2.	Facility Closure Reserves

We conduct regular reviews of our real estate portfolio to identify underperforming facilities, and close those facilities that are no longer strategically or economically beneficial. We record a liability for the cost associated with a facility closure at its fair value in the period in which the liability is incurred, primarily the location's cease-use date. Upon closure, unrecoverable costs are included in facility closure reserves and include the present value of future lease obligations, less contractual or estimated sublease income. Accretion expense is recognized over the life of the required payments.

During 2011, we recorded facility closure charges of $5.6 million in our Retail segment related to closing six underperforming domestic stores prior to the end of their lease terms, of which $5.4 million was related to the lease liability and $0.2 million was related to asset impairments.

During 2010, we recorded facility closure charges of $13.1 million in our Retail segment, of which $11.7 million was related to the lease liability and other costs associated with closing eight domestic stores prior to the end of their lease terms, and $1.4 million was related to other items. In 2009, we recorded charges of $31.2 million related to the closing of 21 underperforming stores prior to the end of their lease terms, of which 16 were in the U.S. and five were in Mexico.

These charges were included in other operating expenses, net in the Consolidated Statements of Operations.

Facility closure reserve account activity during 2011, 2010 and 2009 was as follows:


	Total
	(thousands)
Balance at December 27, 2008	$	48,933
Charges related to stores closed in 2009		31,208
Transfer of deferred rent balance		3,214
Changes to estimated costs included in income		9
Cash payments		(24,594	)
Accretion		2,802

Balance at December 26, 2009	$	61,572
Charges related to stores closed in 2010		13,069
Transfer of deferred rent and other balances		5,985
Changes to estimated costs included in income		(1,358	)
Cash payments		(22,260	)
Accretion		4,665

Balance at December 25, 2010	$	61,673
Charges related to stores closed in 2011		5,406
Transfer of deferred rent and other balances		928
Changes to estimated costs included in income		262
Cash payments		(22,311	)
Accretion		3,117

Balance at December 31, 2011	$	49,075

Reserve balances were classified in the Consolidated Balance Sheets as follows:


	December 31, 2011		December 25, 2010
	(thousands)
Accrued expenses and other current liabilities - Other	$	10,635	$	16,651
Other long-term liabilities		38,440		45,022

Total	$	49,075	$	61,673

At December 31, 2011, the lease termination component of the facilities closure reserve consisted of the following:


	Total
	(thousands)
Estimated future lease obligations	$	102,002
Less: anticipated sublease income		(52,927	)

Total	$	49,075

In addition, we were the lessee of a legacy building materials manufacturing facility near Elma, Washington until the end of 2010. During 2006, we ceased operations at the facility, fully impaired the assets and recorded a reserve for the related lease payments and other contract termination and closure costs. This reserve balance was not included in the facilities closure reserve described above. During 2010, we sold the facility's equipment and terminated the lease. As a result, we recorded income of approximately $9.4 million to adjust the associated reserve. This income is reported in other operating expenses, net in our Consolidated Statements of Operations.