The ODP Corporation DEFA14A Additional proxy soliciting materials

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

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OFFICE DEPOT, INC.

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The following presentation was prepared by Office Depot, Inc. on August 2, 2013.

Investor

Presentation

August 2013

OFFICE DEPOT SAFE HARBOR STATEMENT

This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995

concerning Office Depot, the merger and other transactions contemplated by the merger agreement, Office Depot’s long-term credit rating and

its revenues and operating earnings. These statements or disclosures may discuss goals, intentions and expectations as to future trends,

plans, events, results of operations or financial condition, or state other information relating to Office Depot, based on current beliefs of

management as well as assumptions made by, and information currently available to, management. Forward-looking statements generally will

be accompanied by words such as “anticipate,”

“believe,”

“plan,”

“could,”

“estimate,”

“expect,”

“forecast,”

“guidance,”

“intend,”

“may,”

“possible,”

“potential,”

“predict,”

“project”

or other similar words, phrases or expressions. These forward-looking statements are subject to various risks and

uncertainties, many of which are outside of Office Depot’s control. Therefore, investors and shareholders should not place undue reliance on

such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include adverse

regulatory decisions; failure to satisfy other closing conditions with respect to the merger; the risks that the new businesses will not be

integrated successfully or that Office Depot will not realize estimated cost savings and synergies; Office Depot’s ability to maintain its current

long-term

credit

rating;

unanticipated

changes

the

markets

for

its

business

segments;

unanticipated

downturns

business

relationships

with

customers or their purchases from Office Depot; competitive pressures on Office Depot’s sales and pricing; increases in the cost of material,

energy

and

other

production

costs,

unexpected

costs

that

cannot

recouped

product

pricing;

the

introduction

competing

technologies;

unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; new laws and governmental

regulations. The foregoing list of factors is not exhaustive. Investors and shareholders should carefully consider the foregoing factors and the

other risks and uncertainties that affect Office Depot’s business described in its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,

Current Reports on Form 8-K and other documents filed from time to time with the SEC. Office Depot does not assume any obligation to

update these forward-looking statements.

ADDITIONAL INFORMATION

connection

with

the

solicitation

proxies,

Office

Depot

has

filed

with

the

Securities

and

Exchange

Commission,

definitive

proxy

statement

concerning the proposals to be presented at Office Depot's Annual Meeting of Stockholders. The proxy statement contains important

information about Office Depot and the 2013 Annual Meeting. Office Depot and its directors, executive officers and certain employees may be

deemed to be participants in the solicitation of proxies from Office Depot shareholders in connection with the election of directors and other

matters to be proposed at the 2013 Annual Meeting. Information regarding the interests, if any, of these directors, executive officers and

specified employees is included in the definitive proxy statement and other materials filed by Office Depot with the SEC.

Executive Summary

Steering the Company Through Industry and

Macro-Economic Headwinds

Pursuing Actions to Deliver Shareholder Value

Why We Believe Adding Starboard Nominees is

Unnecessary and Harmful

Table of Contents

Successful Navigation of Headwinds with Long-Term Plan in Place

The Office Depot Board Has Successfully Led the Company through Significant Industry and

Macro-Economic Headwinds, Executing on a Detailed Strategic Plan to Improve Operations

Unprecedented Combination of Secular and Cyclical Challenges Over the Last Six Years

–

Increased competition from non-traditional office supply retailers, web-based competitors and

an overall reduction in paper products consumption

–

Macroeconomic recession in the U.S. and Europe, which significantly impacted small-and

medium-sized

businesses

and

resulted

reduced

office

supply

usage

and

costs

–

Capital markets volatility impacted the OSS sector and created collateral damage as several

specialty retailers failed (e.g. Circuit City)

These challenges required a shift in focus by the Board to address and preempt the impact

of these issues

–

2008 –

2009:

Focus on restoring liquidity and maintaining customer, vendor, rating agency

and debt market confidence in the Company, raised $350 million from BC Partners

–

2010:

New CEO announced and new strategic plan developed

–

2011 –

2012:

Implementation of aggressive business improvement plan and pursuit of

strategic opportunities to unlock meaningful value

–

2013+:

Continued focus on improving operations, while planning for merger integration,

synergy realization and continued business transformation

Sustained Focus on Shareholder Value is Achieving Results

The Board of Directors is Experienced, Engaged and Best-Qualified to Deliver Shareholder Value

Through its Internal Strategic Plan and Managing the Ongoing Integration Efforts with OfficeMax

The Board has maintained a fresh perspective to address new challenges, adding six new

directors in the last six years with a combination of retail experience and equity holder perspective

Continuing Successful Implementation of Multi-Year Business Improvement Plan

The strategy has resulted in over $1 billion in benefits since 2007, including approximately $200

million in 2012 and an estimated $120 million in additional benefits expected in 2013

Recently Executed Two of the Company’s Largest Value Creation Opportunities

Sold Office Depot’s JV stake in Mexico for approximately $680 million, an 11.6x EBITDA multiple,

significantly increasing the Company’s liquidity and financial flexibility

Signed merger agreement with OfficeMax in February 2013, creating the opportunity for Office

Depot shareholders to benefit from an estimated $400-$600 million in annual synergies

Both initiatives were started in late 2011 / early 2012, well before Starboard’s ownership

Inserting Starboard Nominees on the Board of Directors is Unnecessary, Could Jeopardize the

Progress Made to Date and Hinder Future Decision Making

Imperative to continue momentum on integration planning, including the CEO search and

development of the integration plan, in order to deliver the projected synergies for shareholders

Each

month

delay

represents

approximately

$12

million

lost

potential

synergies

for

Newco

Not Your Typical Situation, Merger-of-Equals in Process

Current

Initiatives

Unlock

Shareholder

Value

Are

Years

the

Making

–

A combination with OfficeMax was discussed on many occasions over the past several years

but the two sides were never able to reach agreement, despite very compelling strategic and

economic benefits –

THIS Board Made It Happen

–

The Boards of OfficeMax and Office Depot thoughtfully put together a merger-of-equals (MOE)

that will have a combined Board of 10 of the best directors to lead the combined company

–

The MOE structure requires joint decision-making and trust from both companies; the Board

and management team have established relationships as well as lines of communication that

would take significant time to recreate

–

The

Boards

have

formed

CEO

selection

committee

ensure

there

management

entrenchment and have cast a wide external net, as well as considering the existing CEOs

Single Biggest Value Creator for Shareholders is Completion of the OfficeMax Merger and

Delivery of Synergies in the Most Expeditious and Complete Manner Possible

–

Turnover on the Board and management team could derail a smooth integration process and

delay realization of the merger benefits for shareholders, employees, customers and vendors

–

Starboard’s involvement in the CEO selection committee would likely disrupt and potentially

force us to restart a process that has made significant progress

–

Reconciling Starboard’s outside-in synergy plan will delay synergy implementation

Now is NOT the Time for Change to a Board that Has Repeatedly Demonstrated Its

Commitment to Pursuing the Long-Term Best Interests of Office Depot Shareholders

CEO Selection Efforts Well Underway

*CEO Selection Committee Co-Chair

Nigel Travis *

CEO/Chairman, Dunkin’

Brands;

Former President/CEO, Papa John’s

Thomas Colligan

Director, ADT Corp and CNH Global;

Former Vice Chairman, PriceWaterhouseCoopers

Marsha Evans

Rear Admiral (Ret.), US Navy;

Director, Weight Watchers Int’l;

Former CEO American Red Cross and Girl Scouts USA;

Former Director May Dept. Stores and Autozone

Office Depot

V. James Marino *

Director, PVH Corp;

Former President/CEO, Alberto-Culver

Rakesh Gangwal

Non-Exec. Chairman, OfficeMax;

Director, CarMax and Petsmart;

Former Chairman/President/CEO Worldspan Technologies,

Former President/CEO US Airways Group

Francesca Ruiz de Luzuriaga

Director, SCAN Health;

Former COO, Mattel Interactive

OfficeMax

Korn/Ferry has commenced an exhaustive search process and contacted over 100 candidates, several qualified

individuals currently under consideration and actively interviewing

Committee has held two extensive in-person meetings to review position profile, meet weekly to review search progress

Office Depot and OfficeMax have jointly developed criteria to guide the search process which includes:

Ideally a public company CEO with Wall Street credibility and a global perspective, strong executive from

Fortune 100 organization could also be considered

High integrity, team building, transformational leader with a proven track record

Experienced business integrator who has achieved synergy and value creation

Starboard has been asked to submit qualified candidates to the selection process, and the Committee has reviewed

one of Starboard’s prior director nominees already

Joint CEO Selection Committee

“In our experience, candidates express reluctance to pursue an opportunity when the Board composition is unclear; the current

proxy fight has the potential to be disruptive to both the process and candidate interest in the CEO search assignment for the

combined Office Depot / OfficeMax merger.”

