OfficeMax 2010 Annual Report Download - page 80

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ownership accounts for its affiliate’s members, and the Company does not have the ability to significantly
influence its operating and financial policies. This investment is included in investments in affiliates in the
Consolidated Balance Sheets.
Through its investment in Boise Inc., Boise Cascade Holdings, L.L.C. indirectly owned an interest in Boise
White Paper, L.L.C. (“Boise Paper”). OfficeMax is obligated by contract to purchase its North American
requirements for cut-size office paper from Boise Paper. During 2010, Boise Cascade Holdings, L.L.C. sold its
remaining investment in Boise Inc. As a result of the sale, Boise Paper is no longer a related party to the
Company, and as such, amounts previously presented as related party receivables of $6.5 million and related
party payables of $37.1 million at December 26, 2009 have been reclassified to “Receivables, net” and
“Accounts Payable”, respectively.
The Boise Investment represented a continuing involvement in the operations of the business we sold in
2004. Therefore, approximately $180 million of gain realized from the sale was deferred. This gain is expected to
be recognized in earnings as the Company’s investment is reduced.
Throughout the year, we review the carrying value of this investment whenever events or circumstances
indicate that its fair value may be less than its carrying amount. At year-end, we reviewed certain financial
information of Boise Cascade Holdings, L.L.C., including estimated future cash flows as well as data regarding
the valuation of comparable companies, and determined that there was no impairment of this investment. The
Company will continue to monitor and assess this investment.
The non-voting securities of Boise Cascade Holdings, L.L.C. accrue dividends daily at the rate of 8% per
annum on the liquidation value plus accumulated dividends. Dividends accumulate semiannually to the extent
not paid in cash on the last day of June and December. The Company recognized dividend income on this
investment of $7.3 million in 2010, $6.7 million in 2009 and $6.2 million in 2008. The dividend receivable was
$30.2 million at December 25, 2010, and was recorded in other non-current assets in the Consolidated Balance
Sheets.
The Company receives distributions on the Boise Investment for the income tax liability associated with its
share of allocated earnings. During 2009 and 2008, the Company received tax-related distributions of
$2.6 million and $23.0 million, respectively. The larger distribution in 2008 reflected the gain on the sale by
Boise Cascade, L.L.C. of a majority interest in its paper and packaging and newsprint businesses. No
distributions were received in 2010.
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