ITEM 2. 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 Part II, Item 1A, "Risk Factors" of this Form 10-Q, including "Cautionary and Forward-Looking Statements."

Overall Summary

Sales for the third quarter of 2009 decreased 12.6% to $1,831.9 million and decreased 15.4% to $5,401.5 million for the first nine months of 2009. Gross profit margin decreased by 1.4% of sales to 23.7% of sales for the third quarter of 2009 and by 1.0% of sales to 24.0% of sales in the first nine months of 2009. The reductions in sales and gross profit margin relative to last year primarily reflected the weaker economic environment, which negatively impacted all product categories and geographic areas in both our Contract and Retail segments. Operating and selling expenses were down for both the third quarter and nine month periods as a result of the declines in sales. As a percentage of sales, operating expenses improved for the third quarter as a result of tight cost controls, but declined for the nine month period due to the fixed components of these costs. General and administrative expenses were lower for both the third quarter and nine month periods due to cost reduction efforts, but increased as a percentage of sales due to the deleveraging effect of the lower sales. Net income available to OfficeMax common shareholders for the third quarter of 2009 was $5.7 million, or $0.07 per diluted share. This compared to a net loss available to OfficeMax common shareholders of $432.7 million or $(5.70) per diluted share in the same period last year, which included significant charges relating to the impairment of our timber notes receivable. For the first nine months of 2009, the net income available to OfficeMax common shareholders was $1.1 million, or $0.01 per diluted share compared to a net loss available to OfficeMax common shareholders of $1,265.6 million, or $(16.69) per diluted share in the same period last year which, in addition to the impairment of the timber note receivable, included significant charges relating to the impairment of goodwill and other assets.