OMX » Topics » Commitments

This excerpt taken from the OMX 10-K filed Feb 22, 2010.

Commitments

        The Company has commitments for minimum lease payments due under noncancelable leases and for the repayment of outstanding long-term debt. In addition, the Company has purchase obligations for goods and services and capital expenditures that were entered into in the normal course of business. As previously disclosed, we have liabilities associated with retirement and benefit plans.

        In connection with the sale of our paper, forest products and timberland assets in 2004, the Company entered into a paper supply contract with a former affiliate of Boise Cascade, L.L.C., Boise White Paper, L.L.C., now owned by Boise Inc., under which we are obligated to purchase our North American requirements for cut-size office paper, to the extent Boise White Paper, L.L.C. or its successor, produces such paper, until December 2012, at prices approximating market levels. The Company's purchase obligations under the agreement will phase-out over a four-year period beginning one year after the delivery of notice of termination, but not prior to December 31, 2012. Purchases under the agreement were $633.9 million, $668.3 million and $702.2 million for 2009, 2008 and 2007, respectively.

        In accordance with an amended and restated joint venture agreement, the minority owner of Grupo OfficeMax, our joint-venture in Mexico, can elect to put its 49% interest in the joint venture to OfficeMax if certain earnings targets are achieved. Earnings targets are calculated quarterly on a rolling four-quarter basis. Accordingly, the targets may be achieved in one quarter but not in the next. If the earnings targets are achieved and the minority owner elects to put its ownership interest to OfficeMax, the redemption value would be calculated based on the joint venture's earnings for the last four quarters before interest, taxes and depreciation and amortization, and the current market multiples of similar companies. At December 26, 2009, Grupo OfficeMax met the earnings targets and the estimated redemption value of the minority owner's interest was $21.1 million. While this estimated value is less than the book value at December 26, 2009, other valuation methodologies yield an estimated fair value that is consistent with the December 26, 2009 book value.

These excerpts taken from the OMX 10-K filed Feb 25, 2009.

Commitments

        The Company has commitments for minimum lease payments due under noncancelable leases and for the repayment of outstanding long-term debt. In addition, the Company has purchase obligations for goods and services and capital expenditures that were entered into in the normal course of business.

        The securitized timber notes payable have recourse limited to the applicable pledged timber installment notes receivable and underlying guaranties. For more information, see Note 3. "Timber Notes."

        We have liabilities associated with retirement and benefit plans. See Note 13. "Retirement and Benefit Plans" for a description of the plans and the financial implications.

        Pursuant to an Additional Consideration Agreement between OfficeMax and Boise Cascade, L.L.C. related to the Sale, the Company may have been required to make cash payments to, or entitled to receive cash payments from, Boise Cascade, L.L.C. The Additional Consideration Agreement terminated in the first quarter of 2008.

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Table of Contents

        In connection with the Sale, the Company entered into a paper supply contract with affiliates of Boise Cascade, L.L.C. under which we are obligated to purchase our North American requirements for cut-size office paper, to the extent Boise Cascade, L.L.C. or its successor, produces such paper, until December 2012, at prices approximating market levels. The Company's purchase obligations under the agreement will phase-out over a four-year period beginning one year after the delivery of notice of termination, but not prior to December 31, 2012. Purchases under the agreement were $668.3 million, $702.2 million and $644.4 million for 2008, 2007 and 2006, respectively.

        In accordance with an amended and restated joint venture agreement, the minority owner of our subsidiary in Mexico, Grupo OfficeMax, can elect to put its remaining 49% interest in the subsidiary to OfficeMax if earnings targets are achieved. Earnings targets are calculated quarterly on a rolling four-quarter basis. Accordingly, the targets can be achieved in one quarter but not in the next. If the earnings targets are achieved and the minority owner elects to put its ownership interest, the purchase price would be equal to fair value, calculated based on both the subsidiary's earnings for the last four quarters before interest, taxes and depreciation and amortization, and the current market multiples of similar companies. At December 27, 2008, Grupo OfficeMax did not meet the earnings targets.

Commitments



        The Company has commitments for minimum lease payments due under noncancelable leases and for the repayment of outstanding
long-term debt. In addition, the Company has purchase obligations for goods and services and capital expenditures that were entered into in the normal course of business.




        The
securitized timber notes payable have recourse limited to the applicable pledged timber installment notes receivable and underlying guaranties. For more information, see Note 3.
"Timber Notes."



