OfficeMax 2011 Annual Report Download - page 65

Contractual Obligations
In the following table, we set forth our contractual obligations as of December 31, 2011. Some of the figures
included in this table are based on management’s estimates and assumptions about these obligations, including
their duration, the possibility of renewal, anticipated actions by third parties and other factors. Because these
estimates and assumptions are necessarily subjective, the amounts we will actually pay in future periods may
vary from those reflected in the table.
Payments Due by Period
2012 2013-2014 2015-2016 Thereafter Total
(millions)
Recourse debt .................................... $ 38.9 $ 5.6 $ 20.2 $ 204.0 $ 268.7
Interest payments on recourse debt ................... 16.3 29.0 27.9 111.9 185.1
Non-recourse debt ................................ — — — 1,470.0 1,470.0
Interest payments on non-recourse debt ............... 39.8 79.7 79.7 119.5 318.7
Operating leases .................................. 343.0 530.6 314.8 232.6 1,421.0
Purchase obligations .............................. 35.7 9.1 2.1 — 46.9
Pension obligations (estimated payments) .............. 28.5 120.6 102.8 56.6 308.5
Total ....................................... $502.2 $774.6 $547.5 $2,194.6 $4,018.9
Debt includes amounts owed on our note agreements, revenue bonds and credit agreements assuming the
debt is held to maturity. The amounts above include both current and non-current liabilities. Not included in the
table above are contingent payments for uncertain tax positions of $21.2 million. These amounts are not included
due to our inability to predict the timing of settlement of these amounts. The “Expected Payments” table under
the caption “Financial Instruments” in this Management’s Discussion and Analysis of Financial Condition and
Results of Operations presents principal cash flows and related weighted average interest rates by expected
maturity dates. For more information, see Note 10, “Debt,” of the Notes to Consolidated Financial Statements in
“Item 8. Financial Statements and Supplementary Data” in this form 10-K.
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 non-recourse debt remains
outstanding until it is legally extinguished, which will be when the Installment Notes and related guaranties are
transferred to and accepted by the securitized note holders. For the Lehman Guaranteed Installment Note, we
expect that this will occur when the remaining guaranty claim of the Securitization Note holders in the
bankruptcy is resolved and as the Lehman assets are in the process of distribution. Interest payments on non-
recourse debt will be completely offset by interest income received on the Installment Notes.
We enter into operating leases in the normal course of business. We lease our retail store space as well as
certain other property and equipment under operating leases. Some of our retail store leases require percentage
rentals on sales above specified minimums and contain escalation clauses. The minimum lease payments shown
in the table above do not include contingent rental expense. Some lease agreements provide us with the option to
renew the lease or purchase the leased property. Our future operating lease obligations would change if we
exercised these renewal options and if we entered into additional operating lease agreements. As a result of
purchase accounting from the 2004 acquisition of the U.S. retail business, we recorded an asset relating to store
leases with terms below market value and a liability for store leases with terms above market value. The asset
will be amortized through 2027 while the liability will be amortized through 2012. Since the acquisition date, the
net amortization of these items has reduced rent expense by approximately $7 million per year. Beginning in
2013, the amortization of the asset will result in additional rent expense of approximately $4 million per year. For
more information, see Note 8, “Leases,” of the Notes to Consolidated Financial Statements in “Item 8. Financial
Statements and Supplementary Data” in this Form 10-K. Lease obligations for closed facilities are included in
operating leases and a liability equal to the fair value of these obligations is included in the Company’s
Consolidated Balance Sheets. For more information, see Note 2, “Facility Closure Reserves,” of the Notes to
Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K.
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