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Office Depot Announces Merger with Rival OfficeMax

Office Depot Announces Merger with Rival OfficeMax

 

Office Depot just announced a deal to merge with smaller rival OfficeMax in an all-stock transaction worth approximately $1.2 billion. Details on the prospective deal; however remain limited. 
 
The companies claim they expect to save approximately $400 to $600 million annually from the merger, but there were no estimates provided regarding store closings or staffing cuts. 
 
The decision concerning what to name the combined company will be determined once a CEO is selected by the company’s respective boards. The new company will first look at both current CEOs along with outside candidates before deciding who will run the newly-formed company.
 
The announcement of the merger was a bit of an embarrassment and cast a widespread negative light on Office Depot’s operational abilities.
 
First news of the prospective deal came when Office Depot posted, seemingly by mistake, a fourth quarter earnings report which mentioned the forthcoming deal on page 4 under “other matters.” This statement was then removed from the corporation’s investors relations Web Page later in the morning. That said, once the earnings statement was removed from the site, the New York Times reported that talks on the deal were still ongoing. Then immediately following the market opening came the official joint announcement of the merger, which the company described as a “deal of equals.” News of mergers are typically announced prior to or following market trading hours, not immediately prior to the start of trading. 
 
Neil Austrian, CEO of Office Depot, blamed the premature announcement on the company’s Webcast provider and deeply apologized to analysts during a conference call Wednesday. 
 
The prospective deal is clearly an attempt for the two office supplies companies to compete with larger rival Staples. 
Office Depot currently has 1,629 stores and 38,000 employees throughout the world, while OfficeMax had 940 stores at the end of 2012 and roughly 29,000 employees in 2011. These figures are meager compared to Staples, which has over 2,250 stores worldwide and over 90,000 employees. In addition to Staples, all companies in the retail sector are facing stiff competition from online players, such as Amazon. 
 
Executives from OfficeMax and Office Depot believe they can provide estimates as to how many stores would be closing, claiming that they had not been able to speak on such matters during the initial merger talks. 
 
According to the prospective deal, OfficeMax shareholders will receive 2.69 shares of Office Depot Stock for each of their individual shares. This figure is roughly a 4% premium, based on Tuesday’s closing prices. However, OfficeMax shareholders had already profited on reports of the deal, which drove up share prices 21% on Tuesday alone. While., Office Depot shares closed roughly up 10% on Tuesday. 
 

Henry Barbour: ‘Two Sides to Every Issue

Henry Barbour: ‘Two Sides to Every Issue

Henry Barbour, a member of the Republican National Committee and one of five GOP members tasked with developing a new GOP strategy following the failed 2012 elections, refused to say if climate change is one of the focal points his party should address, stating “there are two sides to every issue.”

During a Thursday appearance on NPR to discuss the Republican Party’s post-election revamping, Barbour fielded a question from a caller who lambasted the Republicans for ignoring climate change as a and refusing to accept its standing as a legitimate concern.

“The Republican Party has to be concerned with fixings its own problems,” said Barbour, a Mississippi Republican. “Whether it’s looking at the environment or whether it’s dealing with education, security or spending, or whatever it is.”

The program’s host then pressed Barbour on the caller’s question by saying, “you can’t fix these issues unless you acknowledge them first.”

“There are certainly two sides to every issue and I’m not going to site her and give you a position on climate change,” Barbour replied. “As a party, we must focus on the ideas that help improve the country, whatever those might be, we need to focus on the ideas that unite us and not divide us.”

Barbour, the nephew of former Mississippi Governor Haley Barbour, was elected to the Republican National Committee in 2005 and has held crucial roles in several GOP campaigns. Last month, Barbour was appointed to the Growth and Opportunity Project, an initiative aimed at broadening the party’s appeal and responsible for examining where candidates failed during the 2012 election cycle.

“We must articulate our policies in a manner in which people can tell the benefit of what we’re trying to do,” Barbour told Bloomberg news. “Democrats were better at connecting with people in this regard and I think we came across as the old accountant too many times.”

Recent data suggests that climate change is an area where voters from both sides show great concern. Various polls released last month show that 83 percent of Democrats and over 70% of Republicans acknowledged rising temperatures, and 80 percent of total respondents stated that global warming is a serious problem.