        We
have liabilities associated with retirement and benefit plans. See Note 13. "Retirement and Benefit Plans" for a description of the plans and the financial implications.



        Pursuant
to an Additional Consideration Agreement between OfficeMax and Boise Cascade, L.L.C. related to the Sale, the Company may have been required to make cash payments to, or
entitled to receive cash payments from, Boise Cascade, L.L.C. The Additional Consideration Agreement terminated in the first quarter of 2008.



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HREF="#bg77901a_main_toc">Table of Contents



        In
connection with the Sale, the Company entered into a paper supply contract with affiliates of Boise Cascade, L.L.C. under which we are obligated to purchase our North American
requirements for cut-size office paper, to the extent Boise Cascade, L.L.C. or its successor, produces such paper, until December 2012, at prices approximating market levels. The Company's
purchase obligations under the agreement will phase-out over a four-year period beginning one year after the delivery of notice of termination, but not prior to
December 31, 2012. Purchases under the agreement were $668.3 million, $702.2 million and $644.4 million for 2008, 2007 and 2006, respectively.



        In
accordance with an amended and restated joint venture agreement, the minority owner of our subsidiary in Mexico, Grupo OfficeMax, can elect to put its remaining 49% interest in the
subsidiary to OfficeMax if earnings targets are achieved. Earnings targets are calculated quarterly on a rolling four-quarter basis. Accordingly, the targets can be achieved in one quarter
but not in the next. If the earnings targets are achieved and the minority owner elects to put its ownership interest, the purchase price would be equal to fair value, calculated based on both the
subsidiary's earnings for the last four quarters before interest, taxes and depreciation and amortization, and the current market multiples of similar companies. At December 27, 2008, Grupo
OfficeMax did not meet the earnings targets.



These excerpts taken from the OMX 10-K filed Feb 27, 2008.

Commitments

        The Company has commitments for minimum lease payments due under noncancelable leases and for the repayment of outstanding long-term debt. In addition, the Company has purchase obligations for goods and services and capital expenditures that were entered into in the normal course of business.

        Pursuant to an Additional Consideration Agreement between OfficeMax and Boise Cascade, L.L.C. related to the Sale, the Company may have been required to make substantial cash payments to, or receive substantial cash payments from, Boise Cascade, L.L.C. The Additional Consideration Agreement terminated in the first quarter of 2008. Under the Additional Consideration Agreement, the Sale proceeds were adjusted upward or downward based on paper prices following the Sale, subject to annual and aggregate caps. Specifically, we agreed to pay Boise Cascade, L.L.C. $710,000 for each dollar by which the average market price per ton of a specified grade of cut-size office paper during any 12-month period ending on September 30 was less than

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$800. Boise Cascade, L.L.C. agreed to pay us $710,000 for each dollar by which the average market price per ton exceeded $920. Under the terms of the agreement, neither party was obligated to make a payment in excess of $45 million in any one year. Payments by either party were also subject to an aggregate cap of $125 million that declined to $115 million in the fifth year and $105 million in the sixth year. (See Note 13, Financial Instruments, Derivatives and Hedging Activities, for more information related to the Additional Consideration Agreement).

        In connection with the Sale, the Company entered into a paper supply contract with affiliates of Boise Cascade, L.L.C. under which we are obligated to purchase our North American requirements for cut-size office paper, to the extent Boise Cascade, L.L.C. produces such paper, until December 2012, at prices approximating market levels. The Company's purchase obligations under the agreement will phase-out over a four-year period beginning one year after the delivery of notice of termination, but not prior to December 31, 2012.

        In accordance with the terms of a joint-venture agreement between the Company and the minority owner of the Company's subsidiary in Mexico (Grupo OfficeMax), the Company can be required to purchase the minority owner's 49% interest in the subsidiary if certain earnings targets are achieved. At December 29, 2007 and throughout 2007, Grupo OfficeMax had met these earnings targets. The earnings targets are calculated quarterly on a rolling four-quarter basis. Accordingly, the targets can be achieved in one quarter but not in the next. If the earnings targets are achieved and the minority owner elects to put its ownership interest to the Company, the purchase price would be equal to fair value, calculated based on the subsidiary's earnings before interest, taxes and depreciation and amortization for the last four quarters, and the current market multiples for similar companies. The fair value purchase price at December 29, 2007 is estimated to be $65 million to $70 million.

