OfficeMax 2010 Annual Report Download - page 82

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borrowing capacity. At the end of fiscal year 2010, the Company was in compliance with all material covenants
under the U.S. Credit Agreement. The U.S. Credit Agreement expires on July 12, 2012.
During all years presented, borrowings under the U.S. Credit Agreement were subject to interest at rates
based on either the prime rate or the London Interbank Offered Rate (“LIBOR”). Margins were applied to the
applicable borrowing rates and letter of credit fees under the U.S. Credit Agreement depending on the level of
average availability. Fees on letters of credit issued under the U.S. Credit Agreement were charged at a weighted
average rate of 0.875%. The Company was also charged an unused line fee of 0.25% on the amount by which the
maximum available credit exceeded the average daily outstanding borrowings and letters of credit.
On September 30, 2009, Grand & Toy Limited, the Company’s wholly owned subsidiary in Canada, entered
into a Loan and Security Agreement (the “Canadian Credit Agreement”) with a group of banks. The Canadian
Credit Agreement permits Grand & Toy Limited to borrow up to a maximum of C$60 million subject to a
borrowing base calculation that limits availability to a percentage of eligible accounts receivable plus a
percentage of the value of eligible inventory less certain reserves. The Canadian Credit Agreement may be
increased (up to a maximum of C$80 million) at Grand & Toy Limited’s request or reduced from time to time, in
each case according to the terms detailed in the Canadian Credit Agreement. Letters of credit, which may be
issued under the Canadian Credit Agreement up to a maximum of C$10 million, reduce available borrowing
capacity under the Canadian Credit Agreement. At the end of fiscal year 2010, Grand & Toy Limited was in
compliance with all material covenants under the Canadian Credit Agreement. The Canadian Credit Agreement
expires on July 12, 2012.
On March 15, 2010, the Company’s five wholly-owned subsidiaries based in Australia and New Zealand
(the “Australasian subsidiaries”) entered into a Facility Agreement (the “Australasian Credit Agreement”) with a
financial institution based in those countries. The Australasian Credit Agreement permits the Australasian
subsidiaries to borrow up to a maximum of A$80 million subject to a borrowing base calculation that limits
availability to a percentage of eligible accounts receivable plus a percentage of the value of certain owned
properties, less certain reserves. At the end of fiscal year 2010, the Australasian subsidiaries were in compliance
with all material covenants under the Australasian Credit Agreement. The Australasian Credit Agreement expires
on March 15, 2013.
Availability under the Company’s credit agreements at the end of fiscal year 2010 was as follows:
2010
U.S.
Credit
Agreement
Canadian
Credit
Agreement
Australasian
Credit
Agreement Total
(millions)
Maximum aggregate available borrowing amount ............. $528.3 $49.2 $55.0 $632.5
Less: Stand-by letters of credit ............................ (56.1) — — (56.1)
Amount available for borrowing at fiscal year-end ............ $472.2 $49.2 $55.0 $576.4
There were no borrowings under the Company’s credit agreements in 2010 or 2009.
Other
At the end of fiscal year 2010, Grupo OfficeMax, our 51%-owned joint venture in Mexico, had total
outstanding borrowings of $13.1 million. This included $7.8 million outstanding under a 60-month installment
note due in the first quarter of 2014 and $5.3 million outstanding under a 54-month installment note due in the
third quarter of 2014. Payments on the installment loans are made monthly. There is no recourse against the
Company on the Grupo OfficeMax loans. The installment loan ending in the third quarter of 2014 is secured by
certain owned property of Grupo OfficeMax. All other Grupo OfficeMax loan facilities are unsecured.
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