–

Korn/Ferry

Executive Summary

Steering the Company Through Industry and

Macro-Economic Headwinds

Pursuing Actions to Deliver Shareholder Value

Why We Believe Adding Starboard Nominees is

Unnecessary and Harmful

Table of Contents

$4.5 billion in 2012 sales

1,109

stores

averaging

22,773

sq. ft.

(2)

Highest concentration in Sunbelt

region, particularly Florida,

California and Texas

Stores also offer Copy & Print

Depot and Tech Depot Services

Pursue smaller footprint stores as

go-forward model

North American Retail

Division

North American Business

Solution Division

International

Division

Sales of $3.2 billion in 2012

One of the world’s largest e-

commerce retailers with over $4

billion in global sales in 2012

Direct business serves small to

medium-sized customers using web

sites and catalog

Contract business employs a

dedicated sales force to serve

medium-sized to large customers

$3.0 billion in 2012 sales

Direct channel has catalog offerings

in 15 countries and operates more

than 40 separate web sites

(2)

Contract business employs a

dedicated sales force that services

medium-sized to large customers in

Europe and Asia

124 retail stores and another 393

stores as part of joint venture,

licensee and franchise agreements

(1)

Reflects full-year 2012 results

(2)

As of March 31, 2013

Office Depot Overview

Office

Depot

$10.7

(1)

billion

leading

global

provider

office

products

and

services

with

1,614

worldwide retail stores, a field sales force, global e-commerce operations and top-rated catalogs

North

American

Retail

42%

North

American

BSD

30%

International

28%

Sales

Division

(2012)

Sales

Category

(2012)

Supplies

65%

Furniture &

Other

14%

Technology

21%

(2)

Fresh Perspective Through Recent Changes in Board Composition

2013 Board of Directors

Neil Austrian (Chairman)

Justin Bateman

Thomas Colligan

Marsha Evans

Eugene Fife

Scott Hedrick

Kathleen Mason

Michael

Massey

(1)

Raymond Svider

Nigel Travis

(1)

Nominated to replace outgoing director Brenda Gaines

The Board Has Evolved Significantly to Maintain a Fresh, Knowledgeable and

Shareholder Oriented Perspective

The Board Has Added Six Highly-Qualified Directors Over

the Last Six Years

Justin

Bateman

–

June

2009

Senior Partner, BC Partners

Director: Intelsat (Audit Committee), Multiplan, and Cequel Communications

Thomas

Colligan

–

January

2010

Former Vice Chairman, PriceWaterhouseCoopers

Director: ADT Corp., CNH Global (Audit Committee), and Targus Group Intl.

Former Director: Schering-Plough, Anesiva, Educational Management

Eugene

Fife

–

July

2012

Sr. Advisor, BC Partners; former Partner, Goldman Sachs

Former Director: Eclipsys (Non-Exec. Chairman), Allscripts, Caterpillar (Audit

and Nominating / Governance Committees)

Michael

Massey

(1)

–

2013

Nominee

Fmr. President/CEO, Collective Brands;

Former President, Payless ShoeSource Intl. JVs

Raymond

Svider

–

June

2009

Managing Partner, BC Partners

Director:

Intelsat

(Audit

and

Compensation

Committees),

Accudyne

(Chairman),

Cequel Communications (Compensation Committee), MultiPlan

Nigel

Travis

–

March

2012

CEO

Chairman,

Dunkin’

Brands

Former President/CEO, Papa John’s

Former Director: Lorillard, Papa John’s, Bombay Company, Limelight Group

Increased Competition from Online Providers (e.g. Amazon) and Low-Cost Superstores (e.g. Wal-Mart)

History of Managing and Creating Value through Change

2009

•

Closed over 120

stores in North

America

•

BC Partners

investment secured,

adding $350M of

crucial liquidity

•

Sold of over $300M

of non-core assets

around the world

2010

•

Established Business

Transformation

Group for cost and

margin initiatives

•

Separation of former

CEO

•

Appointed Neil

Austrian interim CEO

•

Exited Japan

business

•

Divested Office

Depot Israel

2011

•

Launched

Continuous Process

Improvement

internationally

•

After search process,

appointed Austrian

CEO

•

Launched small store

format

•

Board launched

strategic review of

OfficeMax

combination and

attempt to engage

2012

•

April: Started

discussions with

OfficeMax

•

Spring: Commenced

strategic review of

Mexico; more detail on

JV provided publicly

•

June: Launched retail

strategy with smaller-

store format

•

Summer: Began

discussions on

monetization of Mexico

2013

•

February: Signed

merger agreement

with OfficeMax

•

July: Sold stake in

Office Depot de

Mexico

•

July: Shareholders

vote to approve

merger with

OfficeMax

Board and

Management

Actions to

Mitigate

Impact and

Unlock Value

Industry-

Wide

Challenges

Exacerbated

by Existing

Company-

Specific

Dynamics

Rapid Adoption of Mobile Devices Including Smartphones and Tablets

Disproportionate Exposure of Footprint in Hard-Hit Geographies (e.g. FL, CA, TX)

Existing Focus on Technology Products

Starboard Investment in ODP

Credit Crisis / Retailer Bankruptcies / Housing Market and SMB Distress with Significant Sales Deleveraging Across OSS Peers

Launched New Strategic Plan in 2010 with Actions to Improve Operations

•

Made changes in several areas of the top management team (HR, Intl, Retail)

•

Recruited Chief Marketing Officer and new head of marketing and merchandising

•

Changed

pricing

and

promotion

strategy

began

using

DemandTech

tools

•

Opened inside sales office in Austin to focus on small to medium-sized businesses

•

Changed store associate focus from operations to customer engagement with In Store

Customer Experience (ISCE), concentrate on selling skills & conversion

•

Installed store traffic counters to provide measurable traffic and conversion metrics

•

Launched one-hour, in-store pickup for online purchases and mobile hand-held devices

to provide product information, availability, customer reviews and in-aisle checkout

•

Established

new

product

development

initiative

introduce

relevant

new

products and offset declining categories

•

Hired new advertising agency and launched marketing programs to create customer

interest and engagement (smallbizclub, Real Change, One Direction, Loyalty Program)

•

Invested in critical areas –

e-commerce; data knowledge of customers; marketing

intelligence

$551

$131

($1,200)

($1,000)

($800)

($600)

($400)

($200)

$200

$400

$600

$800

2007 Adjusted

EBIT

Sales Volume

Occupancy

Costs

Distribution

Costs

Selling

Expenses

Gross Profit

Improvement

2012 Adjusted

EBIT

Over

$1.1

billion

adjusted

EBIT

(1)

benefits

from cost initiatives and margin improvement

Nearly $5 billion of sales deleveraging

at ~30% gross margin rate

($ millions)

(1)

Adjusted

EBIT

excludes

charges

for

restructuring

actions

and

activities

improve

future

operating

performance.

The

measure

presented

provide

management

and

investors

opportunity

make

meaningful

assessments

and

comparisons

results

from

total

operations,

charges

restructuring

and

efficiency-related

actions,

and

the

results

after

isolating

those

Charges.

The

presentation

such

non-GAAP

information

not

intended

suggest

that

such

information

superior

the

presentation

GAAP

information,

but

only

clarify

some

information

and

assist

the

reader.

reconciliation

GAAP

non-GAAP

numbers

can

found

the

Office

Depot

web

site

www.officedepot.com.