Commitments



        The Company has commitments for minimum lease payments due under noncancelable leases and for the repayment of outstanding long-term debt. In
addition, the Company has purchase obligations for goods and services and capital expenditures that were entered into in the normal course of business.




        Pursuant
to an Additional Consideration Agreement between OfficeMax and Boise Cascade, L.L.C. related to the Sale, the Company may have been required to make substantial cash
payments to, or receive substantial cash payments from, Boise Cascade, L.L.C. The Additional Consideration Agreement terminated in the first quarter of 2008. Under the Additional Consideration
Agreement, the Sale proceeds were adjusted upward or downward based on paper prices following the Sale, subject to annual and aggregate caps. Specifically, we agreed to pay Boise
Cascade, L.L.C. $710,000 for each dollar by which the average market price per ton of a specified grade of cut-size office paper during any 12-month period ending on
September 30 was less than



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$800.
Boise Cascade, L.L.C. agreed to pay us $710,000 for each dollar by which the average market price per ton exceeded $920. Under the terms of the agreement, neither party was obligated to make a
payment in excess of $45 million in any one year. Payments by either party were also subject to an aggregate cap of $125 million that declined to $115 million in the fifth year
and $105 million in the sixth year. (See Note 13, Financial Instruments, Derivatives and Hedging Activities, for more information related to the Additional Consideration Agreement).




        In
connection with the Sale, the Company entered into a paper supply contract with affiliates of Boise Cascade, L.L.C. under which we are obligated to purchase our North American
requirements for cut-size office paper, to the extent Boise Cascade, L.L.C. produces such paper, until December 2012, at prices approximating market levels. The Company's purchase
obligations under the agreement will phase-out over a four-year period beginning one year after the delivery of notice of termination, but not prior to December 31,
2012.



        In
accordance with the terms of a joint-venture agreement between the Company and the minority owner of the Company's subsidiary in Mexico (Grupo OfficeMax), the Company can be required
to purchase the minority owner's 49% interest in the subsidiary if certain earnings targets are achieved. At December 29, 2007 and throughout 2007, Grupo OfficeMax had met these earnings
targets. The earnings targets are calculated quarterly on a rolling four-quarter basis. Accordingly, the targets can be achieved in one quarter but not in the next. If the earnings targets
are achieved and the minority owner elects to put its ownership interest to the Company, the purchase price would be equal to fair value, calculated based on the subsidiary's earnings before interest,
taxes and depreciation and amortization for the last four quarters, and the current market multiples for similar companies. The fair value purchase price at December 29, 2007 is estimated to be
$65 million to $70 million.



This excerpt taken from the OMX 10-K filed Feb 28, 2007.

Commitments

The Company has commitments for minimum lease payments due under noncancelable leases and for the repayment of outstanding long-term debt. In addition, the Company has purchase obligations for goods and services and capital expenditures that were entered into in the normal course of business.

Pursuant to an Additional Consideration Agreement between OfficeMax and Boise Cascade, L.L.C. related to the Sale, the Company may be required to make substantial cash payments to, or receive substantial cash payments from, Boise Cascade, L.L.C. Under the Additional Consideration Agreement, the Sale proceeds may be adjusted upward or downward based on paper prices during the six years following the Sale, subject to annual and aggregate caps. Specifically, we have agreed to pay Boise Cascade, L.L.C. $710,000 for each dollar by which the average market price per ton of a specified grade of cut-size office paper during any 12-month period ending on September 30 is less than $800. Boise Cascade, L.L.C. has agreed to pay us $710,000 for each dollar by which the average market price per ton exceeds $920. Under the terms of the agreement, neither party will be obligated to make a payment in excess of $45 million in any one year. Payments by either party are also subject to an aggregate cap of $125 million that declines to $115 million in the fifth year and $105 million in the sixth year. (See Note 14, Financial Instruments, Derivatives and Hedging Activities, for more information related to the Additional Consideration Agreement).

In connection with the Sale, the Company entered into a paper supply contract with affiliates of Boise Cascade, L.L.C. under which we are obligated to purchase our North American requirements for cut-size office paper, to the extent Boise Cascade, L.L.C. produces such paper, until December 2012, at prices approximating market levels. The Company’s purchase obligations under the agreement will phase-out over a four-year period beginning one year after the delivery of notice of termination, but not prior to December 31, 2012.

