OfficeMax 2008 Annual Report Download - page 77

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60 monthly payments beginning in the second quarter of 2009. The joint venture also has
$11.7 million of short term borrowings of which $4.9 million was refinanced in the first quarter of
2009. The remaining $6.8 million of short term borrowings is a simple revolving loan. The financing
for Grupo OfficeMax is unsecured with no recourse against the Company.
During 2008, the Company made a $6.7 million capital contribution to Grupo OfficeMax,
commensurate with our ownership percentage in the joint venture. The Company may need to
make additional capital contributions in the future.
Note Agreements
The indentures related to the 6.50% senior notes due in 2010 and 7.00% senior notes due in
2013 contained a number of restrictive covenants, substantially all of which have since been
eliminated and replaced with covenants contained in the Company’s other public debt. In
November 2008, we repurchased all of the outstanding 7.00% senior notes using proceeds from the
pledged instruments that matured in October 2008, which had been reported as restricted
investments in the Consolidated Balance Sheets.
Other
We have various unsecured debt outstanding, including approximately $189.9 million of
revenue bonds due in varying amounts through 2029. Approximately $69.2 million of these
obligations may be called in the near future due to a preliminary potential adverse determination
regarding the exempt status of interest on the bonds from the Internal Revenue Service (‘‘IRS’’). We
have appealed the proposed IRS determination. The $69.2 million of debt is classified as long-term
debt in the Consolidated Balance Sheets as we intend to utilize funds available under our existing
long-term revolving credit facility to fund any required payment.
Cash Paid for Interest
Cash payments for interest, net of interest capitalized and including interest payments related
to the timber securitization notes, were $90.0 million in 2008, $116.6 million in 2007 and
$124.1 million in 2006.
12. Financial Instruments, Derivatives and Hedging Activities
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, trade accounts receivable, other assets
(non-derivatives), short-term borrowings, trade accounts payable, and due to related party,
approximate fair value because of the short maturity of these instruments. The following table
presents the carrying amounts and estimated fair values of the Company’s other financial
instruments at December 27, 2008 and December 29, 2007. The fair value of a financial instrument
73