These comments echo the GOP’s political tip-toeing when it comes to climate change. The bulk of GOP members feel that climate change is a non-issue. 

Yahoo Defending No-Work-At-Home Polic

Yahoo Defending No-Work-At-Home Polic

 

Internet giant Yahoo is responding to backlash of a decision to prohibit employees from working at home, claiming it is the right move for the company. 
 
“This is not a broad industry view on working from your home, this is about what is right for Yahoo at this time and going forward,” said a company spokesman in a statement issued to the media on Wednesday morning. 
 
The no-work-at-home policy prompted widespread criticism since it was announced in an e-mail to all employees earlier this week from Jackie Reses, the head of human resources who was hired by CEO Marissa Mayer.
 
“To become the best place to work, collaboration and communication will be principal, so we will need to be working as a team, side-by-side,” said the e-mail. “It is critical that we are all present in the office each and every working day.”
 
Yahoo did not reveal how many of its 11,500 employees currently work from home, claiming it does not comment on internal matters. 
 
Many have criticized the policy as impacting morale, claiming it could even turn-off or chase away talent. 
 
“We wish to give our employees the freedom to work where they choose, safe in the knowledge that they have the talent and drive to perform exceptionally, whether they are in the office or in their kitchen. I have never worked at a traditional office, and I never will” said Virgin CEO Richard Branson on his blog.” 
 
Others claim that the policy itself isn’t the issue, but how it was presented—via e-mail without comment from Yahoo’s Chief Executive Officer– to the company. “The new Human Resources policy is shocking in its measure, and harsh delivery,” opined Fortune’s Patricia Sellers. “The chief issue is how the new policy got communicated to the employee base.”
 
A study by Telework Research Network found that working from home or remotely increased nearly 75% from 2005 to 2011 in the United States. 
 
 
Source: Associated Press
 

The Rich get Richer: Forbes’ Rankings finds 210 New Billionaires

The Rich get Richer: Forbes' Rankings finds 210 New Billionaires

 

The Forbes Rankings, which lists the wealthiest men and women in the world, was released today and revealed a record 1,426 billionaires spread throughout the world. According to the latest tally from Forbes, rising stock prices and a shift to normalcy in the markets added 210 new members to the exclusive 10-figure club. 
 
The rankings also revealed Mexican telecom giant Carlos Slim to be the richest person in the world; this is Silm’s fourth year on top of the prestigious list with an estimated $73 billion, up from $69 billion last year. Slim edged out Microsoft founder Bill Gates, who was once again ranked as the second richest person in the world with his $67 billion fortune. 
 
Gates’ good friend Warren Buffet dropped out of the top three for the rights since 200, as head of Spanish retailer Zara, Armancio Ortega, took third place. Ortega’s wealth of $57 billion is a massive gain of $19.5 billion from 2012, the largest gain of any person on the list. Ironically, Buffet’s fortune posted the second largest increase on the list; Buffet’s estate increased $9.5 billion to 53.5 billion as shares Berkshire Hathaway, Buffet’s investment firm, increased a dramatic 17% in 2012. 
 
The United States is home to the most billionaires with 442, a net gain of 17 from 2012. 386 billionaires call the Asia-Pacific region home and 366 of the world’s wealthiest reside in Europe. 
 
Excluding those who passed away or split their wealth with family members, 60 people who were represented on the 2012 Billionaire’s list feel out of the prestigious club this year. Notable dropouts include Mark Pincus, CEO of online gaming company Zynga, whose stock fell more than 75% last year and former Chesapeake Energy CEO Aubrey McClendon. 
 
Mark Zuckerberg, founder of Facebook wins the dubious award of suffering the biggest loss of wealth for any American billionaire, as his worth plunged $4.2 billion to $13.3 billion. 
 
That said, there were far more winners than losers on the 2013 list. In total, the 1,426 billionaires possess a combined net worth of $5.4 trillion, up from $4.6 trillion in 2012. The majority of the net gain is due to larger membership as the average net worth of each billionaire was $3.8 billion or an uptick of $100 million from 2012.  
 