Strategy Has Delivered Results Despite Headwinds

(1)

Executing Reductions Across the Entire Cost Structure

Occupancy Costs

Distribution

Expenses

Store & Selling Expenses

General & Administrative

Expenses

��

Lowered occupancy costs by $50 million over 2011 and

2012 through downsizes, closures and rent reductions

•

Shifted network costs to 80% variable in N. America

•

Reduced N. American distribution facilities from 32 to 15 and

consolidated Northeast network

•

Rationalized European network

•

Since 2007 reduced expenses in N. America by $440 million

and in International by $140 million

•

Since 2007, reduced advertising by $160 million or ~30%;

normalized N. American Ad spend in line with peers

•

$58 million in reductions since 2007 in outsourcing of

Finance and IT functions, reduction in support costs and

benefits of indirect sourcing initiative

•

Any comparison since 2007 must account for changes in

fixed headquarters costs and ERP costs

Gross Margins

•

220 bps improvement in gross margins over the last four

years

through

sales

and

margin

initiatives

(1)

Other

•

Exited non-strategic markets in International in 2011

producing $17 million of EBIT benefits

(1)

For purposes of comparability, gross margin for the years 2007, 2008, and 2009 have been adjusted retrospectively to include shipping and handling expenses in accordance with the Q1 2013 change in

accounting principle of presenting such expenses. Gross profit for the years 2007, 2008, 2009, 2010, 2011 and 2012 include shipping and handling expenses amounting to $1.0 billion, $0.9 billion,

$0.8 billion, $0.7 billion, $0.7 billion, and $0.7 billion, respectively.

(3)

(1)

Italicized figures denote

Adjusted EBIT including

Mexico contribution

Gross Profit

Adj. Operating Expense & Operating Margin

Adjusted EBIT

(3)

Advertising Expense

(1)(2)

(2)

Improvement

Key

Metrics

Driving

Adjusted

EBIT

(3)

Growth

For purposes of comparability, gross profit and gross profit percentages for the years 2007, 2008, and 2009 have been adjusted retrospectively to include shipping and handling expenses in accordance with the Q1 2013 change in accounting principle of presenting such expenses. Gross

profit for the years 2007, 2008, 2009, 2010, 2011 and 2012 include shipping and handling expenses amounting to $1.0 billion, $0.9 billion, $0.8 billion, $0.7 billion, $0.7 billion, and $0.7 billion, respectively. This also results in a reduction to Operating Expenses for the same period,

which previously included the impact of shipping and handling

Adjusted Operating Expense excludes charges for restructuring actions and activities to improve future operating performance.

Adjusted EBIT excludes charges for restructuring actions and activities to improve future operating performance. The measure is presented to provide management and investors an opportunity to make meaningful assessments and comparisons of results from total operations, charges

related to restructuring and efficiency-related actions, and the results after isolating those charges. The presentation of such non-GAAP information is not intended to suggest that such information is superior to the presentation of GAAP information, but only to clarify some information and

assist the reader. A reconciliation of GAAP to non-GAAP numbers can be found on the Office Depot web site at www.officedepot.com.

(1)

(2)

(3)

Maintaining Positive Cash Flow and Strong Liquidity Position

($ million)

Positive

Free

Cash

Flow

(1)

since

2008

through

successful working capital management

Sustained liquidity above $1.3 billion since 2009

with no current ABL borrowings

$912

$868

$1,386

$1,301

$1,305

$1,370

(1)

Free

Cash

Flow

non-GAAP

financial

measure,

and

equals

net

cash

provided

operating

activities

less

capital

expenditures.

The

measure

presented

provide

management

and

investors

opportunity

make meaningful assessments and comparisons of financial results. The presentation of such non-GAAP information is not intended to suggest that such information is superior to the presentation of GAAP

information,

but

only

clarify

some

information

and

assist

the

reader.

reconciliation

GAAP

non-GAAP

numbers

can

found

the

Office

Depot

web

site

www.officedepot.com.

(2)

2012

free

cash

flow

$117

million

has

been

adjusted

exclude

$58

million

negative

impact

first

quarter

pension

settlement.

The

settlement

impact

cash

flow

from

operating activities

was offset by a positive impact to cash flow from investing activities of the same amount, with the net result of having no total cash flow impact on Office Depot.

($ million)

(2)

(1)

$1,548

6/29/13PF reflects

cash balance of $472

million plus $550

million in after-tax

proceeds from sale

of Mexico JV less

50% redemption for

BC Partners ($216

million)

Stock Price Has Outperformed Peers in a Difficult Market

Since the appointment of Neil Austrian as CEO in November 2010, Office Depot’s stock price has outperformed

its peers despite continued sector headwinds

(100.0%)

(75.0%)

(50.0%)

(25.0%)

0.0%

25.0%

50.0%

11/1/10

3/24/11

8/15/11

1/5/12

5/29/12

10/17/12

3/14/13

Office Depot

OfficeMax

Staples

7/26/13

“We believe that market fears about the sustainability of the office supply business are overblown…[and] believe that

improving industry trends as well as ODPs aggressive push to reduce store size/costs and improve profitability provide

upside to shares over time.”

Morgan Stanley, May 23, 2012

Executive Summary

Steering the Company Through Industry and

Macro-Economic Headwinds

Pursuing Actions to Deliver Shareholder Value

Why We Believe Adding Starboard Nominees is

Unnecessary and Harmful

Table of Contents

Creating

Shareholder

Value

Office

Depot

OfficeMax

Merger

Highlights

•

Office Depot Board initiated review of proposed combination in 2011, and was

actively

engaged

discussions

with

OfficeMax

well

before

Starboard’s

investment

•

OfficeMax

and

Office

Depot

announced

merger

equals

create

$18

billion

(1)

office solutions company in February 2013

•

Two leading companies combined to build a stronger, more efficient competitor

able to meet the growing challenges of a rapidly changing industry

•

Customers will benefit from unique, innovative products, services and solutions

available through a global, multichannel network

•

Well-positioned to optimize sales platform and distribution network, and to expand

multichannel capabilities to better serve customers and compete against larger

players (e.g., Wal-Mart, Amazon, Costco, Target)

•

Size, scale and global reach will strengthen the portfolio of products, services and

solutions to customers worldwide

•

Long-term value creation through realization of annual synergies as well as

enhanced cash generation and liquidity to fund internal and external opportunities

(1) Pro forma combined sales for the 12 months ended December 29, 2012

Creating

Shareholder

Value

Broad

Support

for

OfficeMax

Merger

“We believe the merger is being undervalued by the market as the potential capacity reduction and operating

synergies should be significant for the remaining players.”

Credit Suisse, May 1, 2013

“Consolidation seems logical given headwinds in the industry. A merger between Office Depot and OfficeMax

is a logical

response

industry

dynamics

and

could

unlock

significant

value

for

shareholders.

The

office

superstore (“OSS”) channel is feeling pressures on multiple fronts with macro employment trends lackluster and the

effects of increased digitization in the workplace (i.e. a trend

toward a “paperless office”)…[h]ighly accretive merger

economics benefit shareholders. A merger between ODP and OMX would accelerate store closings, increase

purchasing

power,

leverage

corporate

overhead

and

SG&A

costs,

and

allow

for

distribution

rationalization. ”

Jefferies, February 20, 2013

“We continue to view ODP-OMX as the most compelling value / special situation stocks in our coverage universe,

supported by our belief that the deal will close successfully, synergies will

be significant, NOLs and other

balance sheet opportunities can provide further upside potential, and valuation is supportive.”

