Office Depot 2007 Annual Report Download - page 69

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67
The allocation of assets is as follows:
Percentage of Plan
Assets
Target
Allocation
2007 2006
Equity securities......................................................... 87% 82% 60% - 95%
Debt securities............................................................ 7% 8% 0% - 20%
Real estate .................................................................. 1% 1% 0% - 20%
Other .......................................................................... 5% 9% 0% - 10%
Total ....................................................................... 100% 100%
Anticipated benefit payments, at December 29, 2007 exchange rates, are as follows:
(Dollars in thousands)
2008 ........................................................................................................................... $ 3,091
2009 ........................................................................................................................... 3,205
2010 ........................................................................................................................... 4,403
2011 ........................................................................................................................... 4,794
2012 ........................................................................................................................... 5,457
Next five years........................................................................................................... 30,662
The anticipated Office Depot contribution for fiscal year 2008 is $11 million, at December 29, 2007 exchange rates.
This contribution includes approximately $7 million to reduce the plan’s unfunded status. In addition to the net
periodic pension cost above, one of the foreign plans purchased approximately $3 million of nonparticipating
annuity contracts and anticipates purchasing approximately $2 million in 2008.
The pension plan was part of an entity acquired in 2003. The purchase and sale agreement included a provision
whereby the seller is required to pay to Office Depot an amount of unfunded benefit obligation as measured in a
future period at the seller’s option, but no later than five years following the purchase date. This contract provision is
contingent upon an uncertain future outcome, and we have not recorded a receivable for the amount that would be
recovered if settled currently, though it would be a portion of the unfunded liability recorded in purchase accounting.
The after-tax effect of the payment from the seller, if any, will reduce goodwill when received.
In January 2008, the pension plan trustees expressed a willingness to support a plan to curtail the defined benefit
arrangement. An employee notification period has begun and the curtailment is now anticipated to be effective early
in the second quarter of the year. The curtailment impacts, if and when modifications are enacted, will be recognized
when the related accounting criteria are met.