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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 26, 2009ORo

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 o No ý

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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit
and post such files) Yes o 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 this Form 10-K or any amendment to
this Form 10-K. o

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 o    Accelerated
filer ý    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 26, 2009, was $353,941,409. 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 16, 2010Common Stock, $2.50 par value

84,638,284


Document incorporated by reference

Portions of the registrant's proxy statement relating to its 2010 annual meeting of shareholders to be held on April 14, 2010 ("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

5Item 1B.

Unresolved Staff Comments

10Item 2.

Properties

11Item 3.

Legal Proceedings

12Item 4.

Submission of Matters to a Vote of Security Holders

12Executive Officers of the Registrant

13PART IIItem 5.

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

14Item 6.

Selected Financial Data

16Item 7.

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

18Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

45Item 8.

Financial Statements and Supplementary Data

46Item 9.

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

92Item 9A.

Controls and Procedures

92Item 9B.

Other Information

92PART IIIItem 10.

Directors and Executive Officers of the Registrant

93Item 11.

Executive Compensation

93Item 12.

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

93Item 13.

Certain Relationships and Related Transactions, and Director Independence

94Item 14.

Principal Accountant Fees and Services

94PART IVItem 15.

Exhibits and Financial Statement Schedules

95Signatures

96Index to Exhibits

98


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PART I



ITEM 1.   BUSINESS

As used in this Annual Report on Form 10-K for the fiscal year ended December 26, 2009, the terms "OfficeMax," the
"Company," "we" and "our" refer to 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 to those reports, are available free of
charge on our website at www.officemax.com and can be found by clicking on"Investor Relations" under the "About OfficeMax" heading and then on "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.

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 office furniture to large, medium and small businesses, government offices and consumers. OfficeMax customers are served by
approximately 31,000 associates through direct sales, catalogs, the Internet and retail 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 of Delaware, 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. Due to restructurings conducted by those
affiliates, our investment is currently in Boise Cascade Holdings, L.L.C. (the "Boise Investment").

Fiscal Year

The Company's fiscal year-end is the last Saturday in December. Due primarily to statutory requirements, the Company's international
businesses maintain December 31 year-ends, with our majority-owned joint venture in Mexico reporting one month in arrears. Fiscal year 2009 ended on December 26, 2009,
fiscal year 2008 ended on December 27, 2008, and fiscal year 2007 ended on December 29, 2007. Each of the past three years has included 52 weeks for all reportable segments and
businesses.

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Segments

The Company manages its business using three reportable segments: OfficeMax, Contract ("Contract segment" or "Contract"); OfficeMax, Retail
("Retail segment" or "Retail"); and Corporate and Other. OfficeMax, Contract markets and sells office supplies and paper, technology products and solutions, office furniture and print and document
services directly to large corporate and government offices, as well as to small and medium-sized offices through field salespeople, outbound telesales, catalogs, the Internet and, primarily in
foreign markets, through office products stores. OfficeMax, Retail markets and sells office supplies and paper, print and document services, technology products and solutions and office furniture to
small and medium-sized businesses and consumers through a network of retail stores. Management reviews the performance of the Company based on these segments. We present information pertaining to each
of our segments and the geographic areas in which they operate in Note 14, "Segment Information," of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and
Supplementary Data" of this Form 10-K.

OfficeMax, Contract

We distribute a broad line of items for the office, including office supplies and paper, technology products and solutions, office furniture and
print and document services through our OfficeMax,
Contract segment. OfficeMax, Contract sells directly to large corporate and government offices, as well as to small and medium-sized offices in the United States, Canada, Australia, New Zealand
and Puerto Rico. 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 Boise White
Paper, L.L.C., under a 12-year paper supply contract entered into at the time of the Sale. (See Note 15 "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 23, 2010, OfficeMax, Contract operated 44 distribution centers and 5 customer service and outbound telesales centers. OfficeMax, Contract also operated 55 office
products stores in Canada, Hawaii, Australia and New Zealand.

OfficeMax,
Contract sales for 2009, 2008 and 2007 were $3.7 billion, $4.3 billion and $4.8 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. In addition, this segment contracts with large national retail chains to supply office and school supplies to be sold in their stores. Our retail office products stores feature OfficeMax
ImPress, an in-store module devoted to print-for-pay and related services. Our Retail segment has operations in the United States, Puerto Rico and the U.S. Virgin
Islands. 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 mentioned above, we purchase office papers primarily from Boise White Paper, L.L.C., under a 12-year paper supply contract we
entered into at the time of the Sale.

As
of January 23, 2010, our Retail segment operated 1,010 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

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approximately
10,000 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 23, 2010. 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 addition to supporting our retail stores by providing services that cannot be deployed at every retail store.

OfficeMax,
Retail sales for 2009, 2008 and 2007 were $3.6 billion, $4.0 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, and to meet the needs of 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

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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.

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 in Note 16, "Legal Proceedings and Contingencies,"
of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K.

Capital Investment

Information concerning our capital expenditures is presented under the caption "Investment Activities" 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 14. "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 immediately after "Item 4, Submission of Matters to a Vote of Security
Holders" in Part I of this Form 10-K.

Employees

On December 26, 2009, we had approximately 31,000 employees, including approximately 11,000 part-time employees.

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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," "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.

Current macroeconomic conditions and the current credit crisis 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 continue to 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. 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 of 2008, 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 parties to our debt agreements 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").
The Pension Plans are under-funded and we may be required to make large contributions in subsequent years in order to maintain required funding levels, which will have an adverse impact on our cash
flows and our financial results. Additional future contributions of common stock or cash to the Pension Plans, financial market performance and IRS funding requirements could materially change these
expected payments.

Our business may be adversely affected by the actions of and risks associated with our third-party vendors.We use and resell
many 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, cost or vendor-required conditions of sale of many of the products we offer for sale. Disruptions in the availability of these products or the products and
services we consume may adversely affect our sales and result in customer dissatisfaction. In addition, a material interruption in service by the carriers that ship goods within our supply chain may
adversely affect our sales. Many of our

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vendors
are small or medium sized businesses which are being significantly impacted by current macroeconomic conditions, both in the U.S. and Asia, including reduced 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 our results of operations. Our product offering also 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, such products may not meet applicable regulatory requirements which may require us to recall those products, or such products may infringe upon the intellectual property rights
of third parties. 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.

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 afford
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 identify additional sales through new distribution opportunities or replace lost sales.Our long-term
success
depends, in part, on our ability to expand our product sales in a manner that achieves appropriate sales and profit levels. This could include selling our products through other retailers, opening new
stores or entering into novel distribution arrangements. When we sell our products through other retailers we rely on those retailers to

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provide
an appropriate customer experience and our sales are dependant on the foot traffic and sales of the retail partner. Although we may have influence over the appearance of the area within the
store where our products appear, we have no control over store marketing, staffing or any other aspects of our retail partners' operations. Although we frequently test new store designs, formats,
sizes and market areas, if we are unable to generate the required sales or profit levels, as a result of macroeconomic or operational challenges, we will not open new stores. 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 other significant 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. Failure to increase sales through new distribution opportunities or replace lost sales could materially and adversely affect our future financial performance.

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 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.

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 which
may require us to recall those products. 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

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financial
obligations including leases and the potential Pension Plans' funding discussed previously. This reduces the funds we have available for working capital, capital expenditures, acquisitions,
new stores, store remodels and other purposes and, given current credit constriction, may make it more difficult for us to make borrowings in the future. Similarly, our relatively greater leverage
increases our vulnerability to, and limits our flexibility in planning for, adverse economic and industry conditions and creates other competitive disadvantages compared with other companies with
relatively less leverage.

Compromises of our information security may adversely affect our business.Through our sales and marketing activities, we
collect and store certain
personal information that our customers provide to purchase products or services, enroll in promotional programs, register on our website, or otherwise communicate and interact with us. We also gather
and retain information about our associates in the normal course of business. We may share information about such persons with vendors that assist with certain aspects of our business. Despite
instituted safeguards for the protection of such information, we cannot be certain that all of our systems are entirely free from vulnerability to attack. Computer hackers may attempt to penetrate our
networks or our vendors' network security and, if successful, misappropriate confidential customer or business information. In addition, a Company employee, contractor or other third party with whom
we do business may attempt to circumvent our security measures in order to obtain such information or inadvertently cause a breach involving such information. Loss of customer or business information
could disrupt our operations and expose us to claims from customers, financial institutions, payment card associations and other persons, which could have a material adverse effect on our business,
financial condition and results of operations.

We cannot ensure systems and technology will be fully integrated or updated.We cannot ensure our systems and technology will be
successfully
updated. We have current plans to update the financial reporting platform as well as the technology in our call centers. We will be implementing these technical upgrades in 2010 which is a complicated
and difficult endeavor. Failure to successfully complete these upgrades could have an adverse impact on our business and results of operations. In addition, at the time of our acquisition of
OfficeMax, Inc., we partially integrated the systems of the two companies. If we do not ultimately integrate our systems, it may
constrain our ability to provide the level of service our customers' demand which could thereby cause us to operate inefficiently.

We retained responsibility for certain liabilities of the sold paper, forest products and timberland businesses.In connection
with the Sale, we
agreed to assume responsibility for certain liabilities of the businesses we sold. These obligations include liabilities related to environmental, health and safety, tax, litigation and employee
benefit matters. Some of these retained liabilities could turn out to be significant, which could have an adverse effect on our results of operations. Our exposure to these liabilities could harm our
ability to compete with other office products distributors, who would not typically be subject to similar liabilities. In particular, we are exposed to risks arising from our ability to meet the
funding obligations of our Pension Plans and withdrawal requests from participants pursuant to legacy benefit plans, each of which could require cash to be redirected and adversely impact our cash
flows and financial results.

Our investment in Boise Cascade Holdings, L.L.C. subjects us to the risks associated with the paper and forest products industry.When we sold our
paper, forest products and timberland assets, we purchased an equity interest in Boise Cascade Holdings, L.L.C. Through our investment in Boise Cascade Holdings, L.L.C., we also hold an indirect
interest in Boise Inc., including its wholly-owned subsidiary Boise White Paper, L.L.C., the paper manufacturing business of Boise Cascade Holdings, L.L.C. This continuing interest in Boise
Cascade Holdings, L.L.C. subjects us to market risks associated with the paper and forest products industry. These industries are subject to

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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 Boise Cascade Holdings, 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 White Paper L.L.C.. 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, currently Boise White Paper L.L.C., on a long term basis. The price we pay for this paper is market based
and therefore subject to fluctuations in the supply and demand for the products. Our purchase obligation 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.

We are subject to certain legal proceedings that may adversely affect our results of operations and financial condition.We are
periodically involved
in various legal proceedings, which may involve state and federal governmental inquiries and investigations, employment, tort, consumer litigation and intellectual property litigation. In addition, we
may be subject to investigations by regulatory agencies and customers audits. These legal proceedings, investigations and audits could expose us to significant defense costs, fines, penalties, and
liability to private parties for monetary recoveries and attorneys' fees, any of which could have a material adverse effect on our business and results of operations.

Our results may be adversely affected by disruptions or catastrophic events.Unforeseen events, including public health issues,
such as the H1N1 flu
pandemic, and natural disasters such as earthquakes, hurricanes and other adverse weather and climate conditions, whether occurring in the United States or abroad, could disrupt our operations,
disrupt the operations of our suppliers or customers, have an adverse impact on consumer spending and confidence levels or result in political or economic instability. Moreover, in the event of a
natural disaster or public health issue, we may be required to suspend operations in some or all of our locations, which could have a material adverse effect on our business, financial condition and
results of operations. These events could also reduce demand for our products or make it difficult or impossible to receive products from suppliers.

9

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Table of Contents

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

ITEM 1B.   UNRESOLVED STAFF COMMENTS

None.

10

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Table of Contents

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 which they are used. We constantly evaluate the real estate market to determine the best locations for new stores. We analyze our
existing stores and markets on a case by case basis. 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. In 2010, we expect that store openings will be limited to two by our joint venture partner in Mexico, and we plan no remodels, and less than 20 store closings.

Our
facilities by segment are presented in the following table.

OfficeMax, Contract

As of January 23, 2010, OfficeMax, Contract operated 44 distribution centers in 21 states, Puerto Rico, Canada, Australia and New Zealand.
The following table sets forth the locations of these facilities.

Arizona


1

Maryland


1

Tennessee


1California


2

Massachusetts


1

Texas


2Colorado


1

Michigan


1

Utah


1Florida


1

Minnesota


1

Washington


1Georgia


1

New Jersey


1

Puerto Rico


1Hawaii


1

North Carolina


1

Canada


7Illinois


1

Ohio


1

Australia


10Kansas


1

Pennsylvania


1

New Zealand


3Maine


1




11

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Table of Contents

OfficeMax, Retail

As of January 23, 2010, OfficeMax, Retail operated 1,010 stores in 47 states, Puerto Rico, the U.S. Virgin Islands and Mexico. The
following table sets forth the locations of these facilities.

Alabama


11

Maine


1

Oregon


12Alaska


3

Maryland


1

Pennsylvania


28Arizona


44

Massachusetts


10

Rhode Island


1Arkansas


2

Michigan


42

South Carolina


6California


80

Minnesota


41

South Dakota


4Colorado


29

Mississippi


5

Tennessee


18Connecticut


3

Missouri


29

Texas


75Florida


65

Montana


3

Utah


14Georgia


31

Nebraska


10

Virginia


26Hawaii


8

Nevada


14

Washington


23Idaho


6

New Jersey


4

West Virginia


2Illinois


62

New Mexico


9

Wisconsin


35Indiana


14

New York


31

Wyoming


2Iowa


9

North Carolina


28

Puerto Rico


13Kansas


12

North Dakota


3

U.S. Virgin Islands


2Kentucky


6

Ohio


53

Mexico(a)


77Louisiana


2

Oklahoma


1


(a)Locations operated by our 51%-owned joint venture in Mexico, Grupo OfficeMax.




ITEM 3.   LEGAL PROCEEDINGS

Information concerning legal proceedings is set forth in Note 16, "Legal Proceedings and Contingencies," of the Notes to Consolidated
Financial Statements in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K, and is incorporated herein by reference.

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

None.

12

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Table of Contents

EXECUTIVE OFFICERS OF THE REGISTRANT

Our executive 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. The following lists our executive officers and gives a brief description of their business experience as of February 22, 2010:

Sam K. Duncan,58, joined our board of directors and became chairman of the board in June 2005. Mr. Duncan was first elected an
officer of the Company on April 18, 2005 when he was appointed as chief executive officer. Prior to his election as chief executive officer 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 has been a director of Nash-Finch Company since 2007 and was a director of ShopKo Stores, Inc. from 2002-2005. On February 11, 2010,
Mr. Duncan announced that he will retire in 2011.

Bruce Besanko,51, was first elected an officer of the Company on February 16, 2009. Mr. Besanko has served as executive
vice president and chief financial officer of the Company since that time, and as chief administrative officer since October 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 2009. 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. On November 10, 2008, Circuit City Stores, Inc. filed a voluntary petition for reorganization relief under Chapter 11
of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia; its assets are currently in the process of being liquidated under the jurisdiction of
the bankruptcy court.

Deborah A. O'Connor,47, was first elected an officer of the Company on July 8, 2008. Since that time, Ms. O'Connor has been
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,53, was first elected an officer of the Company on September 17, 2007. Since that time, Mr. Martin has been
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., a natural foods grocery chain, 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, Inc., a toy and baby products retailer.

Ryan T. Vero,40, 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 2005. He served as executive vice president, merchandising of the Company from 2004 until June 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.

13

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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 make an annual report
available to its shareholders. We are making this Form 10-K available to our shareholders in lieu of a separate annual report. The reported high and low sales prices for our common
stock, as well as the frequency and amount of dividends paid on such stock, are included in Note 17, "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 holders of our common stock, based upon actual record holders on February 16, 2010, was
13,411.

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 "Investor Relations" under the "About OfficeMax" heading and then on "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 26, 2009, is presented in the following table.

Period

Total Number
of Shares
Purchased(1)

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 27-October 24


22

$
12.32





October 25-November 21


22

$
11.43





November 22-December 26


22

$
11.44





Total


66

$
11.73








14

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Table of Contents

---

Performance Graph



The following graph compares the five-year cumulative total return (assuming dividend reinvestment) for OfficeMax, the
Standard & Poor's SmallCap 600 Index, the Standard & Poor's 500 Specialty Retail Index and the Standard & Poor's SmallCap 600 Specialty Retail Index. The Company added a
comparison to the SmallCap 600 Specialty Retail Index this year because Standard & Poor's transferred the Company from the Standard & Poor's 500 Specialty Retail Index into the
Standard & Poor's SmallCap 600 Specialty Retail Index in 2008, and the Company was in the Standard & Poor's SmallCap 600 Specialty Retail Index for all of 2009.

GRAPHIC

ANNUAL RETURN PERCENTAGE
Years Ending

Company\Index Name

Dec 05

Dec 06

Dec 07

Dec 08

Dec 09OfficeMax Incorporated


-17.54


98.80


-57.62


-62.75


82.26S&P SmallCap 600 Index


7.68


15.12


-0.30


-34.26


33.53S&P 500 Specialty Retail Index


2.86


6.64


-20.27


-25.37


37.52S&P 600 Specialty Retail Index


12.05


11.55


-37.54


-36.51


77.65


INDEXED RETURNS
Years Ending

Company\Index Name

Base Period
Dec 04

Dec 05

Dec 06

Dec 07

Dec 08

Dec 09OfficeMax Incorporated

$
100

$
82.46

$
163.93

$
69.47

$
25.88

$
47.16S&P SmallCap 600 Index


100


107.68


123.96


123.59


81.25


108.49S&P 500 Specialty Retail Index


100


102.86


109.69


87.45


65.26


89.75S&P 600 Specialty Retail Index


100


112.05


125.00


78.07


49.57


88.05


15

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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.

