The significant unobservable inputs used in amounts reported above are discounted future cash flows of the projects.
We use present value techniques based on discounting the estimated cash flows using a rate commensurate with the inherent risk associated with the assets and related estimated cash flow streams.
Discount rates applied to the estimated future cash flows of our homebuilding assets for 2010 ranged from 15 percent to 18 percent.
Discount rates applied to the estimated future cash flows of our homebuilding assets for 2009 ranged from 12 percent to 25 percent.
During 2008, we recognized $69 million of charges for the impairment of interest that previously was capitalized on Real Estate assets.
Write-off of Pre-Acquisition Costs and Abandoned Community Costs In addition to owning land and residential lots, we also have option agreements to purchase land and lots at a future date.
As of December 31, 2010, we have option agreements on approximately 63,000 residential lots.
When the economics of a project no longer support acquisition of the land or lots under option, we may elect not to move forward with the acquisition.
Option deposits and capitalized engineering and related costs associated with the assets under option may be forfeited at that time.
Charges for such forfeitures are reported as write-off of pre-acquisition costs.
Also included in 2009 are charges for abandoned community costs, which include the write-off of unamortized costs related to projects that have been closed prior to full build-out or related to model complex costs written off due to decisions to sell active communities in their current condition or to change home styles offered within a community.
Goodwill Our impairments of goodwill were primarily related to the following: ?2009 — the goodwill associated with the hardwoods and industrial wood products reporting unit.
?2008 — as a result of the collapse of financial markets in fourth quarter 2008, accompanied by accelerated deterioration of housing markets and declining demand for pulp products in emerging Asian markets, the estimated fair value of certain of our reporting units fell below the carrying value of those units.
This triggered the goodwill impairments in our Wood Products segment of $744 million and $94 million in our Cellulose Fibers segment during fourth quarter.
Impairments of Investments and Other Related Charges Impairments of investments and other related charges relate to loans and investments in unconsolidated entities.
NOTE 20: OTHER OPERATING COSTS (INCOME), NET These costs (income): ?include both recurring and occasional income and expense items and ?fluctuate from year to year.
Various Income and Expense Items Included in Other Operating Costs (Income), Net
## Table 0 ##
Gain on disposition of assets in 2010 included pretax gains of $40 million from the sale of certain British Columbia forest licenses and associated rights, $13 million from the sale of closed facilities, $4 million from the sale of a sawmill and $4 million from the sale of distribution centers.
The $163 million pretax gain on sale of non-strategic timberlands in 2009 resulted from the sale of 140,000 acres in northwestern Oregon.
The total pretax gain on the 2008 sale of our Australian operations was $218 million; $212 million was recorded in other operating income, net and $6 million was recorded in equity in income of affiliates.
The full $218 million is presented on the Consolidated Statement of Operations as earnings from discontinued operations, net of taxes.
Foreign exchange (gains) losses result from changes in exchange rates primarily related to our Canadian operations.
Net Operating Loss Carryforwards Our state and foreign net operating loss carryforwards as of the end of 2010 are as follows: ?$488 million, which expire from 2011 through 2030; and ?$130 million, which do not expire.
Valuation Allowances With the exception of the valuation allowance discussed below, we believe it is more likely than not that we will have sufficient future taxable income to realize our deferred tax assets.
Our valuation allowance on our deferred tax assets was $120 million as of the end of 2010.
This primarily related to foreign net operating losses and state and provincial credits.
Total changes in our valuation allowance over the last year were: ?$17 million net increase in 2010.
This net increase resulted primarily from: – $2 million increase due to foreign exchange; – $10 million increase due to the change in expectations of future use of state credits and net operating loss carryforwards; and – $5 million increase due to additional foreign losses.
Reinvestment of Undistributed Earnings We have approximately $22 million in undistributed earnings from our foreign subsidiaries as of the end of 2010.
We have reinvested our foreign undistributed earnings; therefore they are not subject to U. S.  income taxes.
Generally, such earnings become subject to U. S.  tax upon the remittance of dividends and under certain other circumstances.
It is not practicable to estimate the amount of deferred tax liability on such undistributed earnings.
HOW WE ACCOUNT FOR INCOME TAXES The Income Taxes section of Note 1: Summary of Significant Accounting Policies provides details about how we account for our income taxes.
UNRECOGNIZED TAX BENEFITS Unrecognized tax benefits represent potential future funding obligations to taxing authorities if uncertain tax positions we have taken on previously filed tax returns are not sustained.
