3. Restructuring and Long-Lived Asset Impairment Charges

As a result of continuing adverse market conditions, we recorded restructuring and long-lived asset impairment charges totaling $2 million during the second quarter of 2011 and $11 million during the first six months of 2011.

Restructuring and long-lived asset impairment charges for the second quarter of 2011 included $1 million for lease obligations and $1 million for exit costs related to production facilities closed in 2010 and 2009. These charges totaling $2 million related to North American Gypsum.

Restructuring and long-lived asset impairment charges for the first six months of 2011 included $4 million for severance related to our salaried workforce reduction program announced during the fourth quarter of 2010 and a 2011 cost reduction initiative for L&W Supply Corporation, $2 million for lease obligations, $1 million for long-lived asset impairment related to an asset that was written down to its net realizable value and $4 million for exit costs related to production facilities closed in 2010 and 2009. On a segment basis, $9 million of the charges related to North American Gypsum, $1 million to Building Products Distribution and $1 million to Corporate.

RESTRUCTURING RESERVES

Restructuring reserves totaling $35 million were included in accrued expenses and other liabilities on the condensed consolidated balance sheet as of June 30, 2011. Total cash payments charged against the restructuring reserve in the first six months of 2011 amounted to $24 million. We expect future payments to be approximately $11 million during the remainder of 2011, $9 million in 2012 and $15 million after 2012. All restructuring-related payments in the first six months of 2011 were funded with cash on hand. We expect that the future payments will be funded with cash from operations or cash on hand. The restructuring reserve is summarized as follows:


	Balance		2011 Activity								Balance
	as of				Cash			Asset			as of
(millions)	12/31/10		Charges		Payments			Impairment			6/30/11

Severance	$	11	$	4	$	(11	)	$	—		$	4
Lease obligations		29		2		(8	)		—			23
Asset impairments		—		1		—			(1	)		—
Other exit costs		9		4		(5	)		—			8

Total	$	49	$	11	$	(24	)	$	(1	)	$	35

2010

Second quarter 2010 restructuring and long-lived asset impairment charges totaled $7 million and related to the curtailment of operations at a mining facility in Canada, the closure of one distribution center, the closure of an office and warehouse in Europe and continuing charges and adjustments related to prior-period restructuring initiatives. The charges included $4 million for severance, $1 million for asset impairments and lease obligations and $2 million for other exit costs.

For the first six months of 2010, restructuring and long-lived asset impairment charges were $19 million. This amount primarily included charges related to the closure of five distribution centers and a gypsum wallboard production facility in Southard, Okla., the temporary idling of a gypsum wallboard production facility in Stony Point, N.Y., and the curtailment of operations at the mining facility in Canada. The charges included $9 million for severance, $6 million for asset impairments and lease obligations and $4 million for other exit costs.