In accordance with the terms of a joint-venture agreement between the Company and the minority owner of the Company’s subsidiary in Mexico (OfficeMax de Mexico), the Company can be required to purchase the minority owner’s 49% interest in the subsidiary if certain earnings targets are achieved. At December 30, 2006 and throughout 2006, OfficeMax de Mexico had met these earnings targets. The earnings targets are calculated quarterly on a rolling four-quarter basis. Accordingly, the targets can be achieved in one quarter but not in the next. If the earnings targets are achieved and the minority owner elects to put its ownership interest to the Company, the purchase price would be equal to fair value, calculated based on the subsidiary’s earnings before interest, taxes and depreciation and amortization for the last four quarters, and the current market multiples for similar companies. The fair value purchase price at December 30, 2006 is estimated to be $65 million to $70 million.

This excerpt taken from the OMX 10-K filed Mar 14, 2006.

Commitments

        The Company has commitments for minimum lease payments due under noncancelable leases and for the repayment of outstanding long-term debt. In addition, the Company has purchase obligations for goods and services and capital expenditures that were entered into in the normal course of business.

        The Company may be required to make cash payments to, or entitled to receive cash payments from, Boise Cascade, L.L.C. under the terms of the Additional Consideration Agreement that was entered into in connection with the Sale. Under this agreement, the Sale proceeds may be adjusted upward or downward based on changes in paper prices during the six years following the closing date, with the amount of any such adjustments being subject to annual and aggregate caps. Under the terms of the agreement, neither party will be obligated to make a payment in excess of $45 million in any one year. Payments by either party are also subject to aggregate caps over the term of the agreement; these caps are $125 million in the first four years of the agreement, $115 million in the fifth year and $105 million in the sixth year. The Company has recorded a $42 million liability related to this agreement based on the net present value of the weighted average expected payments calculated using industry paper price projections. In connection with the Sale, the Company entered into a paper supply contract with affiliates of Boise Cascade, L.L.C. under which we are obligated to purchase our North American requirements for cut-size office paper, to the extent Boise Cascade, L.L.C. produces such paper, until December 2012, at prices approximating market levels. The Company's purchase obligations under the agreement will phase-out over a four-year period beginning one year after the delivery of notice of termination, but not prior to December 31, 2012.

        In accordance with the terms of a joint-venture agreement between the Company and the minority owner of the Company's subsidiary in Mexico (OfficeMax de Mexico), the Company can be required to purchase the minority owner's 49% interest in the subsidiary if certain earnings targets are achieved. At December 31, 2005, OfficeMax de Mexico had met these earnings targets. The applicable earnings targets are calculated quarterly on a rolling four-quarter basis. Accordingly, the targets can be achieved in one quarter but not in the next. When the earnings targets are achieved and the minority owner elects to put its ownership interest to the Company, the purchase price would be equal to fair value, calculated based on the subsidiary's earnings before interest, taxes and depreciation and amortization for the last four quarters, and the current market multiples for similar companies. The fair value purchase price at December 31, 2005, was estimated to be $50 million to $55 million.

This excerpt taken from the OMX 10-Q filed Nov 3, 2005.

Commitments

 

On June 24, 2005, we entered into a loan and security agreement for a revolving credit facility.   The revolver replaces our previous revolving credit facility, which was to mature on June 30, 2005 but was terminated by us on June 24, 2005.  There were no borrowings outstanding under the new revolver as of September 24, 2005.  Letters of credit issued under the revolver totaled $96.8 million as of September 24, 2005. Letters of credit may be issued under the revolver up to a maximum limit of $100 million. The combined sum of outstanding borrowings and letters of credit issued under the revolver may not exceed the maximum aggregate borrowing amount. The maximum aggregate borrowing amount is equal to the lesser of (i) a percentage of the value of certain eligible inventory less certain reserves or (ii) $500 million.  As of September 24, 2005, our maximum aggregate borrowing amount was $464.5 million.

 

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Borrowings under the revolver are secured by a lien on substantially all inventory and related proceeds.  The revolving credit contains customary conditions to borrowing including a monthly calculation of excess borrowing availability and reporting compliance.  Covenants in the revolver agreement restrict the amount of letters of credit that may be issued, dividend distributions and other uses of cash if excess availability is less than $75 million.  At September 24, 2005, our excess availability totaled $367.7 million and we were in compliance with all covenants under the revolver agreement. The revolver terminates on June 24, 2010.

