 2008

$


$
29,6569.45% debentures, due in 2009


35,707


35,7076.50% notes, due in 2010


13,680


13,6807.00% notes, due in 2013





19,1007.35% debentures, due in 2016


17,967


17,967Medium-term notes, Series A, with interest rates averaging 7.8% and 7.8%, due in varying amounts annually through 2013


51,900


56,900Revenue bonds, with interest rates averaging 6.4% and 6.4%, due in varying amounts annually through 2029


189,930


189,930American & Foreign Power Company Inc. 5% debentures, due in 2030


18,526


18,526Grupo OfficeMax installment loan, due in 60 monthly installments starting in 2009 and concluding in 2014


11,202


Other indebtedness, with interest rates averaging 10.9% and 8.3%, due in varying amounts annually through 2017


16,058


17,609354,970


399,075Less unamortized discount


596


630Less current portion


64,452


49,024289,922


349,4215.42% securitized timber notes, due in 2019


735,000


735,0005.54% securitized timber notes, due in 2019


735,000


735,000$
1,759,922

$
1,819,421


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Scheduled Debt Maturities

The scheduled payments of debt, excluding timber notes due in 2019, are $64.5 million in 2009, $16.2 million in 2010,
$3.0 million in 2011, $37.6 million in 2012, $4.2 million in 2013 and $229.5 million thereafter.

Credit Agreements

Prior to July 2007, the Company sold, on a revolving basis, an undivided interest in a defined pool of receivables while retaining a
subordinated interest in a portion of the receivables. The Company continued servicing the sold receivables and charged the third-party conduits a monthly servicing fee at market rates. The program
qualified for sale treatment under SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities." This program was terminated on July 12,
2007 in connection with the Amended and Restated Loan and Security Agreement discussed below.

On
July 12, 2007, we entered into an Amended and Restated Loan and Security Agreement (the "Loan Agreement") with a group of banks. The Loan Agreement amended the Company's
existing revolving credit facility and replaced our accounts receivable securitization program. The Loan Agreement permits the Company to borrow up to a maximum of $700 million subject to a
borrowing base calculation that limits availability to a percentage of eligible accounts receivable plus a percentage of the value of eligible inventory less certain reserves. The revolving credit
facility may be increased (up to a maximum of $800 million) at the Company's request or reduced from time to time, in each case according to terms detailed in the Loan Agreement. There were no
borrowings outstanding under the Company's revolving credit facility as of December 27, 2008 or December 29, 2007. There were no borrowings under the revolving credit facility during
2008. The maximum amount outstanding under the revolving credit facility was $103.0 million during 2007. The average amount outstanding under the revolving credit facility was
$6.8 million during 2007. Letters of credit, which may be issued under the revolving credit facility up to a maximum of $250 million, reduce available borrowing capacity under the
revolving credit facility. Letters of credit issued under the revolving credit facility totaled $66.7 million as of December 27, 2008 and $85.5 million as of December 29,
2007. As of December 27, 2008, the maximum aggregate borrowing amount available under the revolver was $613.7 million and excess availability under the revolving credit facility totaled
$546.9 million. As of December 29, 2007, the maximum aggregate borrowing amount available under the revolver was $700 million and excess availability under the revolving credit
facility totaled $614.5 million. At December 27, 2008, the Company was in compliance with all covenants under the Loan Agreement. The Loan Agreement allows the payment of dividends
subject to availability restrictions and so long as no default has occurred. The Loan Agreement expires on July 12, 2012.

Borrowings
under the revolving credit facility bear interest at rates based on either the prime rate or the London Interbank Offered Rate ("LIBOR"). Margins are applied to the applicable
borrowing rates and letter of credit fees under the revolving credit facility depending on the level of average excess availability. Fees on letters of credit issued under the revolving credit
facility were charged at a weighted average rate of 0.875% during the year ended December 27, 2008. The Company is also charged an unused line fee of 0.25% on the amount by which the maximum
available credit exceeds the average daily outstanding borrowings and letters of credit.

As
of December 27, 2008, Grupo OfficeMax, our 51% owned joint venture in Mexico, had total borrowings of $22.9 million. This included $11.2 million under an
installment loan agreement that Grupo OfficeMax entered into during the third quarter of 2008. The joint venture was not in compliance with its debt covenants relating to the installment loan
agreement, but anticipates that the lending institution will provide a waiver of the covenant violations. The installment loan is due in

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60 monthly
payments beginning in the second quarter of 2009. The joint venture also has $11.7 million of short term borrowings of which $4.9 million was refinanced in the first
quarter of 2009. The remaining $6.8 million of short term borrowings is a simple revolving loan. The financing for Grupo OfficeMax is unsecured with no recourse against the Company.

During
2008, the Company made a $6.7 million capital contribution to Grupo OfficeMax, commensurate with our ownership percentage in the joint venture. The Company may need to make
additional capital contributions in the future.

Note Agreements

The indentures related to the 6.50% senior notes due in 2010 and 7.00% senior notes due in 2013 contained a number of restrictive
covenants, substantially all of which have since been eliminated and replaced with covenants contained in the Company's other public debt. In November 2008, we repurchased all of the outstanding 7.00%
senior notes using proceeds from the pledged instruments that matured in October 2008, which had been reported as restricted investments in the Consolidated Balance Sheets.

Other

We have various unsecured debt outstanding, including approximately $189.9 million of revenue bonds due in varying amounts
through 2029. Approximately $69.2 million of these obligations may be called in the near future due to a preliminary potential adverse determination regarding the exempt status of interest on
the bonds from the Internal Revenue Service ("IRS"). We have appealed the proposed IRS determination. The $69.2 million of debt is classified as long-term debt in the Consolidated
Balance Sheets as we intend to utilize funds available under our existing long-term revolving credit facility to fund any required payment.

Cash Paid for Interest

Cash payments for interest, net of interest capitalized and including interest payments related to the timber securitization notes,
were $90.0 million in 2008, $116.6 million in 2007 and $124.1 million in 2006.

12.    Financial Instruments, Derivatives and Hedging Activities

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, trade accounts receivable, other assets (non-derivatives),
short-term borrowings, trade accounts payable, and due to related party, approximate fair value because of the short maturity of these instruments. The following table presents the
carrying amounts and estimated fair values of the Company's other financial instruments at December 27, 2008 and December 29, 2007. The fair value of a financial instrument

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is
the amount at which the instrument could be exchanged in a current transaction between willing parties.

2008

2007Carrying amount

Fair value

Carrying amount

Fair value(thousands)Financial assets:Timber notes receivableWachovia

$
817.5

$
801.9

$
817.5

$
881.8Lehman


81.8


81.8


817.5


881.8Restricted investments


2.1


2.1


22.4


21.8Financial liabilities:Debt

$
355.0

$
236.7

$
398.4

$
396.6Securitization notes payableWachovia

$
735.0

$
736.8

$
735.0

$
790.9Lehman


735.0


81.8


735.0


790.9


The carrying amounts shown in the table are included in the Consolidated Balance Sheets under the indicated captions. The following methods and
assumptions were used to estimate the fair value of each class of financial instruments:



The
Company adopted SFAS No. 157, "Fair Value Measurements," at the beginning of fiscal year 2008 for financial assets and liabilities measured at fair value on a recurring basis.
The adoption of SFAS No. 157 on December 30, 2007 did not have a significant impact on the consolidated financial statements. The Company applied the fair value measurement guidance of
SFAS No. 157 in the valuation of its financial instruments.

In
establishing a fair value, SFAS No. 157 sets a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The basis of the fair value
measurement is categorized in three levels, in order of priority, as described below:

Level 1:
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:
Quoted prices in markets that are not active, or financial instruments for which all significant inputs are observable; either directly or indirectly.

Level 3:
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable; thus, reflecting assumptions about the market
participants.

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The
fair values of all of the assets and liabilities reported in the table above except for restricted investments were determined under a market approach using other relevant
information generated by market transactions involving identical or comparable instruments (Level 2 inputs). The fair values reported for restricted investments were based on quoted market
prices (Level 1 inputs).

Derivatives and Hedging Activities

Changes in interest rates and currency exchange rates expose the Company to financial market risk. Management occasionally uses
derivative financial instruments, such as interest rate swaps, forward purchase contracts and forward exchange contracts, to manage the Company's exposure to changes in interest rates on outstanding
debt instruments and to manage the Company's exposure to changes in currency exchange rates. The Company generally does not enter into derivative instruments for any purpose other than hedging the
cash flows associated with future interest payments on variable rate debt and hedging the exposure related to changes in the fair value of certain outstanding fixed rate debt instruments due to
changes in interest rates. The Company occasionally hedges interest rate risk associated with anticipated financing transactions, as well as commercial transactions and certain liabilities that are
denominated in a currency other than the currency of the operating unit entering into the underlying transaction. The Company does not speculate using derivative instruments. There were no significant
derivative financial instruments in 2007 or 2008.