The total amount of unrecognized tax benefits as of December 31, 2010, and December 31, 2009, are $180 million and $170 million, respectively, which does not include related interest of $30 million and $23 million, respectively.
These amounts represent the gross amount of exposure in individual jurisdictions and do not reflect any additional benefits expected to be realized if such positions were not sustained, such as the federal deduction that could be realized if an unrecognized state deduction was not sustained.
Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits
## Table 1 ##
The net liability recorded in our Consolidated Balance Sheet related to unrecognized tax benefits was $48 million as of December 31, 2010, and $132 million as of December 31, 2009, which includes interest of $27 million and $22 million respectively, net of payments made in advance of settlements.
The net liability recorded for tax positions across all jurisdictions that, if sustained, would affect our effective tax rate was $98 million as of December 31, 2010, and $96 million as of December 31, 2009, which includes interest of $27 million and $22 million, respectively.
In accordance with our accounting policy, we accrue interest and penalties related to unrecognized tax benefits as a component of income tax expense.
As of December 31, 2010, our 2007 federal income tax audit is complete.
Our 2008 and 2009 federal income tax audit has not yet begun.
We are also undergoing examination in various state and foreign jurisdictions for the 2005 - 2009 tax years.
We expect that the outcome of any examination will not have a material effect on our consolidated financial statements; however, audit outcomes and the timing of audit settlements are subject to significant uncertainty.
In the next 12 months, we estimate a decrease of up to $3 million in unrecognized tax benefits on several individually insignificant tax positions due to the lapse of applicable statutes of limitation in multiple jurisdictions.
unique chemical composition.
Examples of mineral rights include oil, gas, coal (even if mined at the surface) and precious metals.
If the two types of rights conflict, then mineral rights are generally superior to surface rights.
A third type of land right is geothermal, which can belong to either the surface or mineral owner.
We routinely reserve mineral and geothermal rights when selling surface timberlands acreage.
Timberlands Products
## Table 2 ##
HOW WE MEASURE OUR PRODUCT We report Timberlands data in cubic meters.
Cubic meters measure the total volume of wood fiber in a tree or log that we can sell.
Cubic meter volume is determined from the large- and small-end diameters and length and provides a more consistent and comparative measure of timber and log volume among operating regions, species, size and seasons of the year than other units of measure.
We also use two other units of measure when transacting business including: ?thousand board feet (MBF) — used in the West to measure the expected lumber recovery from a tree or log, but it does not include taper or recovery of nonlumber residual products; and ?green tons — used in the South to measure weight, but factors used for conversion to product volume can vary by species, size, location and season.
Both measures are accurate in the regions where they are used, but they do not provide a meaningful basis for comparisons between the regions.
The conversion rate for MBF to cubic meters varies based on several factors including diameter, length and taper of the timber.
The average conversion rate for MBF to cubic meters is approximately 6.7 cubic meters per MBF.
The conversion rate from green tons to cubic meters also varies based on the season harvested and the specific gravity of the wood for the region where the timber is grown.
An average conversion rate for green tons to cubic meters is approximately 0.825 cubic meters per green ton.
WHERE WE DO IT Our timberlands assets are located primarily in North America.
In the U. S.  we own and manage sustainable forests in nine states for use in wood products and pulp and paper manufacturing.
We own or lease: ?4.1 million acres in the southern U. S.  (Alabama, Arkansas, Louisiana, Mississippi, North Carolina, Oklahoma and Texas); and ?2.0 million acres in the Pacific Northwest (Oregon and Washington).
Our international operations are located primarily in Uruguay and China where, as of December 31, 2010, we own a total of 317,000 acres and have long-term leases on another 70,000 acres.
In addition, we have renewable, long-term licenses on 14.0 million acres of forestland owned by the provincial government of four Canadian provinces.
Our total timber inventory — including timber on owned and leased land in our U. S.  and international operations — is approximately 303 million cubic meters.
The timber inventory on licensed lands in Canada is approximately 371 million cubic meters.
The amount of timber inventory does not translate into an amount of lumber or panel products because the quantity of end products: ?varies according to the species, size and quality of the timber; and ?will change through time as the mix of these variables adjust.
The species, size and grade of the trees affects the relative value of our timberlands.
DISCUSSION OF OPERATIONS BY GEOGRAPHY Summary of 2010 Timber Inventory and Timberland Locations United States
## Table 3 ##
Wawa, Ontario.
The fair values of the assets were determined using significant other observable inputs (Level 2) based on market quotes and significant unobservable inputs (Level 3) based on discounted cash flow models.