2009(a)

2008(b)

2007(c)

2006(d)

2005(e)(millions, except per-share amounts)AssetsCurrent assets

$
2,021

$
1,855

$
2,205

$
2,097

$
1,942Property and equipment, net


422


491


581


580


535Goodwill








1,217


1,216


1,218Timber notes receivable


899


899


1,635


1,635


1,635Other


728


929


646


688


942$
4,070

$
4,174

$
6,284

$
6,216

$
6,272Liabilities and shareholders' equityCurrent liabilities

$
1,092

$
1,184

$
1,371

$
1,529

$
1,588Long-term debt, less current portion


275


290


349


384


407Non-recourse debt


1,470


1,470


1,470


1,470


1,470Other


702


918


783


817


1,044Noncontrolling interest


28


22


32


30


27OfficeMax shareholders' equitypreferred stock


36


43


50


55


55OfficeMax shareholders' equityother


467


247


2,229


1,931


1,681$
4,070

$
4,174

$
6,284

$
6,216

$
6,272Net sales

$
7,212

$
8,267

$
9,082

$
8,966

$
9,158Income (loss) from:Net income (loss) from continuing operations attributable to OfficeMax and noncontrolling interest

$
(1
)
$
(1,666
)
$
212

$
103

$
(39
)Joint venture results attributable to noncontrolling interest


2


8


(5
)

(4
)

(2
)Net income (loss) from continuing operations attributable to OfficeMax


1


(1,658
)

207


99


(41
)Preferred dividends


(3
)

(4
)

(4
)

(4
)

(4
)Net income (loss) from continuing operations available to OfficeMax common shareholders


(2
)

(1,662
)

203


95


(45
)Net loss from discontinued operations











(7
)

(33
)Net income (loss) available to OfficeMax common shareholders

$
(2
)
$
(1,662
)
$
203

$
88

$
(78
)Basic net income (loss) per common share:Continuing operations

$
(0.03
)
$
(21.90
)
$
2.70

$
1.30

$
(0.58
)Discontinued operations











(0.10
)

(0.41
)Basic net income (loss) available to OfficeMax common shareholders per common share

$
(0.03
)
$
(21.90
)
$
2.70

$
1.20

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

$
(0.03
)
$
(21.90
)
$
2.66

$
1.29

$
(0.58
)Discontinued operations(f)











(0.10
)

(0.41
)Diluted net income (loss) available to OfficeMax common shareholders per common share(f)

$
(0.03
)
$
(21.90
)
$
2.66

$
1.19

$
(0.99
)Cash dividends declared per common share




$
0.45

$
0.60

$
0.60

$
0.60


See notes on following page.


16

---



Table of Contents

Notes to Selected Financial Data



17

---





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 2009 were $7.2 billion, compared to $8.3 billion for 2008. Gross profit margin decreased by 0.8% of sales to 24.1% of
sales in 2009 compared to 24.9% of sales in 2008. The reductions in sales and gross profit margin relative to last year primarily reflected the weaker economic environment that existed throughout
2009, which negatively impacted all product categories and
geographic areas in both our Contract and Retail segments. Notably, in the fourth quarter of 2009, the year-over-year sales decrease moderated on a sequential basis consistent
with the trend in each of the first three quarters. We reported an operating loss of $4.0 million and $1,936.2 million in 2009 and 2008, respectively. As noted in the discussion and
analysis that follows, our operating results were impacted by a number of significant items in both years. These items included charges for asset impairments and store closures offset in part by gains
related to legacy activities and the reversal of a tax reserve. If we eliminate these items, our adjusted operating income for 2009 was $62.9 million compared to $191.9 million for 2008.
The reported net loss available to OfficeMax common shareholders was $2.2 million or $0.03 per diluted share in 2009 compared to $1,661.6 million or $21.90 per diluted share in 2008. If
we eliminate the impact of significant items from both years, adjusted net income available to OfficeMax common shareholders for 2009 was $18.6 million or $0.24 per diluted share compared to
$100.1 million or $1.30 per diluted share for 2008.

Results of Operations, Consolidated

($ in millions)

2009

2008

2007Sales

$
7,212.1

$
8,267.0

$
9,082.0Gross profit


1,737.6


2,054.4


2,310.3Operating and selling expenses


1,377.0


1,555.6


1,633.6General and administrative expenses


297.7


306.9


332.5Goodwill and other asset impairments


17.6


2,100.2


Other operating net


49.3


27.9


Operating income (loss)


(4.0
)

(1,936.2
)

344.2Net income (loss) attributable to OfficeMax and noncontrolling interest


(1.6
)

(1,665.9
)

212.2Net income (loss) available to OfficeMax common shareholders


(2.2
)

(1,661.6
)

203.4(percentage of sales)Gross profit margin


24.1
%

24.9
%

25.4
%Operating and selling expenses


19.1
%

18.8
%

18.0
%General and administrative expenses


4.1
%

3.7
%

3.7
%


In
addition to assessing our operating performance as reported under U.S. generally accepted accounting principles (GAAP), we evaluate our results of operations before
non-operating legacy

18

---



Table of Contents

items
and operating items that are not indicative of our core operating activities such as severance, facility closure, and asset impairments. We believe our presentation of financial measures before,
or excluding, these items, which are non-GAAP measures, enhances our investors' overall understanding of our recurring operational performance and provides useful information to both
investors and management to evaluate the ongoing operations and prospects of OfficeMax by providing better comparisons. Whenever we use non-GAAP financial measures, we designate these
measures as "adjusted" and provide a reconciliation of the non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors are encouraged to review the related
GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure. In the following tables, we reconcile our
non-GAAP financial measures to our reported GAAP financial results for both 2009 and 2008.

Although
we believe the non-GAAP financial measures enhance an investor's understanding of our performance, our management does not itself, nor does it suggest that investors
should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The non-GAAP financial
measures we use may not be consistent with the presentation of similar companies in our industry. However, we present such non-GAAP financial measures in reporting our financial results to
provide investors with an additional tool to evaluate our operating results in a manner that focuses on what we believe to be our ongoing business operations.

OFFICEMAX INCORPORATED AND SUBSIDIARIES
IMPACT OF SPECIAL ITEMS ON INCOME
NON-GAAP RECONCILIATION FOR 2009Operating
income (loss)

Net income (loss)
available to
OfficeMax
common
shareholders

Diluted income
(loss) per
common share(millions, except per-share amounts)As reported

$
(4.0
)
$
(2.2
)
$
(0.03
)Store asset impairment charge


17.6


10.0


0.12Store closure and severance charges


49.3


30.0


0.39Interest income from a legacy tax escrow





(2.7
)

(0.04
)Boise Cascade Holdings, L.L.C. distribution





(1.6
)

(0.02
)Release of income tax reserve





(14.9
)

(0.18
)As adjusted

$
62.9

$
18.6

$
0.24




OFFICEMAX INCORPORATED AND SUBSIDIARIES
IMPACT OF SPECIAL ITEMS ON INCOME
NON-GAAP RECONCILIATION FOR 2008Operating
income (loss)

Net income (loss)
available to
OfficeMax
common
shareholders

Diluted income
(loss) per
common share(millions, except per-share amounts)As reported

$
(1,936.2
)
$
(1,661.6
)
$
(21.90
)Goodwill and other asset impairment charge


1,364.4


1,294.7


17.05Timber note impairment charge


735.8


462.0


6.08Total impairment charges


2,100.2


1,756.7


23.13Store closure and severance charges


27.9


17.5


0.23Boise Cascade Holdings, L.L.C. distribution





(12.5
)

(0.16
)As adjusted

$
191.9

$
100.1

$
1.30


19

---



Table of Contents

These
items are described in more detail in this Management's Discussion and Analysis.

At
the end of the 2009 fiscal year, we had $486.6 million in cash and cash equivalents and $513.0 million in available (unused) borrowing capacity under our revolving
credit facilities. The combination of cash and cash equivalents and available borrowing capacity yields approximately $1 billion of overall liquidity. The Company has strengthened its balance
sheet, cash position and liquidity greatly during 2009. At year-end, we had outstanding recourse debt of $297.1 million (both current and long-term) and
non-recourse obligations of $1,470.0 million related to the timber securitization notes. There is no recourse against OfficeMax on the securitized timber notes payable as recourse
is limited to proceeds from the applicable pledged installment notes receivable and underlying guarantees. There were no borrowings on our revolving credit facilities in 2009.

The
funded status of our pension plans also improved in 2009. Our pension obligations exceeded the assets held in trust to fund them by $210.2 million at year-end
2009, a decrease of $224.8 million compared to the $435.0 million under funding that existed at year-end 2008. This reduction was due to strong returns on plan investments in
the year coupled with our voluntary excess contribution of 8.3 million shares of OfficeMax common stock to the plans in the fourth quarter of 2009.

For
the full year 2009, we generated $358.9 million of cash from operations reflecting our focus on cash generation. Working capital improved $219.0 million as a result of
significant management oversight, which yielded reduced days outstanding for accounts receivable and a decrease in inventory per location along with an improved accounts payable leverage ratio. We
also collected $71.0 million of tax refunds, net of payments, and borrowed $45.7 million on accumulated earnings held in company-owned life insurance policies. In addition, we received
$41.1 million from investment activities, including $25.1 million from a prior tax escrow settlement and $15.0 million in additional company-owned life insurance withdrawals.

Outlook

Given the continued weak economic environment, we are cautious in our expectations for 2010. We expect that U.S. unemployment trends will continue to unfavorably
impact us in the near-term, with improvement occurring in the later part of the year. We anticipate that for the full year 2010, total sales, including the impact of foreign currency
translation, and adjusted operating income margin will be slightly higher than they were in 2009. We expect positive cash flow from operations, although lower than 2009, due to a
larger-than-expected incentive compensation payout during the first quarter and higher working capital needs due to the increased sales. We also believe that our liquidity
position will remain strong and our need to access our revolving line of credit will be limited to seasonal periods.

2009 Compared with 2008

Sales for 2009 decreased 12.8% to $7,212.1 million from $8,267.0 million for 2008. The year-over-year sales decreases
occurred in both our Contract and Retail segments and resulted primarily from the weaker economic environment that existed throughout all of 2009. The change in sales resulting from changes in foreign
exchange rates for the full year of 2009 was a decrease of 1.7%. However, in the fourth quarter, due to the weakening U.S. dollar, the change in total sales resulting from changes in foreign exchange
rates was an increase of 2.8%.

Gross
profit margin decreased by 0.8% of sales to 24.1% of sales in 2009 compared to 24.9% of sales in 2008. The gross profit margins declined in both our Contract and Retail segments.
The Retail segment experienced strong cost support from our vendors and reduced inventory shrinkage, the benefits of which were entirely offset by deleveraging of fixed occupancy costs and a mix shift
to less profitable technology products. The Contract segment also experienced strong cost support

20

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Table of Contents

from
our vendors but earned overall lower gross margins as a result of softer market conditions as well as a shift in its customers' purchasing trends to a higher percentage of lower-margin consumable
items, lower sales of off-contract items, and higher customer acquisition and retention costs.

Operating
and selling expenses increased by 0.3% of sales to 19.1% of sales in 2009 from 18.8% of sales a year earlier. The increased expense was primarily the result of deleveraging of
fixed costs due to lower sales and increased incentive compensation expense, partially offset by reduced payroll and other targeted cost reductions. Incentive compensation expense included in
operating and selling expense was $23.6 million for 2009 compared to $4.0 million for 2008.

General
and administrative expenses increased 0.4% of sales to 4.1% of sales in 2009 compared to 3.7% of sales in 2008. The increase primarily reflected higher pension and incentive
compensation expenses. General and administrative expense included $40.8 million of these costs in 2009 as compared to $5.1 million in 2008. Excluding these costs, general and
administrative expense was consistent between 2009 and 2008. The effect of deleveraging of expense resulting from lower sales was offset by lower headcount resulting from a significant reduction in
force at the corporate headquarters in late 2008.

As
noted above, our results for 2009 include several significant items, as follows:



Interest
expense was $76.4 million in 2009 compared to $113.6 million for 2008. The decline in interest expense was principally due to the Lehman bankruptcy on
September 15, 2008, and the

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resulting
payment defaults on the timber note receivable guaranteed by Lehman and the related securitization notes payable. On October 29, 2008, Lehman failed to pay the semi-annual
interest payment due on the timber note receivable that it guarantees. Because we are only obligated to make interest payments on the securitization notes supported by the timber note receivable and
Lehman guaranty to the extent that we receive the interest payments due on the timber note receivable, we stopped accruing (and making) interest payments due on
those securitization notes after the Lehman default. As a result in 2008 we recorded $33.7 million in interest expense on the Lehman securitization notes payable. In 2009, we did not accrue any
interest on this non-recourse obligation.

Interest
income was $47.3 million and $57.6 million for the years ended 2009 and 2008, respectively. This decline reflects the $13.1 million reduction of interest
income recorded on the timber note receivable guaranteed by Lehman in 2009 as compared to 2008, partially offset by $4.4 million of interest income related to a tax escrow balance established
in a prior period in connection with the sale of our legacy Voyageur Panel business. As a result of Lehman's September 2008 bankruptcy filing, we recorded no interest income on the Lehman portion of
the timber notes receivable in 2009. In 2008, we accrued and collected approximately $13.1 million in interest income on the Lehman timber note receivable for the period from January 1
through April 29, 2008. In 2009, approximately $40.8 million of interest income and $39.8 million of interest expense recorded relating to the Wachovia portion of the timber notes
receivable and associated securitized obligation. See the "Timber Notes/Non-Recourse Debt" section that follows in this Management's Discussion and Analysis of Financial Condition and
Results of Operations.

For
2009, we recognized an income tax benefit of $28.8 million on a pre-tax loss of $30.3 million (effective tax benefit rate of 94.8%) compared to an income
tax benefit of $306.5 million on a pre-tax loss of $1,972.4 million (effective tax benefit rate of 15.5%) for 2008. Income taxes and the related effective rates for both
years were affected by several significant items that caused our actual tax benefits to vary from the amount based on our reported pre-tax accounting income and the statutory U.S. federal
tax rate of 35%. In 2009, the recorded tax benefit included $14.9 million from the release of a tax reserve upon the resolution of our claim that interest on certain of our industrial revenue
bonds was fully tax deductible. In 2008, the goodwill and other assets impairment charge of $1.4 billion unfavorably impacted the tax benefit rate as the book basis of these assets was higher
than the amortizable tax basis which resulted in a 4.6% tax benefit on the charge. In addition, in 2008 the Company also recognized a tax benefit resulting from a favorable U.S. Internal Revenue
Service settlement. The effective tax rate in both years was also impacted by the effects of state income taxes, income items not subject to tax and non-deductible expenses and the mix of
domestic and foreign sources of income.

We
reported a net loss attributable to OfficeMax and noncontrolling interest of $1.6 million for 2009. After adjusting for joint venture earnings attributable to noncontrolling
interest and preferred dividends, we reported a net loss available to OfficeMax common shareholders of $2.2 million or $(0.03) per diluted share for 2009. Excluding the effects of the
significant items discussed above, adjusted net income available to OfficeMax common shareholders was $18.6 million or $0.24 per diluted share for 2009 compared to $100.1 million or
$1.30 per diluted share for 2008.

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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 decrease was
largely the result of the weaker global economic environment and our more disciplined analysis-driven approach to sales generation and retention. The year-over-year sales
decrease reflects a 10.7% decrease in comparable sales, and both our Contract and Retail segments experienced double-digit sales declines in 2008 as compared to 2007. In addition, the rate of sales
decline (on a percentage basis) increased in each quarter of 2008 compared to the comparable quarters of 2007. Foreign exchange rate changes had only a minor effect on sales for full year 2008.
However, they negatively impacted sales comparisons late in the year. For the year, sales increased $9.4 million due to the impact of foreign exchange rates, however, fourth quarter 2008 sales
were reduced by $81.1 million due to the effect of foreign exchange rates.

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 margin decline was primarily due to the deleveraging of fixed costs, resulting from the lower sales, as well as the impact of opening
new stores which require several years to ramp up to mature sales volumes and higher inventory shrinkage results. The decline was partially offset by a sales-mix shift towards
higher-margin office supplies category sales. The Contract segment margin improvement was due
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
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 included several significant items, as follows:



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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 on the timber installment note guaranteed 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 income 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. 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 unfavorably impacted the tax benefit rate as the book basis of these assets was higher than the
amortizable tax basis and resulted in a tax benefit of $63.2 million or approximately 4.6% of the tax charge. The Company also reviewed the realizability of state net operating loss
carryforwards and foreign tax credits in 2008, resulting in the recognition of approximately

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$1.3 million
of tax benefit, as a result of a reduction in the valuation allowance. 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.

As
a result of the foregoing factors, we reported a net loss attributable to OfficeMax and noncontrolling interest of $1,665.9 million for 2008. After adjusting for joint venture
earnings attributable to noncontrolling interest and preferred dividends, we reported a loss available to OfficeMax common shareholders of $1,661.6 or $(21.90) per diluted share, for 2008. Excluding
the effects of the significant items discussed above, adjusted net income available to OfficeMax common shareholders was $100.1 million or $1.30 per diluted share for 2008.

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, office furniture, and print and document
services. OfficeMax, Contract sells directly to large corporate and government offices, as well as to small and medium-sized offices in the United States, Canada, Australia and New Zealand. 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. In addition, this segment
contracts with large national retail chains to supply office and school supplies to be sold in their stores. Our retail office supply stores feature OfficeMax ImPress, an in-store module
devoted to print-for-pay and related services. Our Retail segment has operations in the United States, Puerto Rico and the U.S. Virgin Islands. Our Retail segment also operates
office products stores in Mexico through a 51%-owned joint venture.

Corporate
and Other includes support staff services and certain other legacy expenses as well as the related assets and liabilities. 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.

Management
evaluates the segments' performances based on operating income (loss) after eliminating the effect of certain operating matters such as severances, facility closures, and
asset impairments, that are not indicative of our core operations ("segment income (loss)".)

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OfficeMax, Contract

($ in millions)

2009

2008

2007Sales

$
3,656.7

$
4,310.0

$
4,816.1Gross profit


762.4


948.1


1,050.9Gross profit margin


20.8
%

22.0
%

21.8
%Operating, selling and general and administrative expenses


704.4


780.8


843.0Percentage of sales


19.2
%

18.1
%

17.5
%Segment income

$
58.0

$
167.3

$
207.9Percentage of sales


1.6
%

3.9
%

4.3
%Goodwill and other asset impairments





815.5


Other operating expenses


15.3


9.3


Operating income (loss)

$
42.7

$
(657.5
)
$
207.9Sales by Product LineOffice supplies and paper

$
2,138.5

$
2,518.7

$
2,696.3Technology products


1,174.0


1,299.2


1,535.1Office furniture


344.2


492.1


584.7Sales by GeographyUnited States

$
2,583.1

$
3,035.0

$
3,518.9International


1,073.6


1,275.0


1,297.2Sales GrowthTotal sales growth


(15.2
)%

(10.5
)%

2.2
%


2009 Compared with 2008

Contract segment sales for 2009 decreased 15.2% to $3,656.7 million from $4,310.0 million for 2008, reflecting a U.S. sales decline of 14.9% and an
international sales decline of 15.8% in U.S. dollars, or 8.2% in local currencies. The change in total Contract sales resulting from changes in foreign exchange rates for the full year of 2009 was a
decrease of 2.2%. However, in the fourth quarter, due to the weakening U.S. dollar, the change in total Contract sales resulting from changes in foreign exchange rates was an increase of 5.6%. The
U.S. Contract sales decline primarily reflected weaker sales from existing corporate accounts as our customers reduced overhead spending and headcount in response to the weak overall U.S. economy.
This decline continued to be meaningful, increasing (as measured by the rate of decline compared to the prior year) in the first two quarters, while decreasing modestly in the third and fourth
quarters. For the year, the reduction in sales volume from lost customers was greater than the incremental sales from newly acquired customers. However, in the fourth quarter, the trend reversed and
we gained net sales from newly acquired customers.

