NOTE 3 — RESERVES FOR CLOSED PROPERTIES

The Company maintains reserves for costs associated with closures of retail stores, distribution centers and other properties that are no longer being utilized in current operations. The Company provides for closed property operating lease liabilities using a discount rate to calculate the present value of the remaining noncancellable lease payments after the closing date, reduced by estimated subtenant rentals that could be reasonably obtained for the property. Adjustments to closed property reserves primarily relate to changes in subtenant income or actual exit costs differing from original estimates.

Changes in the Company’s reserves for closed properties consisted of the following:


	September 8, 2012
Reserves for closed properties at beginning of fiscal year	$	141
Additions		10
Payments		(23	)
Adjustments		—

Reserves for closed properties at end of period	$	128

During the second quarter of fiscal 2013, the Company announced the closure of approximately 60 non-strategic stores. Reserves for these closed properties will be recorded at the time of closing. The Company expects to close the majority of these stores before December 1, 2012, the end of the Company’s fiscal 2013 third quarter, and expects that the remaining store closures will be completed by February 23, 2013, the end of the Company’s 2013 fiscal year.