Office Depot 2009 Annual Report Download - page 68

We review our amortizing intangible assets at least annually to determine whether events and circumstances
warrant a revision to the remaining period of amortization. During the fourth quarter of 2008, we concluded that
the value of certain amortizing intangible assets was impaired, and accordingly, we incurred a charge of $10.9
million to fully impair the customer list intangible assets in our International Division.
Amortization of intangible assets was $3.1 million in 2009, $9.0 million in 2008, and $15.3 million in 2007 (at
average foreign currency exchange rates).
The weighted average amortization period for the remaining finite-lived intangible assets is 7.3 years. Estimated
future amortization expense for the next five years at December 26, 2009 is as follows:
(Dollars in thousands)
2010 ..................................................... $2,843
2011 ..................................................... 2,545
2012 ..................................................... 2,545
2013 ..................................................... 2,545
2014 ..................................................... 2,545
NOTE F — DEBT
Debt consists of the following:
(Dollars in thousands)
December 26,
2009
December 27,
2008
Short-term borrowings and current maturities of long-term debt:
Short-term borrowings ...................................... $ 44,121 $ 176,644
Capital lease obligations ..................................... 14,646 14,773
Current maturities of long-term debt ........................... 1,078 515
$ 59,845 $ 191,932
Long-term debt, net of current maturities:
$400 million senior notes .................................... $ 400,172 $ 400,278
Capital lease obligations ..................................... 243,502 287,349
Other .................................................... 19,066 1,161
$ 662,740 $ 688,788
On September 26, 2008, the company entered into a Credit Agreement (the “Agreement”) with a group of
lenders, which provides for an asset based, multi-currency revolving credit facility (the “Facility”) of up to $1.25
billion. The amount that can be drawn on the Facility at any given time is determined based on percentages of
certain accounts receivable, inventory and credit card receivables (the “Borrowing Base”). At December 26,
2009, the company was eligible to borrow approximately $872 million of the Facility based on the December
borrowing base certificate. The Facility includes a sub-facility of up to $250 million which is available to certain
of the company’s European subsidiaries (the “European Borrowers”). Certain of the company’s domestic
subsidiaries (the “Domestic Guarantors”) guaranty the obligations under the Facility. The Agreement also
provides for a letter of credit sub-facility of up to $400 million. All loans borrowed under the Agreement may be
borrowed, repaid and reborrowed from time to time until September 26, 2013 (or, in the event that the company’s
existing 6.25% Senior Notes are not repaid, then February 15, 2013), on which date the Facility matures.
All amounts borrowed under the Facility, as well as the obligations of the Domestic Guarantors, are secured by a
lien on the company’s and such Domestic Guarantors’ accounts receivables, inventory, cash and deposit
accounts. All amounts borrowed by the European Borrowers under the Facility are secured by a lien on such
European Borrowers’ accounts receivable, inventory, cash and deposit accounts, as well as certain other assets.
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