Contract
segment gross profit margin declined 1.2% of sales to 20.8% of sales for 2009 compared to 22.0% of sales in the previous year. The decrease in gross profit margin was primarily
due to softer market conditions, a shift in the purchasing trends of our customers to a higher percentage of on-contract items, including lower-margin commodities and consumable items like
paper, and higher customer acquisition and retention expenses as a percentage of sales. Our Contract performance in the fourth quarter improved from the previous quarters in 2009 due to our
disciplined approach to profitable customer acquisition and retention, as well as other initiatives to grow the business and improve margins by providing better solutions for our customers. Targeted
cost controls in our delivery fleet helped to mitigate the impact of deleveraging.

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Contract
segment operating, selling and general and administrative expenses increased 1.1% of sales to 19.2% of sales for 2009 from 18.1% of sales a year earlier. The increase was
primarily due to the deleveraging of fixed expenses from lower sales and increased incentive compensation expenses, which were $22.1 million higher in 2009 compared to 2008, partially offset by
cost management initiatives, including lower payroll costs as a result of the reorganization of our U.S. and Canadian sales forces, fewer personnel in our customer fulfillment and customer service
centers and the reduction in force at our corporate headquarters in the fourth quarter of 2008.

Contract
segment income was $58.0 million, or 1.6% of sales, for 2009, compared to $167.3 million for 2008. The decline in segment income was primarily attributable to the
reduction in sales and gross profit.

Contract
other operating expenses for 2009 included $15.3 million of severance and other charges, principally related to reorganizations of our U.S. and Canadian Contract sales
forces, customer fulfillment centers and customer service centers.

The
Contract segment's operating income (loss) improved $700.2 million to operating income of $42.7 million for 2009, compared to an operating loss of $657.5 million
for 2008.

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

Contract
segment income was $167.3 million, or 3.9% of sales, for 2008, compared to $207.9 million for 2007. The decline in segment income was primarily attributable to the
reduction in sales and gross profit.

The
Contract segment reported a non-cash charge of $815.5 million related to impairment of the Contract segment's goodwill balance in 2008. Contract other operating
expense of $9.3 million

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for
2008 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 Management's Discussion and Analysis of Financial Condition and Results of Operations.

The
Contract segment's operating income (loss) decreased $865.4 million to an operating loss of $657.5 million compared to segment operating income of $207.9 million
for 2007.

OfficeMax, Retail

($ in millions)

2009

2008

2007Sales

$
3,555.4

$
3,957.0

$
4,265.9Gross profit


975.2


1,106.3


1,259.5Gross profit margin


27.4
%

28.0
%

29.5
%Operating, selling and general and administrative expenses


930.3


1,045.1


1,085.8Percentage of sales


26.1
%

26.5
%

25.4
%Segment income

$
44.9

$
61.2

$
173.7Percentage of sales


1.3
%

1.5
%

4.1
%Goodwill and other asset impairments


17.6


548.9


Other operating expense


33.3


17.4


Operating income (loss)

$
(6.0
)
$
(505.1
)
$
173.7Sales by Product LineOffice supplies and paper

$
1,392.7

$
1,541.5

$
1,610.6Technology products


1,872.6


2,060.5


2,235.5Office furniture


290.1


355.0


419.8Sales by GeographyUnited States

$
3,369.6

$
3,693.5

$
4,030.0International


185.8


263.5


235.9Sales GrowthTotal sales growth


(10.2
)%

(7.2
)%

0.3
%Same-location sales growth


(11.0
)%

(10.8
)%

(1.2
)%


2009 Compared with 2008

Retail segment sales for 2009 decreased by 10.2% (9.1% after adjusting for the foreign currency exchange effect) to $3,555.4 million from
$3,957.0 million for 2008, reflecting a same-store sales decrease of 11.0% mitigated by new store improvement. This included a same-store sales decline in the U.S. of
9.6% and in Mexico of 13.9% (after adjusting for the foreign currency exchange effect). Retail same-store sales declined primarily due to weaker consumer and small business spending in the
U.S. and the significant negative effects of weak economic conditions in Mexico together with the effects of the influenza epidemic during the summer. Store traffic was lower compared to the prior
year as sales declined across all major product categories, particularly in the higher-priced, discretionary furniture category, which resulted in decreased average tickets. We ended 2009 with 1,010
stores. In the U.S., we opened 12 retail stores and closed 18, ending the year with 933 retail stores. Grupo OfficeMax, our majority-owned joint venture in Mexico, closed six stores, ending the year
with 77 retail stores.

Retail
segment gross profit margin declined 0.6% of sales to 27.4% of sales for 2009, compared to 28.0% of sales in the previous year. The declines were primarily due to the

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deleveraging
of fixed occupancy costs which has continued since late-2007, offset by favorable product margins, which benefited from good vendor support and lower inventory shrinkage,
reduced delivery costs, and strong cost controls over utilities and maintenance. Margins were also negatively impacted by a shift to lower margin technology products.

Retail
segment operating, selling and general and administrative expenses decreased 0.4% of sales to 26.1% of sales for 2009 from 26.5% of sales a year earlier. The decrease was
primarily due to targeted cost reductions in response to the sales shortfall partially offset by $29.4 million in additional incentive compensation expenses in 2009 and the deleveraging effect
of reduced sales. Results in the Retail segment benefited from a favorable property tax settlement as well as the resolution of a prior dispute with a service provider, the effects of which were
partially offset by adverse workers compensation expense related to prior period claims. Cost reductions consist primarily of reduced payroll costs resulting from reductions in staff in the stores, in
field management and at the corporate headquarters and lower advertising and pre-opening costs.

Retail
segment income was $44.9 million, or 1.3% of sales, for 2009, compared to $61.2 million for 2008. The decline in segment income was primarily attributable to the
reduction in sales and gross profit, partially offset by the effects of cost reduction initiatives.

For
2009, the Retail segment recorded a $17.6 million non-cash charge related to impaired store assets. Other operating expense included charges of
$33.3 million primarily related to store closure costs. The segment closed 21 underperforming stores prior to the end of their lease terms, of which 16 were in the U.S. and five were in Mexico
with a total cost of $31.2 million. In addition, the segment incurred $2.1 million of severance related to a streamlining of our Retail store staffing.

The
Retail segment's operating loss improved $499.1 million to an operating loss of $6.0 million in 2009, compared to an operating loss of $505.1 million in 2008.

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 by 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 (a smaller
format store), 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.

Retail
segment income was $61.2 million, or 1.5% of sales, for 2008, compared to $173.7 million for 2007. The decline in segment income was primarily attributable to the
reduction in sales and gross profit.

For
2008, the Retail segment recorded impairment charges of $548.9 million, consisting of $386.0 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. Retail other operating expense for 2008 included 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.

The
Retail segment's operating loss was $505.1 million for 2008, compared to operating income of $173.7 million for 2007.

Corporate and Other

Corporate and Other expenses were $40.7 million for 2009 compared to $773.6 million for 2008. Expenses recorded in 2009 included a
$0.7 million pre-tax charge for severance. Increased incentive compensation expense ($3.8 million more in 2009) and pension costs more than offset reduced payroll expense
resulting from reductions in staff at the corporate headquarters in late 2008. Expenses recorded in 2008 included a $735.8 million charge related to the impairment of the timber installment
note guaranteed by Lehman, a $4.3 million severance 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. During 2007, total Corporate and Other expenses were $37.4 million.

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Liquidity and Capital Resources

At the end of fiscal year 2009, the total liquidity available for OfficeMax was $999.6 million. This includes cash and cash equivalents of
$486.6 million and borrowing availability of $513.0 million (availability includes $473.3 million and $39.7 million relating to our U.S. and Canadian revolving credit
agreements, respectively). As of December 26, 2009, the Company was in compliance with all covenants under the credit agreements, both of which expire on July 12, 2012. As of
December 26, 2009, we had $297.1 million of short-term and long-term debt and $1,470 million of non-recourse timber securitization notes
outstanding.

Our
primary ongoing cash requirements relate to working capital, expenditures for property and equipment, technology enhancements and upgrades, lease obligations, pension funding and
debt service. We expect to fund these requirements through a combination of available cash balance, cash flow from operations and, if necessary, seasonal borrowings under our revolving credit
facilities. The following sections of this Management's Discussion and Analysis of Financial Condition and Results of Operations discuss in more detail our operating, investing, and financing
activities, as well as our financing arrangements.

Operating Activities

Our operating activities generated cash of $358.9 million, $223.7 million and $70.6 million in 2009, 2008 and
2007, respectively. The increase in cash from operations in 2009 was due principally to significantly reduced inventories, net of the associated decrease in payables as a result of both lower
purchasing activity and the timing of payments, and reduced receivables as a result of lower sales and strong management oversight. We ended 2009 with $143.8 million less inventory than at the
end of 2008, with approximately 17% lower average inventory per store and approximately 15% lower average inventory per distribution center as compared to the prior year. Clearance inventory levels
were at an all time low while our in-stock levels were high. Accounts payable at the end of 2009 were $68.5 million lower than at the end of the prior year, primarily reflecting
lower merchandise purchasing levels. Receivables at the end of 2009 were $27.5 million lower than at the end of the prior year, reflecting both sales declines in the Contract segment and a
modest improvement in days sales outstanding compared to the prior year period.

In
addition, cash from operations in 2009 includes $71.0 million of tax refunds, net of payments, from federal and state governments and $45.7 million in proceeds from
loans against accumulated earnings in our company-owned life insurance (COLI) policies. We expect to periodically repay and re-borrow on these loans in order to manage our investments and
minimize interest expense.

We
sponsor noncontributory defined benefit pension plans covering certain terminated employees, vested employees, retirees, and some active OfficeMax, Contract employees. Pension expense
was $14.1 million, $4.2 million and $10.0 million for the years ended December 26, 2009, December 27, 2008 and December 29, 2007, respectively. In 2009, 2008
and 2007, we made cash contributions to our pension plans totaling $6.8 million, $13.1 million and $19.1 million, respectively. In 2009, we also contributed 8.3 million
shares of OfficeMax common stock to our qualified pension plans. Based on actuarial estimates, this additional contribution is expected to reduce our pension contributions over the next five years by
approximately $100 million. The minimum required funding contribution in 2010 is approximately $3.8 million and the expense is projected to be $7.1 million compared to expense of
$14.1 million in 2009. 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.

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Investment Activities

Our investing activities provided $2.8 million of cash during 2009 compared to a use of funds of $112.1 million and
$138.9 during 2008 and 2007, respectively. During 2009, we received $25.1 million in cash from the distribution of a tax escrow balance established in a prior period in connection with our
legacy Voyageur Panel business sold in 2004, and $15.0 million related to withdrawals from the principal balance of our COLI policies. Our capital spending in 2009 primarily related to
leasehold improvements, 12 new stores and maintenance projects. Details of the capital investment by segment are included in the following table:

Capital Investment2009

2008

2007(millions)OfficeMax, Contract

$
18.0

$
34.2

$
42.5OfficeMax, Retail


20.3


109.8


98.338.3


144.0


140.8


We
expect our capital investments in 2010 to be approximately $90 to $110 million. Our capital spending in 2010 will be primarily for technology enhancements such
as an upgrade to our financial systems platform and improvements in the telephony software and hardware used by our call centers. We will also invest in leasehold improvements and replacement
maintenance projects. In 2010, we expect store openings to be limited to two by our joint venture partner in Mexico.

Financing Activities

Our financing activities used cash of $60.6 million in 2009, $86.1 million in 2008 and $62.6 million in 2007.
Common and preferred dividend payments totaled $3.1 million in 2009, $47.5 million in 2008, and $49.1 million in 2007. In 2008 and 2007, 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. We had net debt payments of $57.7 million,
$40.0 million and $11.6 million in 2009, 2008 and 2007 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. Our 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 the "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 a revolving credit agreement (the "U.S. Credit Agreement") with a group of banks. The
U.S. Credit Agreement permits us 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 U.S. Credit Agreement may be increased (up to a maximum of $800 million) at our request or reduced from time to
time, in each case according to the terms detailed in the U.S. Credit Agreement. There were no borrowings outstanding under our U.S. Credit Agreement at the end of fiscal years 2009 or 2008, and there
were no borrowings outstanding under this facility

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during
2009 or 2008. Letters of credit, which may be issued under the U.S. Credit Agreement up to a maximum of $250 million, reduce available borrowing capacity. Stand-by
letters of credit issued under the U.S. Credit Agreement totaled $61.1 million at the end of fiscal year 2009 and $66.7 million at the end of fiscal year 2008. At the end of
fiscal year 2009, the maximum aggregate borrowing amount available under the U.S. Credit Agreement was $534.4 million and availability under the U.S. Credit Agreement totaled
$473.3 million. The U.S. Credit Agreement allows the payment of dividends, subject to availability restrictions and if no default has occurred. At the end of fiscal year 2009, we were in
compliance with all covenants under the U.S. Credit Agreement. The U.S. Credit Agreement expires on July 12, 2012.

Borrowings
under the U.S. Credit Agreement bear interest at rates based on either the prime rate or LIBOR. Margins are applied to the applicable borrowing rates and letter of credit fees
under the U.S. Credit Agreement depending on the level of average availability. Fees on letters of credit issued under the U.S. Credit Agreement were charged at a weighted average rate of 0.875%
during 2009. We are charged an unused line fee at an annual rate of 0.25% on the amount by which the maximum available credit exceeds the average daily outstanding borrowings and letters of credit.

On
September 30, 2009, Grand & Toy Limited, the Company's wholly owned subsidiary based in Canada, entered into a revolving credit agreement (the "Canadian Credit
Agreement") with a group of banks. The Canadian Credit Agreement permits Grand & Toy Limited to borrow up to a maximum of C$60 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 Canadian Credit Agreement may be increased (up to a maximum
of C$80 million) at Grand & Toy Limited's request or reduced from time to time, in each case according to the terms detailed in the Canadian Credit Agreement. There were no borrowings
outstanding under the facility at the end of fiscal year 2009, and there were no borrowings outstanding under this facility during 2009. Letters of credit, which may be issued under the Canadian
Credit Agreement up to a maximum of C$10 million, reduce available borrowing capacity. There were no letters of credit outstanding under the Canadian Credit Agreement at the end of fiscal year
2009. The maximum aggregate borrowing amount available under the Canadian Credit Agreement was $39.7 million (C$41.6 million) at the end of fiscal year 2009. Grand & Toy Limited
was in compliance with all
covenants under the Canadian Credit Agreement at the end of fiscal year 2009. The Canadian Credit Agreement expires on July 12, 2012.

Timber Notes/Non-recourse debt

In October 2004, 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 affiliates of Boise Cascade, L.L.C (the "Note
Issuers"). In order to support the Installment Notes, the Note Issuers transferred $1,635 million in cash to Lehman and Wachovia Corporation ("Wachovia") ($817.5 million to each of
Lehman and Wachovia) who issued collateral notes to the Note Issuers and guarantees on the performance of the Installment Notes. 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. The subsidiaries pledged the Installment Notes and related
guarantees and issued securitized notes (the "Securitization Notes") in the amount of $1,470 million. Recourse on the Securitization Notes is limited to the proceeds from the applicable pledged
Installment Notes and underlying Lehman or Wachovia guaranty.As a result, there is no recourse against OfficeMax, and the Securitization Notes have been reported as
non-recourse debt in our Consolidated Balance Sheets.

On
September 15, 2008, Lehman filed for bankruptcy. Lehman's bankruptcy filing constituted an event of default under the $817.5 million Installment Note guaranteed by
Lehman (the "Lehman

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Guaranteed
Installment Note") . We are required for accounting purposes to assess the carrying value of assets whenever circumstances indicate that a decline in value may have occurred. After
evaluating the situation, we concluded in late October 2008 that as a result of the Lehman bankruptcy, it was probable that we would be unable to collect all amounts due according to the contractual
terms of the Lehman Guaranteed Installment Note. Accordingly, we evaluated the carrying value of the Lehman Guaranteed Installment Note and reduced it to the estimated amount we expect to collect
($81.8 million) by recording a non-cash impairment charge of $735.8 million, pre-tax, in the third quarter of 2008. We based our estimate of the recoverable
amount of the Lehman Guaranteed Installment Note on a variety of factors, including consultations with financial advisors and review of the trading prices on outstanding Lehman debt instruments with
similar contractual interest rates and maturities.

Measuring
impairment of a loan requires judgment and estimates, and the eventual outcome may differ from our estimate by a material amount. The Lehman Guaranteed Installment Note has
been pledged as collateral for the related Securitization Notes, and therefore it may not freely be transferred to any party other than the indenture trustee for the Securitization Note holders.
Accordingly, the ultimate amount to be realized on the Lehman Guaranteed Installment Note depends entirely on the proceeds from the Lehman bankruptcy estate, which may not be finally determined for
several years. At December 26, 2009 and December 27, 2008, the carrying value of the Lehman Guaranteed Installment Note was $81.8 million. Going forward, we intend to adjust the
carrying value of the Lehman Guaranteed Installment Note as further information regarding our share of the proceeds, if any, from the Lehman bankruptcy estate becomes available.

Recourse
on the Securitization Notes is limited to the proceeds from the applicable pledged Installment Notes and underlying Lehman or Wachovia guaranty. Accordingly, the Lehman
Guaranteed Installment Note and underlying guarantees by Lehman will be transferred to the holders of the Securitization Notes guaranteed by Lehman in order to settle and extinguish that liability.
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, which will occur when the Lehman Guaranteed Installment Note and the related guaranty are transferred to and accepted by the Securitization 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, we expect to recognize a non-cash gain equal to the
difference between the carrying amount of the Securitization Notes guaranteed by Lehman ($735.0 million at December 26, 2009) and the carrying value of the Lehman Guaranteed Installment
Note ($81.8 million at December 26, 2009) in a later period when the liability is legally extinguished. The actual gain to be recognized in the future will be measured based on the
carrying amounts of the Lehman Guaranteed Installment Note and the Securitization Notes guaranteed by Lehman at the date of settlement.

At
the time of the sale of our timberland assets in 2004, we generated a significant tax gain. As the timber installment notes structure allowed the Company to defer the resulting tax
liability of $543 million until 2020, the maturity date for the Installment Notes, we recognized a deferred tax liability related to this gain in connection with the sale. Due to the Lehman
bankruptcy and note defaults, we initially concluded that approximately half of this gain would be accelerated into 2008 for tax purposes and we estimated and paid taxes on this gain in 2008. In
estimating the cash taxes, we considered our available alternative minimum tax credits, a portion of which resulted from prior tax payments related to the sale of the timberland assets in 2004, which
were used to reduce the net tax payments. After extensive review with our outside tax advisors, we concluded that the recognition of the Lehman portion of the gain was not triggered in 2008, but
instead will be triggered when the Lehman Guaranteed Installment Note is transferred to the Securitization Note holders as payment and/or when the Lehman bankruptcy is resolved. Accordingly, we
appropriately

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modified
our position as we finalized the 2008 tax return, and have requested and received refunds of taxes previously paid in 2008 from the federal government, and anticipate that we will receive an
additional amount from the governments in the various states in which we pay taxes. Accordingly, in the Consolidated Balance Sheets as of December 26, 2009, we have reestablished both the
deferred tax liability related to the full deferred gain from the sale of the timberland assets and the deferred tax assets relative to available alternative minimum tax credits.

