OfficeMax 2009 Annual Report Download - page 39

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modified our position as we finalized the 2008 tax return, and have requested and received refunds
of taxes previously paid in 2008 from the federal government, and anticipate that we will receive an
additional amount from the governments in the various states in which we pay taxes. Accordingly,
in the Consolidated Balance Sheets as of December 26, 2009, we have reestablished both the
deferred tax liability related to the full deferred gain from the sale of the timberland assets and the
deferred tax assets relative to available alternative minimum tax credits.
Through December 26, 2009, we have received all payments due under the Installment Note
guaranteed by Wachovia (the ‘‘Wachovia Guaranteed Installment Notes’’), which have consisted
only of interest due on the notes, and made all payments due on the related Securitization Notes
guaranteed by Wachovia, again consisting only of interest due. As all amounts due on the
Wachovia Guaranteed Installment Notes are current, and we have no reason to believe that we will
not collect all amounts due according to the contractual terms of the Wachovia Guaranteed
Installment Notes, the notes are stated in our Consolidated Balance Sheet at their original principal
amount of $817.5 million. Wachovia exhibited signs of financial distress in the fourth quarter of 2008
and was acquired by Wells Fargo & Company in a stock transaction. The current credit crisis could
have additional adverse impact on our business and financial condition if Wachovia (acquired by
Wells Fargo & Company in 2008), the other timber notes guarantor, became unable to perform its
obligations under the Wachovia Guaranteed Installment Notes, which would result in a significant
impairment impact.
Note Agreements
In November 2008, we repurchased all of the $19.1 million of 7.0% senior notes outstanding by
using proceeds relating to restricted investments that were pledged for this debt.
Other
We have various unsecured debt outstanding, including approximately $189.9 million of
industrial revenue bonds due in varying amounts through 2029. At December 27, 2008,
approximately $69.2 million of these obligations were the subject of a preliminary potential adverse
determination regarding the deductibility of interest on the bonds from the Internal Revenue Service
(‘‘IRS’’). In the fourth quarter of 2009, the IRS conceded the position. The bonds are expected to be
held to their full maturity and continue to be classified as long-term debt in the Consolidated
Balance Sheets at December 26, 2009.
The Company made capital contributions to Grupo OfficeMax, commensurate with our
ownership percentage in the joint venture of $6.0 million and $6.7 million in 2009 and 2008,
respectively.
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