The
Company uses a combination of fixed and variable rate debt to finance its operations. The debt obligations with fixed cash flows expose the Company to variability in the fair value
of outstanding debt instruments due to changes in interest rates. The Company has from time to time entered into interest rate swap agreements that effectively convert the interest rate on certain
fixed-rate debt to a variable rate. The Company has designated these interest rate swap agreements as hedges of the changes in fair value of the underlying debt obligation attributable to
changes in interest rates and accounted for them as fair value hedges. Changes in
the fair value of interest rate swaps designated as hedging instruments that effectively offset the variability in the fair value of outstanding debt obligations are reported in operations. These
amounts offset the gain or loss (that is, the change in fair value) of the hedged debt instrument that is attributable to changes in interest rates (that is, the hedged risk) which is also recognized
currently in operations. The Company has also from time to time entered into interest rate swap agreements that effectively convert floating rate debt to a fixed rate obligation. These swaps have been
designated as hedges of floating interest rate payments attributable to changes in interest rates and accounted for as cash flow hedges, with changes in the fair value of the swap recorded to
accumulated other comprehensive income (loss) until the hedged transaction occurs, at which time it is reclassified to operations.

Under
the Additional Consideration Agreement, the Sale proceeds were adjusted upward or downward based on paper prices following the Sale, subject to annual and aggregate caps. The
Company recorded changes in the fair value of the Additional Consideration Agreement in net income (loss) in the period they occurred; however, any potential payments from Boise Cascade, L.L.C. to us
were not recorded in net income (loss) until all contingencies had been satisfied, which was generally at the end of a 12-month measurement period ending on September 30. Due to
increases in actual and projected paper prices, the change in fair value of this obligation resulted in the recognition of non-operating income in our Consolidated Statements of Income
(Loss) of $48.0 million in 2006 and $32.5 million in 2007. Based upon actual and projected paper prices at December 29, 2007, we did not recognize an asset or liability in our
Consolidated Balance Sheet related to the Additional Consideration Agreement. In February 2008, Boise Cascade, L.L.C. sold a majority interest in its paper and packaging and newsprint businesses to
Aldabra 2 Acquisition

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Corp.
As a result of this transaction, the Additional Consideration Agreement terminated and no further payments will be required of either party.

13.    Retirement and Benefit Plans

Pension and Other Postretirement Benefit Plans

The Company sponsors noncontributory defined benefit pension plans covering certain terminated employees, vested employees, retirees,
and some active OfficeMax, Contract employees. The Company's salaried pension plan was closed to new entrants on
November 1, 2003, and on December 31, 2003, 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 generally based on a fixed amount per year of service. The Company's general funding policy is to make contributions to the plans in amounts
that are within the limits of deductibility under current tax regulations, and not less than the minimum contribution required by law.

The
Company also sponsors various retiree medical benefit and life insurance plans. The type of retiree benefits and the extent of coverage vary based on employee classification, date of
retirement, location, and other factors. All of the Company's postretirement medical plans are unfunded. The Company explicitly reserves the right to amend or terminate its retiree medical and life
insurance plans at any time, subject only to constraints, if any, imposed by the terms of collective bargaining agreements. Amendment or termination may significantly affect the amount of expense
incurred.

During
the first quarter of 2007, the Company made changes to its Canadian retiree medical benefit plan that eliminated benefits for certain active employees. As a result of these plan
changes, the accumulated postretirement benefit obligation was reduced by approximately $6.2 million. The plan changes were considered to be a curtailment, as defined in SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions." There was no gain related to these plan changes recognized in the Consolidated Statement of Income (Loss) for 2007.

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Obligations and Funded Status

The changes in pension and other postretirement benefit obligations and plan assets during 2008 and 2007, as well as the funded status
of the Company's plans at December 27, 2008 and December 29, 2007, were as follows:

Pension Benefits

Other Benefits2008

2007

2008

2007(thousands)Change in benefit obligation:Benefit obligation at beginning of year

$
1,292,023

$
1,381,555

$
24,281

$
31,789Service cost


2,132


1,676


237


341Interest cost


78,041


77,084


1,164


1,353Amendments











(6,191
)Actuarial (gain) loss


10,250


(67,511
)

(2,573
)

(4,717
)Changes due to exchange rates








(3,053
)

3,390Benefits paid


(106,237
)

(100,781
)

(2,474
)

(1,684
)Benefit obligation at end of year

$
1,276,209

$
1,292,023

$
17,582

$
24,281Change in plan assets:Fair value of plan assets at beginning of year

$
1,184,447

$
1,183,275

$


$
Actual return on plan assets


(250,076
)

82,816





Employer contributions


13,070


19,137


2,474


1,684Benefits paid


(106,237
)

(100,781
)

(2,474
)

(1,684
)Fair value of plan assets at end of year

$
841,204

$
1,184,447

$


$
Funded status

$
(435,005
)
$
(107,576
)
$
(17,582
)
$
(24,281
)Unrecognized actuarial loss


590,213


253,923


2,227


5,584Unrecognized prior service cost (benefit)








(34,123
)

(38,176
)Net amount recognized

$
155,208

$
146,347

$
(49,478
)
$
(56,873
)


The following table shows the amounts recognized in the Consolidated Balance Sheets related to the Company's defined benefit pension and other
postretirement benefit plans at year-end:

Pension Benefits

Other Benefits2008

2007

2008

2007(thousands)Prepaid benefit cost

$


$
10,069

$


$
Deferred income tax assets


229,593


98,777


(12,200
)

(12,658
)Accrued benefit liabilitycurrent


(4,359
)

(5,628
)

(1,746
)

(2,039
)Accrued benefit liabilitynon-current


(430,646
)

(112,017
)

(15,836
)

(22,242
)Accumulated other comprehensive income (loss)


360,620


155,146


(19,696
)

(19,934
)Net amount recognized

$
155,208

$
146,347

$
(49,478
)
$
(56,873
)


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Components of Net Periodic Benefit Cost (Income)

The components of net periodic benefit cost (income) are as follows:

Pension Benefits

Other Benefits2008

2007

2006

2008

2007

2006(thousands)Service cost

$
2,132

$
1,676

$
1,600

$
237

$
341

$
870Interest cost


78,041


77,084


74,679


1,164


1,353


1,583Expected return on plan assets


(90,078
)

(89,018
)

(87,353
)







Recognized actuarial loss


11,775


20,220


23,159


269


512


692Plan settlement/curtailment/closures expense


2,331





1,580








Amortization of prior service costs and other











(3,997
)

(4,009
)

(3,571
)Net periodic benefit cost (income)

$
4,201

$
9,962

$
13,665

$
(2,327
)
$
(1,803
)
$
(426
)


The estimated net actuarial loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net
periodic benefit cost over the next fiscal year is $21.9 million.

Assumptions

The assumptions used in accounting for the Company's plans are estimates of factors including, among other things, the amount and
timing of future benefit payments. The following table presents the key assumptions used in the measurement of the Company's benefit obligations:

Pension Benefits

Other BenefitsUnited States

Canada2008

2007

2006

2008

2007

2006

2008

2007

2006Weighted average assumptions as of year-end:Discount rate


6.20%


6.30%


5.80%


6.10%


5.90%


5.60%


7.30%


5.50%


5.00%


The following table presents the assumptions used in the measurement of net periodic benefit cost:

Pension Benefits

Other BenefitsUnited States

Canada2008

2007

2006

2008

2007

2006

2008

2007

2006Weighted average assumptions:Discount rate


6.30%


5.80%


5.60%


5.90%


5.60%


5.20%


5.50%


5.00%


5.10%Expected long-term return on plan assets


8.00%


8.00%


8.00%




















The Company bases its discount rate assumption on the rates of return available on high-quality bonds with maturities approximating
the expected period over which the pension benefits will be paid.

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The
expected long-term rate of return on plan assets assumption is based on the weighted average of expected returns for the major asset classes in which the plans' assets
are held. Asset-class expected returns are based on long-term historical returns, inflation expectations, forecasted gross domestic product and earnings growth, as well as other economic
factors. The weights assigned to each asset class are based on the Company's investment strategy. The weighted-average expected return on plan assets used in the calculation of net periodic pension
benefit cost for 2008 is 8.00%.