Through
December 26, 2009, we have received all payments due under the Installment Note guaranteed by Wachovia (the "Wachovia Guaranteed Installment Notes"), which have consisted
only of interest due on the notes, and made all payments due on the related Securitization Notes guaranteed by Wachovia, again consisting only of interest due. As all amounts due on the Wachovia
Guaranteed Installment Notes are current, and we have no reason to believe that we will not collect all amounts due according to the contractual terms of the Wachovia Guaranteed Installment Notes, the
notes are stated in our Consolidated Balance Sheet at their original principal amount of $817.5 million. Wachovia exhibited signs of financial distress in the fourth quarter of 2008 and was
acquired by Wells Fargo & Company in a stock transaction. The current credit crisis could have additional adverse impact on our business and financial condition if Wachovia (acquired by Wells
Fargo & Company in 2008), the other timber notes guarantor, became unable to perform its obligations under the Wachovia Guaranteed Installment Notes, which would result in a significant
impairment impact.

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 industrial revenue bonds due in varying
amounts through 2029. At December 27, 2008, approximately $69.2 million of these obligations were the subject of a preliminary potential adverse determination regarding the deductibility
of interest on the bonds from the Internal Revenue Service ("IRS"). In the fourth quarter of 2009, the IRS conceded the position. The bonds are expected to be held to their full maturity and continue
to be classified as long-term debt in the Consolidated Balance Sheets at December 26, 2009.

The
Company made capital contributions to Grupo OfficeMax, commensurate with our ownership percentage in the joint venture of $6.0 million and $6.7 million in 2009 and
2008, respectively.

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Contractual Obligations

In the following table, we set forth our contractual obligations as of December 26, 2009. Some of the figures included 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 Period2010

2011-2012

2013-2014

Thereafter

Total(millions)Debt

$
22.4

$
43.6

$
7.4

$
224.2

$
297.6Timber securitization notes











1,470.0


1,470.0Operating leases


363.4


585.9


379.7


403.1


1,732.1Purchase obligations


16.8


8.0


1.4


0.5


26.7Pension obligations (estimated payments)


3.8


63.1


82.4


50.1


199.4$
406.4

$
700.6

$
470.9

$
2,147.9

$
3,725.8


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. Obligations related to interest on 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 Management's Discussion and Analysis of Financial Condition and Results of Operations 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 26, 2009 and does not
attempt to project future rates. Not included in the table above are contingent payments for uncertain tax positions of $8.2 million. These amounts are not included due to our inability to
predict the timing of settlement of these amounts.

There
is no recourse against OfficeMax on the securitized timber notes payable as recourse is limited to proceeds from the applicable pledged installment notes 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 2, "Facility Closure Reserves" 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 26, 2009 includes $277.2 million of liabilities associated with our retirement and benefit and other compensation plans and
$245.0 million of other long-term liabilities. Certain of these amounts have been excluded from the above table as

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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 Grupo OfficeMax, our joint venture in Mexico, can elect to put its 49% interest in the joint
venture to OfficeMax if certain 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 to OfficeMax, the redemption value would be calculated based on the joint
venture's earnings for the last four quarters before interest, taxes and depreciation and amortization, and the current market multiples of similar companies. At December 26, 2009, Grupo
OfficeMax met the earnings targets and the estimated redemption value of the minority owner's interest was $21.1 million. While this estimated value is less than the book value at
December 26, 2009, other valuation methodologies yield an estimated fair value that is consistent with the December 26, 2009 book value.

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 15, "Commitments and Guarantees," of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in
this Form 10-K describes certain of our off-balance sheet arrangements as well as the nature 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 26, 2009, 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 $723.8 million less
than the amount of debt reported in the Consolidated Balance Sheet. As previously discussed, there is no recourse against OfficeMax on the securitized timber notes payable as recourse is limited to
proceeds from the applicable pledged installment notes receivable and underlying guarantees. The debt and receivable related to the timber notes have fixed interest rates and the estimated fair values
of the timber notes are reflected in the following table.

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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 rates and currency exchange rates expose us to financial market risk. We occasionally use derivative financial instruments, such as interest rate swaps, forward
purchase contracts and forward exchange contracts, to manage our exposure to changes in currency exchange rates. We generally do 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. We occasionally hedge 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. We do not speculate using derivative instruments. We were not a party to any
significant derivative financial instruments in 2009 or 2008.

The
following table provides information about our financial instruments outstanding at December 26, 2009 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. For obligations with variable interest rates, the table sets forth payout amounts based
on rates as of December 26, 2009 and does not attempt to project future rates. The following table 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 valuations, such as retirement rates and pension plan participants' increased life expectancies. 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 OfficeMax common stock, 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

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and
take action, where appropriate, in terms of setting investment strategy and agreed contribution levels.

($ in millions)

Fiscal year-ended2009

2008Expected PaymentsThere-
after



Fair
Value



Fair
Value2010

2011

2012

2013

2014

Total

TotalRecourse debtFixed-rate debt payments

$
18.4

$
0.8

$
35.4

$
1.9

$
0.2

$
224.2

$
280.9

$
190.8

$
332.1

$
214.6Average interest rates


6.3
%

7.1
%

7.9
%

8.0
%

5.4
%

6.4
%

6.6
%


%

6.9
%


%Variable-rate debt payments

$
4.0

$
3.7

$
3.7

$
3.7

$
1.6

$
0

$
16.7

$
16.4

$
22.9

$
22.1Average interest rates


7.5
%

7.5
%

7.5
%

7.5
%

8.1
%


%

7.5
%


%

10.9
%


%Non-recourse debt:Timber securitization notesWachovia

$


$


$


$


$


$
735.0

$
735.0

$
754.8

$
735.0

$
736.8Average interest rates

















5.4
%

5.4
%


%

5.4
%


%Lehman

$


$


$


$


$


$
735.0

$
735.0

$
81.8

$
735.0

$
81.8Average interest rates

















5.5
%

5.5
%


%

5.5
%


%




2009

2008Carrying amount

Fair value

Carrying amount

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

$
817.5

$
823.6

$
817.5

$
801.9Lehman


81.8


81.8


81.8


81.8Financial liabilities:Debt

$
297.6

$
207.2

$
355.0

$
236.7Timber securitization notesWachovia

$
735.0

$
754.8

$
735.0

$
736.8Lehman


735.0


81.8


735.0


81.8


Goodwill and Other Asset Impairments

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. In 2008, we fully impaired our goodwill balances. We review other intangible assets annually at year-end.

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. Based on the operating performance
of several of our stores due to the macroeconomic factors and market specific change in expected demographics, we determined that there were indicators of potential impairment relating to our stores.
Therefore, in 2009, we recorded a non-cash charge of $17.6 million to impair long lived assets pertaining to certain stores.

During
2008, based on our sustained low stock price and reduced market capitalization relating to the book value of equity as well as the macroeconomic factors impacting industry
business conditions, actual and forecasted operating performance and continued tightening of the credit markets, we determined indicators of potential impairment were present in the second quarter of
2008. In the fourth quarter of 2008, due to a further decline in market capitalization and worsening economic conditions and performance, we concluded further impairment was indicated. As a result,
during 2008, we recorded non-cash impairment charges associated with goodwill, intangible assets

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and
other long-lived assets of $1,364.4 million before taxes. 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.

Facility Closure Reserves

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 in 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
2009, we recorded pre-tax charges of $31.2 million in our Retail segment related to the closing of 21 underperforming stores prior to the end of their lease
terms, of which sixteen were in the U.S. and five were in Mexico. In 2008, we recorded $3.1 million of charges related principally to the closure of five stores and we reduced rent and
severance accruals by $3.4 million relating to stores that had previously closed. Also in 2008, we recorded a charge of $8.7 million related to four domestic retail stores for which we
had signed lease commitments but 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.

At
December 26, 2009, the facility closure reserve was $61.6 million with $16.8 million included in current liabilities, and $44.8 million included in
long-term liabilities. The vast majority of the reserve represents future lease obligations of $113 million, net of anticipated sublease income of approximately $51 million.
Cash payments relating to the integration and facility closures were $24.6 million, $35.2 million and $48.3 million in 2009, 2008 and 2007, respectively.

In
addition, we are the lessee of a non-operating, building materials manufacturing facility near Elma, Washington. During 2006, we ceased operations at the facility, fully
impaired the assets and recorded a reserve for lease payments and other contract termination and closure costs. We have not been successful in identifying a buyer for the business which would include
the assumption of the long term lease. The liabilities of the Elma facility ($14.1 million in total) are recorded in other current liabilities and other long-term liabilities in the
Consolidated Balance Sheets.

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 businesses and timberland assets prior to the closing of the sale of our paper, forest products
and timberland assets in 2004 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

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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. 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.

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.

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Throughout
the year, we perform physical inventory counts at a significant number of our locations. For periods subsequent to each location's last physical inventory count, an allowance
for estimated shrinkage is provided based on historical shrinkage 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. At December 26, 2009, the funded status of our defined benefit pension and other postretirement benefit plans was a liability of
$230.5 million. Changes in assumptions related to the measurement of funded status could have a material impact on the amount reported. We are required 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 for a
theoretical portfolio of high-grade corporate bonds (rated Aa1 or better) with cash flows that generally match our expected benefit payments in future years. We base our
long-term asset return assumption on the average rate of earnings expected 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
2010, our discount rate assumption used in the measurement of our net periodic benefit cost is 6.15%, and our expected return on plan assets is 8.20%. Using these assumptions, our
2010 pension expense will be approximately $7.1 million. If we were to decrease our estimated discount rate assumption used in the measurement of our net periodic benefit cost to 5.90% and our
expected return on plan assets to 7.95%, our 2010 pension expense would be approximately $9.7 million. If we were to increase our discount rate assumption used in the measurement of our net
periodic benefit cost to 6.40% and our expected return on plan assets to 8.45%, our 2010 pension expense would be approximately $4.4 million.

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.

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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 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.

Significant
judgment is required in determining our uncertain tax positions. We have established accruals for uncertain tax positions using management's best judgment and adjust these
liabilities as warranted by changing facts and circumstances. A change in our uncertain tax positions, in any given period, could have a significant impact on our results of operations and cash flows
for that period.

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 26, 2009, the vast majority of the reserve
represents future lease obligations of $113 million, net of anticipated sublease income of approximately $51 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 sublease income is different than our estimates,
adjustments to the recorded reserves may be required.

Environmental and Asbestos Reserves

Environmental and asbestos liabilities that relate to the operation of the paper and forest products businesses and timberland assets
prior to the sale of the paper, forest products and timberland assets continue to be liabilities of OfficeMax. We are subject to a variety of environmental laws and regulations. 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 and asbestos liabilities. As additional information becomes known, our
estimates may change.

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

Generally accepted accounting principles ("GAAP") require us to assess intangible assets 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, we are required to make estimates of the fair values the assets. If we
determine the fair values are less
than the carrying amount recorded on our Consolidated Balance Sheet, we must recognize an impairment loss in our financial statements. We are also required 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.

The
measurement of impairment of indefinite life intangibles and other long-lived assets includes estimates and assumptions which are inherently subject to significant
uncertainties. In testing for impairment, we measure 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 use our internal budgets and operating plans, which include many assumptions about future growth
prospects, margin rates, and cost factors. 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.

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
June 2009, the Financial Accounting Standards Board ("FASB") issued a statement establishing the FASB Accounting Standards Codification ("the ASC" or "the Codification").
Effective for interim and annual periods ended after September 15, 2009, the Codification became the source of authoritative U.S. GAAP recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. This statement is not
intended to change existing GAAP and as such did not have an impact on the consolidated financial statements of the Company. The Company has updated its references to reflect the Codification.

In
September 2006, the FASB issued guidance which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures
about fair value measurements. This guidance was 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 the financial statements. In November 2007, the FASB provided a one year deferral for the implementation of this guidance for other
nonfinancial assets and liabilities. The Company adopted this guidance for financial assets and liabilities effective at the beginning of fiscal year 2008 and for non-financial assets and
liabilities effective at the beginning of fiscal year 2009. The adoption of this guidance had no significant impact on our consolidated financial statements for either fiscal year 2008 or 2009.

In
December 2007, the FASB issued updated guidance which changed the presentation and disclosure requirements for noncontrolling interests (previously referred to as minority interests).
This updated guidance is effective for periods beginning on or after December 15, 2008, and is to be applied prospectively to all noncontrolling interests, including those that arose prior to
the effective date. While the accounting requirements are to be applied prospectively, prior period financial information must be recast to attribute net income and other comprehensive income to

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noncontrolling
interests and provide other disclosures. The Company adopted this guidance for all noncontrolling interests effective at the beginning of fiscal year 2009, and has revised its prior
period financial statements to reflect the required change in presentation and additional disclosures. The adoption of this accounting change and the retrospective impact of the required presentation
and disclosure changes on the Company's prior year financial statements was immaterial.

In
December 2008, the FASB issued updated guidance related to an employer's disclosures about plan assets of a defined benefit pension or other postretirement plan. This updated guidance
requires enhanced disclosures about the fair value of plan assets including major categories of plan assets, inputs and valuation techniques used to measure fair value, significant concentrations of
risk, the method used to allocate investments and the effect of fair value measurements using significant unobservable inputs. The disclosures about plan assets must be provided for fiscal years
ending after December 15, 2009. The Company adopted this guidance prospectively for the period ended December 26, 2009 and has included the required disclosures in its consolidated
financial statements for 2009.

In
April 2009, the FASB issued updated guidance related to fair-value measurements to clarify the considerations related to measuring fair-value in inactive
markets, modify the recognition and measurement of other-than-temporary impairments of debt securities, and require public companies to disclose the fair values of financial
instruments in interim periods. The updated guidance is effective for interim and annual periods ended after June 15, 2009, with early adoption permitted for periods ended after
March 15, 2009. The Company adopted the updated guidance in the first quarter of fiscal year 2009, which required certain additional disclosures regarding the fair value of financial
instruments in the financial statements.

In
May 2009, the FASB issued guidance which establishes accounting and disclosure requirements for subsequent events. This guidance details the period after the balance sheet date during
which the Company should evaluate events or transactions that occur for potential recognition or disclosure in the financial statements, the circumstances under which the Company should recognize
events or transactions occurring after the balance sheet date in its financial statements and the required disclosures for such events. The Company adopted this guidance prospectively in the second
quarter.

In
June 2009, the FASB issued guidance which eliminates previous exceptions to rules requiring the consolidation of qualifying special-purpose entities, which will result in more
entities being subject to consolidation assessments and reassessments. This guidance requires ongoing reassessment of whether a company is the primary beneficiary of a variable interest entity ("VIE")
and clarifies characteristics that identify a VIE. In addition, additional disclosures are required about a company's involvement with a VIE and any significant changes in risk exposure due to that
involvement. The Company is currently evaluating the impact of the adoption of this guidance (which is required beginning in 2010) but does not anticipate it will have a material impact on our results
of operations or financial condition.

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 herein by reference.

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ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

OfficeMax Incorporated and SubsidiariesConsolidated Statements of Operations

Fiscal year endedDecember 26,
2009

December 27,
2008

December 29,
2007(thousands, except per-share amounts)Sales

$
7,212,050

$
8,267,008

$
9,081,962Cost of goods sold and occupancy costs


5,474,452


6,212,591


6,771,657Gross profit


1,737,598


2,054,417


2,310,305Operating expensesOperating and selling


1,377,057


1,555,615


1,633,606General and administrative


297,654


306,940


332,528Goodwill and other asset impairments


17,612


2,100,212


Other operating, net


49,263


27,851


Operating income (loss)


(3,988
)

(1,936,201
)

344,171Interest expense


(76,363
)

(113,641
)

(121,271
)Interest income


47,270


57,564


87,940Other income, net


2,748


19,878


26,687Pre-tax income (loss)


(30,333
)

(1,972,400
)

337,527Income tax benefit (expense)


28,758


306,481


(125,282
)Net income (loss) attributable to OfficeMax and noncontrolling interest


(1,575
)

(1,665,919
)

212,245Joint venture results attributable to noncontrolling interest


2,242


7,987


(4,872
)Net income (loss) attributable to OfficeMax

$
667

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


(2,818
)

(3,663
)

(3,961
)Net income (loss) available to OfficeMax common shareholders

$
(2,151
)
$
(1,661,595
)
$
203,412Net income (loss) per common shareBasic

$
(0.03
)
$
(21.90
)
$
2.70Diluted

$
(0.03
)
$
(21.90
)
$
2.66


See accompanying notes to consolidated financial statements

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OfficeMax Incorporated and SubsidiariesConsolidated Balance Sheets

December 26,
2009

December 27,
2008(thousands, except share
and per-share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
486,570

$
170,779Receivables, net


532,822


561,509Related party receivables


6,528


5,337Inventories


805,646


949,401Deferred income taxes and receivables


133,836


105,140Other current assets


55,934


62,850Total current assets


2,021,336


1,855,016Property and equipment:Land and land improvements


41,072


38,720Buildings and improvements


483,133


473,188Machinery and equipment


792,650


777,371Total property and equipment


1,316,855


1,289,279Accumulated depreciation


(894,707
)

(798,551
)Net property and equipment


422,148


490,728Intangible assets, net


83,806


81,793Investments in affiliates


175,000


175,000Timber notes receivable


899,250


899,250Deferred income taxes


300,900


436,182Other non-current assets


167,091


235,614Total assets

$
4,069,531

$
4,173,583


See accompanying notes to consolidated financial statements

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OfficeMax Incorporated and SubsidiariesConsolidated Balance Sheets

December 26,
2009

December 27,
2008(thousands, except share
and per-share amounts)LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Current portion of debt

$
22,430

$
64,452Accounts payable:Trade


650,233


727,424Related parties


37,107


28,373Income tax payable


3,389


18,288Accrued expenses and other current liabilities:Compensation and benefits


153,408


112,041Other


225,125


233,040Total current liabilities


1,091,692


1,183,618Long-term debt, less current portion


274,622


289,922Non-recourse debt


1,470,000


1,470,000Other long-term obligations:Compensation and benefits


277,247


502,447Deferred gain on sale of assets


179,757


179,757Other long-term obligations


244,958


235,965Total other long-term obligations


701,962


918,169Noncontrolling interest in joint venture


28,059


21,871Shareholders' equity:Preferred stockno par value; 10,000,000 shares authorized; Series D ESOP: $.01 stated value; 810,654 and 945,899 shares outstanding


36,479


42,565Common stock$2.50 par value; 200,000,000 shares authorized; 84,624,726 and 75,977,152 shares outstanding


