OfficeMax 2006 Annual Report Download - page 42

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The table below provides informationabout our financial instruments outstandingat
December 30, 2006 that are sensitive to changes ininterest rates or paper prices. For debt
obligations, the table presents principal cashflows and related weighted average interest rates by
expected maturity dates. For obligations with variable interest rates, the table sets forth payout
amounts based on current rates and does not attempt to project future rates. Estimate d future cash
payments under the terms of the Additional Consideration Agreement, included inthe table below, are
based on expected payments usingpublished industry paper price projections. Otherinstruments
subject to marketrisk, such as obligations for pension plans and other postretirement benefits, are not
reflected in the table.
Financial Instruments
Year Ended
2006 2005
2007 20082009 2010 2011
There-
afterTotal
Fair
Value Total
Fair
Value
Debt
Short-term borrowings.......$ — $ — $ —$ — $ — $ —$ —$ — $ 18.7 $ 18.7
Average interestrates ......— % —% —% —% —% —% —% — % 6.6% —%
Long-term debt
Fixed-rate debt payments... $ 25.6 $ 35.1$ 5 0.9$ 1 5.8$ 0 .5 $ 282.7$410.6$412.0 $476.6 $ 471.3
Average interest rates. ....7.8%7.5%8.9%5.6%5.8%6.1%7.0%— % 6.9% —%
Timber notes securitized....$ — $ — $ —$ — $ 1,470.0 $1,470.0 $1,440.7 $ 1,470.0 $ 1,440.7
Average interest rates. ....— — — — 5.5%5.5%— % 5.5% —%
Additional Consideration
Agreement ..............$ — $ — $ —$ — $ —$ —$ — $ 54.7 $ 44.9
Environmental
As an owner and operator of real estate, we may be liable under environmental laws for the
cleanup of past and present spillsand releases of hazardousor toxic substances on or from our
properties and operations. We can be found liable under these laws if we knew of, or were
responsible for, the presence of such substances. In some cases, this liability may exceed the value of
the property itself.
Environmental liabilities that relate to theoperation of the paper and forest products assets prior
to the closing of the Sale continue to be our liabilities. We have been notified thatwe are a “potentially
responsible party” under the Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA) or similar federal andstate laws, or havereceived aclaim from a private party, with
respect to 12 active sites where hazardous substances or other contaminantsare or may be located.
All 12 active sites relate to operations either no longer owned by the Company or unrelated to its
ongoing operations. In most cases, we are one of many potentially responsible parties, and our
alleged contribution to these sites is relatively minor. For sites where a range of potential liability can
be determined, we have established appropriate reserves. We cannot predict with certainty the total
response and remedial costs, our share of the total costs, the extent to which contributions will be
available from other parties, or the amount of time necessary tocomplete the cleanups. Based on our
investigations; our experiencewith respect to cleanup of hazardous substances; the fact that
expenditures will, in many cases, be incurred over extended periods oftime; and the number of
solvent potentially responsible parties, we do not believe thatthe knownactual and potential response
costswill, in the aggregate, materially affectour financial position or results of operations.
Critical Accounting Estimates
The Securities andExchange Commission defines critical accounting estimatesas those thatare
most important to the portrayal of our financial condition and results. Theseestimates require