KeyBanc Capital Markets, April 30, 2013

•

Merger overwhelmingly approved by shareholders in July 2013, over 98% of

the shares voted from each company were voted FOR the merger

Approximately $8 billion in combined North American spend

SKU harmonization and vendor optimization

Estimated synergy potential of $130 -

$200 million

Purchasing

Efficiencies

Supply

Chain

Approximately $1 billion in combined North American spend

Network optimization, transportation and delivery efficiencies

Estimated synergy potential of $70 -

$100 million

Advertising &

Marketing

Approximately $0.5 billion in combined North American spend

Efficiencies in weekly inserts, media and catalogs

Estimated synergy potential of $70 -

$100 million

Selling, General &

Administrative

Approximately $1.5 billion in combined North American spend

Sales and support function efficiencies and standardization of processes

Estimated synergy potential of $130 -

$200 million

Creating

Shareholder

Value

Substantial

Synergy

Potential

Total annual run-rate cost synergies following integration of approximately $400-$600 million

Target to realize one-third of synergies in Year 1, with majority of synergies expected to be achieved by Year 3

Approximately $350-$450 million in one-time costs

(2)

and $200 million in capital investment to achieve synergies

Approximately $18 billion in Sales

(1)

and $11 billion in North American Costs

(1)

Sales based on 2012 pro-forma figures.

(2)

Includes transaction costs.

Creating

Shareholder

Value

Strong

Leadership

Integration

Planning

After extensive involvement in merger negotiations, the Board has continued to provide

close oversight of integration and planning

Steering Committee

Neil Austrian

Mike Newman*

Michael Allison

Elisa Garcia

Ravi Saligram

Steve Parsons*

Matt Broad

Deb O’Connor

Merchandising/COGS

ODP

OMX

Indirect Procurement

ODP

OMX

ODP

OMX

Legal

ODP

OMX

ODP

OMX

E-Commerce

Communication/PR

ODP

OMX

Finance / Accounting

ODP

OMX

Supply Chain

ODP

OMX

B2B Ops

ODP

OMX

Marketing

ODP

OMX

Retail Ops Mgmt

ODP

OMX

Integration Management Office (IMO)

* Integration Planning

Leaders

ODP

OMX

ODP

OMX

Platform Teams

Project management

Baselines and synergies

Communications

Culture and change

Talent management

Vince Pierce

Paul Hoelscher

Boston Consulting Group actively engaged as external integration advisor

Established Integration Management Office (IMO) and planning teams with joint representation from

Office Depot and OfficeMax in IMO and all integration tracks

Development of detailed integration strategy and Day 1 operating plan well under way

Extensive collaboration with frequent face-to-face Steering Committee meetings

Unlocking

Shareholder

Value

Office

Depot

Mexico

Sale

Highlights

Formed in 1994 as joint venture with

Grupo Gigante; 2012 sales of

approximately $1.1 billion

50% ownership interest and equity

method of accounting

Began initiative to illuminate value of

business in Q1 of 2012, well before

Starboard involvement

Transaction closed in July 2013

Total transaction value of approximately

$680 million represents 11.6x 2012

EBITDA (high-end of Starboard’s

estimated value)

(1)

After-tax proceeds of approximately $550

million, enhancing liquidity going into the

merger

Represents significant value creation for

shareholders

Latin American Geographic Presence

257* retail locations and

distribution facilities in

Latin America

Mexico

Colombia

Costa Rica

El Salvador

Guatemala

Honduras

Panama

$31

$34

$32

2009

2010

2011

2012

Miscellaneous

Income

Recorded

Office

Depot

–

Mexico

($ in millions)

* At end of 2012

(1)

Range

$500

$700

million

for

“value

unconsolidated

Office

Depot

Mexico”

presented

Starboard’s

September

17,

2012

letter

Unlocking

Shareholder

Value

Broad

Support

for

Mexico

Transaction

“We

are

encouraged

the

Office

Depot

Mexico

sale,

which

will

provide

Office

Depot

funding

buy

back

significant

portion

Partners’

stake

and

deliver

its

balance

sheet,

both

which

view

positives

given

the

pending

OfficeMax

merger.

addition,

not

believe

the

market

was

giving

Office

Depot

much

credit

for

the

JV’s

value,

are

happy

see

management

monetize

this

investment

attractive

valuation.”

BB&T

Capital

Markets,

June

2013

“This

sale

price

higher

than

our

initial

estimates

$450

–

500

million

and

reflects

–

22x

multiple

2012

earnings…[t]his

transaction

strengthens

[Office

Depot’s]

balance

sheet

and

financial

position,

and

will

simplify

the

integration

ODP

and

OMX.”

Janney,

June

2013

“We

are

pleased

that

the

Company

has

announced

that

July

2013,

has

consummated

the

sale

its

valuable

50/50

joint

venture

interest

Office

Depot

Mexico

its

joint

venture

partner.”

Starboard

Value,

July

23,

2013

“In our view, the deal is a positive for Office Depot for several reasons.

First, it would allow a combined ODP-

OMX

(assuming

the

merger

approved)

focus

integrating

the

U.S.

office

supply

retail

business

–

which

has faced ever-increasing challenges in recent quarters. Second, it enables ODP to reduce its leverage and

simplify its ownership

structure. Third, we believe the deal is highly attractive for Office Depot from a

valuation standpoint,

given that it effectively values its stake in the Mexico JV at over 20x trailing PE.”

Barclays, June 4, 2013

Until the merger with OfficeMax is completed, the two companies continue to operate

independently as competitors in the marketplace

To drive sales and profitability improvements, we remain highly focused on our key

standalone operating initiatives to deliver our 2013 plan:

Executing the North American Retail strategy

Improving the web experience and making omni-channel a reality

Growing services and solutions

Increasing own brand and direct import penetration

Driving small-and medium-size business customer growth

Improving the International Division cost structure

Working with vendors to decrease cost of goods sold

Reducing expenses

Continued Improvement of Operations Regardless of Merger Outcome

Executive Summary

Steering the Company Through Industry and

Macro-Economic Headwinds

Pursuing Actions to Deliver Shareholder Value

Why We Believe Adding Starboard Nominees is

Unnecessary and Harmful

Table of Contents

The Board Is Committed to Open Dialogue with All Shareholders

•

Since Starboard filed its 13D, the Board and management have held six face-to-face discussions and

multiple phone conversations over 11 months with Starboard on a variety of topics

The Board has welcomed any new ideas Starboard has regarding Office Depot’s operations

The Board has repeatedly requested the restructuring plan that Starboard claims to have developed,

but has yet to receive it

Starboard Value has said it plans to release its detailed plan “within the next two weeks”, which

appears to be timed for maximum shock value ahead of the annual meeting, rather than a genuine

attempt to cooperatively and effectively work toward delivering shareholder value

•

Any names Starboard Value puts forth to the CEO Selection Committee will (and have) receive full vetting

and consideration, as has been offered previously

•

The Board has also been accommodating in timing its Annual Meeting to permit Starboard, at their request,

to conduct its work according to a reasonable timeline and provide full and fair opportunity to be heard

•

The Board has engaged with Starboard subject to the limitations on information it can share with individual

investors, especially considering the Company’s strategic activity

Starboard declined the opportunity to receive more information under a confidentiality agreement

The Office Depot Board Has Shown a Cooperative and Flexible Approach to

Understanding Starboard’s Concerns

Starboard’s Analysis of Office Depot is Simplistic and Flawed

•

Despite

“extensive

due

diligence

the

Company”

and

“detailed

research

and

analysis”

over

the

past

year,

Starboard’s current analysis is virtually identical to its initial 2012 letter, with no detail on specific initiatives

•

Starboard’s peer comparison focuses primarily on one metric (operating margins) and ignores important

differences

–

Excludes the impact of Office Depot’s high-margin 50/50 Mexico JV from operating income but uses

OfficeMax figures that fully consolidate OfficeMax’s 51/49 Mexico JV

–

Fully consolidating the 50/50 Mexico JV would increase adjusted operating income margins for Office

Depot by nearly a full percentage point

–

Other relevant metrics that Starboard has ignored show Office Depot in line with peer performance

(e.g., adj. EBITDA margins of 3.1% [3.6% fully consolidating Mexico] in line with OfficeMax at 3.0%)

•

Since 2007, the existing Board and management team have generated over $1 billion in adjusted EBIT

benefits through cost initiatives and margin improvement across the full cost structure, not just Starboard’s

focus areas of G&A and advertising spend (only ~30% of total costs, excluding COGS)

•

In Q1 2013, the Company reallocated certain corporate G&A expenses to its Divisions and reclassified

shipping & handling expenses as COGS in order to improve transparency and comparability both internally

and externally with peers

•

Have further reduced Adjusted Operating Expenses by $51 million through the first half of 2013

