OfficeMax 2008 Annual Report Download - page 76

Scheduled Debt Maturities
The scheduled payments of debt, excluding timber notes due in 2019, are $64.5 million in
2009, $16.2 million in 2010, $3.0 million in 2011, $37.6 million in 2012, $4.2 million in 2013 and
$229.5 million thereafter.
Credit Agreements
Prior to July 2007, the Company sold, on a revolving basis, an undivided interest in a defined
pool of receivables while retaining a subordinated interest in a portion of the receivables. The
Company continued servicing the sold receivables and charged the third-party conduits a monthly
servicing fee at market rates. The program qualified for sale treatment under SFAS No. 140,
‘‘Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities.’’ This
program was terminated on July 12, 2007 in connection with the Amended and Restated Loan and
Security Agreement discussed below.
On July 12, 2007, we entered into an Amended and Restated Loan and Security Agreement
(the ‘‘Loan Agreement’’) with a group of banks. The Loan Agreement amended the Company’s
existing revolving credit facility and replaced our accounts receivable securitization program. The
Loan Agreement permits the Company to borrow up to a maximum of $700 million subject to a
borrowing base calculation that limits availability to a percentage of eligible accounts receivable
plus a percentage of the value of eligible inventory less certain reserves. The revolving credit facility
may be increased (up to a maximum of $800 million) at the Company’s request or reduced from
time to time, in each case according to terms detailed in the Loan Agreement. There were no
borrowings outstanding under the Company’s revolving credit facility as of December 27, 2008 or
December 29, 2007. There were no borrowings under the revolving credit facility during 2008. The
maximum amount outstanding under the revolving credit facility was $103.0 million during 2007.
The average amount outstanding under the revolving credit facility was $6.8 million during 2007.
Letters of credit, which may be issued under the revolving credit facility up to a maximum of
$250 million, reduce available borrowing capacity under the revolving credit facility. Letters of credit
issued under the revolving credit facility totaled $66.7 million as of December 27, 2008 and
$85.5 million as of December 29, 2007. As of December 27, 2008, the maximum aggregate
borrowing amount available under the revolver was $613.7 million and excess availability under the
revolving credit facility totaled $546.9 million. As of December 29, 2007, the maximum aggregate
borrowing amount available under the revolver was $700 million and excess availability under the
revolving credit facility totaled $614.5 million. At December 27, 2008, the Company was in
compliance with all covenants under the Loan Agreement. The Loan Agreement allows the payment
of dividends subject to availability restrictions and so long as no default has occurred. The Loan
Agreement expires on July 12, 2012.
Borrowings under the revolving credit facility bear interest at rates based on either the prime
rate or the London Interbank Offered Rate (‘‘LIBOR’’). Margins are applied to the applicable
borrowing rates and letter of credit fees under the revolving credit facility depending on the level of
average excess availability. Fees on letters of credit issued under the revolving credit facility were
charged at a weighted average rate of 0.875% during the year ended December 27, 2008. The
Company is also charged an unused line fee of 0.25% on the amount by which the maximum
available credit exceeds the average daily outstanding borrowings and letters of credit.
As of December 27, 2008, Grupo OfficeMax, our 51% owned joint venture in Mexico, had total
borrowings of $22.9 million. This included $11.2 million under an installment loan agreement that
Grupo OfficeMax entered into during the third quarter of 2008. The joint venture was not in
compliance with its debt covenants relating to the installment loan agreement, but anticipates that
the lending institution will provide a waiver of the covenant violations. The installment loan is due in
72