Effective
October 1, 2005, the healthcare cost trend rate assumptions for the U.S. plan were reduced to zero following the adoption of plan changes that reduced the Company's
medical insurance subsidy to retirees. As a result, the impact of changes in trend rates is for the Canadian plan only. The following table presents the assumed healthcare cost trend rates used in
measuring the Company's postretirement benefit obligations at December 27, 2008 and December 29, 2007:

Canada2008

2007Weighted average assumptions as of year-end:Healthcare cost trend rate assumed for next year


8.00%


8.50%Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)


5.00%


5.00%Year that the rate reaches the ultimate trend rate


2015


2015


The assumed healthcare cost trend rates have an effect on the amounts reported for the healthcare plans. A one-percentage-point change
in the assumed healthcare cost trend rates would have the following effects:

One-Percentage-Point
Increase

One-Percentage-Point
Decrease(thousands)Effect on total of service and interest cost

$
164

$
(130
)Effect on postretirement benefit obligation

$
1,539

$
(1,254
)


Plan Assets

The allocation of pension plan assets by category at December 27, 2008 and December 29, 2007 is as follows:

Asset Category

2008

2007U.S. equity securities


19.8
%

44.5
%International equity securities


8.9
%

23.0
%Global equity securities


18.1
%

Fixed-income securities


53.2
%

32.5
%100
%

100
%


The Company's Retirement Funds Investment Committee is responsible for establishing and overseeing the implementation of the investment policy for
the Company's pension plans. The investment policy is structured to optimize growth of the pension plan trust assets, while minimizing the risk of significant losses, in order to enable the plans to
satisfy their benefit payment obligations over time. Plan assets are invested primarily in U.S. equities, global equities, international equities and fixed-income securities. The Company uses benefit
payments and Company contributions as its primary rebalancing mechanisms to maintain the asset class exposures within the guideline ranges established under the investment policy.

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The
current asset allocation guidelines set forth a U.S. equity range of 15% to 25%, an international equity range of 5% to 15%, a global equity range of 15% to 25% and a fixed-income
range of 45% to 55%. Asset-class positions within the ranges are continually evaluated and adjusted based on expectations for future returns, the funded 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. At December 27, 2008 and December 29, 2007, the pension trust did not have any equity investments in the Company's common stock.

Cash Flows

Pension plan contributions include required statutory minimums and, in some years, additional discretionary amounts. During 2008, 2007
and 2006, the Company made cash contributions to its pension plans totaling $13.1 million, $19.1 million and $9.6 million, respectively. Minimum contribution requirements for 2009
are approximately $6.7 million. However, the Company may elect to make additional voluntary contributions. For further information related to pension plans, see Contractural Obligations and
Disclosures of Financial Market Risks in "Item 7.
Managements' Discussion and Analysis of Financial Condition and Results of Operations" of this Form 10K.

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

Other
Benefits(thousands)2009

$
102,253

$
1,7462010


100,908


1,6512011


99,785


1,5572012


99,100


1,4732013


97,892


1,415Years 2014-2018


473,387


6,569


Defined Contribution Plans

The Company also sponsors defined contribution plans for most of its employees. Through 2004, the Company sponsored four contributory
defined contribution savings plans for most of its salaried and hourly employees: a plan for OfficeMax, Retail employees, a plan for non-Retail salaried employees, a plan for union hourly
employees, and a plan for non-Retail, nonunion hourly employees. The plan for non-Retail salaried employees included an employee stock ownership plan ("ESOP") component through
which the Company matches contributions of eligible employees. Under that plan, the Company's Series D ESOP convertible preferred stock was allocated to eligible participants, as principal and
interest payments are made on the ESOP debt by the plan. The ESOP debt was guaranteed by the Company. (See Note 14, Shareholders' Equity for additional information related to the ESOP.) The
final principal and interest payments on the ESOP debt were made on June 30, 2004. All remaining shares were allocated to the ESOP participants as matching contributions in 2005. As a result,
Company matching contributions for ESOP participants are now made in cash. In January 2005, all of the remaining savings plans were merged into a single plan. Total Company contributions to the
defined contribution savings plans were $8.0 million in 2008, $8.1 million in 2007 and $7.8 million in 2006.

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14.    Shareholders' Equity

Preferred Stock

At December 27, 2008, 945,899 shares of 7.375% Series D ESOP convertible preferred stock were outstanding, compared with
1,110,867 shares outstanding at December 29, 2007 and 1,216,335 shares outstanding at December 30, 2006. The Series D ESOP convertible preferred stock is shown in the Consolidated
Balance Sheets at its liquidation preference of $45 per share. This preferred stock was originally issued to the trustee of the Company's ESOP for salaried employees in 1989, and was allocated to
eligible participants through 2005. All shares outstanding have been allocated to participants in the plan. Each ESOP preferred share is entitled to one vote, bears an annual cumulative dividend of
$3.31875 and is convertible at any time by the trustee to 0.80357 share of common stock. The ESOP preferred shares may not be redeemed for less than the liquidation preference.

Common Stock

The Company is authorized to issue 200,000,000 shares of common stock, of which 75,977,152 shares were issued and outstanding at
December 27, 2008. Of the unissued shares, 9,457,997 shares were reserved for the following purposes:

Conversion or redemption of Series D ESOP preferred stock


760,096Issuance under OfficeMax Incentive and Performance Plan


7,441,607Issuance under Key Executive Stock Option Plan


1,167,624Issuance under Director Stock Compensation Plan


7,475Issuance under Director Stock Option Plan


16,000Issuance under Key Executive Deferred Compensation Plan


8,008Issuance under 2003 Director Stock Compensation Plan


57,187


Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) includes the following:

Minimum
Pension
Liability
Adjustment

Foreign
Currency
Translation
Adjustment

Accumulated
Other
Comprehensive
Income (Loss)Balance at December 30, 2006

$
(188,963
)
$
96,968

$
(91,995
)Current-period changes, before taxes


87,435


59,977


147,412Income taxes


(33,679
)




(33,679
)Balance at December 29, 2007


(135,207
)

156,945


21,738Current-period changes, before taxes


(336,993
)

(83,758
)

(420,751
)Income taxes


131,275





131,275Balance at December 27, 2008

$
(340,925
)
$
73,187

$
(267,738
)


Share-Based Payments

The Company recognizes compensation expense from all share-based payment transactions with employees in the consolidated financial
statements at fair value.

The
Company sponsors several share-based compensation plans, which are described below. Compensation costs related to the Company's share-based plans were $0.3 million,
$26.9 million

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and
$24.7 million for 2008, 2007 and 2006, respectively. Compensation expense is generally recognized on a straight-line basis over the vesting period of grants. The total income
tax benefit recognized in the income statement for share-based compensation arrangements was $0.1 million, $10.5 million and $9.6 million for 2008, 2007 and 2006, respectively.

2003 Director Stock Compensation Plan and OfficeMax Incentive and Performance Plan

In February 2003, the Company's Board of Directors adopted the 2003 Director Stock Compensation Plan (the "2003 DSCP") and the 2003
OfficeMax Incentive and Performance Plan (the "2003 Plan"), formerly named the 2003 Boise Incentive and Performance Plan, which were approved by shareholders in April 2003.

A
total of 57,187 shares of common stock are reserved for issuance under the 2003 DSCP. Prior to December 8, 2005, the 2003 DSCP permitted non-employee directors to
elect to receive some or all of their annual retainer and meeting fees in the form of options to purchase shares of the Company's common stock. Non-employee directors who elected to
receive a portion of their compensation in the form of stock options did not receive cash for that portion of their compensation. The difference between the exercise price of the options and the
market value of the common stock on the date of grant was equal to the cash compensation that participating directors elected to forego and was recognized as compensation expense in the Consolidated
Statements of Income (Loss). On December 8, 2005, the Board of Directors amended the 2003 DSCP to eliminate the choice to receive discounted stock options. All options granted under the 2003
DSCP expire three years after the holder ceases to be a director.

The
2003 Plan was effective January 1, 2003, and replaced the Key Executive Performance Plan for Executive Officers, Key Executive Performance Plan for Key Executives/Key
Managers, 1984 Key Executive Stock Option Plan ("KESOP"), Key Executive Performance Unit Plan ("KEPUP") and Director Stock Option Plan ("DSOP"). No further grants or awards have been made under the
Key Executive Performance Plans, KESOP, KEPUP, or DSOP since 2003. A total of 7,441,607 shares of common stock are reserved for issuance under the 2003 Plan. The Company's executive officers, key
employees and nonemployee directors are eligible to receive awards under the 2003 Plan at the discretion of the Executive Compensation Committee of the Board of Directors. Eight types of awards may be
granted under the 2003 Plan, including stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares, annual incentive awards and stock
bonus awards.