211,562


189,943Additional paid-in capital


989,912


925,328Accumulated deficit


(602,242
)

(600,095
)Accumulated other comprehensive loss


(132,515
)

(267,738
)Total OfficeMax shareholders' equity


503,196


290,003Total liabilities and shareholders' equity

$
4,069,531

$
4,173,583


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 26,
2009

December 27,
2008

December 29,
2007(thousands)Cash provided by (used for) operations:Net income (loss) attributable to OfficeMax and noncontrolling interest

$
(1,575
)
$
(1,665,919
)
$
212,245Items in net income (loss) not using (providing) cash:Earnings from affiliates


(6,707
)

(6,246
)

(6,065
)Depreciation and amortization


116,417


142,896


131,573Non-cash impairment charges


17,612


2,120,572


Non-cash deferred taxes on impairment charges


(6,484
)

(357,313
)

Pension and other postretirement benefits expense


11,537


1,874


8,159Other


9,131


329


32,096Changes in operating assets and liabilities:Receivables


26,334


119,133


(139,120
)Inventories


164,027


98,111


(3,585
)Accounts payable and accrued liabilities


(56,471
)

(137,716
)

(228,269
)Current and deferred income taxes


48,752


(40,698
)

(11,521
)Other


36,371


(51,346
)

75,091Cash provided by operations


358,944


223,677


70,604Cash provided by (used for) investment:Expenditures for property and equipment


(38,277
)

(143,968
)

(140,843
)Distribution from escrow account


25,142





Withdrawal from insurance policies


14,977





Proceeds from sale of restricted investments





20,252


Proceeds from sales of assets, net


980


11,592


1,909Cash used for investment


2,822


(112,124
)

(138,934
)Cash used for financing:Cash dividends paid:Common stock





(45,474
)

(45,142
)Preferred stock


(3,089
)

(2,003
)

(3,961
)(3,089
)

(47,477
)

(49,103
)Short-term borrowings (repayments), net


(11,035
)

(1,974
)

14,197Payments of long-term debt


(52,936
)

(53,944
)

(25,751
)Borrowings of long-term debt


6,255


15,928


Purchase of Series D preferred stock


(6,079
)

(7,376
)

(4,621
)Proceeds from exercise of stock options








2,653Other


6,326


8,709


Cash used for financing


(60,558
)

(86,134
)

(62,625
)Effect of exchange rates on cash and cash equivalents


14,583


(7,277
)

1,522Increase (decrease) in cash and cash equivalents


315,791


18,142


(129,433
)Balance at beginning of the year


170,779


152,637


282,070Balance at end of the year

$
486,570

$
170,779

$
152,637


See accompanying notes to consolidated financial statements

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OfficeMax Incorporated and SubsidiariesConsolidated Statements of Equity

For the Fiscal Years ended December 26, 2009, December 27, 2008 and December 29, 2007Common
Shares
Outstanding



Preferred
Stock

Common
Stock

Additional
Paid-In
Capital

Retained
Earnings
(Accumulated
Deficit)

Accumulated
Other
Comprehensive
Income
(Loss)

Total
OfficeMax
Share-
holders'
Equity

Non-
controlling
Interest(thousands, except per share)74,903,220

Balance at December 30, 2006

$
54,735

$
187,226

$
893,848

$
941,830

$
(91,995
)
$
1,985,644

$
29,885Comprehensive income:Net income











207,373





207,373


4,872Other comprehensive income (loss)Cumulative foreign currency translation adjustment














59,977


59,977


(1,780
)Minimum pension liability adjustment, net of tax














53,756


53,756


Other comprehensive income (loss)














113,733


113,733


(1,780
)Comprehensive income
















$
321,106

$
3,092Adjustment from initial adoption of FIN 48











(3,959
)




(3,959
)

Cash dividends declared:Common stock











(45,333
)




(45,333
)

Preferred stock











(3,961
)




(3,961
)

Restricted stock issued








26,437








26,437


301,443

Restricted stock vested





767


(767
)










187,843

Stock options exercised





470


5,447








5,917


4,588

Other


(4,746
)

18


(2,551
)







(7,279
)

(935
)75,397,094

Balance at December 29, 2007

$
49,989

$
188,481

$
922,414

$
1,095,950

$
21,738

$
2,278,572

$
32,042Comprehensive loss:Net loss











(1,657,932
)




(1,657,932
)

(7,987
)Other comprehensive income (loss)Cumulative foreign currency translation adjustment














(83,758
)

(83,758
)

(6,894
)Minimum pension liability adjustment, net of tax














(205,718
)

(205,718
)

Other comprehensive income (loss)














(289,476
)

(289,476
)

(6,894
)Comprehensive loss
















$
(1,947,408
)
$
(14,881
)Cash dividends declared:Common stock











(34,220
)




(34,220
)

Preferred stock











(3,663
)




(3,663
)

Restricted stock issued








93








93


571,727

Restricted stock vested





1,436


(1,436
)










8,331

Other


(7,424
)

26


4,257


(230
)




(3,371
)

4,71075,977,152

Balance at December 27, 2008

$
42,565

$
189,943

$
925,328

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

$
21,871Comprehensive income (loss):Net income (loss)











667





667


(2,242
)Other comprehensive incomeCumulative foreign currency translation adjustment














47,477


47,477


1,157Minimum pension liability adjustment, net of tax














87,746


87,746


Other comprehensive income














135,223


135,223


1,157Comprehensive income (loss)
















$
135,890

$
(1,085
)Preferred stock dividend declared











(2,818
)




(2,818
)

Restricted stock issued








6,130








6,130


313,517

Restricted stock vested





784


(777
)







7


8,331,722

Stock contribution to pension plan





20,829


61,321








82,150


2,335

Other


(6,086
)

6


(2,090
)

4





(8,166
)

7,27384,624,726

Balance at December 26, 2009

$
36,479

$
211,562

$
989,912

$
(602,242
)
$
(132,515
)
$
503,196

$
28,059


See accompanying notes to consolidated financial statements

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Notes to Consolidated Financial Statements

1.    Summary of Significant Accounting Policies

Nature of Operations

OfficeMax Incorporated ("OfficeMax," the "Company" or "we") is a leader in both business-to-business and retail
office products
distribution. The Company provides office supplies and paper, print and document services, technology products and solutions and furniture to large, medium and small businesses, government offices and
consumers. OfficeMax customers are served by approximately 31,000 associates through direct sales, catalogs, the Internet and a network of retail stores located throughout the United States, Canada,
Australia, New Zealand and Mexico. The Company's common stock is traded on the New York Stock Exchange under the ticker symbol OMX. The Company's corporate headquarters is located in Naperville,
Illinois, and the OfficeMax website address is www.officemax.com.

The
Company manages its business using three reportable segments: OfficeMax, Contract ("Contract segment" or "Contract"); OfficeMax, Retail ("Retail segment" or "Retail"); and Corporate
and Other. OfficeMax, Contract markets and sells office supplies and paper, technology products and solutions, print and document services, and office furniture directly to large corporate and
government offices, as well as to small and medium-sized offices through field salespeople, outbound telesales, catalogs, the Internet and, primarily in foreign markets, through office products
stores. OfficeMax, Retail markets and sells office supplies and paper, print and document services, technology products and solutions and office furniture to small and medium-sized businesses and
consumers through a network of retail stores. Management reviews the performance of the Company based on these segments. We present information pertaining to our segments in Note 14, Segment
Information.

Consolidation

The consolidated financial statements include the accounts of OfficeMax and all majority owned subsidiaries, except our 90%-owned
subsidiary in Cuba which is accounted for as an investment due to various asset restrictions. We also consolidate the variable interest entities in which the Company is the primary beneficiary. All
significant intercompany balances and transactions have been eliminated in consolidation.

Fiscal Year

The Company's fiscal year-end is the last Saturday in December. Due primarily to statutory requirements, the Company's
international businesses maintain December 31 year-ends, with our majority-owned joint venture in Mexico reporting one month in arrears. Fiscal year 2009 ended on
December 26, 2009, fiscal year 2008 ended on December 27, 2008 and fiscal year 2007 ended on December 29, 2007. Each of the past three years has included 52 weeks for all
reportable segments and businesses.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures about contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. Actual results are likely to differ from those estimates, but management does not believe such differences
will materially affect the Company's financial position, results of operations or cash flows. Significant items subject to such estimates

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and
assumptions include the recognition of vendor rebates and allowances; the carrying amount of intangibles and long lived assets; inventories; income tax assets and liabilities; facility closure
reserves; environmental and asbestos liabilities; and assets and obligations related to employee benefits.

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 shareholders' 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 Operations in the
periods 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

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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.

At
December 26, 2009 and December 27, 2008, the Company had allowances for doubtful accounts of $8.6 million and $11.2 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.

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 a significant number of our locations. For periods subsequent to each location's last physical inventory count, an
allowance for estimated shrinkage is provided based on historical shrinkage 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

Long-lived assets, such as property, leasehold improvements, equipment, capitalized software costs and purchased
intangibles subject to amortization, are reviewed for impairment whenever

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events
or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. 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. In 2009 and 2008
the Company determined that there were indicators of impairment, completed tests for impairment and recorded impairment of store assets. See Note 5, "Goodwill, Intangible Assets and Other
Long-lived Assets," for further discussion regarding impairment of assets.

Goodwill and 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 carrying amount of the asset might be impaired, using a fair-value-based approach. 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.
The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. The Company's annual impairment testing date is the last day of the fiscal year. The Company
fully impaired its goodwill balances in 2008. See Note 5, "Goodwill, Intangible Assets and Other Long-lived Assets," for further discussion regarding impairment of 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.

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 26, 2009 and December 27, 2008, the Company held an investment in affiliates of Boise Cascade, L.L.C. Due to restructurings conducted by those
affiliates, our investment is currently in Boise Cascade Holdings, L.L.C. (the "Boise Investment").

Capitalized Software Costs

The Company capitalizes certain costs related to the acquisition and development of internal use software that is expected to benefit
future periods. These costs are amortized using the straight-line method over the expected life of the software, which is typically three to five years. Other non-current
assets in the Consolidated Balance Sheets include unamortized capitalized software costs of $25.7 million and $37.9 million at December 26, 2009 and December 27, 2008,
respectively. Amortization of capitalized software costs totaled $17.2 million, $18.7 million and $15.2 million in 2009, 2008 and 2007, respectively. Software development costs
that do not meet the criteria for capitalization are expensed as incurred.

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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. Since the majority of participants in the plans are inactive, the actuarial models use an
attribution approach that generally spreads recognition of the effects of individual events over the life expectancy of the participants. Net pension and postretirement benefit income or expense is
also determined using assumptions which include discount rates and expected long-term rates of return on plan assets. The Company bases the discount rate assumption on the rates of return
for a theoretical portfolio of high-grade corporate bonds (rated Aa1 or better) with cash flows that generally match our expected benefit payments in future years. The
long-term 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 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 in 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.

Environmental and Asbestos Matters

Environmental and asbestos liabilities that relate to the operation of the paper and forest products businesses and timberland assets
prior to the sale of the paper, forest products and timberland assets continue to be liabilities of OfficeMax. The Company accrues for losses associated with these types of obligations when such
losses are probable and reasonably estimable.

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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 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 further discussion.)

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 Operations.

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 and catalog expense was $211.3 million in 2009, $232.1 million in 2008 and
$242.6 million in 2007, and is recorded in operating and selling expenses in the Consolidated Statements of Operations.

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 2009, 2008
and 2007, the Company recorded approximately $1.6 million, $10.0 million and $10.2 million in pre-opening costs, respectively.

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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. 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 26, 2009 and December 27, 2008, other long-term liabilities included approximately
$68.2 million and $74.3 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 records all derivative instruments 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 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 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 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 derivative instruments at December 26, 2009 and did not have any significant hedge transactions
in 2009, 2008 or 2007.

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
June 2009, the Financial Accounting Standards Board ("FASB") issued a statement establishing the FASB Accounting Standards Codification ("the ASC" or "the Codification").
Effective for interim and annual periods ended after September 15, 2009, the Codification became the source of authoritative U.S. generally accepted accounting principles ("GAAP") recognized by
the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.
The FASB statement establishing the ASC is not intended to change existing GAAP and as such did not have an impact on the consolidated financial statements of the Company. The Company has updated its
references to reflect the Codification.

In
September 2006, the FASB issued guidance which defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value

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measurements.
This guidance was 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 the financial statements. In November 2007, the FASB provided a one year deferral for the implementation of this guidance for other nonfinancial assets
and liabilities. The Company adopted this guidance for financial assets and liabilities effective at the beginning of fiscal year 2008 and for non-financial assets and liabilities
effective at the beginning of fiscal year 2009. The adoption of this guidance had no significant impact on our consolidated financial statements for either fiscal year 2008 or 2009.

In
December 2007, the FASB issued updated guidance which changed the presentation and disclosure requirements for noncontrolling interests (previously referred to as minority interests).
This updated guidance is effective for periods beginning on or after December 15, 2008 and is to be applied prospectively to all noncontrolling interests, including those that arose prior to
the effective date. While the accounting requirements are to be applied prospectively, prior period financial information must be recast to attribute net income and other comprehensive income to
noncontrolling interests and provide other disclosures. The Company adopted this guidance for all noncontrolling interests effective at the beginning of fiscal year 2009, and has revised its prior
period financial statements to reflect the required change in presentation and additional disclosures. The adoption of this accounting change and the retrospective impact of the required presentation
and disclosure changes on the Company's prior year financial statements was immaterial.

In
December 2008, the FASB issued updated guidance related to an employer's disclosures about plan assets of a defined benefit pension or other postretirement plan. This updated guidance
requires enhanced disclosures about the fair value of plan assets including major categories of plan assets, inputs and valuation techniques used to measure fair value, significant concentrations of
risk, the method used to allocate investments and the effect of fair value measurements using significant unobservable inputs. The disclosures about plan assets must be provided for fiscal years
ending after December 15, 2009. The Company adopted this guidance prospectively for the period ended December 26, 2009, and has included the required disclosure in Note 12,
Retirement and Benefit Plans.

In
April 2009, the FASB issued updated guidance related to fair-value measurements to clarify the considerations related to measuring fair-value in inactive
markets, modify the recognition and measurement of other-than-temporary impairments of debt securities, and require public companies to disclose the fair values of financial
instruments in interim periods. The updated guidance is effective for interim and annual periods ended after June 15, 2009, with early adoption permitted for periods ended after
March 15, 2009. The Company adopted the updated guidance in the first quarter of fiscal year 2009, which required certain additional disclosures regarding the fair value of financial
instruments in the financial statements.

In
May 2009, the FASB issued guidance which establishes accounting and disclosure requirements for subsequent events. This guidance details the period after the balance sheet date during
which the Company should evaluate events or transactions that occur for potential recognition or disclosure in the financial statements, the circumstances under which the Company should recognize
events or transactions occurring after the balance sheet date in its financial statements and the required disclosures for such events. The Company adopted this guidance prospectively in the second
quarter.

In
June 2009, the FASB issued guidance which eliminates previous exceptions to rules requiring the consolidation of qualifying special-purpose entities, which will result in more
entities being subject to consolidation assessments and reassessments. This guidance requires ongoing reassessment of whether a company is the primary beneficiary of a variable interest entity ("VIE")
and clarifies characteristics that identify a VIE. In addition, additional disclosures are required about

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a
company's involvement with a VIE and any significant changes in risk exposure due to that involvement. The Company is currently evaluating the impact of the adoption of this guidance (which is
required beginning in 2010) but does not anticipate it will have a material impact on our results of operations or financial condition.

2.    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 beneficial. 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, primarily
the location's cease-use date. Upon closure, unrecoverable costs are included in facility closure reserves 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 required payments.

In
2009, the Company recorded charges of $31.2 million related to the closing of 21 underperforming stores prior to the end of their lease terms, of which 16 were in the U.S. and
five were in Mexico. In 2008, the Company recorded $3.1 million of charges related principally to close five stores and it reduced rent and severance accruals by $3.4 million relating to
prior closed stores. In 2008, the Company also recorded $8.7 million of charges related to four domestic retail stores where we had signed lease commitments, but decided not to open the stores
due to the existing economic environment. This charge was partially offset by reduced rent accruals of $4.0 million on other store lease obligations.

These
charges were included in other operating net, in the Consolidated Statements of Operations.

Facility
closure reserve account activity during 2009, 2008 and 2007, including activity related to the reorganization of the Contract segment, retail store closures and headquarters
consolidation was as follows:

Lease\
Contract
Terminations

Severance\
Retention\
Other

Total(thousands)Balance at December 30, 2006

$
107,824

$
13,980

$
121,804Cash payments


(38,196
)

(10,149
)

(48,345
)Accretion


3,603





3,603Balance at December 29, 2007

$
73,231

$
3,831

$
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
)

(2,002
)

(35,229
)Accretion


2,643





2,643Balance at December 27, 2008

$
48,439

$
494

$
48,933Charges related to stores closed


30,001


1,207


31,208Transfer of deferred rent balance


3,214





3,214Changes to estimated costs included in income


418


(409
)

9Cash payments


(23,315
)

(1,279
)

(24,594
)Accretion


2,802





2,802Balance at December 26, 2009

$
61,559

$
13

$
61,572


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Reserve balances were classified in the Consolidated Balance Sheets as follows:

December 26,
2009

December 27,
2008

December 29,
2007(thousands)Other accrued liabilities

$
16,775

$
14,328

$
22,213Other long-term liabilities


44,797


34,605


54,849Total

$
61,572

$
48,933

$
77,062


At December 26, 2009, the facilities closure reserve consisted of the following:

(thousands)Estimated future lease obligations

$
112,654Less: anticipated sublease income


(51,095
)Total

$
61,559


In addition, the Company is the lessee of a non-operating, building materials manufacturing facility near Elma, Washington. During
2006, the Company ceased operations at the facility, fully impaired the assets and recorded a reserve for the lease payments and other contract termination and closure costs. The Company has not been
successful in identifying a buyer for the business which would include the assumption of the long-term lease. The liabilities of the Elma facility ($14.1 million in total) are
recorded in other current liabilities and other long-term liabilities in the Consolidated Balance Sheets.

3.    Severance and Other Charges

In 2009, we recorded $18.1 million of severance and other charges, principally related to reorganizations of our U.S. and Canadian Contract sales forces,
our customer fulfillment centers and our customer service centers, as well as a streamlining of our Retail store staffing. These charges are recorded by segment in the following manner: Contract
$15.3 million, Retail $2.1 million and Corporate and Other $0.7 million.

During
2008, the Company 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 the 2008 year-end) and a $2.4 million charge related to the
consolidation of the Contract segment's manufacturing facilities in New Zealand. These items are included in the caption "Other operating, net" in the Consolidated Statements of Operations.

As
of December 26, 2009, $6.0 million of severance charges recorded in 2009 and 2008 remain unpaid and are included in accrued expenses and other current liabilities in the
Consolidated Balance Sheets.

