OfficeMax 2009 Annual Report Download - page 43

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and take action, where appropriate, in terms of setting investment strategy and agreed contribution
levels.
($ in millions)
Fiscal year-ended
2009 2008
Expected Payments There- Fair Fair
2010 2011 2012 2013 2014 after Total Value Total Value
Recourse debt
Fixed-rate debt payments .......... $18.4 $0.8 $35.4 $1.9 $0.2 $224.2 $280.9 $190.8 $332.1 $214.6
Average interest rates ........... 6.3% 7.1% 7.9% 8.0% 5.4% 6.4% 6.6% —% 6.9% —%
Variable-rate debt payments ........ $4.0 $3.7 $3.7 $3.7 $1.6 $ 0 $ 16.7 $ 16.4 $ 22.9 $ 22.1
Average interest rates ........... 7.5% 7.5% 7.5% 7.5% 8.1% —% 7.5% —% 10.9% —%
Non-recourse debt:
Timber securitization notes
Wachovia ................. $ — $— $ — $— $— $735.0 $735.0 $754.8 $735.0 $736.8
Average interest rates .......... 5.4% 5.4% —% 5.4% —%
Lehman .................. $ — $— $ — $— $— $735.0 $735.0 $ 81.8 $735.0 $ 81.8
Average interest rates .......... 5.5% 5.5% —% 5.5% —%
2009 2008
Carrying amount Fair value Carrying amount Fair value
(millions)
Financial assets:
Timber notes receivable
Wachovia— ............. $817.5 $823.6 $817.5 $801.9
Lehman— .............. 81.8 81.8 81.8 81.8
Financial liabilities:
Debt .................... $297.6 $207.2 $355.0 $236.7
Timber securitization notes
Wachovia— ............. $735.0 $754.8 $735.0 $736.8
Lehman— .............. 735.0 81.8 735.0 81.8
Goodwill and Other Asset Impairments
We are required for accounting purposes to assess the carrying value of goodwill and other
intangible assets annually or whenever circumstances indicate that a decline in value may have
occurred. In 2008, we fully impaired our goodwill balances. We review other intangible assets
annually at year-end.
For other long lived assets, we are also required to assess the carrying value when
circumstances indicate that a decline in value may have occurred. Based on the operating
performance of several of our stores due to the macroeconomic factors and market specific change
in expected demographics, we determined that there were indicators of potential impairment
relating to our stores. Therefore, in 2009, we recorded a non-cash charge of $17.6 million to impair
long lived assets pertaining to certain stores.
During 2008, based on our sustained low stock price and reduced market capitalization relating
to the book value of equity as well as the macroeconomic factors impacting industry business
conditions, actual and forecasted operating performance and continued tightening of the credit
markets, we determined indicators of potential impairment were present in the second quarter of
2008. In the fourth quarter of 2008, due to a further decline in market capitalization and worsening
economic conditions and performance, we concluded further impairment was indicated. As a result,
during 2008, we recorded non-cash impairment charges associated with goodwill, intangible assets
39