 

As described in Note 14, Debt, of the Notes to Quarterly Consolidated Financial Statements (Unaudited) herein and Note 10, Leases, and Note 14, Debt, of “Item 8.  Financial Statements and Supplementary Data” in our 2004 Annual Report on Form 10-K, we have commitments for leases and long-term debt.  In addition, we have purchase obligations for goods and services and capital expenditures entered into in the normal course of business.  During the nine months ended September 24, 2005, there have been no material changes to our contractual obligations outside the ordinary course of our business.

 

This excerpt taken from the OMX 10-Q filed Aug 4, 2005.

Commitments

 

On June 24, 2005, we entered into a loan and security agreement for a revolving credit facility.   The revolver replaces our previous revolving credit facility, which was to mature on June 30, 2005 but was terminated by us on June 24, 2005.  Borrowings under the new revolver totaled $35.6 million as of June 25, 2005 and are included in “short-term borrowings” in our Consolidated Balance Sheet. In addition to these borrowings, letters of credit issued under the revolver totaled $74.7 million as of June 25, 2005. Letters of credit may be issued under the revolver up to a maximum limit of $100 million. The combined sum of borrowings and letters of credit issued under the revolver may not exceed the maximum aggregate borrowing amount. The maximum aggregate borrowing amount is equal to the lesser of (i) a percentage of the value of certain eligible inventory or (ii) $500 million.  As of June 25, 2005, our maximum aggregate borrowing amount was $500 million.

 

Borrowings under the revolver are secured by a lien on substantially all inventory and related proceeds.  The revolving credit contains customary conditions to borrowing including a monthly calculation of excess borrowing availability and reporting compliance. A covenant in the revolver agreement restricts the amount of letters of credit that may be issued, dividend distributions and other uses of cash if excess availability is less than $75 million. At June 25, 2005, our excess availability totaled $389.7 million and we were in compliance with all covenants under the revolver agreement. The revolver terminates on June 24, 2010.

 

As described in Note 14, Debt, of the Notes to Quarterly Consolidated Financial Statements (Unaudited) herein and Note 10, Leases, and Note 14, Debt, of “Item 8.  Financial Statements and Supplementary Data” in our

 

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2004 Annual Report on Form 10-K, we have commitments for leases and long-term debt.  In addition, we have purchase obligations for goods and services and capital expenditures entered into in the normal course of business.  During the six months ended June 25, 2005, there have been no material changes to our contractual obligations outside the ordinary course of our business.

 

This excerpt taken from the OMX 10-Q filed May 5, 2005.

Commitments

 

As described in Note 10, Leases, and Note 14, Debt, of “Item 8.  Financial Statements and Supplementary Data” in our 2004 Annual Report on Form 10-K, we have commitments for leases and long-term debt.  In addition, we have purchase obligations for goods and services and capital expenditures entered into in the normal course of business.  During the quarter ended March 26, 2005, there have been no material changes to our contractual obligations outside the ordinary course of our business.

 

This excerpt taken from the OMX 10-K filed Mar 16, 2005.

Commitments

        We have commitments for leases and long-term debt. (See Note 10, Leases, and Note 14, Debt.) In addition, we have purchase obligations for goods and services and capital expenditures entered into in the normal course of business.

        Pursuant to an Additional Consideration Agreement between OfficeMax and Boise Cascade, L.L.C., related to the Sale, we may be required to make substantial cash payments to, or receive substantial cash payments from, Boise Cascade, L.L.C. Under the Additional Consideration Agreement, the Sale proceeds may be adjusted upward or downward based on paper sales prices during the six years following the closing date, subject to annual and aggregate caps. Neither party will be obligated to make a payment in excess of $45 million in any one year under the agreement. Payments are also subject to an aggregate cap of $125 million that declines to $115 million in the fifth year and $105 million in the sixth year. We calculated our projected future obligation under the Additional Consideration Agreement and accrued $42 million in "Other long-term liabilities" on our Consolidated Balance Sheet. We calculated the $42 million based on the net present value of weighted average expected payments using industry paper price projections. We recorded the accrual as an adjustment to the "Gain on sale of assets" in our Consolidated Statement of Income. In future periods, we will record the changes in the fair value as an adjustment to the gain on the sale of assets, and it will affect reported net income (loss).

        In connection with the Sale, we entered into a paper supply contract with affiliates of Boise Cascade, L.L.C. under which we purchase our North American requirements for cut-size office paper, to the extent Boise Cascade, L.L.C. produces such paper, until December 2012, at prices approximating market levels. Our purchase obligations under the agreement will phase out over a four-year period beginning one year after the delivery of notice of termination, but not prior to December 31, 2012.

