OfficeMax 2012 Annual Report Download - page 106

limits availability to a percentage of eligible trade and credit card receivables plus a percentage of the value of
eligible inventory less certain reserves. The Credit Agreement may be increased (up to a maximum of
$850 million) at the Company’s request and the approval of the lenders participating in the increase, or may be
reduced from time to time at the Company’s request, in each case according to the terms detailed in the Credit
Agreement. Letters of credit, which may be issued under the Credit Agreement up to a maximum of
$250 million, reduce available borrowing capacity. At the end of fiscal year 2012, the Company was in
compliance with all covenants under the Credit Agreement. The Credit Agreement will expire on October 7,
2016.
Borrowings under the Credit Agreement are subject to interest at rates based on either the prime rate, the
federal funds rate, LIBOR or the Canadian Dealer Offered Rate. An additional percentage, which varies
depending on the level of average borrowing availability, is added to the applicable rates. Fees on letters of credit
issued under the Credit Agreement are charged at rates between 1.25% and 2.25% depending on the type of letter
of credit (i.e., stand-by or commercial) and the level of average borrowing availability. The Company is also
charged an unused line fee of between 0.375% and 0.5% on the amount by which the maximum available credit
exceeds the average daily outstanding borrowings and letters of credit. The fees on letters of credit were 1.75%
and the unused line fee was 0.5% at December 29, 2012. Thereafter, the rate will vary depending on the level of
average borrowing availability and type of letters of credit.
Availability under the Credit Agreement at the end of fiscal year 2012 was as follows:
Total
(millions)
Maximum aggregate available borrowing amount ........................................... $621.2
Less: Stand-by letters of credit .......................................................... (41.0)
Amount available for borrowing at fiscal year-end .......................................... $580.2
On March 15, 2010, the Company’s five wholly-owned subsidiaries based in Australia and New Zealand
entered into a Facility Agreement (the “Australia/New Zealand Credit Agreement”) with a financial institution
based in those countries. The Australia/New Zealand Credit Agreement permitted the subsidiaries in Australia
and New Zealand to borrow up to a maximum of A$80 million subject to a borrowing base calculation that
limited availability to a percentage of eligible accounts receivable plus a percentage of the value of certain owned
properties, less certain reserves. During the first quarter of 2012, the Company exercised its option to terminate
the Australia/New Zealand Credit Agreement effective March 30, 2012.
There were no borrowings under the Company’s credit agreements in 2012 or 2011.
Other
During the second quarter of 2012, we repaid $35 million of Medium-term notes, Series A, which had
reached maturity. These notes had been reported in current portion of debt in our Consolidated Balance Sheets at
December 31, 2011.
At the end of fiscal year 2012, Grupo OfficeMax had total outstanding borrowings of $11.1 million. This
included $2.7 million outstanding under a 60-month installment note due in the first quarter of 2014 and $2.3
million outstanding under a 54-month installment note due in the third quarter of 2014. Payments on the
installment loans are made monthly. The remaining $6.1 million of borrowings is a simple revolving loan.
Recourse on the Grupo OfficeMax loans is limited to Grupo OfficeMax. The installment loan maturing 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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