Restricted Stock and Restricted Stock Units

In 2008, the Company granted to employees and nonemployee directors 1,261,404 restricted stock units ("RSUs"). The weighted-average
grant-date fair value of the RSUs was $23.00. As of December 27, 2008, 1,109,453 of these RSUs were unvested, and vest after defined service periods as follows: 35,784 units in
2009, 257,444 in 2010 and 816,225 in 2011. Nearly half of the RSUs granted to employees in 2008 also require certain performance criteria to be met. During 2008, management concluded that these
performance criteria would not be met for the 2008 plan.

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In 2007, the Company granted to employees and nonemployee directors 786,282 RSUs. The weighted-average grant-date fair value of the RSUs was $50.09.
As of December 27, 2008, 552,350 of these RSUs were unvested, and vest after defined service periods as follows: 276,175 in both 2009 and 2010. Nearly all of the RSUs granted to employees in
2007 also require certain performance criteria to be met. During 2008, management concluded that these performance criteria would not be met for the 2007 plan.

In
2006, the Company granted to employees and non-employee directors 1,621,235 RSUs. The weighted-average grant-date fair value of the RSUs was $27.36. As of
December 27, 2008, 489,809 of these RSUs remained outstanding, all of which vest after defined service periods in 2009. All of the RSUs granted to employees in 2006 also require achievement of
certain performance criteria, which have already been met.

In
2005, the Company granted to employees and nonemployee directors 728,123 RSUs. The weighted-average grant-date fair value of the RSUs was $33.15. As of December 29,
2007, 6,000 of these RSUs were unvested, and vest after defined service periods as follows: 3,000 units in both 2009 and 2010. All of the RSUs granted to employees in 2005 did not contain performance
criteria.

In
2004, the Company granted 14,765 shares of restricted stock to non-employee directors. The restricted stock granted to directors vests six months from their termination or
retirement from board service and 4,670 of these restricted stock shares remain outstanding at December 27, 2008. These RSUs did not contain performance criteria.

Restricted
stock are restricted until they vest and cannot be sold by the recipient until the restriction has lapsed. RSUs are restricted until they vest and are convertible into one
common share after the restriction has lapsed. No entries are made in the financial statements on the grant date of restricted stock and RSU awards. The Company recognizes compensation expense related
to these awards 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, management periodically reviews
actual performance against the criteria and adjusts compensation expense accordingly. In 2008, 2007 and 2006, the Company recognized $0.1 million, $26.4 million and $24.1 million,
respectively, of pre-tax compensation expense and additional paid-in capital related to restricted stock and RSU awards.

Restricted
stock and RSUs are not included as shares outstanding in the calculation of basic earnings per share, but are included in the number of shares used to calculate diluted
earnings per share as long as all applicable performance criteria are met, and their effect is dilutive. When the restriction lapses on restricted stock, the par value of the stock is reclassified
from additional paid-in-capital to common stock. When the restriction lapses on RSUs, the units are converted to unrestricted common shares and the par value of the stock is
reclassified from additional paid-in-capital to common stock. Unrestricted shares are included in shares outstanding for purposes of calculating both basic and diluted earnings
per share. Depending on the terms of the applicable grant agreement, restricted stock and RSUs may be eligible to receive all dividends declared on the Company's common shares during the vesting
period; however, such dividends are not paid until the restrictions lapse.

Stock Units

The Company has a shareholder approved deferred compensation program for certain of its executive officers that allows them to defer a
portion of their cash compensation. Previously, these officers could allocate their deferrals to a stock unit account. Each stock unit is equal in value to one share of the Company's common stock. The
Company matched deferrals used to purchase stock units with a 25% Company allocation of stock units. The value of deferred stock unit accounts is paid in shares of the Company's common stock when an
officer retires or terminates

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employment.
There were 8,008 and 9,377 stock units allocated to the accounts of these executive officers at December 27, 2008 and December 29, 2007, respectively. As a result of an
amendment to the plan, no additional deferrals can be allocated to the stock unit accounts.

Stock Options

In addition to the 2003 DSCP and the 2003 Plan discussed above, the Company has the following shareholder-approved stock option plans:
the Key Executive Stock Option Plan ("KESOP"), the Director Stock Option Plan ("DSOP") and the Director Stock Compensation Plan ("DSCP"). No further grants will be made under the KESOP, DSOP or DSCP.

The
KESOP provided for the grant of options to purchase shares of common stock to key employees of the Company. The exercise price of awards under the KESOP was equal to the fair market
value of the Company's common stock on the date the options were granted. Options granted under the KESOP expire, at the latest, ten years and one day following the grant date.

The
DSOP, which was available only to nonemployee directors, provided for annual grants of options. The exercise price of awards under the DSOP was equal to the fair market value of the
Company's common stock on the date the options were granted. The options granted under the DSOP expire upon the earlier of three years after the director ceases to be a director or ten years after the
grant date.

Under
the KESOP and DSOP, options may not, except under unusual circumstances, be exercised until one year following the grant date. Under the 2003 DSCP, options may be exercised six
months after the grant date.

A
summary of stock option activity for the years ended December 27, 2008, December 29, 2007 and December 30, 2006 is presented in the table below:

2008

2007

2006Shares

Wtd. Avg.
Ex. Price

Shares

Wtd. Avg.
Ex. Price

Shares

Wtd. Avg.
Ex. PriceBalance at beginning of year


1,596,295

$
31.84


1,753,188

$
31.81


5,759,545

$
32.39Options granted








35,000


31.39





Options exercised








(187,843
)

31.49


(3,993,857
)

32.62Options forfeited and expired


(100,500
)

30.08


(4,050
)

32.88


(12,500
)

37.57Balance at end of year


1,495,795

$
31.95


1,596,295

$
31.84


1,753,188

$
31.81Exercisable at end of year


1,400,462





1,409,896





1,522,390Weighted average fair value of options granted (Black-Scholes)







$
7.95








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Table of Contents

The following table provides summarized information about stock options outstanding at December 27, 2008:

Options Outstanding

Options ExercisableRange of Exercise Prices

Options
Outstanding

Weighted
Average
Contractual
Life (Years)

Weighted
Average
Exercise
Price

Options
Exercisable

Weighted
Average
Exercise
Price$2.50


11,171




$
2.50


11,171

$
2.50$18.00  $28.00


569,664


1.6


27.65


569,664


27.65$28.01  $39.00


914,960


3.1


34.99


819,627


35.30


The remaining compensation expense to be recognized related to outstanding stock options, net of estimated forfeitures, is approximately
$0.2 million. At December 27, 2008, the aggregate intrinsic value was $0.1 million for outstanding stock options and 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 2008 and the exercise
price, multiplied by the number of in-the-money options at the end of the quarter).

The
Company did not grant any stock options during 2008 or 2006. In 2007, the Company estimated the fair value of each option award on the date of grant using the Black-Scholes option
pricing model with the following weighted-average assumptions: risk-free interest rate of 4.5% (based on the applicable Treasury bill rate); expected dividends of 60 cents per share (based
on actual cash dividends expected to be paid); expected life of 3.0 years (based on the time
period options are expected to be outstanding based on historical experience); and expected stock price volatility of 35.5% (based on the historical volatility of the Company's common stock).

Other

In September 1995, the Company's Board of Directors authorized the purchase of up to 4.3 million shares of the Company's common
stock. As part of this authorization, the Company repurchased odd-lot shares (fewer than 100 shares) from shareholders wishing to exit their holdings in the Company's common stock. Shares
repurchased under this program are retired. The Company repurchased 50,577 shares of common stock under this authorization, including 907 shares in 2006. The Company's Board of Directors terminated
the share repurchase authorization in December 2006.

15.    Segment Information

The Company manages its business using three reportable segments: OfficeMax, Contract; OfficeMax, Retail; and Corporate and Other. Management reviews the
performance of the Company based on these segments.

OfficeMax,
Contract distributes a broad line of items for the office, including office supplies and paper, technology products and solutions and office furniture. OfficeMax, Contract
sells directly to large corporate and government offices, as well as small and medium-sized offices in the United States, Canada, Australia and New Zealand. This segment markets and sells through
field salespeople, outbound telesales, catalogs, the Internet and in some markets, including Canada, Australia and New Zealand, through office products stores. Substantially all products sold by
OfficeMax, Contract are purchased from third-party manufacturers or industry wholesalers, except office papers. OfficeMax, Contract purchases office papers primarily from the paper operations of Boise
Cascade, L.L.C., under a 12-year paper supply contract.

