OfficeMax 2011 Annual Report Download - page 94

For operating leases with remaining terms of more than one year, the minimum lease payment requirements are:
Total
(thousands)
2012 ............................................................................ $ 343,000
2013 ............................................................................ 292,228
2014 ............................................................................ 238,360
2015 ............................................................................ 183,120
2016 ............................................................................ 131,664
Thereafter ....................................................................... 232,588
Total ........................................................................... $1,420,960
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
$28.1 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 facility closures reserve.
As a result of purchase accounting from the 2003 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. The
net amortization of these items has reduced rent expense by approximately $7 million in 2011, 2010 and 2009.
The net amortization of these items will also reduce rent expense by approximately $7 million in 2012.
Beginning in 2013, the amortization of the asset will result in additional rent expense of approximately $4
million per year. At the end of 2011, the asset balance was $55.7 million and the liability balance was $11.0
million. The asset and liability were reported in non-current assets and other long-term liabilities in the
Consolidated Balance Sheets.
9. Investment in Boise Cascade Holdings, L.L.C.
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., a building products company (the “Boise
Investment”).
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
ownership accounts for its members’ interests, and the Company does not have the ability to significantly
influence its operating and financial policies.
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
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