NORTH AMERICAN RETAIL

Our North American Retail Division sells a broad assortment of merchandise, including brand name and private brand office supplies, business machines and computers, computer software, office furniture and other business-related products and services through our chain of office supply stores. Most stores also contain a design, print and ship center offering graphic design, printing, reproduction, mailing, shipping, and other services.
In recent years, we have developed a new store format that we call "M2." This design is intended to enhance the overall shopping experience for customers by providing improved lines of sight, more effective product adjacencies, and updated signage and lighting, while lowering overall operating costs. This format is being used for all new store openings and remodels. In 2006, we completed remodeling 176 stores, and we expect to remodel all remaining stores in the next two to three years.
Our North American Retail Division currently operates nearly 1,200 office supply stores throughout the U.S. and Canada. The largest concentration of our retail stores is in California, Texas and Florida, but we have broad
representation across North America. We plan to continue our store expansion by adding approximately 150 new retail stores in 2007 and 200 additional stores in 2008.

INTERNATIONAL DIVISION

Office Depot sells to customers in 43 countries throughout North America, Europe, Asia and Latin America either through wholly-owned entities, majority-owned entities or other ventures covering 35 countries, and through alliances
in an additional eight countries. The International Division sells office products and services through direct mail catalogues, contract sales forces, internet sites and retail stores, using a mix of company owned operations, joint ventures, licensing and franchise agreements, alliances and other arrangements.
Currently, the International Division operates 137 stores in France, Japan, Hungary, Israel and South Korea through wholly-owned or majority-owned entities. In addition, 161 retail stores are operating under the Office Depot brand name under various licensing and joint venture agreements in Costa Rica, El Salvador, Guatemala, Honduras, Panama, Mexico, and Thailand.
We also participate in 71 franchised stores in South Korea, bringing our total number of stores outside North America to 369. In 2007, the International Division expects to open over 20 stores through company-owned and majority-owned entities.