OfficeMax (OMX) to Extinguish Certain Liability Tied to Lehman-Backed Timber Notes; Will Recognize non-Cash Charge
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Price: $12.33 --0%
Revenue Growth %: -5.3%
Financial Fact:
Interest income: 10.76M
Today's EPS Names:
MGT, RXN, KID, More
Revenue Growth %: -5.3%
Financial Fact:
Interest income: 10.76M
Today's EPS Names:
MGT, RXN, KID, More
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OfficeMax Inc. (NYSE: OMX), has entered into an agreement to extinguish the non-recourse liability related to the Lehman-backed timber notes. This agreement is subject to the approval of the United States Bankruptcy Court, which OfficeMax expects will be determined within the next two to three months.
Concurrently with the effectiveness of the agreement and extinguishment of this debt, OfficeMax will recognize a non-cash, pre-tax gain of $671.1 million, which is equal to the difference between:
In the quarter following effectiveness, OfficeMax anticipates that it will make a cash payment in the amount of approximately $15 million, representing the accelerated tax liability on approximately one half of the gain on the 2004 timberlands sale transaction, mostly offset by alternative minimum tax credits. OfficeMax anticipates using available cash to fund the tax payment.
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Concurrently with the effectiveness of the agreement and extinguishment of this debt, OfficeMax will recognize a non-cash, pre-tax gain of $671.1 million, which is equal to the difference between:
- The carrying value of the non-recourse liability pertaining to the Lehman-backed securitization notes ($735.0 million at June 30, 2012) plus the related interest payable ($17.9 million at June 30, 2012; and together, $752.9 million); and
- The carrying value of the receivable pertaining to the Lehman-backed installment note ($32.2 million at June 30, 2012) plus the $49.6 million initial distribution made by the Lehman estate (together, $81.8 million at June 30, 2012).
In the quarter following effectiveness, OfficeMax anticipates that it will make a cash payment in the amount of approximately $15 million, representing the accelerated tax liability on approximately one half of the gain on the 2004 timberlands sale transaction, mostly offset by alternative minimum tax credits. OfficeMax anticipates using available cash to fund the tax payment.
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