4.    Timber Notes/Non-Recourse Debt

In October 2004, 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 affiliates of 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, the Note Issuers transferred a total of $1,635 million in cash to Lehman Brothers Holdings Inc. ("Lehman") and Wachovia Corporation
("Wachovia") (which was later purchased by Wells Fargo & Company)

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($817.5 million
to each of Lehman and Wachovia). Lehman and Wachovia issued collateral notes (the "Collateral Notes") to the Note Issuers. 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.

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. The subsidiaries pledged the Installment Notes and related guarantees and issued securitized notes (the "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 proceeds of the applicable pledged Installment Notes and underlying Lehman or Wachovia guaranty, and therefore there is no recourse against OfficeMax. The Securitization Notes are
15-year non-amortizing, and were issued in two equal $735 million tranches paying interest of 5.54% and 5.42%, respectively. The Securitization Notes are reported as
non-recourse debt in the Company's Consolidated Balance Sheets.

As
a result of these transactions, we received $1,470 million in cash. The subsidiaries were expected to earn approximately $82.5 million per year in interest income on the
Installment Notes receivable and expected to incur annual interest expense of approximately $80.5 million on the Securitization Notes. 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.

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. Lehman's bankruptcy filing constituted an event of default under the $817.5 million Installment
Note guaranteed by Lehman.

We
are required for accounting purposes to assess the carrying value of assets whenever circumstances indicate that a decline in value may have occurred. After evaluating the situation,
we concluded in late October 2008 that as a result of the Lehman bankruptcy, it was probable that we would be unable to collect all amounts due according to the contractual terms of the Installment
Note guaranteed by Lehman (the "Lehman Guaranteed Installment Note"). Accordingly, we evaluated the carrying value of the Lehman Guaranteed Installment Note and reduced it to the estimated amount we
expect to collect ($81.8 million) by recording a non-cash impairment charge of $735.8 million, pre-tax, in the third quarter of 2008. We based our estimate of the
recoverable amount of the Lehman Guaranteed Installment Note on a variety of factors, including consultations with financial advisors and review of the trading prices on outstanding Lehman debt
instruments with similar contractual interest rates and maturities.

Recourse
on the Securitization Notes is limited to the proceeds from the applicable pledged Installment Notes and underlying Lehman and Wachovia guaranty. Accordingly, the Lehman
Guaranteed Installment Note and underlying guarantees by Lehman will be transferred to the holders of the Securitization Notes guaranteed by Lehman in order to settle and extinguish that liability.
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. This will occur when the Lehman Guaranteed

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Installment
Note and the guaranty are transferred to and accepted by the Securitization 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, we expect to recognize a non-cash gain equal to the difference between the carrying amount of the Securitization Notes guaranteed by Lehman
($735.0 million at December 26, 2009) and the carrying value of the Lehman Guaranteed Installment Note ($81.8 million at December 26, 2009) in a later period when the
liability is legally extinguished. The actual gain to be recognized in the future will be measured based on the carrying amounts of the Lehman Guaranteed Installment Note and the Securitization Notes
guaranteed by Lehman at the date of settlement.

At
the time of the sale of the timberlands in 2004, we generated a tax gain and recognized the related deferred tax liability. The timber installment notes structure allowed the Company
to defer the resulting tax liability of $543 million until 2020, the maturity date for the Installment Notes. Due to the Lehman bankruptcy and note defaults, the recognition of the Lehman
portion of the gain will be triggered when the Lehman Guaranteed Installment Note is transferred to the Securitization Note holders as payment and/or when the Lehman bankruptcy is resolved.

Through
December 26, 2009, we have received all payments due under the Installment Notes guaranteed by Wachovia, which have consisted only of interest due on the notes, and made
all payments due on the related Securitization Notes guaranteed by Wachovia, again consisting only of interest due. As all amounts due on the Installment Notes guaranteed by Wachovia ("the Wachovia
Guaranteed Installment Notes") are current and we have no reason to believe that we will not be able to collect all amounts due according to the contractual terms of the Wachovia Guaranteed
Installment Notes. The Wachovia Guaranteed Installment Notes are stated in our Consolidated Balance Sheet at their original principal amount of $817.5 million.

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

Impairment Reviews and Charges

In 2008, management concluded 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 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 tested the assets for impairment.

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, a second step is required, 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 2008, 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. We recorded a charge of $1,201.5 million in 2008 to write-off

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the
goodwill of the Company in both segments; Contract ($815.5 million) and Retail ($386.0 million). The impairment charges 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. These charges resulted in a full impairment of our goodwill balances as of
the end of 2008, and, as a result, there will be no future annual assessment of goodwill.

The
measurement of impairment of indefinite-lived intangible assets consists of calculating the fair value and comparing that value to the intangible asset's carrying value. The fair
value is calculated based on the estimated future discounted cash flows associated with the intangible asset. In 2008, the Company recorded estimated impairment of the trade names in the Retail
reporting unit of $107.1 million, before taxes. Based on the Company's assessment and testing, no impairment of indefinite-lived intangible assets was required in 2009.

Interim
impairment tests of the Company's other long-lived assets were also performed in 2009 and 2008. Impairment testing of other long-lived assets 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. In 2008, due to the existence of indicators
of potential impairment, the Company performed the recoverability test for all the other long-lived assets of each reporting unit, in aggregate. The recoverability test did not identify
potential impairment for these asset groups. In 2009 and 2008, 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. This testing did identify impairment at certain stores. As a result, we completed the second step and, based on our conclusions, wrote off
$17.6 million and $55.8 million of store assets in 2009 and 2008, respectively.

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. 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:

2009Gross Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount(thousands)Trade names

$
66,000

$


$
66,000Customer lists and relationships


25,833


(11,288
)

14,545Exclusive distribution rights


6,636


(3,375
)

3,261$
98,469

$
(14,663
)
$
83,806


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2008Gross Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount(thousands)Trade names

$
66,000

$


$
66,000Customer lists and relationships


34,767


(21,848
)

12,919Exclusive distribution rights


5,255


(2,381
)

2,874$
106,022

$
(24,229
)
$
81,793


Intangible
amortization expense totaled $1.6 million, $5.4 million and $7.0 million in 2009, 2008 and 2007 respectively. The estimated amortization expense is
approximately $1.5 to $2.0 million in each of the next five years.

The
changes in the intangible carrying amounts from December 30, 2006 to December 26, 2009, were as follows:

Trade names

Customer
lists and
relationships

Noncompete
agreements

Exclusive
distribution
rights

Total(thousands)Net carrying amount, December 30, 2006

$
173,150

$
22,003

$
4,640

$
1,511

$
201,304Additions





195





2,860


3,055Amortization





(3,969
)

(2,607
)

(420
)

(6,996
)Effect of foreign currency translation





2,080


9


268


2,357Net carrying amount, December 29, 2007

$
173,150

$
20,309

$
2,042

$
4,219

$
199,720Impairment


(107,150
)










(107,150
)Amortization





(2,912
)

(2,041
)

(409
)

(5,362
)Effect of foreign currency translation





(4,478
)

(1
)

(936
)

(5,415
)Net carrying amount, December 27, 2008

$
66,000

$
12,919

$


$
2,874

$
81,793Amortization





(1,271
)




(363
)

(1,634
)Effect of foreign currency translation





2,897





750


3,647Net carrying amount, December 26, 2009

$
66,000

$
14,545

$


$
3,261

$
83,806


6.    Net Income (Loss) Per Common Share

Basic net income (loss) per share is calculated using net earnings available to holders of our common stock divided by the weighted-average number of shares of
common stock outstanding during the year. Diluted net income (loss) 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 the vesting of non-vested restricted shares, and the conversion of outstanding preferred stock. Net income (loss) per
common share was

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determined
by dividing net income (loss), as adjusted, by weighted average shares outstanding as follows:

2009

2008

2007(thousands, except per-share amounts)Net income (loss) available to OfficeMax common shareholders

$
(2,151
)
$
(1,661,595
)
$
203,412Average sharesbasic(a)


77,483


75,862


75,274Restricted stock, stock options and other(b)








1,100Average sharesdiluted


77,483


75,862


76,374Net income (loss) available to OfficeMax common shareholders per common share:Basic

$
(0.03
)
$
(21.90
)
$
2.70Diluted

$
(0.03
)
$
(21.90
)
$
2.66


(a)The
assumed conversion of outstanding preferred stock was anti-dilutive in all periods presented, and therefore no adjustment was required to
determine diluted income (loss) from continuing operations or average shares-diluted.(b)Outstanding
options to purchase shares of common stock totaled 1.3 million and 1.5 million at the end of 2009 and 2008, respectfully, but were
not included in the computation of diluted income (loss) per common share because the impact would have been anti-dilutive due to the loss reported for the period. Options to purchase
0.4 million shares of common stock were outstanding during 2007, but were not included in the computation of diluted income (loss) per common share because the impact would have been
anti-dilutive as the option price was higher than the average market price during the year.


7.    Income Taxes

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

2009

2008

2007(thousands)Current income tax (provision) benefitFederal

$
60,354

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


33,770


(24,166
)

(11,380
)Foreign


(9,999
)

(23,282
)

(24,582
)84,125


(57,559
)

(61,672
)Deferred income tax (provision) benefitFederal


(23,190
)

274,376


(61,882
)State


(29,593
)

76,129


(4,785
)Foreign


(2,584
)

13,535


3,057(55,367
)

364,040


(63,610
)$
28,758

$
306,481

$
(125,282
)


During
2009, 2008 and 2007, the Company made cash payments for income taxes, net of refunds received, as follows:

2009

2008

2007(thousands)Cash tax payments (refunds), net

$
(71,026
)
$
91,530

$
89,483


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The income tax provision attributable to income (loss) from continuing operations for the years ended December 26, 2009, December 27, 2008 and
December 29, 2007 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:

2009

2008

2007(thousands)Tax (provision) benefit at statutory rate

$
10,617

$
690,340

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


2,516


29,041


(11,030
)Foreign tax provision differential


1,085


(3,283
)

106Impact of goodwill impairment





(418,920
)

Net operating loss valuation allowance and credits


(2,484
)

1,291


434Change in tax contingency liability


(3,390
)

(3,394
)

755Tax settlement, net of other charges


14,880


6,830


1,582Repatriation of foreign earnings, net


3,428





ESOP dividend deduction


944


1,166


1,317Other, net


1,162


3,410


(262
)$
28,758

$
306,481

$
(125,282
)


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 in the
following table:

2009

2008(thousands)Impairment of note receivable

$
286,207

$
286,207Minimum tax and other credits carryover


237,897


28,303Net operating loss carryovers


104,605


27,801Deferred gain on Boise Investment


69,925


69,925Compensation obligations


154,400


220,045Operating reserves and accrued expenses


59,682


64,563Investments and deferred charges


18,110


25,681Property and equipment


15,942


47,899Allowances for receivables


14,253


18,219Inventory


8,699


11,863Tax goodwill


6,788


9,774Other


3,064


10,207Total deferred tax assets


979,572


820,487Valuation allowance on NOLs and credits


(16,117
)

(13,633
)Total deferred tax assets after valuation allowance

$
963,455

$
806,854Timberland installment gain related to Wachovia Note

$
(266,798
)
$
(266,798
)Timberland installment gain related to Lehman Note


(276,965
)

Undistributed earnings


(4,606
)

(4,606
)Total deferred tax liabilities


(548,369
)

(271,404
)Total net deferred tax assets

$
415,086

$
535,450


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Deferred
tax assets and liabilities in our Consolidated Balance Sheets were as follows:

(thousands)Deferred income taxes and receivables

$
114,186

$
99,268Deferred income taxes


300,900


436,182$
415,086

$
535,450


As
discussed in Note 4, "Timber Notes/Non-Recourse Debt" at the time of the sale of the timberlands in 2004, we generated a tax gain and recognized the related
deferred tax liability. The timber installment notes structure allowed the Company to defer the resulting tax liability of $543 million until 2020, the maturity date for the Lehman Guaranteed
Installment Notes. Due to the Lehman bankruptcy and note defaults, we initially concluded that approximately half of this gain would be accelerated into 2008 for tax purposes and we estimated and paid
taxes on this gain in 2008. In estimating the cash taxes, we considered our available alternative minimum tax credits, a portion of which resulted from prior tax payments related to the sale of the
timberlands in 2004, which were used to reduce the net cash payments. After extensive review with our outside tax advisors, we concluded that the recognition of the Lehman portion of the gain was not
triggered in
2008, but instead will be triggered when the Installment Note is transferred to the Securitization Note holders as payment and/or when the Lehman bankruptcy is resolved. Accordingly, we appropriately
modified our position as we finalized the 2008 tax return, and have received refunds of taxes paid in 2008 from the federal and state government. Accordingly, in the Consolidated Balance Sheets as of
December 26, 2009, the Company has reestablished both the deferred tax liability related to the full deferred gain from the sale of the timberlands and the deferred tax assets relative to
available alternative minimum tax credits.

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 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 and other credit carryforwards 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 $78 million which expire in 2020, and alternative minimum tax
credit carryforwards of approximately $207 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 $33 million, net of the valuation allowance, that expire between 2010 and 2029.

The
Company has established a valuation allowance related to net operating loss carryforwards and other credit 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 $16.1 million
and $13.6 million at December 26, 2009 and December 27, 2008, respectively. Annually, the valuation allowance is reviewed and adjusted based on management's assessments of
realizable deferred tax assets.

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

2009

2008

2007(thousands)Domestic

$
(69,386
)
$
(1,953,946
)
$
272,169Foreign


39,053


(18,454
)

65,358Total pre-tax income (loss)

$
(30,333
)
$
(1,972,400
)
$
337,527


Total
gross unrecognized tax benefits at December 26, 2009 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 Company does not anticipate any tax settlements to occur within
the next twelve months. The recorded income tax benefit for 2009 includes a $14.9 million decrease in unrecognized benefits due to the resolution of an issue under IRS appeal related to the
deductibility of interest on the Company's industrial revenue bonds. The recorded income tax benefit for 2008 includes 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. As of December 26, 2009, the Company had $8.2 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 27, 2008

$
20,380Increase related to prior year tax positions


1,710Decrease related to prior year tax positions


(14,369
)Increase related to current year tax positions


1,420Settlements


(894
)Balance at December 26, 2009

$
8,247


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 2003.

The
Company recognizes accrued interest and penalties associated with uncertain tax positions as part of income tax expense. As of December 26, 2009, the Company had
$2.1 million of accrued interest and penalties associated with uncertain tax positions. Income tax benefit for 2009 includes a benefit of $0.1 million related to interest and penalties,
reflecting interest accrued less the effect of adjustments on settlement.

Deferred
taxes are not recognized for temporary differences related to investments in foreign subsidiaries because such earnings are considered to be indefinitely reinvested in the
business. The determination of the amount of the unrecognized deferred tax liability related to the undistributed earnings is not practicable because of the complexities associated with its
hypothetical calculation.

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

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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:

2009

2008

2007(thousands)Minimum rentals

$
355,662

$
348,629

$
331,066Contingent rentals


1,013


886


908Sublease rentals


(671
)

(1,013
)

(1,515
)$
356,004

$
348,502

$
330,459


For
operating leases with remaining terms of more than one year, the minimum lease payment requirements are:

(thousands)2010

$
363,4432011


320,5392012


265,3412013


213,4602014


166,223Thereafter


403,086Total

$
1,732,092


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 been reduced by $33.6 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.

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.    Investments in Affiliates

In connection with the sale of the paper, forest products and timberland assets in 2004, the Company invested $175 million in the Boise Investment. A
portion of the securities received in exchange for the Company's investment carry no voting rights. This investment is accounted for under the cost method as Boise Cascade Holdings, L.L.C. does not
maintain separate ownership accounts for its affiliate's 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 Investment represented a continuing involvement in the operations of the business we sold in 2004. 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.

Throughout
the year, we review the carrying value of this investment whenever events or circumstances indicate that its fair value may be less than its carrying amount. At
year-end, we reviewed certain financial information of Boise Cascade Holdings, L.L.C., including estimated future cash flows as well as data regarding the valuation of comparable
companies, and determined that

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there
was no impairment of this investment. The Company will continue to monitor and assess this investment.

The
non-voting securities of Boise Cascade Holdings, L.L.C. 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 $6.7 million in 2009,
$6.2 million in 2008 and $6.1 million in 2007. These amounts were recorded as reductions of general and administrative expenses in the Consolidated Statements of Operations. The dividend
receivable was $22.9 million at December 26, 2009, and was recorded in other non-current assets in the Consolidated Balance Sheets.

The
Company receives distributions on the Boise Investment for the income tax liability associated with its share of allocated earnings. During 2009 and 2008, the Company received
tax-related distributions of $2.6 million and $23.0 million, respectively. The larger distribution in 2008 reflected the gain on the sale by Boise Cascade, L.L.C. of a
majority interest in its paper and packaging and newsprint businesses. The distributions are reported as other income (expense), net in the Consolidated Statements of Operations.

10.    Debt

The Company's debt, almost all of which is unsecured, consists of both recourse and non-recourse obligations as follows at year-end:

2009

2008(thousands)Recourse debt:9.45% debentures, paid in 2009

$


$
35,7076.50% notes, due in 2010


13,680


13,6807.35% debentures, due in 2016


17,967


17,967Medium-term notes, Series A, with interest rates averaging 7.9% and 7.8%, due in varying amounts periodically through 2013


36,900


51,900Revenue bonds, with interest rates averaging 6.4% and 6.4%, due in varying amounts periodically through 2029


189,930


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


18,526


18,526Grupo OfficeMax installment loans, due in monthly installments through 2014


16,085


11,202Other indebtedness, with interest rates averaging 7.0% and 10.9%, due in varying amounts annually through 2016


4,528


16,058297,616


354,970Less unamortized discount


564


596Less current portion


22,430


64,452$
274,622

$
289,922Non-recourse debt:5.42% securitized timber notes, due in 2019


735,000


735,0005.54% securitized timber notes, due in 2019


735,000


735,000$
1,470,000

$
1,470,000


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Scheduled Debt Maturities

The scheduled payments of recourse debt, are as follows:

(thousands)2010

$
22,4302011


4,4782012


39,0782013


5,5692014


1,773Thereafter


224,288Total

$
297,616


All
non-recourse debt is due in full in 2019.

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. 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, the Company entered into an Amended and Restated Loan and Security Agreement (the "U.S. Credit Agreement") with a group of banks. The U.S. Credit 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 U.S. Credit Agreement 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 the terms detailed in the U.S. Credit Agreement. Letters of credit, which may be issued under the U.S. Credit Agreement up to a maximum of $250 million, reduce available
borrowing capacity. At December 26, 2009, the Company was in compliance with all covenants under the U.S. Credit Agreement. The U.S. Credit Agreement expires on July 12, 2012.

Borrowings
under the U.S. Credit Agreement 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 U.S. Credit Agreement depending on the level of average availability. Fees on letters of credit issued under the U.S. Credit Agreement were charged
at a weighted average rate of 0.875% during 2009. 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.

