OfficeMax 2014 Annual Report Download - page 48

Table of Contents
There is no recourse against the Company on the Securitization Notes as recourse is limited to proceeds from the pledged Installment Notes receivable
and underlying guaranty. The non-recourse debt remains outstanding until it is legally extinguished, which will be when paid in cash or when the
Installment Notes and related guaranty is transferred to and accepted by the Securitization Note holders. Interest payments on non-recourse debt will be
completely offset by interest income received on the Installment Notes.
The operating lease obligations presented reflect future minimum lease payments due under the non-cancelable portions of our leases, as of
December 27, 2014. 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 and have not been reduced by sublease income of $43
million. 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. Our operating lease obligations are
described in Note 10, “Leases,” of the Consolidated Financial Statements.
Purchase obligations include all commitments to purchase goods or services of either a fixed or minimum quantity that are enforceable and legally
binding on us that meet any of the following criteria: (1) they are non-cancelable, (2) we would incur a penalty if the agreement was cancelled, or
(3) we must make specified minimum payments even if we do not take delivery of the contracted products or services. If the obligation is non-
cancelable, the entire value of the contract is included in the table. If the obligation is cancelable, but we would incur a penalty if cancelled, the dollar
amount of the penalty is included as a purchase obligation.
If we can unilaterally terminate the agreement simply by providing a certain number of days notice or by paying a termination fee, we have included
the amount of the termination fee or the amount that would be paid over the “notice period.” As of December 27, 2014, purchase obligations include
marketing services, outsourced accounting services, certain fixed assets and software licenses and service and maintenance contracts for information
technology. Contracts that can be unilaterally terminated without a penalty have not been included.
Pension obligations in the table above represent the estimated, minimum contributions required per Internal Revenue Service funding rules and the
Company’s estimated future payments under nonqualified pension and postretirement plans. Actuarially-determined liabilities related to pension and
postretirement benefits are recorded based on estimates and assumptions. Key factors used in developing estimates of these liabilities include
assumptions related to discount rates, rates of return on investments, future compensation costs, healthcare cost trends, benefit payment patterns and
other factors. Changes in assumptions related to the measurement of funded status could have a material impact on the amount reported.
Our Consolidated Balance Sheet as of December 27, 2014 includes $621 million classified as Deferred income taxes and other long-term liabilities. Deferred
income taxes and other long-term liabilities primarily consist of net long-term deferred income taxes, deferred lease credits, long-term restructuring accruals,
certain liabilities under our deferred compensation plans, accruals for uncertain tax positions, and environmental accruals. Certain of these liabilities have
been excluded from the above table as either the amounts are fully funded or the timing and/or the amount of any cash payment is uncertain. Refer to Note 3,
“Merger, Restructuring, and Other Accruals,” for a discussion of our restructuring accruals and Note 9, “Income Taxes,” of the Consolidated Financial
Statements for additional information regarding our deferred tax positions and accruals for uncertain tax positions.
In addition to the above, we have outstanding letters of credit totaling $92 million at December 27, 2014.
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