BJS WHOLESALE CLUB INC

4. Discontinued Operations

The following tables summarize the activity for the six months ended July 30, 2011 and July 31, 2010 associated with our discontinued operations, which consist of closing five BJ's clubs in 2010, both our ProFoods clubs in 2006 and three BJ's clubs in 2002 (dollars in thousands):

2010 Closure of Five BJ's Locations

On January 5, 2011, we announced the closing of five clubs, located in Sunrise, Florida, Charlotte, North Carolina and three clubs in the Atlanta, Georgia market. All five clubs ceased operations by January 29, 2011. The operating results of these clubs are classified as a component of discontinued operations for all periods presented. In last year's second quarter, these five clubs reported total revenues of $37.1 million and a pre-tax operating loss of $1.3 million. In last year's first six months, these five clubs reported total revenues of $73.4 million and a pre-tax operating loss of $2.4 million. We recorded a $41.8 million charge in the fourth quarter of 2010 to close the clubs. This charge consisted of $33.5 million of lease obligation costs, net of estimated sublease income, $3.8 million of inventory dispositions, including markdowns, $2.2 million of employee termination benefits and $2.3 million of other exit costs.

The remaining reserve at July 30, 2011 consists of $32.5 million of lease obligation costs for our four remaining club leases and approximately $0.4 million of other exit costs. We expect our lease obligations will be paid over the next 14 years and we expect the other exit costs will be substantially paid over the remainder of the current year. Increases to the reserve in this year's first six months include $1.0 million of accretion expense on the remaining lease obligations, a $0.4 million charge related to expected sublease income and a $0.3 million charge to repair insured property damage at one of the clubs. Reductions to the reserve consist primarily of lease obligation payments and payments for employee termination benefits.

Closure of ProFoods

Both ProFoods clubs were closed in the fourth quarter ended February 3, 2007. We recorded a charge of $25.7 million to close these clubs, which included lease obligation costs of $8.8 million. We have since settled one of the leases and subleased the other for a portion of its remaining lease term. The reserve at July 30, 2011 is related to the lease obligations for the remaining club. Increases to the reserve in this year's and last year's first six months consist of interest accretion charges and reductions to the reserve consist of lease obligation payments.

2002 Closure of Three BJ's Locations

On November 9, 2002, we closed both of our clubs in the Columbus, Ohio, market and a club in North Dade, Florida. We settled two of the three related leases in prior periods. In the fourth quarter of 2010 we reached an agreement to settle the last remaining lease in Dublin, Ohio for $7.6 million. In this year's first six months we paid approximately $7.8 million for the settlement and related closing charges. We do not expect any future expenses related to this settlement.

The charges for BJ's and ProFoods lease obligations are based on the present value of rent liabilities under the relevant leases, including estimated real estate taxes and common area maintenance charges, reduced by estimated income from the potential subleasing of these properties. The liabilities for the closed club leases are included in current and noncurrent closed store obligations on our balance sheet.