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Commitments and Other Contingencies
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12 Months Ended |
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Dec. 31, 2011
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| Litigation and Environmental Contingencies and Commitments and Other Contingencies [Abstract] | |
| Commitments and Other Contingencies |
Note 16 — Commitments and Other Contingencies We lease timberland, facilities and equipment under non-cancelable long-term operating lease agreements. In addition, we have various obligations under other office space and equipment leases of less than one year. Lease expense on timberland was $349,000 in 2011, $289,000 in 2010 and $366,000 in 2009. Rent expense on facilities and equipment was $2,000,000 in 2011, $2,048,000 in 2010 and $1,982,000 in 2009. Future minimum rental commitments under non-cancelable operating leases having a remaining term in excess of one year are: 2012 — $2,531,000; 2013 — $2,424,000; 2014 — $2,114,000; 2015 — $2,072,000; 2016 — $1,851,000 and thereafter —$10,718,000. We have 14 years remaining on a 65-year timber lease of over 16,000 acres. At year-end 2011, the remaining contractual obligation for this lease is $10,224,000. In 2008, we entered into a 10-year operating lease for approximately 32,000 square feet in Austin, Texas, which we occupy as our corporate headquarters. This lease contains predetermined fixed increases of the minimum rental rate during the initial lease term and a construction allowance for leasehold improvements. The remaining contractual obligation for this lease is $8,839,000. In connection with our unconsolidated venture operations, we have provided performance bonds and letters of credit aggregating $1,428,000 at year-end 2011. Generally these performance bonds and letters of credit would be drawn on due to lack of specific performance by the ventures, such as failure to deliver streets and utilities in accordance with local codes and ordinances.
Temple-Inland has received a private letter ruling from the Internal Revenue Service that our 2007 spin-off qualifies for tax-free treatment under applicable sections of the Internal Revenue Code, and has also received an opinion of tax counsel that the spin-off so qualifies. However, if the spin-off fails to qualify for tax-free treatment, under the tax matters agreement between Temple-Inland and us we may be required to indemnify Temple-Inland against any tax resulting from the distribution of our shares of stock to the extent that such tax resulted from any of our representations or undertakings being incorrect or violated. |