OfficeMax 2005 Annual Report Download - page 94

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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. At December 31, 2005
and 2004, the pension trust did not have any equity investments in the Company’s common stock.
Cash Flows
Pension plan contributions include required statutory minimums and, in some years, additional
discretionary amounts. During 2005, the Company made cash contributions to its pension plans
totaling $2.8 million. In 2004, cash contributions to the Company’s pension plans totaled
$279.8 million, while $84.5 million was contributed to the plans in 2003. There are no minimum
contribution requirements in 2006. However, the Company may elect to make voluntary
contributions in 2006.
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 Other
Benefits Benefits
(thousands)
2006 ..................................................... $105,570 $2,932
2007 ..................................................... 101,408 2,589
2008 ..................................................... 100,933 2,372
2009 ..................................................... 100,043 2,165
2010 ..................................................... 98,801 2,038
Years 2011-2015 ............................................ 480,368 8,621
Defined Contribution Plans
During 2004, the Company also 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. Effective October 29, 2004, the defined contribution plan account
balances for active forest products employees were transferred to plans established by Boise
Cascade, L.L.C. The plan for non-Retail salaried employees includes an employee stock ownership
plan (‘‘ESOP’’) component through which the Company matches contributions of eligible
employees. Under that plan, the Company’s Series D ESOP convertible preferred stock is allocated
to eligible participants, as principal and interest payments are made on the ESOP debt by the plan
and guaranteed by the Company. (See Note 18, Shareholders’ Equity for additional information
related to the ESOP.) The final principal and interest payments on the ESOP debt were made on
June 30, 2004. All remaining shares were allocated to the ESOP participants as matching
contributions in 2005. As a result, Company matching contributions for former ESOP participants
are now made in cash. Total Company contributions to the defined contribution savings plans were
$9.9 million in 2005, $26.6 million in 2004 and $34.8 million in 2003. In January 2005, all of the
remaining savings plans were merged into a single plan.
18. Shareholders’ Equity
Preferred Stock
At December 31, 2005, 1,216,335 shares of 7.375% Series D ESOP convertible preferred stock
were outstanding, compared with 1,376,987 shares outstanding at December 31, 2004. The
Series D ESOP convertible preferred stock is shown in the Consolidated Balance Sheets at its
90