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OfficeMax,
Retail is a retail distributor of office supplies and paper, print and document services, technology products and solutions and office furniture. OfficeMax, Retail has
operations in the United States, Puerto Rico and the U.S. Virgin Islands. OfficeMax, Retail office supply stores feature
OfficeMax ImPress, an in-store module devoted to print-for-pay and related services. The retail segment also operates office supply stores in Mexico through a 51%
owned joint venture. Substantially all products sold by OfficeMax, Retail are purchased from third-party manufacturers or industry wholesalers, except office papers. OfficeMax, Retail purchases office
papers primarily from the paper operations of Boise Cascade, L.L.C., under the paper supply contract described above.

Corporate
and Other includes corporate support staff services and related assets and liabilities.

Management
evaluates the segments based on operating profits before interest expense, income taxes, minority interest, extraordinary items and cumulative effect of accounting changes.
The income and expense related to certain assets and liabilities that are reported in the Corporate and Other segment have been allocated to the Contract and Retail segments.

The
segments follow the accounting principles described in Note 1, Summary of Significant Accounting Policies.

No
single customer accounts for 10% or more of consolidated trade sales.

OfficeMax,
Contract has foreign operations in Canada, Australia and New Zealand. OfficeMax, Retail has foreign operations in Mexico through a 51% owned joint venture.

The
following table summarizes by geography, net sales for fiscal years 2008, 2007 and 2006, and non-current assets at each year-end:

2008

2007

2006(millions)Net salesUnited States

$
6,728.5

$
7,548.9

$
7,617.2Foreign


1,538.5


1,533.1


1,348.5$
8,267.0

$
9,082.0

$
8,965.7Non-current assetsUnited States

$
2,187.3

$
3,662.8

$
3,755.9Foreign


131.3


416.3


363.3$
2,318.6

$
4,079.1

$
4,119.2


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Segment sales to external customers by product line are as follows:

2008

2007

2006(millions)OfficeMax, ContractOffice supplies and paper

$
2,518.7

$
2,696.3

$
2,568.9Technology products


1,299.2


1,535.1


1,551.9Office furniture


492.1


584.7


593.74,310.0


4,816.1


4,714.5OfficeMax, RetailOffice supplies and paper


1,541.5


1,610.6


1,627.5Technology products


2,060.5


2,235.5


2,212.5Office furniture


355.0


419.8


411.23,957.0


4,265.9


4,251.2Total OfficeMaxOffice supplies and paper(1)

$
4,060.2

$
4,306.9

$
4,196.4Technology products(1)


3,359.7


3,770.6


3,764.4Office furniture(1)


847.1


1,004.5


1,004.9$
8,267.0

$
9,082.0

$
8,965.7


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An analysis of the Company's operations by segment is as follows:

Selected Components
of Income (Loss)Income (Loss) Before Taxes and Minority InterestSales

Earnings from Affiliates

Depreciation and Amortization

Capital Expendi-
tures

Assets

Investments In Affiliates(millions)Year Ended December 27, 2008OfficeMax, Contract

$
4,310.0

$
(657.5
)
$


$
65.6

$
34.2

$
895.4


OfficeMax, Retail


3,957.0


(505.1
)




77.2


109.8


1,504.8


8,267.0


(1,162.6
)




142.8


144.0


2,400.2


Corporate and Other





(773.6
)

6.2


0.1





1,773.4


175.0$
8,267.0

$
(1,936.2
)

6.2


142.9


144.0


4,173.6


175.0Interest expense





(113.6
)













Interest Income and other





77.4














$
8,267.0

$
(1,972.4
)
$
6.2

$
142.9

$
144.0

$
4,173.6

$
175.0Year Ended December 29, 2007OfficeMax, Contract

$
4,816.1

$
207.9

$


$
66.6

$
42.5

$
1,778.2


OfficeMax, Retail


4,265.9


173.7





64.9


98.3


2,238.5


9,082.0


381.6





131.5


140.8


4,016.7


Corporate and Other





(37.4
)

6.1


0.1





2,267.1


175.0$
9,082.0

$
344.2


6.1

$
131.6


140.8


6,283.8


175.0Interest expense





(121.3
)













Interest income and other





114.6














$
9,082.0

$
337.5

$
6.1

$
131.6

$
140.8

$
6,283.8

$
175.0Year Ended December 30, 2006OfficeMax, Contract

$
4,714.5

$
197.7

$


$
60.6

$
81.2

$
1,649.8

$
OfficeMax, Retail


4,251.2


86.3





67.1


93.6


2,406.6


8,965.7


284.0





127.7


174.8


4,056.4


Corporate and Other





(118.0
)

5.9


0.1





2,159.6


175.0$
8,965.7

$
166.0


5.9


127.8


174.8


6,216.0


175.0Interest expense





(123.1
)













Interest income and other





129.0














$
8,965.7

$
171.9

$
5.9

$
127.8

$
174.8

$
6,216.0

$
175.0


16.    Commitments and Guarantees

Commitments

The Company has commitments for minimum lease payments due under noncancelable leases and for the repayment of outstanding
long-term debt. In addition, the Company has purchase obligations for goods and services and capital expenditures that were entered into in the normal course of business.

The
securitized timber notes payable have recourse limited to the applicable pledged timber installment notes receivable and underlying guaranties. For more information, see Note 3.
"Timber Notes."

We
have liabilities associated with retirement and benefit plans. See Note 13. "Retirement and Benefit Plans" for a description of the plans and the financial implications.

Pursuant
to an Additional Consideration Agreement between OfficeMax and Boise Cascade, L.L.C. related to the Sale, the Company may have been required to make cash payments to, or
entitled to receive cash payments from, Boise Cascade, L.L.C. The Additional Consideration Agreement terminated in the first quarter of 2008.

88

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In
connection with the Sale, the Company entered into a paper supply contract with affiliates of Boise Cascade, L.L.C. under which we are obligated to purchase our North American
requirements for cut-size office paper, to the extent Boise Cascade, L.L.C. or its successor, produces such paper, until December 2012, at prices approximating market levels. The Company's
purchase obligations under the agreement will phase-out over a four-year period beginning one year after the delivery of notice of termination, but not prior to
December 31, 2012. Purchases under the agreement were $668.3 million, $702.2 million and $644.4 million for 2008, 2007 and 2006, respectively.

In
accordance with an amended and restated joint venture agreement, the minority owner of our subsidiary in Mexico, Grupo OfficeMax, can elect to put its remaining 49% interest in the
subsidiary to OfficeMax if earnings targets are achieved. Earnings targets are calculated quarterly on a rolling four-quarter basis. Accordingly, the targets can be achieved in one quarter
but not in the next. If the earnings targets are achieved and the minority owner elects to put its ownership interest, the purchase price would be equal to fair value, calculated based on both the
subsidiary's earnings for the last four quarters before interest, taxes and depreciation and amortization, and the current market multiples of similar companies. At December 27, 2008, Grupo
OfficeMax did not meet the earnings targets.

Guarantees

The Company provides guarantees, indemnifications and assurances to others, which constitute guarantees as defined under FASB
Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others."

Indemnification
obligations may arise from the Asset Purchase Agreement between OfficeMax Incorporated, OfficeMax Southern Company, Minidoka Paper Company, Forest Products Holdings,
L.L.C. and Boise Land & Timber Corp. The terms of this agreement include purchase price adjustments, which could require the Company to make additional payments in the future. Additionally, the
Company has agreed to provide indemnification with respect to a variety of obligations. These indemnification obligations are subject, in some cases, to survival periods, deductibles and caps. At
December 27, 2008, the Company is not aware of any material liabilities arising from these indemnifications.

There
are eleven operating leases that have been assigned to other parties but for which the Company remains contingently liable in the event of nonpayment by the other parties. The
lease terms vary and, assuming exercise of renewal options, extend through 2019. Annual rental payments under these leases are approximately $4.7 million.

The
Company and its affiliates enter into a wide range of indemnification arrangements in the ordinary course of business. These include tort indemnifications, tax indemnifications,
officer and director indemnifications against third-party claims arising out of arrangements to provide services to the Company and indemnifications in merger and acquisition agreements. It is
impossible to quantify the maximum potential liability under these indemnifications. At December 27, 2008, the Company is not aware of any material liabilities arising from these
indemnifications.

17.    Legal Proceedings and Contingencies

OfficeMax Incorporated and certain of its subsidiaries are named as defendants in a number of lawsuits, claims and proceedings arising out of the operation of the
paper and forest products assets prior to the closing of the Sale, for which OfficeMax agreed to retain responsibility. Also, as part of the Sale, we agreed to retain responsibility for all pending or
threatened proceedings and future proceedings alleging asbestos-related injuries arising out of the operation of the paper and forest products assets prior to the closing of the Sale. We do not
believe any of these retained proceedings are material to our business.

