OfficeMax 2010 Annual Report Download - page 79

Download and view the complete annual report

Please find page 79 of the 2010 OfficeMax annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

The Company recognizes accrued interest and penalties associated with uncertain tax positions as part of
income tax expense. As of December 25, 2010, the Company had $0.7 million of accrued interest and penalties
associated with uncertain tax positions.
Deferred taxes are not recognized for temporary differences related to investments in foreign subsidiaries
because such earnings are considered to be indefinitely reinvested in the business. The determination of the
amount of the unrecognized deferred tax liability related to the undistributed earnings is not practicable because
of the complexities associated with its hypothetical calculation.
8. Leases
The Company leases its retail stores as well as certain other property and equipment under operating leases.
These leases are noncancelable and generally contain multiple renewal options for periods ranging from three to
five years, and require the Company to pay all executory costs such as maintenance and insurance. Rental
payments include minimum rentals plus, in some cases, contingent rentals based on a percentage of sales above
specified minimums. Rental expense for operating leases included the following components:
2010 2009 2008
(thousands)
Minimum rentals ................................................ $338,924 $355,662 $348,629
Contingent rentals ............................................... 1,187 1,013 886
Sublease rentals ................................................. (422) (671) (1,013)
Total .......................................................... $339,689 $356,004 $348,502
For operating leases with remaining terms of more than one year, the minimum lease payment requirements
are:
Total
(thousands)
2011 ............................................................................ $ 356,730
2012 ............................................................................ 303,141
2013 ............................................................................ 249,033
2014 ............................................................................ 198,612
2015 ............................................................................ 148,168
Thereafter ....................................................................... 291,534
Total ........................................................................... $1,547,218
These minimum lease payments do not include contingent rental payments that may be due based on a
percentage of sales in excess of stipulated amounts. These future minimum lease payment requirements have not
been reduced by $33.2 million of minimum sublease rentals due in the future under noncancelable subleases.
These sublease rentals include amounts related to closed stores and other facilities that are accounted for in the
integration activities and facility closures reserve.
9. Investments in Affiliates
In connection with the sale of the paper, forest products and timberland assets in 2004, the Company
invested $175 million in affiliates of Boise Cascade, L.L.C. Due to restructurings conducted by those affiliates,
our investment is currently in Boise Cascade Holdings, L.L.C. (the “Boise Investment”), a building products
company.
A portion of the securities received in exchange for the Company’s investment carry no voting rights. This
investment is accounted for under the cost method as Boise Cascade Holdings, L.L.C. does not maintain separate
59