OfficeMax 2010 Annual Report Download - page 53

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table sets forth payout amounts based on rates as of December 25, 2010 and does not attempt to project future
rates. The following table does not include our obligations for pension plans and other post retirement benefits,
although market risk also arises within our defined benefit pension plans to the extent that the obligations of the
pension plans are not fully matched by assets with determinable cash flows. We sponsor noncontributory defined
benefit pension plans covering certain terminated employees, vested employees, retirees, and some active
OfficeMax employees. As our plans were frozen in 2003, our active employees and all inactive participants who
are covered by the plans are no longer accruing additional benefits. However, the pension plan obligations are
still subject to change due to fluctuations in long-term interest rates as well as factors impacting actuarial
valuations, such as retirement rates and pension plan participants’ increased life expectancies. In addition to
changes in pension plan obligations, the amount of plan assets available to pay benefits, contribution levels and
expense are also impacted by the return on the pension plan assets. The pension plan assets include OfficeMax
common stock, U.S. equities, international equities, global equities and fixed-income securities, the cash flows of
which change as equity prices and interest rates vary. The risk is that market movements in equity prices and
interest rates could result in assets that are insufficient over time to cover the level of projected obligations. This
in turn could result in significant changes in pension expense and funded status, further impacting future required
contributions. Management, together with the trustees who act on behalf of the pension plan beneficiaries, assess
the level of this risk using reports prepared by independent external actuaries and take action, where appropriate,
in terms of setting investment strategy and agreed contribution levels.
Expected Payments
(millions)
2011 2012 2013 2014 2015 Thereafter Total
Recourse debt:
Fixed-rate debt payments ................... $0.8 $35.4 $1.9 $0.1 $0.1 $224.1 $262.4
Weighted average interest rates .......... 7.3% 7.9% 8.1% 5.4% 3.8% 6.4% 6.6%
Variable-rate debt payments ................. $3.8 $ 3.8 $3.8 $1.7 $ 13.1
Weighted average interest rates .......... 7.4% 7.4% 7.4% 8.1% 7.5%
Non-recourse debt:
Securitization Notes
Wachovia(a) ......................... $— $ — $— $— $— $735.0 $735.0
Average interest rates .............. 5.4% 5.4%
Lehman(a) ........................... $— $ — $— $— $— $735.0 $735.0
Average interest rates .............. 5.5% 5.5%
(a) There is no recourse against OfficeMax on the Securitization Notes as recourse is limited to proceeds from
the applicable pledged Installment Notes receivable and underlying guarantees. The debt remains
outstanding until it is legally extinguished, which will be when the Installment Note and guaranty are
transferred to and accepted by the securitized note holders.
2010 2009
Carrying
amount
Fair
value
Carrying
amount
Fair
value
(millions)
Financial assets:
Timber notes receivable ....................................
Wachovia ........................................... $817.5 $888.3 $817.5 $823.6
Lehman ............................................. 81.8 81.8 81.8 81.8
Financial liabilities:
Recourse debt ............................................ $275.0 $255.5 $297.6 $207.2
Non-recourse debt ........................................
Wachovia ........................................... $735.0 $811.1 $735.0 $754.8
Lehman ............................................. 735.0 81.8 735.0 81.8
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