OfficeMax Confirms Finalization Of Agreement To Extinguish Non-Recourse Lehman-Backed Timber Notes Liability

Sep 14, 2012, 07:00 ET from OfficeMax Incorporated

NAPERVILLE, Ill., Sept. 14, 2012 /PRNewswire/ -- OfficeMax® Incorporated (NYSE: OMX), a leader in office supplies, technology and services, today confirmed that its agreement to extinguish the non-recourse liability related to the Lehman-backed timber notes is now effective as the result of the entry of a Final Order by the United States Bankruptcy Court resolving certain claims against Lehman Brothers based on the notes.

As a result, OfficeMax will recognize a non-cash, pre-tax gain of $671.1 million in the third quarter of this year.  In the fourth quarter, 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.   

President and Chief Executive Officer Ravi Saligram said, "We are very pleased to resolve this matter.  We anticipate that extinguishment of the Lehman non-recourse liability will help to create greater clarity for our investors, as our efforts to simplify the balance sheet continue. As shared previously, we also continue to explore ways to enhance our capital structure and drive shareholder value." 


As previously disclosed, OfficeMax received an $817.5-million Lehman-backed note in connection with a 2004 timberlands sale.  Also in 2004, OfficeMax monetized the note by issuing securitization notes through a special purpose entity.  Payment of these securitization notes was guaranteed by Lehman and was non-recourse to OfficeMax.  Lehman's bankruptcy filing on September 15, 2008 constituted an event of default under the note.  For more information on these matters, see the company's most recent Form 10-Q, filed with the Securities and Exchange Commission on August 3, 2012 and the company's news release issued on August 16, 2012.

Forward-Looking Statements

Certain statements made in this press release and other written or oral statements made by or on behalf of the company constitute "forward-looking statements" within the meaning of the federal securities laws, including statements regarding the company's future performance, as well as management's expectations, beliefs, intentions, plans, estimates or projections relating to the future.  Management believes that these forward-looking statements are reasonable.  However, the company cannot guarantee that its actual results will be consistent with the forward-looking statements and you should not place undue reliance on them.  These statements are based on current expectations and speak only as of the date they are made.  The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise.  Important factors regarding the company that may cause results to differ from expectations are included in the company's Annual Report on Form 10-K for the year ended December 31, 2011, under Item 1A "Risk Factors", and in the company's other filings with the SEC.

About OfficeMax

OfficeMax Incorporated (NYSE: OMX) is a leader in integrating products, solutions and services for the workplace, whether for business or at home.  The OfficeMax mission is simple: We provide workplace innovation that enables our customers to work better.  The company provides office supplies and paper, in-store print and document services through OfficeMax ImPress®, technology products and solutions, and furniture to businesses and consumers.  OfficeMax customers are served by approximately 29,000 associates through e-commerce, more than 900 stores in the U.S. and Mexico, direct sales and catalogs.  OfficeMax has been named one of the 2012 World's Most Ethical Companies, and is the only company in the office supply industry to receive Ethics Inside® Certification by the Ethisphere Institute.  To find the nearest OfficeMax, call 1-877-OFFICEMAX.  For more information, visit

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SOURCE OfficeMax Incorporated