 
Source: CNN

Hess to Quit Retail Gasoline Business

Hess to Quit Retail Gasoline Business

 

The Hess Corporation is set to discontinue its retail gasoline operations along with its marketing and energy trading businesses to focus on production and exploration, the company announced on Monday. 
 
Hess also announced it will boost its yearly dividend to $1 per share and buy back up to $4 billion in company stock. Upon release of this news, Hess stock increased $2.45 a share or $3.68 percent to $68.99 on Monday. 
 
Hess also said it will nominate five independent directors for election to its board at the annual shareholders meeting in May. Moreover, the company named a six director that will be up for election at the 2014 shareholder’s meeting. Six of the oil giant’s current directors will announce their retirement from the board in the upcoming months.
These announcements come just over a month after prominent Hess investor Elliot Management pushed for alterations at the company and began lobbying for new management. The plea from Elliot with regards to changing leadership was based on an accusation that the board partook in poor oversight and engaged in a “decade of failures.”
 
Hess has already issued plans to sell domestic oil storage facilities and close a New Jersey refinery as it leaves the volatile refining sector. ConocoPhillips, Murphy Oil and Marathon Oil have all syphoned and split their refining businesses in recent years to place a greater emphasis on production and exploration. 
 
 
Source: CNN

Is the Cure for HIV at Risk because of Budget Cuts?

Is the Cure for HIV at Risk because of Budget Cuts?

 

Dr. Deborah Persuad of Johns Hopkins Children’s Center spearheaded a remarkable treatment plan that cured the HIV virus in a toddler. However, the budget cuts undertaken by the United States Federal Government will reduce funding delivered to the National Institutes of Health, which co-founded the incredible achievement. 
The cuts in federal spending, known as sequestration, could slash critical medical research, including the recently unveiled treatment plan that cured the toddler.
 
The National Institutes of Health, which co-administered the study, is set to lose over $1.6 billion of its $31 billion budget through September of this year as a result of the sequester. As the most prominent supporter of biomedical research in the United States, it could reduce funding for hundreds of research programs, such as the HIV case. 
 
The National Institutes of Health, in conjunction with AIDS research foundation, funded the treatment plan used to treat the child. 
 
Chris Collins, the vice president of public policy for the AIDS Research Foundation said there was a “brutal irony” to the timing of the HIV cure discovery and the budget cuts. “As we have heard this exciting news about HIV cure research, the entire AIDS research field is undergoing a significant setback,” said Collins. “If we are in the business of ending this virus, this would be the time invest, not to cut back.”
 
Doctors at Johns Hopkins Children’s Center used a mix of antiretroviral drugs to eliminate the HIV virus out of the Mississippi toddler, who was born to a woman with AIDS and is now free of the infection. 
 
The toddler was given a cocktail of drugs including Epivir, Viramune and Zidovudine. The child was then treated with a Kaletra drug mix to sweep-out the virus. This combination of drugs costs several hundred dollars when produced in a generic fashion in developing nations. 
 
The budget cuts would reduce funding to long-running research programs that the National Institutes of Health is already committed to, claims Dr. Anthony Fauci, the director of the National Institute of Allergies and Infectious Diseases. 
 
Dr. Fauci claims that the budget cuts will damage the program and its initiatives in the long run. Moreover, Fauci said the budget cats may also keep future research projects from materializing. 
 
 
Source: Whitehouse.gov

Your Guide to International Banks

Your Guide to International Banks

What is an International Bank?
An international bank is a banking institution that operates overseas and actively manages foreign accounts. Although the roles and basic functions of an international bank are similar to other banking institutions, the ability to deliver typical functions to customer and business accounts in different countries is the fundamental difference of international banks and smaller regionalized banking systems.
The typical regional bank in the United States possesses the ability to process checking accounts, savings accounts, or lending practices in limited jurisdictions. These banks do not handle accounts that are opened overseas nor do they lend funds to international businesses or customers.
An international bank is a financial entity that offers international companies and individual clients financial services, such as payment accounts and lending opportunities. Although the term ‘foreign clients’ encompasses both international businesses and individuals, every international bank will operate under its own policies that outline how they conduct their particular business.
According to OCRA Worldwide—an international organization that connects individual customers and companies to various international banking systems—an international bank will tend to offer their varied services to companies those wealthy individuals (typically individual clients with $100,000 accounts). That being said, some international banks, specifically banks in Switzerland, will offer their services to customers of any income bracket.
Why would a Business or an Individual Open an International Bank Account?

