OfficeMax 2014 Annual Report Download - page 108

Table of Contents
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Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-
dividend date.
Cash Flows
Pension plan contributions include required statutory minimum amounts and, in some years, additional discretionary amounts. In 2014, the Company
contributed $43 million to these pension plans. Pension contributions for a full year of 2015 are estimated to be $9 million. The Company may elect at any
time to make additional voluntary contributions.
Qualified pension benefit payments are paid from the assets held in the plan trust, while nonqualified pension and other benefit payments are paid by the
Company. Anticipated benefit payments by year are as follows:
(In millions)




2015 $ 94 $ 1
2016 91 1
2017 89 1
2018 87 1
2019 85 1
Next five years 393 4
Pension Plan — Europe
The Company has a defined benefit pension plan which is associated with a 2003 European acquisition and covers a limited number of employees in Europe.
During 2008, curtailment of that plan was approved by the trustees and future service benefits ceased for the remaining employees.
The sale and purchase agreement (“SPA”) associated with the 2003 European acquisition included a provision whereby the seller was required to pay an
amount to the Company if the acquired pension plan was determined to be underfunded based on 2008 plan data. The unfunded obligation amount
calculated by the plan’s actuary based on that data was disputed by the seller. In accordance with the SPA, the parties entered into arbitration to resolve this
matter and, in March 2011, the arbitrator found in favor of the Company. The seller pursued an annulment of the award in French court. In November 2011,
the seller paid GBP 5.5 million ($8.8 million, measured at then-current exchange rates) to the Company to allow for future monthly payments to the pension
plan, pending a court ruling on their cancellation request. That money was placed in an escrow account with the pension plan acting as trustee. On January 6,
2012, the Company and the seller entered into a settlement agreement that settled all claims by either party for this and any other matter under the original
SPA. The seller paid an additional GBP 32 million (approximately $50 million, measured at then-current exchange rates) to the Company in February 2012.
Following this cash receipt in February 2012, the Company contributed the GBP 38 million (approximately $58 million at then-current exchange rates) to
the pension plan, resulting in the plan changing to a net asset position since December 29, 2012. There are no additional funding requirements while the plan
is in a surplus position.
This pension provision of the SPA was disclosed in 2003 and subsequent periods as a matter that would reduce goodwill when the plan was remeasured and
cash received. However, all goodwill associated with this transaction was impaired in 2008, and because the remeasurement process had not yet begun, no
estimate of the potential payment to the Company could be made at that time. Consistent with disclosures subsequent to the 2008 goodwill impairment,
resolution of this matter in the first quarter of 2012 was reflected as a credit to operating expense. The cash received from the seller, reversal of an accrued
liability as a result of the settlement
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