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We
have been notified that we are a "potentially responsible party" under the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA") or similar federal and state
laws, or have received a claim from a private party, with respect to certain sites where hazardous substances or other contaminants are or may be located. These sites relate to operations either no
longer owned by the Company or unrelated to its ongoing operations. For sites where a range of potential liability can be determined, we have established appropriate reserves. We cannot predict with
certainty the total response and remedial costs, our share of the total costs, the extent to which contributions will be available from other parties or the amount of time necessary to complete the
cleanups. Based on our investigations; our experience with respect to cleanup of hazardous substances; the fact that expenditures will, in many cases, be incurred over extended periods of time; and in
some cases, the number of solvent potentially responsible parties, we do not believe that the known actual and potential response costs will, in the aggregate, materially affect our 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. The claims vary widely and often are not specific about the plaintiffs' contacts with the Company. None of the claimants seeks damages from
us individually, and we are generally one of numerous defendants. Many of the cases filed against us have been voluntarily dismissed, although we have settled some cases. The settlements we have paid
have been covered mostly by insurance, and we believe any future settlements or judgments in these cases would be similarly covered. To date, no asbestos case against us has gone to trial, and the
nature of these cases makes any prediction as to the outcome of pending litigation inherently subjective. At this time, however, we believe our involvement in asbestos litigation is not material to
either our financial position or our results of operations.

18.    Quarterly Results of Operations (unaudited)

Summarized quarterly financial data is as follows:

2008

2007First(a)

Second(b)

Third(c)

Fourth(d)

First(e)

Second

Third

Fourth(f)(millions, except per-share and stock price information)Sales

$
2,303

$
1,985

$
2,096

$
1,883

$
2,436

$
2,132

$
2,315

$
2,199Income (loss) from continuing operations


63


(894
)

(432
)

(395
)

59


27


50


71Net income (loss)


63


(894
)

(432
)

(395
)

59


27


50


71Net income (loss) per common share from continuing operations(g)Basic


.82


(11.79
)

(5.70
)

(5.21
)

.77


.35


.65


.93Diluted


.81


(11.79
)

(5.70
)

(5.21
)

.76


.35


.64


.92Net income (loss) per common share(g)Basic


.82


(11.79
)

(5.70
)

(5.21
)

.77


.35


.65


.93Diluted


.81


(11.79
)

(5.70
)

(5.21
)

.76


.35


.64


.92Common stock dividends paid per share


.15


.15


.15


.15


.15


.15


.15


.15Common stock prices(h)High


25.64


22.22


16.23


10.96


55.40


54.38


40.16


34.89Low


17.12


13.41


9.14


2.84


47.87


38.64


30.96


20.38


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Report of Independent Registered Public Accounting Firm

The
Board of Directors and Shareholders
OfficeMax Incorporated:

We
have audited the accompanying consolidated balance sheets of OfficeMax Incorporated and subsidiaries as of December 27, 2008 and December 29, 2007, and the related
consolidated statements of income (loss), shareholders' equity, and cash flows for each of the years in the three-year period ended December 27, 2008. We also have audited OfficeMax
Incorporated's internal control over financial reporting as of December 27, 2008, based on criteria established inInternal ControlIntegrated
Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). OfficeMax Incorporated's management is responsible for these consolidated
financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these consolidated
financial statements and an opinion on the Company's internal control over financial reporting based on our audits.

We
conducted our audits in accordance with the standards 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 maintained in all material
respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our
opinions.

A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of OfficeMax Incorporated and subsidiaries as of
December 27, 2008 and December 29, 2007, and the results of their operations and their cash flows for each of the years in the three-year period ended December 27,
2008, in conformity with

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U.S.
generally accepted accounting principles. It is also our opinion, OfficeMax Incorporated maintained, in all material respects, effective internal control over financial reporting as of
December 27, 2008, based on criteria established inInternal ControlIntegrated Frameworkissued by the Committee of Sponsoring
Organizations of the Treadway Commission.

As
discussed in Note 1 to the consolidated financial statements, OfficeMax Incorporated adopted the provisions of FASB Interpretation No. 48, "Accounting for Uncertainty in
Income TaxesAn Interpretation of FASB Statement No. 109," in 2007, and Statement of Financial Accounting Standards No. 158, "Employers' Accounting for Defined Benefit
Pension and Other Postretirement Plansan amendment of FASB Statements No. 87, 88, 106 and 132(R)", in 2006.

KPMG LLP

Chicago,
Illinois
February 25, 2009

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Table of Contents

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We have had no disagreements with our independent registered public accounting firm regarding accounting or financial disclosure matters.

ITEM 9A.   CONTROLS AND PROCEDURES







ITEM 9B.   OTHER INFORMATION

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PART III



ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information regarding directors and nominees for director is presented under the caption "Board of Directors" in our proxy statement. This
information is incorporated by reference.

Our
officers are elected by the Board of Directors and hold office until a successor is chosen or qualified or until their earlier resignation or removal. Sam Duncan, our Chief Executive
Officer, has an employment agreement, which is described under the caption "Compensation Disclosure and Analysis" and under the caption "Estimated Termination BenefitsMr. Duncan"
in our proxy statement. This information is incorporated by reference. The following lists our executive officers covered by Section 16 of the Securities and Exchange Act of 1934 and gives a
brief description of their business experience as of February 25, 2009:

Sam K. Duncan,57, joined our board of directors and became its chairman on June 30, 2005. Mr. Duncan became the chief
executive officer of the Company on April 18, 2005. Prior to his election as chief executive officer and president of the Company, Mr. Duncan was president and chief executive officer of
ShopKo Stores, Inc., a multi-department retailer, from October 2002 to April 2005. From 1992 to 2002, Mr. Duncan held various merchandising and executive positions with Fred
Meyer, Inc. (a division of The Kroger Co.) a grocery retailer, including: president of Fred Meyer from February 2001 to October 2002 and president of Ralph's Supermarkets from 1998 to
2001. Mr. Duncan began his retail career in the supermarket industry in 1969 with Albertson's, Inc., where he held various merchandising positions until 1992. Mr. Duncan currently
serves on the Board of Trustees of North Central College. He is also a director of Nash-Finch Company.

Bruce Besanko, 50, was first elected an officer of the Company on February 16, 2009. Mr. Besanko previously served as
executive vice president and chief financial officer of Circuit City Stores, Inc., a leading specialty retailer of consumer electronics and related services from July 2007 to February 2008.
Prior to that, Mr. Besanko served as senior vice president, finance and chief financial officer for The Yankee Candle Company, Inc., a leading designer, manufacturer, wholesaler and
retailer of premium scented candles, since April 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.

Deborah A. O'Connor, 46, was first elected an officer of the Company on July 8, 2008. At that time, Ms. O'Connor became
senior vice president, finance and chief accounting officer of the Company. Ms. O'Connor previously served as senior vice president and controller of the ServiceMaster Company, a company
providing residential and commercial lawn care, landscape maintenance, termite and pest control, home warranty, cleaning and disaster restoration, furniture repair, and home inspection services, from
December 1999 to December 2007.

Sam Martin, 52, was first elected an officer of the Company on September 17, 2007. At that time, Mr. Martin became executive
vice president and chief operating officer of the Company. Mr. Martin has responsibility for all areas of Retail, Contract and Supply Chain. Prior to joining the Company, he served most
recently as senior vice president of operations of Wild Oats Markets, Inc. from January 2006 through September 2007. Prior to joining Wild Oats, Mr. Martin served as senior vice
president of supply chain for ShopKo Stores Inc. from April 2005 through December 2005 and vice president of distribution and transportation from April 2003 to April 2005. From 1998 until 2003,
he was regional vice president, western region, and general manager for Toys R Us.

Ryan T. Vero, 39, was first elected an officer of the Company on November 1, 2004. Mr. Vero has served as executive vice
president and chief merchandising officer of the Company since June,

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2005.
He served as executive vice president, merchandising of the Company from 2004 until June 27, 2005 when he was promoted to executive vice president and chief merchandising officer.
Mr. Vero previously served as executive vice president, merchandising and marketing of OfficeMax, Inc., beginning in 2001 and executive vice president, e-commerce/direct of
OfficeMax, Inc.

Information
concerning our Audit Committee and our Audit Committee financial expert is set forth under the caption "Audit Committee Report" in our proxy statement and is incorporated by
reference.

Information
concerning the procedures by which security holders may recommend nominees to our Board of Directors is set forth under the caption "Stockholder Nominations for Directors" in
our proxy statement and is incorporated by reference.

Information
concerning compliance with Section 16 of the Securities Exchange Act of 1934 is set forth under the caption "Section 16(a) Beneficial Ownership Reporting
Compliance" in our proxy statement and is incorporated 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.com, by clicking on "About us," "Investors" and then "Code of Ethics." You also may obtain copies of this Code by contacting our Investor Relations Department, 263 Shuman
Boulevard, Naperville, Illinois 60563, or by calling 630/864-6800. If we amend or grant a waiver of one or more of the provisions of our Code of Ethics, we intend to disclose such
amendments or waivers by posting the required information on our website at the address above.

