FOURTH QUARTER RESULTS
Total Company sales for the fourth quarter grew 7% to $3.7 billion compared to the fourth quarter of 2004.  Excluding the 53^rd week of 2005, sales for the quarter increased 2% from the same period last year.

Net earnings for the quarter were $106 million compared to $52 million in the same quarter of the prior year, and diluted earnings per share were $0.34 in the fourth quarter of 2005 versus $0.17 in the same period a year ago. The fourth quarter 2004 and 2005 results include the effects of charges related to asset impairments, exit costs and other operating items which are more fully described in our Form 10-K filed today with the Securities and Exchange Commission. Fourth quarter charges in 2005 had a $0.09 per diluted share negative impact on results, and net charges identified in the fourth quarter of 2004 had a $0.12 per diluted share negative impact on results. Without these charges and the benefits of having a 53rd week of sales, our fourth quarter 2005 net earnings were $117 million1 or $0.38 per share . This is an increase of 31% compared to an adjusted earnings per share for fourth quarter in the prior year of $0.29.

For the quarter, gross profit as a percentage of sales was 31.1%, down from 31.8% in the same period last year. Negative gross margin impact was primarily attributable to a decline in the International Division as gross margin was relatively consistent with the same quarter in the prior year for both the North American Retail and North American Business Solutions Divisions.

Total operating expenses, as a percentage of sales, were 27.4% for the quarter, and 28.9% in the fourth quarter of 2004. Fourth quarter charges negatively impacted operating margin by 120 basis points in the current quarter, as compared to 100 basis points in the same quarter of the prior year. Improvements were realized in both general and administrative expenses as well as store and warehouse operating and selling expenses, driven by advertising cost efficiencies, increased sales leverage from the 53rd week, and lower warehouse costs.

Operating profit for the quarter was $137 million as compared to $103 million in the fourth quarter of the prior year. Fourth quarter charges, negatively impacted operating results by $45 million in 2005 as compared to $33 million in the fourth quarter of 2004.

Return on invested capital for the year was 9.5%, compared to 10.6% in the same period of the prior year. Charges in 2005 negatively impacted the calculation of our current return on invested capital by 310 basis points, and charges in 2004 negatively impacted the calculation of ROIC in the prior period by 60 basis points.

Share Repurchase
We repurchased 11.5 million shares of our common stock for $330 million in the quarter under the $500 million share repurchase program approved by the Board of Directors in the fourth quarter of 2005. For the year, share repurchases totaled $815 million, or 29.8 million shares at an average share price of approximately $27. Today, we are announcing that Office Depot’s Board of Directors has granted authorization for the repurchase of an additional $500 million in market value of its common stock.

“We are pleased with the overall performance of North America in the fourth quarter,” said Steve Odland, Office Depot’s Chairman and Chief Executive Officer. “The North American Retail Division recorded its eighth consecutive quarter of positive comparable sales while expanding its operating profit margin. Our retail comps for the quarter reflect solid promotions and merchandising that were particularly effective during a more heavily consumer based holiday season. Given the strong impact of the holiday season on this comp, we would caution people not to expect this level of performance going forward. North American Business Solutions Division sales increased by 6% excluding the 53rd week of sales, and division operating profit margins also expanded. Our International Division results are still not where we would like them to be. We remain optimistic on the long term potential of our International business, but cautious regarding expectations of immediate marked improvements in this Division’s performance based on modest changes in broad economic conditions in Europe. Our focus remains to improve profitability and grow this business over time.”

FOURTH QUARTER DIVISION RESULTS
North American Retail Division
Fourth quarter sales in the North American Retail Division increased 15% compared to the same period last year (8% excluding sales in the 53rd week). Comparable store sales in the 945 stores in the U.S. and Canada that have been open for more than one year increased 5% in the fourth quarter and 3% for the full year.

North American Retail had an operating profit of $119 million for the fourth quarter of 2005 up 20% from the same period in the prior year, and as a percentage of sales was 6.9%, up 30 basis points from the prior year. Fourth quarter 2005 charges negatively impacted operating results for the period by $7 million, and charges in the fourth quarter 2004 impacted that period’s operating results by $2 million. Broad based product category management improvement and increased private brand sales improved gross margin in the quarter. Effective advertising, leverage from the 53rd week of sales, and expense controls more than compensated for incremental costs associated with adding new stores during the period and helped to drive the increase in operating profit.

During the fourth quarter, the Company opened 41 new stores, while closing 1 office supply store. At the end of the fourth quarter, Office Depot operated a total of 1,047 office products superstores throughout the U.S. and Canada.

North American Business Solutions Division

North American Business Solutions Division sales increased by 11% in the fourth quarter compared to the same period last year (6% excluding the 53rd week of sales). We experienced broad based revenue growth in all customer segments

Division operating profit was $130 million for the quarter, up 24% from the prior year, and as a percentage of sales was 11.8%, up 130 basis points from the same period in 2004. Fourth quarter 2005 charges negatively impacted operating profit by $7 million, while charges in the fourth quarter of the prior year had a negative $4 million impact on that period’s operating profit.