        We have a legal obligation to fund our defined benefit plans. The minimum required contributions to our pension plans are zero in 2005. However, we may elect to make voluntary contributions of up to $25.0 million for that year. (See Note 16, Retirement and Benefit Plans, for more information.) Our contributions may change from period to period, based on the performance of plan assets, actuarial valuations and company discretion within pension laws and regulations.

        In accordance with our joint-venture agreement, the minority owner of our subsidiary in Mexico, OfficeMax de Mexico, can require us to purchase its 49% interest in the subsidiary if earnings targets are achieved. At December 31, 2004, OfficeMax de Mexico had met these earnings targets. These earnings targets are calculated quarterly on a rolling four-quarter basis. Accordingly, the targets can be achieved in one quarter but not in the next. When the earnings targets are achieved and the minority owner elects to put its ownership interest, the purchase price would be equal to fair value, calculated based on both the subsidiary's earnings for the last four quarters before interest, taxes and depreciation and amortization and the current market multiples of similar companies. The fair value purchase price at December 31, 2004, was estimated to be $35 million to $40 million.

        Operating leases represent a significant commitment to us. We lease our store space and other property and equipment under operating leases. Our minimum lease requirements are $367.3 million for 2005, $332.5 million for 2006, $285.9 million for 2007, $257.2 million for 2008 and $231.4 million for 2009, with total payments thereafter of $904.0 million, for leases with remaining terms of more than one year. These minimum lease payments do not include contingent rental expenses that may be paid based on percentages in excess of stipulated amounts. These future minimum lease payment requirements have not been reduced by $70.3 million of minimum sublease rentals due in the future under noncancelable subleases.

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This excerpt taken from the OMX 10-Q filed Mar 16, 2005.

Commitments

 

As of the date of our consolidated financial statements, we had commitments for timber contracts, leases and long-term debt.  See Notes 1, 7, and 11 of “Item 8.  Financial Statements and Supplementary Data” in our 2003 Annual Report on Form 10-K.  In addition, we have purchase obligations for goods and services, capital expenditures and raw materials entered into in the normal course of business.  On October 29, 2004, we sold our paper, forest products and timberland assets.  After the sale, we remain contingently liable for contracts assigned to Boise Cascade, L.L.C.  With the proceeds of the sale, we reduced our commitments for long-term debt (see Note 23).

 

Pursuant to an Additional Consideration Agreement between OfficeMax and Boise Cascade, L.L.C., we may be required to make substantial cash payments to, or receive substantial cash payments from, Boise Cascade, L.L.C.  Under the Additional Consideration Agreement, the transaction proceeds may be adjusted upward or downward based on paper sales prices during the six years following the closing date.  Over that period, we could pay Boise Cascade, L.L.C., a maximum annual amount of $45 million, subject to a maximum aggregate cap of $125 million, during the life of the contract, or Boise Cascade, L.L.C., could pay us a maximum annual amount of $45 million, subject to a maximum aggregate cap of $125 million, during the life of the contract, in each case net of payments received.

 

Operating leases represent a significant commitment to us.  We lease our store space and other property and equipment under operating leases.  The minimum lease requirements for OfficeMax leases are $92.9 million for the last quarter of 2004, $354.4 million for 2005, $320.8 million for 2006, $276.2 million for 2007 and $248.4 million for 2008, with total payments thereafter of $1,102.7 million, for leases with remaining terms of more than one year.  These minimum lease payments do not include contingent rental expenses that may be paid based on percentages in excess of stipulated amounts.  These future minimum lease payment requirements have not been reduced by minimum sublease rentals due in the future under noncancelable subleases.

 

In accordance with our joint-venture agreement, the minority owner of our subsidiary in Mexico, OfficeMax de Mexico, can require us to purchase its 49% interest in the subsidiary if earnings targets are achieved.  At September 30, 2004, OfficeMax de Mexico had met these earnings targets.  These earnings targets are calculated quarterly on a rolling four-quarter basis.  Accordingly, the targets can be achieved in one quarter but not in the next.  When the earnings targets are achieved and the minority owner elects to put its ownership interest, the purchase price would be equal to fair value, calculated based on both the subsidiary’s earnings for the last four quarters before interest, taxes, and depreciation and amortization and the current market multiples of similar companies.  The fair value purchase price estimate at September 30, 2004, was estimated to be $25 million to $30 million.

 

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