OfficeMax 2006 Annual Report Download - page 39

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Contractual Obligations
In the table below, we set forth our contractual obligations as of December 30, 2006. Some of the
figureswe include inthis table are based on management’s estimates and assumptions about these
obligations, including their duration, the possibility ofrenewal,anticipated actions by third parties and
other factors. Because these estimates and assumptions are necessarily subjective, the amounts we
will actually pay in future periods may vary from those reflected in the table.
Payments Due by Period
2007 2008-2009 2010-2011 Thereafter Total
(millions)
Debt(a)(c). ....................... $25.6 $86.0 $16.3$282.7 $ 410.6
Timber notessecuritized ........... — — —1,470.0 1,470.0
Operatingleases(b)(e). ............ 341.7 589.9 461.6 636.3 2,029.5
Purchase obligations .............. 37.3 35.91.5 0.875.5
Other long-term liabilities(d)........ —— ———
$ 404.6 $ 711.8 $ 479.4 $ 2,389.8 $ 3,985.6
(a) Included indebt are amounts owed on our note agreements, revenue bonds and credit agreements. These borrowings
are further described in Note 13, Debt, of the NotestoConsolidatedFinancialStatements in “Item 8. Financial Statements
andSupplementary Data”in this Form 10-K. The table assumes ourdebt is held to maturity.
(b) We enterinto operating leases in the normal course of business. We lease our retail store space as well as certain other
property and equipment under operating leases.Some of our retail store leases requirepercentage rentals on sales
above specifiedminimums and contain escalation clauses. Theseminimum leasepaymentsdonot include contingent
rental expense. Some lease agreements provide uswiththe option torenew the leaseor pu rchase the leased property.
Our future operating lease obligations would change if we exercised these renewal options and if we entered into
additional operating lease agreements. For more information, see Note 8, Leases, of the Notes to Consolidated Financial
Statementsin “Item 8. Financial Statementsand Supplementary Data” in this Form 10-K.
(c) The current portion of these liabilities is also included.
(d)Our Consolidated Balance Sheet as of December 30, 2006 includes $287.1 million of liabilities associated with our
retirement and benefit plans and $311.8 million of other long-term liabilities. These amounts have been excluded from the
above table as the timing and/or the amount of any cash payment is uncertain.
(e) Lease obligations for closed facilities are included inoperating leases and a liability equal to the fair valueof these
obligations is included in the Company’s Consolidated Balan ce Sheets.For more information, see Note 4, Integration
Activities and Facility Closures, of the Notes to ConsolidatedFinancial Statements in “Item 8. Financial Statements &
Supplementary Data” in this Form 10-K.
In accordance with an amended and restated joint-venture agreement, the minority owner of our
subsidiary inMexico, OfficeMax de Mexico, can elect to put its remaining 49% interest in the
subsidiary to OfficeMax if earnings targets are achieved. At December 30, 2006, OfficeMax de Mexico
had met these earnings targets, which are calculated quarterly on a rolling four-quarter basis.
Accordingly, the targets can be achieved in one quarterbut not inthe next. If the earnings targets are
achieved and theminority owner elects to put its ownership interest, the purchase price would be
equal to fair value, calculated based on both the subsidiary’s earnings for the last four quarters before
interest, taxes and depreciation and amortization,and the current marketmultiples ofsimilar
companies. The fair value purchaseprice is currently estimated at $65 to $70 million. This contingent
obligation is not included in the table above.
In addition tothe contractual obligations quantified inthe table above, we have other obligations
for goodsand services entered into in the normal course of business. These contracts, however, are
either not enforceable or legally binding or are subject to changebased on our business decisions.