Superficial Analysis of Office Depot’s Operating Performance Done on the Basis of a

Limited, and Not Readily Comparable, Universe of Peers

Starboard Value is Restating the Company’s Existing Plan

ODP Initiatives

Executing the North American Retail strategy

First Discussed on Q1 2012 Earnings Call

Improving web experience and making omni-channel a reality

First Discussed on Q3 2012 Earnings Call

Growing services and solutions

First Discussed on Q2 2011 Earnings Call

Increasing own brand and direct import penetration

First Discussed on Q3 2011 Earnings Call

Driving SMB customer growth

First Discussed on Q1 2011 Earnings Call

Improving the International Division cost structure

First Discussed on Q1 2011 Earnings Call

Working with vendors to decrease cost of goods sold

First Discussed on Q1 2009 Earnings Call

Reducing expenses

Began in Q4 2009 Earnings Call and Every Earnings Call Since

Starboard “Initiatives”

Increasing higher-margin services

mix

Increasing private label and direct-

sourced penetration

Downsize to smaller-store formats

Increasing the mix of higher-margin

SMB customers

Reducing G&A / Advertising expenses

“Starboard’s

lengthy

list

recommended

operational

improvements

largely

consistent

with

existing

themes

…

Hence,

are

inclined

view

[many of] these initiatives as already reflected in the company’s run rate and investor expectations. We note that ODP is already achieving a healthy rate

of margin

benefits

from

its

various

initiatives

…

but

this

has

largely

been

offset

deleverage

from

declining

revenues.”

Bernstein,

October

15,

2012

Starboard Value Agrees with the Company’s Strategic Actions

ODP Strategic Actions

Merger-of-Equals with OfficeMax

Starboard Reactions

Merger-of-Equals with OfficeMax

•

Began strategic evaluation in 2011 and

initiated discussions in April 2012 to

explore range of potential transactions

•

Significant scale benefits with notable

growth opportunities

•

$400 -

$600 million of potential cost

synergies

•

Stronger financial profile

Sale of Mexico JV

•

Internal strategic review commenced in

early 2012 to determine best course for

asset

•

$680 million sale at 11.6x EBITDA

•

Successfully negotiated transaction

concurrent with pending OMX merger

despite complexities

•

Opportunity not identified initially by

Starboard, but they have expressed

support for the transaction post-

announcement

•

Subsequent Starboard synergy

estimates comparable to those

presented at announcement by Office

Depot

and

OfficeMax

(1)

Sale of Mexico JV

•

Advocated for transaction after Office

Depot internal strategic review already

well progressed and discussions with

Grupo Gigante underway

•

Value realized by ODP represents high

end of the estimated Starboard value

range

for

Mexico

($500

$700

million)

(2)

(1)

Estimated

synergies

excluding

store

closures

presented

$500

$700

million

Starboard’s

April

22,

2013

investor

presentation

(2)

Range

$500

$700

million

for

“value

unconsolidated

Office

Depot

Mexico”

presented

Starboard’s

September

17,

2012

letter

The Board is Focused on Shareholder Value

•

The Board’s

strategic

actions

this

year

(OfficeMax

merger

and

Office

Depot

Mexico

sale)

were

well

underway

when

Starboard showed up and are clear evidence of the pursuit of shareholder interests

–

A merger-of-equals transaction where the combined company’s board, HQ, branding, CEO and management

team are to be determined jointly and objectively based on merit, demonstrates that this Board is solely focused

on shareholder value

–

Starboard’s involvement with the selection committee now would be extremely disruptive and impact the work

done to date, including interviews of potential CEOs already conducted

•

There

has

been

active

equity

investor

participation

the

Board

with

the

inclusion

Partners,

holder

22%

the common stock through its preferred stock investment

•

Office Depot adopted a one-year Rights Plan (which the Board announced will expire in October 2013) to prevent an

investor from amassing control of the Company without paying a fair price, at a time the Board was negotiating

transactions that would unlock substantial value

–

Starboard has repeatedly cited the Company’s theoretical ability to increase BC Partner’s ownership stake in an

effort to increase the votes of a supportive shareholder and thus “usurp voting control”. The Company has paid

only cash dividends to BC Partners since Q3 2012 and voting shares have not increased

•

Annual election of all directors and the ability to act by written consent both exist, and have been utilized by Starboard

in its current campaign

•

The Board plans to hold the next Annual Shareholders Meeting to elect directors in April of 2014

The Current

Board

Members

Have

Consistently

Acted

the

Best

Long-Term

Interests

all the Company’s Stockholders, and Consistent with Their Fiduciary Duties

Independent & Highly Qualified Board

Nine of 10 Board members are

independent of the Company

Appointed six new directors in

the past six years, with a new

director nominee in 2013

Lead independent director

charged with clearly-defined

responsibilities

Key committees comprised of

solely independent directors

Board Independence

Breadth of Experience

Forward-Looking, Strong

Oversight

Industry and operational

experience includes years of

service as directors, CEOs

and presidents

Financial expertise derives

from former public company

and private equity leadership

Diversity of retail industry and

governance experience

supports long-term shareholder

interests

Focused implementation of

ongoing strategic plan,

regardless of OfficeMax

merger

Actively pursuing

transformative initiatives for the

benefit of shareholders:

–

Proposed Merger with

OfficeMax

–

Sale of the JV interest in

Office Depot de Mexico

Office Depot’s Board is focused on good governance and pursuing transformative

strategies to drive long-term shareholder value creation

Office Depot is a global company with major non-retail businesses (in addition to

retail) and requires a board with a diverse set of experiences

Starboard’s Claims Do Not Warrant Election of its Nominees

•

Office Depot is a global company with major non-retail businesses (in addition to retail), and requires a board with a

diverse set of experiences, including international sales force management and e-commerce, not just retail operators

–

Office Depot has nominated Michael Massey, the former CEO and President of Collective Brands, to the Board;

there are ample directors with excellent retail operating experience to serve on the combined company’s board

•

Starboard

has

repeatedly

emphasized

the

“turnaround”

expertise

its

nominees

without

providing

any

examples

its

nominees

leading

the

integration

of,

even

participating

in,

major

merger-of-equals

transaction

–

As a sign of constructive dialogue with Starboard, Office Depot extended an offer to invite Joseph Vassalluzzo

(a Starboard nominee) to join its Board of Directors, which was declined

•

Important decisions regarding a merger, especially a merger-of-equals, require collaboration and compromise –

Starboard’s pubic agitation to date illustrates that their direct involvement would hinder rather than help ongoing

integration

discussions,

with

each

month

delay

integration

costing

$12

million

foregone

cost

savings

•

The CEO selection committee is set, has hired a leading executive recruiting firm in Korn/Ferry, and is making good

progress towards identifying and reviewing top candidates

–

Office Depot’s contribution to the selection committee includes a director whose retail operating experience

Starboard has consistently acknowledged (Travis), a director with extensive HR / recruiting experience and as a

public company director in the consumer/retail sector (Evans), and the former Vice Chairman of PWC (Colligan)

–

Any CEO candidates Starboard submits to the selection committee will be considered in the same fashion as all

other candidates

•

Starboard candidates do not offer expertise that is not currently represented on the Board

Additional Director Candidates are NOT Needed for the Combined Company Board and

Disproportionate Influence from Starboard Could Harm the Merger Process

Recognition of Starboard’s Disruptive Effect on Integration

“We see this proxy context as more of an incremental distraction to an already complicated

situation. We are not convinced that bringing in a new set of managers or directors at this

juncture

would

lead

superior

outcome.

The

success

failure

the

combined

entity

will

determined by willingness and prudence to make short-term sacrifices for the good of the long-term benefits.”

UBS, July 31, 2013

“One

issue

that

continues

remain

question

mark

the

merger

the

role

Starboard.

They

are the activist investor that has been aggressively pushing their agenda at ODP. They are actively pursuing for

four board seats and we believe are trying to be active in choosing the CEO. Our concern with Starboard,

and

their

potential

influence,

that

they

will

have

somewhat

different

agenda

than

the

company

itself.