ITEM 11.   EXECUTIVE COMPENSATION

Information concerning compensation of OfficeMax's executive officers and directors for the year ended December 27, 2008, is presented
under the captions "Compensation Discussion and Analysis," "Summary Compensation Table," "Award Tables," "Other Compensation and Benefit Plans," "Estimated Current Value of Change in Control
Benefits," "Estimated Termination Benefits," and "Director Compensation" in our proxy statement. This information is incorporated by reference. Information regarding compensation committee interlocks
is presented under the caption "Executive Compensation Committee Interlocks and Insider Participation" in our proxy statement. This information is incorporated by reference. The report of our
Executive Compensation Committee can be found under the caption "Executive Compensation Committee Report" in our proxy. This information is incorporated by reference.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

96

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Table of Contents



Equity Compensation Plan Information (pending)Plan Category

Number of Securities to Be
Issued Upon Exercise of
Outstanding Options,
Warrants, and Rights (#)

Weighted-Average
Exercise Price of
Outstanding Options,
Warrants, and Rights ($)

Number of Securities Remaining
Available for Future Issuance
Under Equity Compensation
Plans (Excluding Securities
Reflected in the First Column) (#)Equity compensation plans approved by security holders


3,754,756
(1)
$
12.73


7,495,098
(2)Equity compensation plans not approved by security holders








Total


3,754,756

$
12.73


7,495,098


---

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information concerning the independence of our directors, certain relationships and related transactions during 2008 and our policies with respect
to such transactions is set forth under the captions "Director Independence" and "Related Transactions" in our proxy statement and is incorporated by reference.

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information concerning principal accountant fees and services is set forth under the captions "Items You May Vote OnAppointment of
Independent Registered Public Accounting Firm" and "Audit Committee ReportAudit, Audit-Related, and Other Nonaudit Services" in our proxy statement and is incorporated by reference.

97

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Table of Contents

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PART IV



ITEM 15.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES





See
Index to Exhibits.

98

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Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

OfficeMax IncorporatedBy

/s/ SAM K. DUNCAN Sam K. Duncan
Chief Executive OfficerDated: February 25, 2009


Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities
indicated on February 25, 2009.

Signature

Capacity(i) Principal Executive Officer:/s/ SAM K. DUNCAN Sam K. Duncan

Chief Executive Officer(ii) Principal Financial Officer:/s/ BRUCE BESANKO Bruce Besanko

Executive Vice President and Chief Financial
    Officer(iii) Principal Accounting Officer:/s/ DEBORAH A. O'CONNOR Deborah A. O'Connor

Senior Vice President and Controller and
    Chief Accounting Officer(iv) Directors:/s/ DORRIT J. BERN Dorrit J. Bern

/s/ WARREN F. BRYANT Warren F. Bryant/s/ JOSEPH M. DEPINTO Joseph M. DePinto

/s/ SAM K. DUNCAN Sam K. Duncan/s/ RAKESH GANGWAL Rakesh Gangwal

/s/ WILLIAM J. MONTGORIS William J. Montgoris/s/ FRANCESCA RUIZ DE LUZURIAGA Francesca Ruiz de Luzuriaga

/s/ DAVID M. SZYMANSKI David M. Szymanski


99

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Table of Contents

Consent of Independent Registered Public Accounting Firm

To
the Board of Directors of OfficeMax Incorporated:

We
consent to the incorporation by reference in the registration statements (Nos. 33-28595, 33-21964, 33-31642, 333-105223,
333-37124, 333-86425, 333-86427, 333-61106, 333-113648, 333-110397 and 333-150957) on Form S-8; and the
registration statements (Nos. 333-41033, 333-74450 and 333-86362) on Form S-3 of OfficeMax Incorporated of our reports dated
February 25, 2009, with respect to the consolidated balance sheets of OfficeMax Incorporated as of December 27, 2008 and December 29, 2007, and the related consolidated statements
of income (loss), shareholders' equity, and cash flows for each of the years in the three-year period ended December 27, 2008, and the effectiveness of internal control over
financial reporting as of December 27, 2008, which report appears in the December 27, 2008, annual report on Form 10-K of OfficeMax Incorporated.

Our
report on the Company's consolidated financial statements refers to changes in accounting for uncertainty in income taxes in 2007, and defined benefit and other postretirement plans
during 2006.

/s/ KPMG LLP
KPMG LLPChicago, Illinois
February 25, 2009


100

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Table of Contents

OFFICEMAX INCORPORATED

INDEX TO EXHIBITS

Filed
with the Annual Report on Form 10-K for the Year Ended December 27, 2008

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith2.1

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 Corp.

8-K

001-05057


2

7/28/043.1.1

Restated Certificate of Incorporation, as restated to date

8-K

001-05057


3.1

4/24/063.1.2

Amendment to Certificate of Incorporation

8-K

001-05057


3.1

5/1/073.2

Amended and Restated Bylaws, as amended to February 12, 2009

8-K

001-05057


3.1

2/18/094.1(1)

Trust Indenture between Boise Cascade Corporation (now OfficeMax Incorporated) and Morgan Guaranty Trust Company of New York, Trustee, dated October 1, 1985, as amended

S-3

33-5673


4

5/13/864.2

Amended and Restated Loan and Security Agreement dated as of July 12, 2007

8-K

001-05057


99.1

7/18/074.3

Indenture dated as of December 21, 2004 by and between OMX Timber Finance Investments II, LLC, as the Issuer and Wells Fargo Bank Northwest, N.A., as Trustee.

8-K

001-05057


99.1

9/22/089

Inapplicable10.1(a)

Paper Purchase Agreement between Boise White Paper, L.L.C., OfficeMax Contract, Inc., and OfficeMax North America, Inc.

10-Q

001-05057


10.1

11/9/0410.2

Installment Note for $559,500,000 between Boise Land & Timber, L.L.C. (Maker) and Boise Cascade Corporation (now OfficeMax Incorporated) (Initial Holder) dated October 29, 2004

10-Q

001-05057


10.3

11/9/0410.3

Installment Note for $258,000,000 between Boise Land & Timber, L.L.C. (Maker) and Boise Southern Company (Initial Holder) dated October 29, 2004

10-Q

001-05057


10.4

11/9/04


101

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Table of Contents

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith10.4

Installment Note for $817,500,000 between Boise Land & Timber II, L.L.C. (Maker) and Boise Cascade Corporation (now OfficeMax Incorporated) (Initial Holder) dated October 29, 2004

10-Q

001-05057


10.5

11/9/0410.5

Guaranty by Wachovia Corporation dated October 29, 2004

10-Q

001-05057


10.6

11/9/0410.6

Guaranty by Lehman Brothers Holdings Inc. dated October 29, 2004

10-Q

001-05057


10.7

11/9/0410.7

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

10-Q

001-05057


10.11

11/9/0410.8

Registration Rights Agreement among Kooskia Investment Corporation, Forest Products Holdings, L.L.C., and Boise Land & Timber Holdings Corp., dated October 29, 2004

10-Q

001-05057


10.12

11/9/0410.9

Boise Cascade Holdings, L.L.C., Operating Agreement dated October 29, 2004

10-Q

001-05057


10.13

11/9/0410.10

Securityholders 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

10-Q

001-05057


10.14

11/9/0410.11

Stockholders Agreement among Kooskia Investment Corporation, Forest Products Holdings, L.L.C., and Boise Land & Timber Holdings Corp., dated October 29, 2004

10-Q

001-05057


10.15

11/9/0410.12

Purchase Agreement dated December 13, 2004, between OMX Timber Finance Investments I, LLC, OMX Timber Finance Investments II, LLC, OfficeMax Incorporated, Wachovia Capital Markets, LLC, and Lehman
Brothers Inc.

8-K

001-05057


10.1

12/17/0410.13

Indemnification Agreement dated December 13, 2004, between Wachovia Corporation, Lehman Brothers Holdings Inc., OMX Timber Finance Investments I, LLC, OMX Timber Finance Investments II, LLC,
OfficeMax Incorporated, Wachovia Capital Markets, LLC, Lehman Brothers Inc.

