Item 2. PROPERTIES

We own and lease properties in our business. All of our leases are noncancelable and, are primarily accounted for as operating leases. These leases are not subject to early termination except for standard nonperformance clauses.

Information concerning capacity and utilization of our principal operating facilities, the segments that use those facilities, and a map of geographical locations is presented in "Part I, Item 1. Business" of this Form 10-K. We assess the condition and capacity of our manufacturing, distribution, and other facilities needed to meet our operating requirements. Our properties have been generally well maintained and are in good operating condition. In general, our facilities have sufficient capacity and are adequate for our production and distribution requirements.

We currently own five containerboard mills and three white paper mills. Additionally, we have 98 corrugated manufacturing operations, of which 54 are owned, including 46 combining operations, or corrugated plants, one corrugated sheet-only manufacturer, and seven sheet plants. 18 corrugated plants and 26 sheet plants are leased. We own one warehouse and miscellaneous other properties, including sales offices and woodlands management offices. We lease the space for regional design centers and numerous other distribution centers, warehouses, and facilities. The equipment in these leased facilities is, in virtually all cases, owned by us, except for forklifts and other rolling stock which are generally leased.

We lease the cutting rights to approximately 88,000 acres of timberland located near our Valdosta mill (77,000 acres) and our Counce mill (11,000 acres). On average, these cutting rights agreements have terms with approximately 10 years remaining. Additionally, we lease approximately 9,000 acres of land for a fiber farm, located near our Wallula mill, where we plant, grow and harvest fiber.

Our corporate headquarters is located in Lake Forest, Illinois. The headquarters facility is leased for the next eight years with provisions for two additional five year lease extensions. We also lease an office in Boise, Idaho, which is leased through March 2018.