Mergers

this

magnitude

can

take

time,

perhaps

long

time

work.

There

will

set

backs,

some

synergies

will

prove

optimistic

and

others

much

bigger

opportunity

than

anticipated.

However,

one

thing that we regularly have heard from companies involved in mergers like this, is that going slow may

frustrate some stakeholders, but ultimately going too fast can frustrate customers, the ultimate

stakeholder

long

term

success.

hope

that

the

combined

company

works

along

appropriate

timeline that does not alienate customers.”

Janney Capital Markets, July 30, 2013

Office Depot Board Best-Qualified to Complete Value Creation Initiatives

•

The Office Depot Board of Directors has demonstrated its commitment to sustained

value creation

–

Secured investment from BC Partners in 2009 to solidify liquidity position

–

Ongoing input and oversight on development and execution of key operating initiatives through

industry and macro-economic headwinds

–

Negotiated merger with OfficeMax, creating opportunity for Office Depot shareholders to benefit

from an estimated $400-$600 million in annual synergies

–

Unlocked

value

for

shareholders

proactively

monetizing

Office

Depot’s

Mexico JV

•

The highly-qualified Board and management team have been instrumental in the

progress made to date on the OfficeMax and Office Depot de Mexico transactions

–

Important relationships have been built with OfficeMax in multiple functional areas

–

Key leaders from both companies are actively engaged in merger integration planning for the

successful integration of the two companies and realization of potential synergies

–

The CEO Selection Committee has launched a search process that is well underway

•

We strongly believe inserting new parties at the table at this point will be harmful to the

merger process and not in our shareholders’

best interests

Please Vote the WHITE PROXY Card in Support

of the Office Depot Nominees

DIRECTOR BIOGRAPHIES

Director Biography –

Neil Austrian

•

Director since 1998

•

Chairman & CEO since May 2011, Interim

Chairman & CEO since November 2010

•

Former President & COO of the National

Football League

•

Former Managing Director at Dillon Read & Co.

•

Former CEO and CFO of Doyle Bernbach

Advertising

•

Former CEO of Showtime / The Movie Channel

•

In-depth insights into the Company’s operations

and management coupled with background in

finance, investment banking and deal

negotiation uniquely qualifies him for serving on

the Board

•

Significant expertise in management, finance,

marketing and strategic planning

•

Chairman of Nominating and

Corporate Governance

Committee

•

Compensation Committee

DirecTV

•

Director

Viking Office Products

Merged with Office Depot

Former Director

Active Director

•

Chairman

Office Depot

•

Governance Committee

Bankers Trust Company

Director Biography –

Justin Bateman

•

Director since 2009

•

Senior Partner with BC Partners, a leading

global private equity firm with advised funds of

€12.6Bn

•

Former PricewaterhouseCoopers professional

and Chartered Accountant

•

Non-voting observer on the Audit Committee

•

Experience as a chartered accountant and

understanding of accounting issues is helpful in

fulfilling the Audit Committee’s oversight

responsibilities; participation in portfolio

company oversight provides him with the skills

necessary to assist the Company with its

strategic planning process

•

Education and experience in business and

finance provides the Board with significant

managerial, strategic, financial and compliance-

based expertise

•

Director

Intelsat SA

•

Director

General Healthcare Group

Acquired by Netcare

Former Director

Active Director

•

Director

Baxi Holdings

Merged with Remeha

•

Director

Regency Entertainment

•

Director

MultiPlan

•

Director

Cequel Communications

•

Finance Committee

Office Depot

Director Biography –

Thomas Colligan

•

Director since January 2010

•

Former Vice Dean of The Wharton School’s Aresty

Institute of Executive Education

•

Former managing director at Duke Corporate

Education, a corporation that provides custom

executive education affiliated with Duke University’s

Fuqua School of Business

•

Former Vice Chair of PricewaterhouseCoopers LLP

•

Served on the Coopers & Lybrand / PriceWaterhouse

integration committee responsible for harmonizing audit

approaches and market strategy

•

Former Chair of the Transaction Committee at

Schering-Plough in its $40 billion merger with Merck

•

Broad-based understanding of new and developing

business strategies that are helpful to the Board, in

addition to deep accounting experience

•

As Chair of CNH Global special committee, oversaw

the negotiation of the recently-announced merger of

CNH and Fiat Industrial SpA

•

Audit Committee Chair

•

Nominating Committee

ADT

•

Audit Committee Chair

•

Transaction Committee

Educational Management

Sold to Goldman Sachs

•

Non-Executive Chairman

•

Audit Committee Chair

•

Transaction Committee

Schering Plough

Sold to Merck

•

Audit Committee Chair

Targus

•

Special Committee Chair

•

Audit Committee

CNH Global

Former Director

Active Director

•

Chair of Audit Committee

Office Depot

Director Biography –

Marsha Evans

•

Director since 2006

•

Retired from the U.S. Navy with the rank of Rear

Admiral

•

Held a number of senior positions in the U.S. Navy

including heading the Navy’s worldwide recruitment

organization

•

Former Acting Commissioner of the Ladies

Professional Golf Association

•

Former President and Chief Executive Officer of

the American Red Cross

•

Former National Executive Director (CEO) of Girl

Scouts of the USA

•

Former Director of May Department Stores through

its merger-of-equals with Federated Department

Stores

•

Extensive human resources and governance

experience including retail companies May

Department Stores, AutoZone and Weight

Watchers International

•

Audit Committee

Weight Watchers International

•

Compensation Committee

AutoZone

•

Finance and Audit Committee

May Department Stores

Sold to Federated

•

Chair of the Nominating and

Governance Committee

•

Compensation Committee

North Highland Company

Former Director

Active Director

•

Chair of Compensation

Committee

•

Corporate Governance and

Nominating Committee

Office Depot

•

Nominating and Corporate

Governance Committee

Huntsman Corporation

Director Biography –

Eugene Fife

Former Director

Active Director

•

Director since 2012

•

Founder and Managing Principal of Vawter Capital

and Senior Director at Goldman Sachs

•

Former Interim President & CEO of Eclipsys

•

Former Partner at Goldman Sachs, member of the

Management Committee and Chairman of

Goldman Sachs International; advised companies

and boards on numerous merger situations,

including dozens of mergers-of-equals transactions

•

Former Presiding Director of the Caterpillar Board

•

Previously designated to the Board by BC

Partners, a leading global private equity firm with

advised funds of €12.6Bn, before nomination as an

Independent Director

•

Financial expertise and experience as a CEO and

director of large, publicly-traded multinational

corporations provides meaningful support

•

Non-Executive Chairman

Eclipsys

Sold to Allscripts

•

Director

Allscripts

•

Presiding Director

•

Chair of Nominating and

Governance Committee

•

Chair of Audit Committee

Caterpillar

•

Director

Accudyne Industries

•

Chair of Audit Committee

Cequel Communications

•

Corporate Governance and

Nominating Committee

Office Depot

•

Audit Committee

Capital Research & Mgmt.

Director Biography –

Scott Hedrick

Former Director

Active Director

•

Director since 1991 and Lead Director since 2011

•

Founding investor and Director of Office Club from

inception until acquisition by Office Depot

•

Served on boards of dozens of start-up companies as a

founder and general partner of Interwest Partners, a

venture capital firm with $2.8 billion under management:

–

Noodles & Company: Director until sold to Catterton

in 2011; recently had successful IPO

–

Tetra Technologies: Founding investor and Director;

now a NYSE company

–

Hot Topic: Head of Compensation Committee until

successful acquisition in early 2013

–

Corporate Express: Early investor and Director

through IPO

•

Former Director, National Venture Capital Association

•

Institutional knowledge of Office Depot, deep financial

expertise and other board service provide significant

perspective on retail operations

•

Director

The Office Club

Sold to Office Depot

•

Compensation Committee

Hot Topic

Sold to Private Investor

•

Chair of Corporate

Governance and Nominating

Committee

•

Compensation Committee

Office Depot

•

Compensation Committee

•

Audit Committee

Genesco

Director Biography –

Kathleen Mason

Former Director

Active Director

•

Director since 2006

•

Former President & CEO of Tuesday Morning

Corporation

•

Former President of Filene’s Basement

•

Former President of HomeGoods

•

Former Chair & CEO of Cherry & Webb

•

Senior executive positions at various large

national retail companies provides experience to

critically review the various business

considerations necessary to run a successful

consumer-driven business such as Office

Depot’s North American Retail Division

•

Broad exposure to numerous retailers and

extensive retail knowledge offers insight into the

business and financial strategies necessary to

address evolving complex audit issues

•

Extensive international sourcing and business

expertise provide important perspective

•

Director

Hot Topic

Sold to Private Investor

•

Director

Tuesday Morning Corporation

•

Director

The Men’s Wearhouse

•

Finance Committee

Office Depot

Director Biography –

Michael J. Massey

Former Director

Active Director

•

Nominee

Office Depot

•

Nominated in 2013

•

Former President & CEO of Collective Brands, Inc.