8-K

001-05057


10.2

12/17/04


102

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Table of Contents

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith10.14

Executive Savings Deferral Plan

8-K

001-05057


10.2

12/15/0410.15

2005 Deferred Compensation Plan

8-K

001-05057


10 .3

12/15/0410.16

2005 Directors Deferred Compensation Plan

8-K

001-05057


10.4

12/15/0410.17

Directors Compensation Summary Sheet

8-K

001-05057


99.3

2/20/0710.18

Form of OfficeMax Incorporated Nonstatutory Stock Option Agreement

8-K

001-05057


10.1

1/6/0510.19

Executive Life Insurance Program

8-K

001-05057


10.1

2/16/0510.20

Officer Annual Physical Program

8-K

001-05057


10.2

2/16/0510.21

Financial Counseling Program

8-K

001-05057


10.3

2/16/0510.22

Executive Officer Mandatory Retirement Policy

10-K

001-05057


10.31

3/16/0510.23

Form of Severance Agreement with Executive Officer (for executive officer not covered by Supplement Early Retirement Plan)

10-K

001-05057


10.32

3/16/0510.24

1982 Executive Officer Deferred Compensation Plan, as amended through September 26, 2003

10-K

001-05057


10.4

3/2/0410.25

Nonbusiness Use of Corporate Aircraft Policy, as amended

10-K

001-05057


10.13

3/14/9410.26

Supplemental Early Retirement Plan for Executive Officers, as amended through September 26, 2003

10-K

001-05057


10.6

3/2/0410.27

Boise Cascade Corporation (now OfficeMax Incorporated) Supplemental Pension Plan, as amended through September 26, 2003

10-K

001-05057


10.7

3/2/0410.28

Form of Severance Agreement with Executive Officer (for executive officer covered by Supplemental Early Retirement Plan)

10-K

001-05057


10.37

3/16/0510.29

1984 Key Executive Stock Option Plan, as amended through September 26, 2003

10-K

001-05057


10.9

3/2/0410.30

1980 Split Dollar Life Insurance Plan, as amended through September 25, 2003

10-K

001-05057


10 .10

3/2/0410.31

Form of Agreement with Executive Officers, as amended through September 26, 2003 (for executive officers who were employees of Boise Cascade Corporation)

10-K

001-05057


10.11

3/2/04


103

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Table of Contents

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith10.32

Supplemental Healthcare Plan for Executive Officers, as amended through January 1, 2003

10-K

001-05057


10.13

3/4/0310.33

Form of Directors' Indemnification Agreement, as revised September 26, 2003

10-K

001-05057


10.15

3/2/0410.34,(2)

Deferred Compensation and Benefits Trust, as amended for the Form of Sixth Amendment dated May 1, 2001

10-Q

001-05057


10

11/13/0110.35

Director Stock Compensation Plan, as amended through September 26, 2003

10-K

001-05057


10.17

3/2/0410.36

Directors Stock Option Plan, as amended through September 26, 2003

10-K

001-05057


10.18

3/2/0410.37

Form of Agreement with Executive Officers, as amended through September 26, 2003 (for Boise Office Solutions employees who were executive officers of Boise Cascade Corporation)

10-K

001-05057


10.22

3/2/0410.38

2001 Key Executive Deferred Compensation Plan, as amended through September 26, 2003

10-K

001-05057


10.23

3/2/0410.39

2001 Board of Directors Deferred Compensation Plan, as amended through September 26, 2003

10-K

001-05057


10.24

3/2/0410.40

Key Executive Performance Unit Plan, as amended through September 26, 2003

10-K

001-05057


10.25

3/2/0410.41

2003 Director Stock Compensation Plan, as amended through September 26, 2003

10-K

001-05057


10.26

3/2/0410.42

2003 Boise (now OfficeMax) Incentive and Performance Plan, as amended through December 12, 2003

10-K

001-05057


10.27

3/2/0410.43

Employment Agreement between OfficeMax Incorporated and Sam Duncan dated April 15, 2005

8-K

001-05057


10.1

4/20/0510.44

Nonstatutory Stock Option Award Agreement between OfficeMax Incorporated and Sam Duncan dated April 18, 200570,000 shares

8-K

001-05057


10.2

4/20/0510.45

Nonstatutory Stock Option Award Agreement between OfficeMax Incorporated and Sam Duncan dated April 18, 2005180,000 shares

8-K

001-05057


10.3

4/20/05


104

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Table of Contents

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith10.46

Restricted Stock Unit Award Agreement between OfficeMax Incorporated and Sam Duncan dated April 18, 200535,000 units

8-K

001-05057


10.4

4/20/0510.47

Restricted Stock Unit Award Agreement between OfficeMax Incorporated and Sam Duncan dated April 18, 200515,000 units

8-K

001-05057


10.5

4/20/0510.48

Amended and Restated Going Public Agreement dated as of May 17, 2005

8-K

001-05057


10.1

5/23/0510.49

Nondisclosure and Noncompetition Agreement between OfficeMax Incorporated and Don Civgin dated October 4, 2005

8-K

001-05057


10.4

10/7/0510.50

Amendment to the OfficeMax Incorporated 2003 Director Stock Compensation Plan

8-K

001-05057




2/20/0710.51

Amendment to OfficeMax Incorporated Executive Savings Deferral Plan

8-K

001-05057


99.2

12/14/0510.52

Amendment to 2003 OfficeMax Incentive and Performance Plan

8-K

001-05057


99.3

12/14/0510.53

Form of 2006 Restricted Stock Unit Award Agreement

8-K

001-05057


10.2

2/15/0610.54

Form of 2007 Restricted Stock Unit Award Agreement

8-K

001-05057


99.2

2/20/0710.55

Form of 2007 Annual Incentive Award Agreement

8-K

001-05057


99.1

2/20/0710.56

Form of 2007 Directors' Restricted Stock Unit Award Agreement

8-K

001-05057


99.3

8/1/0710.57

General Waiver and Release of Claims between OfficeMax Incorporated and Mr. Rowsey

8-K

001-05057


99.1

8/16/0710.58

Letter Agreement between OfficeMax Incorporated and Mr. Martin dated September 12, 2007

8-K

001-05057


99.1

9/19/0710.59

Restricted Stock Unit Award Agreement between OfficeMax Incorporated and Mr. Martin dated September 17, 2007

8-K

001-05057


99.2

9/19/0710.60

Nonstatutory Stock Option Award Agreement between OfficeMax Incorporated and Mr. Martin dated September 17, 2007

8-K

001-05057


99.3

9/19/0710.61

Nondisclosure and Noncompetition Agreement between OfficeMax Incorporated and Mr. Martin dated September 13, 2007

8-K

001-05057


99.4

9/19/07


105

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Table of Contents

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith10.62

Tuition Reimbursement Agreement between OfficeMax Incorporated and Mr. DePaul dated October 25, 2007

8-K

001-05057


99.1

10/31/0710.63

Mr. Vero's Relocation Repayment Agreement dated June 12, 2006

10-K

001-05057


10.81

2/27/0810.64

Form of 2008 Annual Incentive Award Agreement

8-K

001-05057


99.1

2/26/0810.65

Form of 2008 Restricted Stock Unit Award Agreement (Performance Based)

8-K

001-05057


99.2

2/26/0810.66

Form of 2008 Restricted Stock Unit Award Agreement (Time Based)

10-Q

001-05057


10.3

5/7/0810.67

Form of 2008 Director Restricted Stock Unit Award Agreement.

8-K

001-05057


99.2

7/29/0810.68

Form of Amendment to OfficeMax Incorporated 2007 Restricted Stock Unit Award Agreement granted to Sam Martin.

10-Q

001-05057


10.3

11/6/0810.69

Executive Officer Severance Pay Policy

10-Q

001-05057


10.4

11/6/0810.70

Form of Executive Officer Change in Control Severance Agreement

10-Q

001-05057


10.5

11/6/0810.71

Amendment to OfficeMax Incorporated 2005 Directors Deferred Compensation Plan

10-Q

001-05057


10.6

11/6/0810.72

Form of Amendment to Employment Agreement between OfficeMax Incorporated and Sam Duncan

10-Q

001-05057


10.7

11/6/0810.73

Form of Amendment to OfficeMax Incorporated 2005 Restricted Stock Unit Award Agreements granted to Sam Duncan

10-Q

001-05057


10.8

11/6/0810.74

Second Amendment to the 2003 OfficeMax Incentive and Performance Plan as amended and restated effective April 23, 2008

8-K

001-05057


99.1

12/23/0813

Inapplicable14(3)

Code of Ethics16

Inapplicable18

Inapplicable21

Significant subsidiaries of the registrant










X22

Inapplicable23

Consent of KPMG LLP, independent registered public accounting firm (see page 84)










X


106

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Table of Contents

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith24

Inapplicable31.1

CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002










X31.2

CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002










X32

Section 906 Certifications of Chief Executive Officer and Chief Financial Officer of OfficeMax Incorporated










X


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107

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