A company or corporation will open an account with an international bank to help facilitate international business (proposals, lending, or investment strategies executed in foreign countries). The facilitation is necessary due to the ever-changing and complex international laws that regulate international business transactions.
An individual will conduct business with an international bank for a variety of reasons, including tax avoidance. This process, which is most commonly attached to offshore banking, isn’t necessarily illegal, but is complicated due to the variance in tax laws that exist between foreign countries. Additionally, many individuals utilize international bank account to store their home country’s currency or income to take advantage or rates and taxes. As a result, numerous international banks are based in countries with low or no income and estate taxes, such as Belize, the Cayman Islands, Panama, and the Isle of Man.

Individuals will also open an international bank account to invest in the booming economies of particular countries, such as those in developing nations. Foreign banks may also be utilized to achieve a higher interest rate that is found domestically.
Another reason why an individual may store their money in an international bank account is to keep their funds safe from lawsuits or other legal actions.
What is an International Bank Account Number?
An international bank account number is a system that enables a financial institution to recognize a particular bank account regardless of where the account resides. The system was developed to enable the process of managing transactions that involved bank accounts connected with banks that were not located in the country.
The international bank account numbering system was primarily utilized among European nations; however, as international banking services become more popular, the use of the system is becoming more globalized.

Depreciation

Depreciation


What is Depreciation?
As a financial term, “depreciation” refers to the following separate, but related concepts: 
o Depreciation may refer to the decline in the value of assets
o Depreciation may also refer to the allocation of the cost of assets to periods where the assets are used
• The first definition of depreciation affects the values of goods, assets, businesses and entities, while the latter predominantly affects net income. 
Different entities will define depreciation in an assortment of ways; however, in a general sense, the term refers to the diminishing value attached to a good, asset or business organization as a result of the underlying object’s wear and tear, obsolescence or deterioration. For example, if a consumer purchases a television, with the most updated technology, that particular television will invariably undergo depreciation within the next five years, as newer and better televisions hit the market. 
Depreciation in Accounting:
When determining the profits (net income) from a specific activity, the receipts from the activity must be reduced by the appropriate costs. One such cost is the expense of the underlying assets used, but not necessarily consumed, in the activity. The cost of an asset is the difference between the amount paid for the asset and the amount expected to be received upon its forfeiture, sale or disposition. 
Depreciation refers to any method of allocating such net costs to those periods expected to benefit from the use of the asset. As a result, depreciation is a method of allocation and not valuation in accounting. 
Any business using tangible assets may incur costs related to the aforementioned asset groups. When the assets produce a benefit in future periods, the costs must be deferred rather than treated as current expenditures. The business will then record depreciation expenses as an allocation of such costs for financial reporting purposes. When evaluating deprecation as an accounting concept the following criteria must be analyzed: the cost of the asset, the estimated useful life of the asset, a method of apportioning the cost over such life and the expected savage value or residual value of the asset.
How does the IRS define Depreciation?
The Internal Revenue Service defines depreciation as an income tax deduction that allows a taxpayer to recover the cost of certain property. Depreciation, in regards to taxation, refers to the annual allowance for the wear and tear, deterioration or obsolescence of the property.
The majority of tangible property (with the exception of land), such as buildings, vehicles, machinery, furniture and equipment are depreciable. In order for a taxpayer to be allowed a depreciation deduction for a property, the investment must meet all the following requirements:
o The taxpayer must own the property
o The taxpayer must use the property in business or in an income-producing activity.
o The property must possess a determinable useful life of more than one year.   