•

Former President of Payless ShoeSource’s

international joint ventures, which included a total of

over 200 stores; previously at The May Department

Stores Company

•

Oversaw transformational mergers in 2007 of

Collective Licensing International and The Stride Rite

Corporation as senior executive and was a key player

in merger integration of both acquisitions

•

As a former CEO of a retailer and brand wholesaler,

provides valuable retail experience and meaningful

insight to address issues affecting retailers, as well as

perspectives on B2B sales

•

Additional international experience driving Payless,

Sperry Top-Sider, Keds and Stride Rite into broad

range of international markets (both at retail and

wholesale) offers global insights on issues affecting

Office Depot’s overseas business

Director Biography –

Raymond Svider

•

Director since June 2009

•

Co-Chairman and Managing Partner of BC

Partners, a leading global private equity firm with

advised funds of €12.6Bn

•

Has participated in or led a variety of investments

including Tubesca, Nutreco, UTL, Neopost,

Polyconcept, Neuf Telecom, Unity Media/Tele

Columbus, Intelsat S.A., Multiplan, Suddenlink and

Accudyne (formerly Hamilton Sundstrand)

•

Former investment banker at Wasserstein Perella

•

Significant leadership abilities and extensive

knowledge of complex financial and operational

issues facing large organizations

•

Expertise in international operations and financial

strategy as well as in developing various strategies

to motivate and compensate executives provides

significant Board support

•

Audit Committee

•

Compensation Committee

Intelsat SA

Former Director

Active Director

•

Compensation Committee

MultiPlan

•

Compensation Committee

Cequel Communications

•

Compensation Committee

•

Chair of Finance Committee

Office Depot

•

Chairman

•

Compensation Committee

Accudyne

Director Biography –

Nigel Travis

•

Director since March 2012

•

Chairman,

President

CEO

Dunkin’

Brands

Group Inc.

•

Former President & CEO of Papa John’s

International, Inc.

•

Former executive in Europe, International and

Retail divisions of Blockbuster, Inc., culminating

with the role of President & COO

•

Former executive with Grand Metropolitan PLC,

including Managing Director, EMEA and SVP

Human Resources for Burger King

•

Significant international, retail, human resources

and operations expertise

•

Experience as a public company CEO provides

differentiated perspectives on leadership and

strategy

•

Chairman

Dunkin’

Brands

Former Director

Active Director

•

Compensation Committee

Office Depot

•

Director

Lorillard

•

Director

Bombay Company

•

Director

Limelight Group

APPENDIX

SUPPLEMENTAL

MATERIALS

Costs

Comments

($ million)

2007

2012

(B)/W

Occupancy Costs

646

602

(44)

Driven by occupancy reductions and store closures

Cost of Goods Sold (COGS)

10,378

6,846

(3,532)

Distribution Expenses

964

712

(252)

In North America, shifted network costs to 80%

variable, reduced distribution facilities from 32

to 15 and consolidated Northeast network.

Rationalized European network

Adjusted Other Selling

Expenses

(1)

2,383

1,801

(582)

Reduced North America expense by $441 million

and International by $141 million

Adjusted G&A Expenses

(1)

633

639

Adjustments

S-T Compensation

(21)

Facilities

(12)

Incremental headquarters costs

IT Depreciation

(31)

Incremental enterprise resource planning costs

G&A Expenses (pro forma)

671

613

(58)

Outsourcing of Finance and IT functions reduction

in support costs, benefits of indirect sourcing

initiative

Total Costs

15,042

10,574

(4,468)

Total Costs (excl.COGS)

4,664

3,728

(936)

Cost

Structure

Reductions

2007

2012

(1)

Adjusted Other Selling and G&A expenses are non-GAAP financial measures. The measures are presented to provide management and investors an opportunity to make meaningful assessments and

comparisons of results from total operations, charges related to restructuring and efficiency-related actions, and the results after isolating those Charges. The presentation of such non-GAAP information

is not intended to suggest that such information is superior to the presentation of GAAP information, but only to clarify some information and assist the reader. A reconciliation of GAAP to non-GAAP

numbers can be found on the Office Depot web site at www.officedepot.com.

Reduced total Company operating

expense, adjusted for charges, by

$51 million in the first half of 2013

versus prior year

Adj. Operating Expense

(1)(2)

$1,237

$1,186

1,000

1,100

1,200

1,300

1H 2012

2H 2013

Adj. Operating Expense

(1)(2)

$3,187

$2,440

2,000

2,500

3,000

3,500

2008

2012

Reduced total Company

operating expense, adjusted for

charges, by $747 million between

2008 and 2012

($ millions)

Successfully Reducing Operating Expenses

(1)

(2)

Adjusted operating expense is a non-GAAP financial measure. The measure is presented to provide management and investors an opportunity to make meaningful assessments and comparisons of results from total operations,

charges related to restructuring and efficiency-related actions, and the results after isolating those Charges. The presentation of such non-GAAP information is not intended to suggest that such information is superior to the

presentation of GAAP information, but only to clarify some information and assist the reader. A reconciliation of GAAP to non-GAAP numbers can be found on the Office Depot web site at www.officedepot.com.

accounting principle of presenting such expenses. Gross profit for the years 2007, 2008, 2009, 2010, 2011 and 2012 include shipping and handling expenses amounting to $1.0 billion, $0.9 billion, $0.8 billion, $0.7 billion, $0.7

billion, and $0.7 billion, respectively. This also results in a reduction to Operating Expenses for the same period, which previously included the impact of shipping and handling

Costs In-Line with Peers and Potential Additional Gross Margin Opportunity

($ millions)

Office Depot

Office Max

Staples

2010

2011

2012

2010

2011

2012

2010

2011

2012

Revenue

$11,633

$11,490

$10,696

$7,150

$7,121

$6,920

$24,135

$24,665

$24,381

Gross Profit

$2,610

$2,707

$2,536

$1,850

$1,809

$1,784

$6,535

$6,690

$6,491

% Sales

22.4%

23.6%

23.7%

25.9%

25.4%

25.8%

27.1%

26.6%

SG&A

$2,560

$2,616

$2,439

$1,689

$1,691

$1,645

$4,894

$5,056

$4,963

% Sales

22.0%

22.8%

23.6%

23.7%

23.8%

20.3%

20.5%

20.4%

Adjusted Operating Income

(1)

$50

$91

$97

$161

$118

$139

$1,641

$1,634

$1,528

% Sales

0.4%

0.8%

0.9%

2.2%

1.7%

2.0%

6.8%

6.6%

6.3%

Adjusted EBIT

(1)

$84

$122

$131

$153

$110

$131

$1,641

$1,634

$1,548

% Sales

0.7%

1.1%

1.2%

2.1%

1.6%

1.9%

6.8%

6.6%

6.3%

Adjusted EBITDA

(1)

$291

$331

$333

$254

$195

$205

$2,140

$2,116

$2,015

% Sales

2.5%

2.9%

3.1%

3.6%

2.7%

3.0%

8.9%

8.6%

8.3%

100% Consolidation of Mexico

(2)

Adj. EBIT

(1)

$145

$186

$200

% Sales

1.2%

1.5%

1.7%

Adj. EBITDA

(1)

$373

$418

$426

% Sales

3.0%

3.3%

3.6%

Adjusted Operating Income, EBIT and EBITDA are non-GAAP financial measures. The measures are presented to provide management and investors an opportunity to make meaningful assessments and

is not intended to suggest that such information is superior to the presentation of GAAP information, but only to clarify some information and assist the reader. A reconciliation of GAAP to non-GAAP numbers

can be found on the Office Depot web site at www.officedepot.com.