Gross margin for the Division was relatively unchanged, but selling and warehouse expense was leveraged from our call center optimization, positive effects of the 53rd week, and reduced expenses resulting from the integration of the Office Depot and Viking catalog brands.

International Division
International fourth quarter sales decreased 8% in U.S. dollars or 1% in local currencies compared to the same period in 2004. Excluding the 53rd week of sales, revenue decreased 10% or 3% in local currencies from the same quarter of the prior year. The change in exchange rates from the corresponding prior year period decreased sales reported in U.S. dollars by approximately $70 million for the quarter.

Division operating profit was $71 million or 7.9% of sales as compared to $92 million or 9.4% of sales in the prior year’s fourth quarter. Fourth quarter 2005 charges negatively impacted operating profit by $28 million, and fourth quarter 2004 charges negatively impacted operating profit in that quarter by $13 million.

Gross margin experienced substantial declines in the quarter because of continued pricing pressures in key product categories and increased competitive activity.

New Managing Director For Europe
Today Office Depot announced the appointment of Dirk Collin to the position of Executive Vice President and Managing Director, Europe. In this position, he has general management accountability for all operations in Europe. Dirk comes to Office Depot with a proven track record of developing and growing sales organizations as well as successfully managing operations through restructuring initiatives. Dirk will report to the President of our International Division, Charles Brown, from our European headquarters in Venlo, Netherlands.

Acquisition
Office Depot also announced today the acquisition of a controlling interest in Best Office, one of the leading South Korean office supply companies. Best Office operates a network of over 70 franchised and company owned retail stores along with a complementary delivery sales channel. This $44 million dollar business will strengthen Office Depot’s global presence in a rapidly growing area of the world and extend our ability to service our global customers. The transaction is subject to normal regulatory approvals.

FULL YEAR RESULTS
For the year, sales were $14.3 billion, an increase of 5% from the prior year. Excluding the 53rd week, sales increased by 4% when compared to 2004. Comparable sales for the year in the North American Retail Division, excluding the 53rd week, increased by 3%.

Net earnings for 2005 were $274 million ($0.87 per share on a fully diluted basis). Included in 2005 net income were after tax charges of $185 million, or $0.59 per share in 2005 and $37 million in 2004. Without charges and the benefits of having a 53rd week of sales, our full year net earnings were $444 million, or $1.41 per share on a non-GAAP basis. This is an increase of 19% compared to an adjusted earnings per share for the prior year of $1.18 on a non-GAAP basis.

Operating profit in 2005 was $348 million on an operating margin of 2.4% as compared to an operating profit of $530 million in 2004 on an operating margin of 3.9%. 2005 charges negatively impacted operating margin by 200 basis points while 2004 charges had a negative impact of 20 basis points on the operating margin of the prior period.

Mr. Odland remarked, “Our Company is clearly headed in the right strategic direction. We are pleased with the results that we have achieved in 2005, but we are mindful of the significant work that still must be accomplished to drive continuous improvement in those operating results. We are focused on delivering top line growth as well as achieving results from various cost management activities in each of our Divisions. These growth and cost cutting initiatives will take some time to complete. In addition, competition in the office supply market both domestically and abroad is steadily increasing and we anticipate increased gross margin pressure in many product categories in the years to come. Globally, we have a significant percentage of sales where margins are more contractually linked. So, our fourth quarter and fiscal year 2005 results are promising, but we still have much to do.”

Non-GAAP Reconciliation
A reconciliation of GAAP results to results excluding Charges and the effects of the 53rd week may be accessed on our corporate website, officedepot.com, under the category Company Info.

About Office Depot
With annual sales of over $14 billion, Office Depot provides more office products and services to more customers in more countries than any other company. Incorporated in 1986 and headquartered in Delray Beach, Florida, Office Depot conducts business in 22 countries and employs 47,000 people worldwide. The Company operates under the Office Depot®, Viking Office Products® and Viking Direct® brand names.

Office Depot is a leader in every distribution channel - from retail stores and contract delivery to catalogs and e-commerce. With over $ 3.8 billion of sales the Company is one of the world’s largest e-commerce retailers. As of December 31, 2005, Office Depot has 1,047 retail stores in North America. Internationally, the Company conducts wholly-owned operations in 14 countries, and operates under joint venture and license arrangements in another six countries.

The company’s common stock is listed on the New York Stock Exchange under the symbol ODP and is included in the S&P 500 Index. Additional press information can be found at: http://mediarelations.officedepot.com.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS: Except for historical information, the matters discussed in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements, including without limitation all of the projections and anticipated levels of future performance, involve risks and uncertainties which may cause actual results to differ materially from those discussed herein. These risks and uncertainties are detailed from time to time by Office Depot in its filings with the United States Securities and Exchange Commission (“SEC”), including without limitation its most recent filing on Form 10-K, filed on February 15, 2006 and its 10-Q and 8-K filings made from time to time. You are strongly urged to review all such filings for a more detailed discussion of such risks and uncertainties. The Company’s SEC filings are readily obtainable at no charge at www.sec.gov and at www.freeEDGAR.com, as well as on a number of other commercial web sites.