On
September 30, 2009, Grand & Toy Limited, the Company's wholly owned subsidiary in Canada, entered into a Loan and Security Agreement (the "Canadian Credit Agreement")
with a group of banks. The Canadian Credit Agreement permits Grand & Toy Limited to borrow up to a maximum of C$60 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 Canadian Credit Agreement may be increased (up to a maximum
of C$80 million) at Grand & Toy Limited's request or reduced from time to time, in each case according to the terms detailed in the Canadian Credit Agreement. Letters of credit, which
may be issued under the Canadian Credit Agreement up to a maximum of C$10 million, reduce available borrowing capacity under the Canadian Credit Agreement. At December 26, 2009,
Grand & Toy Limited was in compliance with all covenants under the Canadian Credit Agreement. The Canadian Credit Agreement expires on July 12, 2012.

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Borrowings
and availability under the Company's credit agreements for 2009 and 2008 were as follows:

2009

2008U.S.
Credit
Agreement

Canadian
Credit
Agreement

Total

U.S.
Credit
Agreement(millions)Maximum aggregate available borrowing amount

$
534.4

$
39.7

$
574.1

$
613.6Less: Stand-by letters of credit


(61.1
)




(61.1
)

(66.7
)Amount available for borrowing at fiscal year-end

$
473.3

$
39.7

$
513.0

$
546.9Maximum borrowings outstanding during fiscal year

$


$


$


$



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 pledged instruments that matured in October 2008, which had been reported as restricted investments in the Consolidated Balance Sheets.

Other

At the end of the fiscal year 2009, Grupo OfficeMax, our 51%-owned joint venture in Mexico, had total outstanding borrowings of
$16.7 million. This included $9.9 million under an installment loan agreement which is due in 60 monthly payments that started in the second quarter of 2009. In the third quarter
of 2009, Grupo OfficeMax entered into a second installment loan agreement for $6.2 million due in 54 monthly payments beginning in the second quarter of 2010. The remaining
$0.6 million of borrowings is a simple revolving loan. There is no recourse against the Company on the Grupo OfficeMax loans. The $6.2 million installment loan is secured by certain
owned property of Grupo OfficeMax. All other Grupo OfficeMax loan facilities are unsecured.

We
have various unsecured debt outstanding, including approximately $189.9 million of industrial revenue bonds due in varying amounts through 2029. At December 27, 2008,
approximately $69.2 million of these obligations were the subject of a preliminary potential adverse determination regarding the deductibility of interest on the bonds from the Internal Revenue
Service ("IRS"). In the fourth quarter of 2009, the IRS conceded the position. The bonds are expected to be held to their full maturity and continue to be classified as long-term debt in
the Consolidated Balance Sheets at December 26, 2009.

Cash Paid for Interest

Cash payments for interest, net of interest capitalized and including interest payments related to the timber securitization notes,
were $71.8 million in 2009, $90.0 million in 2008 and $116.6 million in 2007.

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11.    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 26, 2009 and December 27, 2008. The fair value of a financial instrument is the amount
at which the instrument could be exchanged in a current transaction between willing parties.

2009

2008Carrying amount

Fair value

Carrying amount

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

$
817.5

$
823.6

$
817.5

$
801.9Lehman


81.8


81.8


81.8


81.8Financial liabilities:Debt

$
297.6

$
207.2

$
355.0

$
236.7Timber securitization notesWachovia

$
735.0

$
754.8

$
735.0

$
736.8Lehman


735.0


81.8


735.0


81.8


In establishing a fair value, there is 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, described as follows:

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.

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:



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During
2009, there was no change in assets and liabilities measured at estimated fair value using Level 3 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. The Company was not a party to any significant derivative financial instruments in 2009 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. There were no swaps or other hedge transactions in 2009 or 2008.

12.    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

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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 second quarter of 2009, based on the high level of inactive participants in the Company's pension plans as well as the fact that all plan participants were fully vested, the
Company changed the estimated amortization period for its unrecognized actuarial loss (which represents the difference between the actual funded status and the expected funded status measured through
2009), from the average remaining service period of the participants to their average remaining life expectancy. The impact of the change in the amortization period was a reduction in pension expense
for 2009 of $11.2 million ($6.8 million after-tax), or $0.09 per diluted share.

Obligations and Funded Status

The changes in pension and other postretirement benefit obligations and plan assets during 2009 and 2008, as well as the funded status
of the Company's plans at December 26, 2009 and December 27, 2008 were as follows:

Pension Benefits

Other Benefits2009

2008

2009

2008(thousands)Change in benefit obligation:Benefit obligation at beginning of year

$
1,276,209

$
1,292,023

$
17,582

$
24,281Service cost


4,506


2,132


184


237Interest cost


75,858


78,041


1,137


1,164Actuarial (gain) loss


5,721


10,250


1,432


(2,573
)Changes due to exchange rates








1,885


(3,053
)Benefits paid


(101,618
)

(106,237
)

(1,883
)

(2,474
)Benefit obligation at end of year

$
1,260,676

$
1,276,209

$
20,337

$
17,582Change in plan assets:Fair value of plan assets at beginning of year

$
841,204

$
1,184,447

$


$
Actual return on plan assets


222,022


(250,076
)




Employer contributions


88,906


13,070


1,883


2,474Benefits paid


(101,618
)

(106,237
)

(1,883
)

(2,474
)Fair value of plan assets at end of year

$
1,050,514

$
841,204

$


$
Funded status

$
(210,162
)
$
(435,005
)
$
(20,337
)
$
(17,582
)


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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 Benefits2009

2008

2009

2008(thousands)Noncurrent assets

$
2,355

$


$


$
Current liabilities


(3,773
)

(4,359
)

(1,526
)

(1,746
)Noncurrent liabilities


(208,744
)

(430,646
)

(18,811
)

(15,836
)Net amount recognized

$
(210,162
)

(435,005
)
$
(20,337
)
$
(17,582
)


Amounts recognized in accumulated other comprehensive income consist of:

Net loss (gain)

$
440,206

$
590,213

$
3,520

$
2,227Prior service cost (credit)








(30,148
)

(34,123
)Total

$
440,206

$
590,213

$
(26,628
)
$
(31,896
)


The accumulated benefit obligation for all defined benefit pension plans was $1,260.5 million and $1,275.9 million for
December 26, 2009 and December 27, 2008, respectively.

Information
for pension plans with an accumulated benefit obligation in excess of plan assets:

Pension Benefits2009

2008(thousands)Projected benefit obligation

$
1,225,972

$
1,276,209Accumulated benefit obligation


1,225,762


1,275,895Fair value of plan assets


1,013,455


841,204


Components of Net Periodic Benefit Cost (Income)

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

Pension Benefits

Other Benefits2009

2008

2007

2009

2008

2007(thousands)Service cost

$
4,506

$
2,132

$
1,676

$
184

$
237

$
341Interest cost


75,858


78,041


77,084


1,137


1,164


1,353Expected return on plan assets


(76,623
)

(90,078
)

(89,018
)







Recognized actuarial loss


10,330


11,775


20,220


147


269


512Participant settlement expense





2,331











Amortization of prior service costs and other











(4,001
)

(3,997
)

(4,009
)Net periodic benefit cost (income)

$
14,071

$
4,201

$
9,962

$
(2,533
)
$
(2,327
)
$
(1,803
)


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Other changes in plan assets and benefit obligations recognized in other comprehensive income:

Pension Benefits

Other Benefits2009

2008

2009

2008(thousands)Accumulated other comprehensive income at beginning of year

$
590,213

$
253,917

$
(31,895
)
$
(32,593
)Net loss (gain)

$
(139,677
)
$
350,403

$
1,432

$
(2,573
)Amortization of net (loss) gain


(10,330
)

(14,107
)

(147
)
$
(269
)Amortization of prior service (cost) credit








4,001


3,997Canadian rate adjustment








(18
)

(457
)Accumulated other comprehensive income at end of year

$
440,206

$
590,213

$
(26,627
)
$
(31,895
)


The estimated net loss and prior service cost for the defined benefit pension plans that will be amortized from accumulated other comprehensive
income into net periodic benefit cost over the next fiscal year are $13.4 million and none, respectively. The estimated net loss and prior service credit for the other defined benefit
postretirement plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $0.2 million and $4.0 million,
respectively.

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

Canada2009

2008

2007

2009

2008

2007

2009

2008

2007Weighted average assumptions as of year-end:Discount rate


6.15%


6.20%


6.30%


5.10%


6.10%


5.90%


6.40%


7.30%


5.50%


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

Pension Benefits

Other BenefitsUnited States

Canada2009

2008

2007

2009

2008

2007

2009

2008

2007Weighted average assumptions:Discount rate


6.20%


6.30%


5.80%


6.10%


5.90%


5.60%


7.30%


5.50%


5.00%Expected long-term return on plan assets


7.50%


8.00%


8.00%




















In 2009, the assumed discount rate (which is required to be the rate at which the projected benefit obligation could be effectively settled as of
the measurement date) is based on the rates of return for a theoretical portfolio of high-grade corporate bonds (rated Aa1 or better) with cash flows

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that
generally match our expected benefit payments in future years. In selecting bonds for this theoretical portfolio, we focus on bonds that match cash flows to benefit payments and limit our
concentration of bonds by issuer. To the extent scheduled bond proceeds exceed the estimated benefit payments in a given period, the yield calculation assumes those excess proceeds are reinvested at
forecasted three-month Treasury bill rates. In 2008 and prior years, we matched our expected future benefit payments to a hypothetical zero coupon discount curve derived from high quality corporate
bonds. The theoretical portfolio with matching cash flows is a more precise method for developing a plan specific rate.

The
expected long-term rate of return 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 2010 is 8.2%.

Obligation
and costs related to the Canadian retiree health plan are impacted by changes in trend rates. The following table presents the assumed healthcare cost trend rates used in
measuring the Company's postretirement benefit obligations at December 26, 2009 and December 27, 2008:

Canada2009

2008Weighted average assumptions as of year-end:Healthcare cost trend rate assumed for next year


7.5%


8.0%Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)


5.0%


5.0%Year that the rate reaches the ultimate trend rate


2015


2015


A one-percentage-point change in the assumed healthcare cost trend rates would have less than a $2 million impact on operating
income.

Plan Assets

The allocation of pension plan assets by category at December 26, 2009 and December 27, 2008 is as follows:

Asset Category

2009

2008OfficeMax common stock


10.1
%

U.S. equity securities


16.9
%

19.8
%International equity securities


8.7
%

8.9
%Global equity securities


17.6
%

18.1
%Fixed-income securities


46.7
%

53.2
%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

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its
primary rebalancing mechanisms to maintain the asset class exposures within the guideline ranges established under the investment policy.

The
current asset allocation guidelines set forth an OfficeMax common stock range of 0% to 15%, a U.S. equity range of 12% to 23%, an international equity range of 4% to 14%, a global
equity range of 12% to 23% and a fixed-income range of 37% to 57%. 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.

In
2009, we contributed 8,331,722 shares of OfficeMax common stock to our qualified pension plans. At the end of 2009, the plan held 8,331,722 million shares with a value of
$105.7 million.

Generally,
quoted market prices are used to value pension plan assets. Equities, some fixed income securities, publicly traded investment funds, and U.S. government obligations are
valued by reference to published market prices. Investments in certain restricted stocks are valued at the quoted market price of the issuer's unrestricted common stock less an appropriate discount.
If a quoted market price for unrestricted common stock of the issuer is not available, restricted common stocks are valued at a multiple of current earnings less an appropriate discount. The multiple
chosen is consistent with multiples of similar companies based on current market prices.

The
following table presents the pension plan assets by level within the fair value hierarchy as of December 26, 2009.

Level 1

Level 2

Level 3(thousands)Money market funds

$


$
30,009

$
Equity securities:OfficeMax common stock


105,730





U.S. large-cap


62,385





U.S. small and mid-cap


17,212





International


56,629





Fixed Income:Corporate bonds





425,378


Government securities





29,127


Mortgage backed securities





3,139


Other fixed income





8,362


Other:Equity mutual Funds





303,804


Group annuity contracts








5,004Other, including plan receivables and payables


3,735





$
245,691

$
799,819

$
5,004


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The following is a reconciliation of the change in fair value of pension plan assets calculated based on level 3 inputs:

Amount(thousands)Balance at December 27, 2008

$
4,206Benefit payments and administrative expenses


(10
)Investment income and net appreciation in investments


808Balance at December 26, 2009

$
5,004


Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.

Cash Flows

Pension plan contributions include required statutory minimum amounts and, in some years, additional discretionary amounts. During
2009, 2008 and 2007, the Company made cash contributions to its pension plans totaling $6.8 million, $13.1 million and $19.1 million, respectively. In 2009, we also made a
voluntary contribution of OfficeMax common stock to our qualified pension plans which, based on actuarial estimates, is expected to reduce our pension contributions over the next five years by
approximately $100 million. Pension contributions for 2010 are expected to be approximately $4 million. The Company may elect at any time to make additional voluntary contributions.

Qualified
pension benefit payments are paid from the assets held in the plan trust, while nonqualified pension and other benefit payments are paid by the Company. Future benefit payments
by year are estimated to be as follows:

Pension
Benefits

Other
Benefits(thousands)2010

$
98,742

$
1,5262011


98,260


1,4412012


97,937


1,3712013


97,258


1,3082014


96,772


1,268Years 2015-2019


472,098


6,081


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 and the
Company's Series D ESOP convertible preferred stock were fully allocated to eligible participants in prior years. Total Company contributions to the defined contribution savings plans were
$1.3 million in 2009, $8.0 million in 2008 and $8.1 million in 2007.

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13.    Shareholders' Equity

Preferred Stock

At December 26, 2009, 810,654 shares of 7.375% Series D ESOP convertible preferred stock were outstanding,
compared with 945,899 shares outstanding at December 27, 2008 and 1,110,867 shares outstanding at December 29, 2007. The Series D ESOP convertible preferred stock is
shown in the Consolidated Balance Sheets at its liquidation preference of $45 per share. 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 0.82168 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 84,624,726 shares were issued and
outstanding at December 26, 2009. Of the unissued shares, 6,096,695 shares were reserved for the following purposes:

Conversion or redemption of Series D ESOP preferred stock


666,098Issuance under OfficeMax Incentive and Performance Plan


4,399,456Issuance under Key Executive Stock Option Plan


948,142Issuance under Director Stock Compensation Plan


7,475Issuance under Director Stock Option Plan


13,000Issuance under Key Executive Deferred Compensation Plan


5,337Issuance 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)(thousands)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
)Current-period changes, before taxes


144,206


47,477


191,683Income taxes


(56,460
)




(56,460
)Balance at December 26, 2009

$
(253,179
)
$
120,664

$
(132,515
)


Share-Based Payments

The Company sponsors several share-based compensation plans, which are described below. The Company recognizes compensation expense
from all share-based payment transactions with employees in the consolidated financial statements at fair value. Compensation costs related to the Company's share-based plans were $8.5 million,
$0.3 million and $26.9 million for 2009, 2008 and 2007, 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-

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based
compensation arrangements was $3.3 million, $0.1 million and $10.5 million for 2009, 2008 and 2007, 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. At December 26, 2009, a total of 57,187 shares of common stock were reserved for issuance under the 2003 DSCP, and a total of
4,399,456 shares of common stock were reserved for issuance under the 2003 Plan.

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.

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

Restricted stock is restricted until it vests and cannot be sold by the recipient until its restrictions have lapsed. Each restricted
stock unit ("RSU") is convertible into one share of common stock after its restrictions have 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 the grant date fair value is set assuming performance at target, and management periodically reviews actual performance against the criteria and adjusts compensation
expense accordingly. In 2009, 2008 and 2007, the Company recognized $6.1 million, $0.1 million and $26.4 million, respectively, of pre-tax compensation expense and
additional paid-in capital related to restricted stock and RSU awards.

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A
summary of restricted stock and RSU activity for the years ended December 26, 2009, December 27, 2008 and December 29, 2007 is presented in the following table:

Shares

Weighted-Average
Grant Date Fair
Value Per ShareNonvested, December 30, 2006


1,679,552

$
30.31Granted


770,211


50.72Vested


(476,451
)

48.50Forfeited


(249,031
)

40.91Nonvested, December 29, 2007


1,724,281


37.50Granted


1,742,860


23.17Vested


(859,661
)

22.65Forfeited


(348,519
)

15.01Nonvested, December 27, 2008


2,258,961


31.07Granted


800,828


5.08Vested


(496,813
)

5.65Forfeited


(633,031
)

5.24Nonvested, December 26, 2009


1,929,945

$
16.24


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 shares of our common stock 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 accrue all dividends declared on the Company's common stock during
the vesting period; however, such dividends are not paid until the restrictions lapse.

Stock Units

The Company previously had 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 executive 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 executive officer retires or terminates employment. There were 5,337 and 8,008 stock units
allocated to the accounts of these executive officers at December 26, 2009 and December 27, 2008, respectively. As a result of an amendment to the plan, no additional deferrals can be
allocated to the stock unit accounts.

Stock Options

The Company's stock options generally are issued at a price equal to fair market value on the grant date and typically expire within
seven years of the grant date. Stock options granted under the OfficeMax Incentive and Performance Plan generally vest over a three year period.

83

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Table of Contents

A
summary of stock option activity for the years ended December 26, 2009, December 27, 2008 and December 29, 2007 is presented in the following table:

2009

2008

2007Shares

Wtd. Avg.
Ex. Price

Shares

Wtd. Avg.
Ex. Price

Shares

Wtd. Avg.
Ex. PriceBalance at beginning of year


1,495,795

$
31.95


1,596,295

$
31.84


1,753,188

$
31.81Options granted


2,071,360


4.77








35,000


31.39Options exercised














(187,843
)

31.49Options forfeited and expired


(317,382
)

26.70


(100,500
)

30.08


(4,050
)

32.88Balance at end of year


3,249,773

$
15.14


1,495,795

$
31.95


1,596,295

$
31.84Exercisable at end of year


1,225,646





1,400,462





1,409,896Weighted average fair value of options granted (Black-Scholes)

$
2.63










$
7.95


The
following table provides summarized information about stock options outstanding at December 26, 2009:

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$4.00  $5.00


1,976,460


6.1


4.77





$18.00  $28.00


534,782


0.7


27.65


534,782


27.65$28.01  $39.00


727,360


2.8


34.32


679,693


34.46


The
remaining compensation expense to be recognized related to outstanding stock options, net of estimated forfeitures, is approximately $2.4 million. At
December 26, 2009, the aggregate intrinsic value was $17.5 million for outstanding stock options and $0.1 million for exercisable stock options. The aggregate intrinsic value
represents the total pre-tax intrinsic value (i.e. the difference between the Company's closing stock price on the last trading day of the fourth quarter of 2009 and the exercise price,
multiplied by the number of in-the-money stock options at the end of the quarter).

