OfficeMax 2011 Annual Report Download - page 103

The Company’s Retirement Funds Investment Committee is responsible for establishing and overseeing the
implementation of the investment policy for the Company’s pension plans. The investment policy is structured to
optimize growth of the pension plan trust assets, while minimizing the risk of significant losses, in order to
enable the plans to satisfy their benefit payment obligations over time. Plan assets are invested primarily in
OfficeMax common stock, U.S. equities, global equities, international equities and fixed-income securities. The
Company uses benefit payments and Company contributions as its primary rebalancing mechanisms to maintain
the asset class exposures within the guideline ranges established under the investment policy.
The current asset allocation guidelines set forth an OfficeMax common stock range of 0% to 15%, a U.S.
equity range of 20% to 40%, an international equity range of 6% to 16%, a global equity range of 11% to 22%
and a fixed-income range of 35% to 55%. Asset-class positions within the ranges are continually evaluated and
adjusted based on expectations for future returns, the funded position of the plans and market risks. Occasionally,
the Company may utilize futures or other financial instruments to alter the pension trust’s exposure to various
asset classes in a lower-cost manner than trading securities in the underlying portfolios.
In 2009, we contributed 8.3 million shares of OfficeMax common stock to our qualified pension plans,
which are managed by an independent fiduciary. At the end of 2011, the plan held 2.8 million shares with a value
of $12.6 million.
Generally, quoted market prices are used to value pension plan assets. Equities, some fixed-income
securities, publicly traded investment funds, and U.S. government obligations are valued by reference to
published market prices. Investments in certain restricted stocks are valued at the quoted market price of the
issuer’s unrestricted common stock less an appropriate discount. If a quoted market price for unrestricted
common stock of the issuer is not available, restricted common stocks are valued at a multiple of current earnings
less an appropriate discount. The multiple chosen is consistent with multiples of similar companies based on
current market prices.
The following table presents the pension plan assets by level within the fair value hierarchy as of
December 31, 2011.
Level 1 Level 2 Level 3
(thousands)
Money market funds ................................................ $ — $ 19,280 $ —
Equity securities:
OfficeMax common stock ....................................... 12,585 — —
U.S. large-cap ................................................. 53,629 — —
U.S. small and mid-cap ......................................... 13,529 — —
International .................................................. 84,647 — —
Fixed-Income:
Corporate bonds ............................................... — 421,027 —
Government securities .......................................... — 7,785 —
Other fixed-income ............................................ — 24,907 —
Other:
Equity mutual funds ............................................ — 385,862 —
Group annuity contracts ......................................... — 0 5,662
Other, including plan receivables and payables ....................... 5,665 1,153 —
$170,055 $860,014 $5,662
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