Assumes conversion to U.S. dollars at average exchange rate for each of the periods shown based on figures as presented in Office Depot’s 2011 and 2012 10-Ks.

(1)

(2)

100

200

300

400

500

2010

2011

2012

North America

International

NASCAR

•

Redirecting advertising expense

into more effective e-commerce

marketing strategies

•

Total Company 2012 advertising

expense as a percent of sales was

about 3.8%

•

2012 North American advertising

expense as a percent of sales was

about 3.6%

•

Excluding the NASCAR

sponsorship that ended in 2012,

2012 North American advertising

expenses as a percent of sales

would have been about 3.3%, a

rate comparable to other office

supply superstore players

Increasing Advertising Effectiveness

NPD

Group

includes

ink,

toner

and

paper

technology,

not

supplies

NPD Group –

Regaining Market Share in Key Categories

Office Supply Superstores (OSS) include Office Depot, OfficeMax and Staples

SUPPLIES * ($M)

Retail Store Sales

SPLS Total

All Other Total

ODP & OMX OSS

Retail All ODPMKT

OSS MKT

Time Period

Stores

2010

$917 $2,277 $3,194

$5,812 $9,006 10.2%

35.5%

2011

$925 $2,307 $3,232

$6,047 $9,280 10.0%

34.8%

2012

$896 $2,300 $3,196

$6,245 $9,441 9.5%

33.9%

YTD –

June 2013

$412 $1,007 $1,419

$2,497 $3,916 10.5%

29.1%

36.2%

TECHNOLOGY * ($M)

Retail Sales (Stores + Web)

Total All Other

ODP MKT

Time Period

ODP

Retail

2010

$3,449

$87,398

3.8%

2011

$3,275

$85,860

3.7%

2012

$3,021

$81,676

3.6%

YTD –

June 2013

$1,465

$36,893

3.8%

28.7%

28.6%

28.0%

OSS

ODP

NPD Group –

Channel Partner Peer Group

Retail Tracking Service –

Office Supplies

•

Office Superstores

Office Depot, OfficeMax, Staples

•

Other Retail*

AAFES, Best Buy, BJ’s Wholesale Club, Dollar General, ALCO Stores, Family Dollar Stores, Fred Meyer, Kmart, Meijer, Navy Exchange, Pamida, QVC, Sam’s

Club, Shopko, Target, Walgreens, Walmart

•

Ecommerce

TechDepot.com, AAFES.com, Amazon.com, Bestbuy.com, Kmart.com, Meijer.com, NavyExchange.com, Newegg.com, OfficeDepot.com, OfficeMax.com,

Overstock.com, QVC.com, Rakuten.com, Reliable.com, Sam’s Club.com, Shopko.com, Staples.com, Target.com, Walmart.com

Retail Tracking Service –

Technology

•

AV Specialty/ Electronic Specialty/ Mass Merchant/Ecommerce

4Sure.com, AAFES, AAFES.com, ABC Warehouse, ABC Warehouse.com, Abt Electronics, Abt Electronics.com, Amazon.com, American TV, AmericanTV.com,

Apple Store, Apple.com, Bernie's

, Best Buy, Best Buy.com, Bjorn's, BJ's Wholesale Club, Blockbuster Video, Bloomingdale's, Bob & Ron's Worldwide Stereo,

Bob

Ron's

Worldwide

Stereo.com,

Boscov's,

Boscovs.com,

Rakuten.com,

Calumet.com,

Car

Toys.com,

Circuit

City.com

CompUSA.com,

CompUSA/Tiger

Direct

, Conns Appliance, Conns Appliance.com, Cowboy Maloney's, Crutchfield, Crutchfield.com, Dell.com, Dillard's, Dollar General, ALCO Stores, Dunham's

Sports, eCost.com, Electronics Expo, Electronics Expo.com, Electronics Express, Electronics Express.com, Family Dollar Stores, Flanner's, Fred Meyer,

GameStop,

GameStop.com,

Hastings,

hhgregg,

hhgregg.com,

Hunts

Photo

Video.com,

Huppins,

JCPenney

Company,

JCPenney.com,

Ken

Crane's

Kmart,

Kmart.com, Kohl's, Kohl's.com, La Curacao, La Curacao.com, Listen Up, Listen Up.com, Macy's East, Macy's.com, Magnolia Hi-Fi, Meijer, Meijer.com, Mike's

Camera.com,

Myer

Emco

National

Camera

Exchange.com,

Navy

Exchange,

NavyExchange.com,

Nebraska

Furniture

Mart,

NewEgg.com,

Office

Depot,

Office

Depot.com, OfficeMax, OfficeMax.com, OneCall.com, Ovation Audio/Video Specialists

, Overstock.com, P.C. Richard & Son, P.C. Richard & Son.com, Pamida,

Panasonic.com,

Paradyme,

Paul's

TV,

Paul's

TV.com,

Connection

Express,

Queen

City

Appliance,

QVC,

QVC.com,

R.C.

Willey,

R.C.

Willey.com,

RadioShack,

RadioShack.com,

Reliable.com,

Ritz

Camera.com,

Sam's

Club,

SamsClub.com,

Sears,

Sears.com,

Shopko,

Shopko.com,

Sixth

Avenue

Electronics

, Sixth Avenue Electronics.com

, Sprint Store, Staples, Staples.com, Target, Target.com, The Bon Ton, TigerDirect.com, Toys R Us, Toys R Us.com,

Ultimate Electronics

, Vann's, Vann's.com, Video Only, Walgreens, Walmart, Walmart.com

•

Photo Specialty

Adorama Camera, Adorama.com, Bedford Camera & Video, Bel Air Camera, Bergen County Camera, Biggs Camera, Calumet Photo, Calumet.com, Camcor,

Cameta

Camera,

Cameta.com,

Columbia

Photo

Cord

Camera,

Creve

Coeur

Camera,

Crown

Camera,

Dan's

Camera

City,

Dodd

Camera,

DoddCamera.com,

Fort

Worth

Camera,

Harold's

Photo

Centers,

Helix

Camera

Highland/Rowe

Photo,

Hooper

Camera

Imaging,

Hunts

Photo

Video,

Hunts

Photo

Video.com,

Jack's

Camera,

Keeble

Shuchat

Photography,

Kenmore

Camera,

Kenmore

Camera.com,

Lakeside

Camera,

Larmon

Camera,

Lawrence

Photo,

Mike's

Camera,

Mike's

Camera.com,

Murphy's

Camera,

National

Camera

Exchange,

National

Camera

Exchange.com

Noble's

Camera

Shops,

Penn

Camera

Photomark

PJ's Camera, Precision Camera & Video, Ritz Camera, Ritz Camera.com, Rockbrook Camera & Video, Samy's Camera, Sarber's Cameras, Shutterbug Camera,

Wolfe's Camera, Woodward Camera, Worldwide Camera

•

Mobile Electronics

Al & Ed's Autosound, Audio Express, Audiotronics, Breakers Mobile Electronics, Car Concepts SLC, Car Toys, Custom Sounds, Drive-In Autosound, Freeman's

Stereo & Video, Hawk Electronics, Mobile One AutoSound, Rhodes Complete Auto Radio, Sound of Tri-State, The Specialists, The Specialists.com

Office Supplies -

*The “Other Retail”channel includes all categories within office supplies, except the paint & painting supplies category and the janitorial & break room category group. For Monthly POS

within the Other Retail channel, we are also projecting for Dollar Tree and the 99 Cent Store.

Technology

Historical

data

only

available

through

2/09

3/09

6/09,

8/09,

09/09,

10/09,

11/09,

1/10,

2/10,

10/10,

12/10,

04/11,

06/11,

7/11,

7/10,

2/12

The ODP Corporation (ODP) DEFA14AAdditional proxy soliciting materials