SEC

SEC

What is the SEC?
The SEC is an acronym for the Securities and Exchange Commission, which is the regulatory body mandated by the Federal government of the United States employed to investigate and regulate matters involving financial and investment activity of the public, commercial market.
The History of the SEC
The SEC was founded in 1934; many historians attribute the formation of the SEC to the stock market crash, which had occurred only years prior in 1929 – this stock market crash is oftentimes referred to as ‘The Stock Market Crash of 1929’. Subsequent to this crash of the stock market, a national depression and economic recession swept over the United States, credited in part to the crash of the stock market. Although no definitive attribution exist with regard to the exact reasons for the Stock Market Crash of 1929, both historians and economists have managed to place the some of the responsibility for the crash – and subsequent economic downturn – to a drastic decline in the valuation of stocks traded within the stock market at the time:
As the stock prices began to fall, a panic swept over a multitude of investors who quickly rushed to exchange their respective stocks prior to further decreases in value
The economic devastation resulting from the Stock Market Crash of 1929 prompted to the Federal Government to create an agency to regulate trade and exchange activity occurring within the open market in order to avoid the repeat of such a catastrophic event; this resulted in the creation of the SEC
What is the Open Market?
Public trading conducted within the realm of the stock market, which is oftentimes referred to as the ‘Commercial Market’ or the ‘Open Market’ must be undertaken in methodologies authorized by the SEC; these guidelines ensure that the activities occurring with regard to both invest and finance are conducted in a manner that is conducive to any and all legality expressed within applicable legislature – the following activities are both regulated and authorized by the SEC:
The commercial trade and exchange of securities, which include bonds, security certificates, and bank notes
The commercial trade and exchange of stock or shares belonging to publically traded companies
The behavior and activities undertaken by both private investors, as well as investors represented by financial and investment firms
The professional activity of financial firms, publically-traded companies, conglomerate organizations, financial firms, and investment institutions
What Does the SEC Do?
The creation of the SEC allowed for the Federal Government to undertake regulation of investment activity with regard to the procedures undertaken by any or all individuals participating in commercial market activity; in theory, SEC regulation is considered to allow for the Federal Government to enact a measure of damage control with regard to addressing legal, financial issues prior to catastrophic development:
The SEC undertakes the regulation of commercial trade activity
The SEC enacts the mandating of any or all lawful and ethical trade and exchange activity taking place
The Sec provides commercial investors and potential investors alike with documented reporting and information with regard to the background, legality, financial history, and legal review of all publically-traded companies
 

Traditional IRA

Traditional IRA

The traditional IRA was established by the Tax Reform Act of 1968.  The purpose of the traditional IRA is to help individuals save for retirement through presently tax exempt contributions to a traditional IRA.  A traditional IRA, like a Roth IRA is an individual retirement account.  
Unlike a Roth IRA, the only requirement for eligibility in a traditional IRA is that the individual have sufficient income to contribute to the traditional IRA.  However, even though you can contribute to the traditional IRA at any point there are requirements in order to take advantage of the tax incentives that go along with a traditional IRA.  In order to have these available an individual must meet income, filing status other requirements of the IRS, including the availability of other retirement plans.
If you qualify for the tax incentives of a traditional IRA you will be able to take advantage of tax exclusions to interest, dividends, and capital gains produced by the traditional IRA.  When contributing to a traditional IRA, all the funds that you allocate from your income to the traditional IRA is not included in your taxable income.  This is a major advantage in that it will lower your currently taxable income.  However, the funds from the traditional IRA will become taxable at their dispersement.  If you feel that your income in the future will be less than it is now then the traditional IRA is a great way to reduce your lifetime tax burden.
The limitations for investing in a traditional IRA are standard.  If you are under the age of 50 you will be allowed to contribute up to $4,000 per year to your traditional IRA.  If you are 50 or over that limit increases to $6,000.  
There are some disadvantages to having a traditional IRA.  At the time you reach 70 and a half you must begin making automatic yearly withdrawals from your traditional IRA.  If you neglect to do so then the IRS will automatically confiscate one half of the mandatory amount.  In addition, if you are below the age of 59 and a half you may not withdraw funds from your traditional IRA without incurring a 10% early withdrawal penalty.
You may rollover your traditional IRA once every 12 months.  This means that you may remover your funds from one traditional IRA account into another without incurring an early withdrawal fine.  The transfer must be made within 60 days of removing the funds from the traditional IRA account.
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