In
2009, the Company granted stock options for 2,071,360 shares of our common stock and estimated the fair value of each stock 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 2.2% (based on the applicable Treasury bill rate); expected life of
3.0 years (based on the time period stock options are expected to be outstanding based on historical experience); and expected stock price volatility of 87.3% (based on the historical
volatility of the Company's common stock). The Company did not grant any stock options during 2008. In 2007, the Company estimated the fair value of each stock 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 stock 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).

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14.    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, print and document services and office
furniture. OfficeMax, Contract sells directly to large corporate and government offices, as well as to small and medium-sized offices in the United States, Canada, Australia and New Zealand. 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 Boise White Paper, L.L.C., under a 12-year paper supply contract.

OfficeMax,
Retail is a retail distributor of office supplies and paper, print and document services, technology products and solutions and office furniture. In addition, this segment
contracts with large national retail chains to supply office and school supplies to be sold in their stores. OfficeMax, Retail office supply stores feature OfficeMax ImPress, an in-store
module devoted to print-for-pay and related services. OfficeMax, Retail has operations in the United States, Puerto Rico and the U.S. Virgin Islands. The retail segment also
operates office products 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 Boise White Paper, L.L.C., under the paper supply contract described above.

Corporate
and Other includes corporate support staff services and certain other legacy expenses as well as the related assets and liabilities. 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.

In
the current year, management evaluated the segments' performances based on operating income (loss) after eliminating the effect of certain operating matters such as severances,
facility closures, and asset impairments, that are not indicative of our core operations ("segment income (loss)".)

The
following table summarizes by geography, net sales for fiscal years 2009, 2008 and 2007, and non-current assets at each year-end:

2009

2008

2007(millions)Net salesUnited States

$
5,952.8

$
6,728.5

$
7,548.9Foreign


1,259.3


1,538.5


1,533.1$
7,212.1

$
8,267.0

$
9,082.0Non-current assetsUnited States

$
1,909.8

$
2,187.3

$
3,662.8Foreign


138.4


131.3


416.3$
2,048.2

$
2,318.6

$
4,079.1


There
is no single customer that accounts for 10% or more of consolidated trade sales.

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Table of Contents

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

2009

2008

2007(millions)OfficeMax, ContractOffice supplies and paper

$
2,138.5

$
2,518.7

$
2,696.3Technology products


1,174.0


1,299.2


1,535.1Office furniture


344.2


492.1


584.73,656.7


4,310.0


4,816.1OfficeMax, RetailOffice supplies and paper


1,392.7


1,551.7


1,610.6Technology products


1,872.6


2,052.6


2,235.5Office furniture


290.1


352.7


419.83,555.4


3,957.0


4,265.9Total OfficeMaxOffice supplies and paper

$
3,531.2

$
4,070.4

$
4,306.9Technology products


3,046.6


3,351.8


3,770.6Office furniture


634.3


844.8


1,004.5$
7,212.1

$
8,267.0

$
9,082.0


The following tables contain details of the Company's operations by segment:

Sales

Segment
income

Goodwill and
other asset
impairments

Other
operating,
net

Operating
income

Interest
and other,
net

Income(loss)
before income
taxes(millions)Year ended December 26, 2009OfficeMax, Contract

$
3,656.7

$
58.0

$


$
(15.3
)
$
42.7OfficeMax, Retail


3,555.4


44.9


(17.6
)

(33.3
)

(6.0
)Corporate and Other





(40.0
)




(0.7
)

(40.7
)$
7,212.1

$
62.9

$
(17.6
)
$
(49.3
)
$
(4.0
)
$
(26.3
)
$
(30.3
)Year ended December 27, 2008OfficeMax, Contract

$
4,310.0

$
167.3

$
(815.5
)
$
(9.3
)
$
(657.5
)OfficeMax, Retail


3,957.0


61.2


(548.9
)

(17.4
)

(505.1
)Corporate and Other





(36.6
)

(735.8
)

(1.2
)

(773.6
)$
8,267.0

$
191.9

$
(2,100.2
)
$
(27.9
)
$
(1,936.2
)
$
(36.2
)
$
(1,972.4
)Year ended December 29, 2007OfficeMax, Contract

$
4,816.1

$
207.9

$


$


$
207.9OfficeMax, Retail


4,265.9


173.7








173.7Corporate and Other





(37.4
)







(37.4
)$
9,082.0

$
344.2

$


$


$
344.2

$
(6.7
)
$
337.5




Selected components of income (loss)Earnings
from affiliates

Depreciation
and
amortization

Capital
expenditures

Assets

Investments
in affiliates(millions)Year ended December 26, 2009OfficeMax, Contract

$


$
57.5

$
18.0

$
1,035.2


OfficeMax, Retail





58.9


20.3


1,239.6


Corporate and Other


6.7








1,794.7


175.0$
6.7

$
116.4

$
38.3

$
4,069.5

$
175.0Year ended December 27, 2008OfficeMax, Contract

$


$
65.6

$
34.2

$
895.4


OfficeMax, Retail





77.2


109.8


1,504.8


Corporate and Other


6.2


0.1





1,773.4


175.0$
6.2

$
142.9

$
144.0

$
4,173.6

$
175.0Year ended December 29, 2007OfficeMax, Contract

$


$
66.6

$
42.5

$
1,778.2


OfficeMax, Retail





64.9


98.3


2,238.5


Corporate and Other


6.1


0.1





2,267.1


175.0$
6.1

$
131.6

$
140.8

$
6,283.8

$
175.0


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Table of Contents

15.    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. As previously
disclosed, we have liabilities associated with retirement and benefit plans.

In
connection with the sale of our paper, forest products and timberland assets in 2004, the Company entered into a paper supply contract with a former affiliate of Boise Cascade,
L.L.C., Boise White Paper, L.L.C., now owned by Boise Inc., under which we are obligated to purchase our North American requirements for cut-size office paper, to the extent Boise White
Paper, 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 $633.9 million,
$668.3 million and $702.2 million for 2009, 2008 and 2007, respectively.

In
accordance with an amended and restated joint venture agreement, the minority owner of Grupo OfficeMax, our joint-venture in Mexico, can elect to put its 49% interest in the joint
venture to OfficeMax if certain earnings targets are achieved. Earnings targets are calculated quarterly on a rolling four-quarter basis. Accordingly, the targets may 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 to OfficeMax, the redemption value would be calculated based on the joint
venture's earnings for the last four quarters before interest, taxes and depreciation and amortization, and the current market multiples of similar companies. At December 26, 2009, Grupo
OfficeMax met the earnings targets and the estimated redemption value of the minority owner's interest was $21.1 million. While this estimated value is less than the book value at
December 26, 2009, other valuation methodologies yield an estimated fair value that is consistent with the December 26, 2009 book value.

Guarantees

The Company provides guarantees, indemnifications and assurances to 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 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 26, 2009, the Company is not aware of any material liabilities arising from these indemnifications.

There
are eight 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 $3.9 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 26, 2009, the Company is not aware of any material liabilities arising from these
indemnifications.

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16.    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 2004 sale transaction, 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, 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.

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Table of Contents

17.    Quarterly Results of Operations (unaudited)

Summarized quarterly financial data is as follows:

2009

2008First(a)

Second(b)

Third(c)

Fourth(d)

First(e)

Second(f)

Third(g)

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

$
1,912

$
1,658

$
1,832

$
1,810

$
2,303

$
1,985

$
2,096

$
1,883Gross Profit


465.6


394.9


434.7


442.4


587.8


483.6


526.5


456.5Percent of sales


24.4
%

23.8
%

23.7
%

24.4
%

25.5
%

24.4
%

25.1
%

24.2
%Operating income


27.5


(27.5
)

25.2


(29.2
)

78.6


(902.6
)

(681.5
)

(430.7
)Net income (loss) available to OfficeMax common shareholders


13


(18
)

6


(3
)

62


(895
)

(433
)

(396
)Net income (loss) per common share available to OfficeMax common shareholders(i)Basic


0.17


(0.23
)

0.07


(0.04
)

0.82


(11.79
)

(5.70
)

(5.21
)Diluted


0.17


(0.23
)

0.07


(0.04
)

0.81


(11.79
)

(5.70
)

(5.21
)Common stock dividends paid per share














.15


.15


.15


.15Common stock prices(j)High


8.44


9.49


13.92


14.50


25.64


22.22


16.23


10.96Low


1.86


2.88


4.81


9.58


17.12


13.41


9.14


2.84


89

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Table of Contents

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 26, 2009 and December 27, 2008, and the related
consolidated statements of operations, equity, and cash flows for each of the years in the three-year period ended December 26, 2009. We also have audited OfficeMax Incorporated's
internal control over financial reporting as of December 26, 2009, 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 26, 2009 and December 27, 2008, and the results of their operations and their cash flows for each of the years in the three-year period ended December 26,
2009, in conformity with

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Table of Contents

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 26, 2009, based on criteria established inInternal ControlIntegrated Frameworkissued by the Committee of Sponsoring
Organizations of the Treadway Commission.

KPMG LLP

Chicago,
Illinois
February 22, 2010

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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 concerning directors and nominees for director is presented under the caption "Board of Directors" in our proxy statement and is
incorporated herein by reference.

Information
concerning our officers is presented under the caption "Executive Officers of the Registrant" in Part 1 of this Form 10-K and is incorporated herein
by reference.

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
herein by reference.

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

Information
concerning compliance with Section 16 of the Securities Exchange Act of 1934 is set forth under the caption "Stock OwnershipSection 16(a)
Beneficial Ownership Reporting Compliance" in our proxy statement and is incorporated herein by reference.

We
have adopted a Code of Ethics that applies to all OfficeMax employees and directors, including our senior financial officers. Copies of the Code are available, free of charge, on our
website at www.officemax.com, by clicking on "Investor Relations" under the "About OfficeMax" heading and then on "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 26, 2009, 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 herein by reference.

Information
concerning compensation committee interlocks is presented under the caption "Executive Compensation Committee Interlocks and Insider Participation" in our proxy statement and
is incorporated herein by reference.

The
report of our Executive Compensation Committee can be found under the caption "Executive Compensation Committee Report" in our proxy statement and is incorporated herein by
reference.

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

Information concerning the security ownership of certain beneficial owners as of December 31, 2009, is set forth under the caption "Stock
OwnershipOwnership of More Than 5% of OfficeMax Stock" in our proxy statement and is incorporated herein by reference.

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Table of Contents

Information
concerning the security ownership of our directors and executive officers as of December 31, 2009, is set forth under the caption "Stock
OwnershipDirectors and Executive Officers" in our proxy statement and is incorporated herein by reference.

Our
shareholders have approved all of the Company's equity compensation plans, including the Director Stock Compensation Plan (the "DSCP") and the 2003 OfficeMax Incentive and
Performance Plan (the "2003 Plan"), formerly the Boise Incentive and Performance Plan. These plans are designed to further align our directors' and management's interests with the Company's
long-term performance and the long-term interests of our shareholders. The following table provides information regarding the equity securities that may be issued under our
equity compensation plans as of December 26, 2009.

Equity Compensation Plan Information(1)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


5,179,718
(2)
$
9.50


4,452,947
(3)Equity compensation plans not approved by security holders








Total


5,179,718

$
9.50


4,452,947


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

Information concerning the independence of our directors, certain relationships and related transactions during 2009 and our policies with respect
to such transactions is set forth under the captions "Board of Directors Director Independence" and "Board of Directors Related Transactions" in our proxy statement and is incorporated herein 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 herein by
reference.

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PART IV



ITEM 15.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES





See
Index to Exhibits.

95

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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 22, 2010


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 22, 2010.

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

Senior Vice President, Finance 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


96

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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 statement (No. 333-162866) on Form S-1; 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 report dated February 22, 2010, with respect to the consolidated balance sheets of OfficeMax Incorporated as of
December 26, 2009 and December 27, 2008, and the related consolidated statements of operations, equity, and cash flows for each of the years in the
three-year period ended December 26, 2009, and the effectiveness of internal control over financial reporting as of December 26, 2009, which report appears in the
December 26, 2009 annual report on Form 10-K of OfficeMax Incorporated.

/s/ KPMG LLP
KPMG LLP


Chicago,
Illinois
February 22, 2010

97

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Table of Contents

OFFICEMAX INCORPORATED

INDEX TO EXHIBITS

Filed
with the Annual Report on Form 10-K for the fiscal year ended December 26, 2009

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

7/28/20043.1

Conformed Restated Certificate of Incorporation, as restated to date

S-1

333-162866


3.1.1

11/4/20093.2

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

8-K

001-05057


3.1

2/18/20094.1(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

5/13/19864.2

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

8-K

001-05057


99.1

7/18/20074.3

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

9/22/20084.4

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

S-1/A

333-162866


4.4

12/14/20099

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

11/9/200410.2

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

11/9/2004


98

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Table of Contents

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith10.3

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

11/9/200410.4

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

11/9/200410.5

Guaranty by Wachovia Corporation dated October 29, 2004

10-Q

001-05057


10.6

11/9/200410.6

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

10-Q

001-05057


10.7

11/9/200410.7

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

11/9/200410.8

Restructuring Agreement and Amendment No. 1 to Securityholders Agreement by and among Boise Cascade Holdings, L.L.C., Boise Cascade, L.L.C., Boise Land & Timber Corp., Forest Product
Holdings, L.L.C., OfficeMax Incorporated and Kooskia Investment Corporation

8-K

001-05057


99.1

11/15/200610.9

Boise Cascade Holdings, L.L.C. Second Amended and Restated Operating Agreement

8-K

001-05057


99.2

11/16/200610.10

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

11/9/200410.11

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

12/17/2004


99

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Table of Contents

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith10.12

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

12/17/200410.13

Executive Savings Deferral Plan

8-K

001-05057


10.2

12/15/200410.14

2005 Deferred Compensation Plan

8-K

001-05057


10.3

12/15/200410.15

2005 Directors Deferred Compensation Plan

8-K

001-05057


10.4

12/15/200410.16

Directors Compensation Summary Sheet










X10.17

Form of OfficeMax Incorporated Nonstatutory Stock Option Agreement

8-K

001-05057


10.1

1/6/200510.18

Executive Life Insurance Program

8-K

001-05057


10.1

2/16/200510.19

Officer Annual Physical Program

8-K

001-05057


10.2

2/16/200510.20

Financial Counseling Program

8-K

001-05057


10.3

2/16/200510.21

Executive Officer Mandatory Retirement Policy

10-K

001-05057


10.31

3/16/200510.22

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

10-K

001-05057


10.4

3/2/200410.23

Nonbusiness Use of Corporate Aircraft Policy, as amended

10-K

001-05057


10.13

3/14/199410.24

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

10-K

001-05057


10.6

3/2/200410.25

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

10-K

001-05057


10.7

3/2/200410.26

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

10-K

001-05057


10.10

3/2/200410.27

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

10-K

001-05057


10.15

3/2/2004


100

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Table of Contents

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith10.28(2)

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

10-Q

001-05057


10

11/13/200110.29

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

10-K

001-05057


10.17

3/2/200410.30

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

10-K

001-05057


10.18

3/2/200410.31

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

10-K

001-05057


10.23

3/2/200410.32

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

10-K

001-05057


10.24

3/2/200410.33

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

10-K

001-05057


10.25

3/2/200410.34

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

10-K

001-05057


10.26

3/2/200410.35

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

8-K

001-05057


10.1

4/20/200510.36

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

8-K

001-05057


10.2

4/20/200510.37

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

8-K

001-05057


10.3

4/20/200510.38

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

8-K

001-05057


10.4

4/20/200510.39

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

8-K

001-05057


10.5

4/20/200510.40

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

8-K

001-05057


10.1

5/23/200510.41

Amendment to the OfficeMax Incorporated 2003 Director Stock Compensation Plan

8-K

001-05057




2/20/2007


101

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Table of Contents

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith10.42

Amendment to OfficeMax Incorporated Executive Savings Deferral Plan

8-K

001-05057


99.2

12/14/200510.43

Form of 2006 Restricted Stock Unit Award Agreement

8-K

001-05057


10.2

2/15/200610.44

Form of 2007 Directors' Restricted Stock Unit Award Agreement

8-K

001-05057


99.3

8/1/200710.45

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

8-K

001-05057


99.1

9/19/200710.46

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

8-K

001-05057


99.2

9/19/200710.47

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

8-K

001-05057


99.3

9/19/200710.48

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

8-K

001-05057


99.4

9/19/200710.49

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

10-K

001-05057


10.81

2/27/200810.50

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

8-K

001-05057


99.2

2/26/200810.51

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

10-Q

001-05057


10.3

5/7/200810.52

2003 OfficeMax Incentive and Performance Plan as amended and restated effective April 23, 2008

S-8

333-150957


4.1

5/16/0810.53

Form of 2008 Director Restricted Stock Unit Award Agreement

8-K

001-05057


99.2

7/29/200810.54

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

10-Q

001-05057


10.3

11/6/200810.55

Executive Officer Severance Pay Policy

10-Q

001-05057


10.4

11/6/200810.56

Form of Executive Officer Change in Control Severance Agreement

10-Q

001-05057


10.5

11/6/2008


102

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Table of Contents

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith10.57

Amendment to OfficeMax Incorporated 2005 Directors Deferred Compensation Plan

10-Q

001-05057


10.6

11/6/200810.58

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

10-Q

001-05057


10.7

11/6/200810.59

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

10-Q

001-05057


10.8

11/6/200810.60

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

8-K

001-05057


99.1

12/23/200810.61

Form of Amendment of OfficeMax Incorporated Executive Savings Deferral Plan

8-K

001-05057


99.1

1/28/200910.62

Form of 2009 Annual Incentive Award Agreement

8-K

001-05057


99.2

2/18/200910.63

Sam Duncan Waiver and Ratification dated February 12, 2009

8-K

001-05057


99.3

2/18/200910.64

Form of 2009 Restricted Stock Unit Award Agreement (Performance Based)

8-K

001-05057


99.4

2/18/200910.65

Form of 2009 Nonqualified Stock Option Award Agreement.

8-K

001-05057


99.5

2/18/200910.66

Bruce Besanko Change in Control Agreement

8-K

001-05057


99.1

3/6/200910.67

Bruce Besanko Nondisclosure and Noncompetition Agreement

8-K

001-05057


99.2

3/6/200910.68

Form of 2009 Director Restricted Stock Unit Award Agreement

8-K

001-05057


99.1

7/28/200910.69

Contribution Agreement between OfficeMax Incorporated and Evercore Trust Company, N.A., the independent fiduciary of the Master Trust

8-K

001-05057


99.1

11/4/0910.70

Registration Rights Agreement between OfficeMax Incorporated and Evercore Trust Company, N.A., the independent fiduciary of the Master Trust

8-K

001-05057


99.2

11/4/0911

Inapplicable12

Inapplicable


103

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Table of Contents

Incorporated by ReferenceExhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing
Date

Filed
Herewith13

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 97)










X24

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


---

104

---