Rocky Mountain Lease Transactions

9 Months Ended

Sep. 30, 2012

Rocky Mountain Lease Transactions

Rocky Mountain Lease Transactions

(P)

Rocky Mountain Lease Transactions.    In December 1996 and January 1997, we entered into six long-term lease transactions relating to our 74.61% undivided interest in Rocky Mountain. In each transaction, we leased a portion of our undivided interest in Rocky Mountain to six separate owner trusts for the benefit of three investors for a term equal to 120% of the estimated useful life of Rocky Mountain.

On July 12, 2012, we terminated three of the six lease transactions prior to the end of their lease terms. These three leases were each owned by a separate owner trust for the benefit of one of the three investors, representing approximately 69% of the six original lease transactions. In connection with these terminations, we incurred termination costs of approximately $17,200,000 and recognized $31,900,000 of the deferred net benefit associated with the terminated leases, resulting in a net gain on termination of $14,700,000 which we recognized in income in July 2012. The termination of these leases resulted in a $94,500,000 decrease in the Deposit on Rocky Mountain transactions and Obligation under Rocky Mountain transactions in our unaudited condensed balance sheet at September 30, 2012.

On October 18, 2012, we terminated two additional leases, each owned by a separate owner trust for the benefit of one of the other two investors, representing approximately 21% of the six original lease transactions. In connection with these terminations, we incurred termination costs of approximately $5,300,000 and recognized $9,532,000 of the deferred net benefit associated with the terminated leases, resulting in a net gain on termination of $4,232,000, which we recognized in income in October 2012. The termination of these leases also results in a $28,775,000 decrease in the Deposit on Rocky Mountain transactions and Obligation under Rocky Mountain transactions from the amounts reflected in our unaudited condensed balance sheet at September 30, 2012.

For a more detailed discussion of the Rocky Mountain lease transactions, see Note 2 to "Item 8—FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA—Notes to Consolidated Financial Statements" in our 2011 on Form 10-K