OfficeMax 2007 Annual Report Download - page 41

this obligation resulted in the recognition of non-operating income in our Consolidated Statement of
Income (Loss) of $48.0 million in 2006 and $32.5 million in 2007. Based upon actual and projected
paper prices at December 29, 2007 and December 30, 2006, we did not recognize an asset or
liability in our Consolidated Balance Sheet related to the Additional Consideration Agreement.
In February 2008, Boise Cascade, L.L.C. sold a majority interest in its paper and packaging
and newsprint businesses to Aldabra 2 Acquisition Corp. As a result of this transaction, the
Additional Consideration Agreement terminated and no further payments will be required of either
party.
The table below provides information about our financial instruments outstanding at
December 29, 2007 that are sensitive to changes in interest rates or paper prices. For debt
obligations, the table presents principal cash flows 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. No amounts
receivable or payable under the terms of the Additional Consideration Agreement are reflected in
the table due to the termination of that agreement in the first quarter of 2008. Other instruments
subject to market risk, such as obligations for pension plans and other postretirement benefits, are
not reflected in the table.
Financial Instruments
Year Ended
2007 2006
There- Fair Fair
2008 2009 2010 2011 2012 after Total Value Total Value
Debt
Short-term borrowings ...... $14.2 $ — $ — $ — $ — $ — $ 14.2 $ 14.2 $ — $ —
Average interest rates ..... 9.0% —% —% —% —% —% 9.0% —% —% —%
Long-term debt
Fixed-rate debt payments . . $34.8 $50.9 $15.9 $ 0.5 $35.1 $ 247.0 $ 384.2 $ 382.4 $ 410.6 $ 412.0
Average interest rates . . . 7.5% 8.9% 5.6% 5.8% 7.9% 5.9% 6.9% —% 7.0% —%
Timber notes securitized . . . $ — $ — $ — $ — $ — $1,470.0 $1,470.0 $1,581.7 $1,470.0 $1,440.7
Average interest rates . . . ————— 5.5% 5.5% —% 5.5% —%
Additional Consideration
Agreement ........... $ — $ — $ — $ — $ — $ — $ — $ — $ — $ —
Environmental
As an owner and operator of real estate, we may be liable under environmental laws for the
cleanup of past and present spills and releases of hazardous or 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 the operation of the paper and forest products assets
prior to the closing of the Sale continue to be our liabilities. We have been notified that we are a
‘‘potentially responsible party’’ under the Comprehensive Environmental Response, Compensation
and Liability Act (CERCLA) or similar federal and state laws, or have received a claim from a private
party, with respect to certain sites where hazardous substances or other contaminants are or may
be located. All of these 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
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