?2009 — charges for Wood Products facilities included $74 million related to engineered wood products facilities in Hazard, Kentucky and Valdosta, Georgia.
In addition, charges included $30 million related to corporate-region buildings and $11 million related to a lumber mill in Brazil.
The fair values of the assets were determined using significant other observable inputs (Level 2) based on market quotes and significant unobservable inputs (Level 3) based on discounted cash flow models.
?2008 — charges for Wood Products facilities included a $27 million charge related to the assets of the Trust Joist?
Commercial division and $37 million related to oriented strand board facilities in Drayton Valley, Alberta and Miramichi, New Brunswick.
Real Estate Impairments and Charges We review homebuilding long-lived assets and investments within our Real Estate segment for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
These assets are stated at cost unless events or circumstances trigger an impairment review.
If a triggering event occurs and the asset’s carrying amount is not recoverable, we record an impairment loss, which is the difference between the asset’s book value and fair value.
The determination of fair value is based on appraisals and market pricing of comparable assets when that information is available, or the discounted value of estimated future net cash flows from these assets.
During 2008 and 2009, unfavorable market conditions caused us to re-evaluate our strategy to develop certain projects, reduce sales prices, and increase customer incentives.
Asset impairments are recorded as adjustments to the cost basis of inventory and investments.
Because of such changes, we reassessed the recoverability of several of our investments, which triggered impairment charges.
The number of real estate projects owned or operated by us ranged from approximately 100 to 125 during 2009 and 2010.
This includes communities where we were actively building homes or developing land and land positions held for future development.
The table below provides, for each period indicated: ?the number of projects that were tested for recoverability as a result of triggering events that occurred during the period, ?the number of projects for which impairment charges were recognized in the period, ?the amount of real estate impairment charges attributable to Weyerhaeuser shareholders that were recognized in the period and ?additional information about the fair value of assets impaired in the period.
Real estate impairments relate primarily to projects, or communities, held for development.
Within a community that is held for development, there may be individual homes or parcels of land that are currently held for sale.
Impairment charges recognized as a result of adjusting individual held-for-sale assets within a community to estimated fair value less cost to sell are also included in the total impairment charges below.
An individual project or held-for-sale asset may have been tested for recoverability and impairment charges may have been recognized in more than one quarter.
DOLLAR AMOUNTS IN MILLIONS Fai
## Table 4 ##

<table><tr><td></td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Gain on the sale of non-strategic timberlands</td><td>$—</td><td>$-163</td><td>$—</td></tr><tr><td>Gain on the sale of five short line railroads</td><td>-46</td><td>—</td><td>—</td></tr><tr><td>Gain on the sale of Containerboard, Packaging and Recycling operations(Note 4)</td><td>—</td><td>—</td><td>-1,175</td></tr><tr><td>Gain on the sale of Australian operations (Note 4)</td><td>—</td><td>—</td><td>-212</td></tr><tr><td>Gain from change in postretirement benefits (Note 9)</td><td>—</td><td>—</td><td>-52</td></tr><tr><td>Gain on disposition of assets</td><td>-69</td><td>-22</td><td>-29</td></tr><tr><td>Insurance settlement and casualty losses</td><td>—</td><td>-11</td><td>19</td></tr><tr><td>Foreign exchange (gains) losses, net</td><td>-8</td><td>-41</td><td>48</td></tr><tr><td>Land management income</td><td>-26</td><td>-20</td><td>-22</td></tr><tr><td>Litigation expense, net</td><td>18</td><td>18</td><td>26</td></tr><tr><td>Other, net</td><td>-37</td><td>-27</td><td>5</td></tr><tr><td></td><td>-168</td><td>-266</td><td>-1,392</td></tr><tr><td>Less discontinued operations</td><td>—</td><td>—</td><td>1,405</td></tr><tr><td>Total</td><td>$-168</td><td>$-266</td><td>$13</td></tr></table>
<table><tr><td></td><td>DECEMBER 31, 2010</td><td>DECEMBER 31, 2009</td></tr><tr><td>Balance at beginning of year</td><td>$170</td><td>$114</td></tr><tr><td>Additions based on tax positions related to current year</td><td>1</td><td>53</td></tr><tr><td>Additions for tax positions of prior years</td><td>17</td><td>—</td></tr><tr><td>Reductions for tax positions of prior years</td><td>-6</td><td>-4</td></tr><tr><td>Foreign currency translation</td><td>4</td><td>12</td></tr><tr><td>Settlements</td><td>—</td><td>—</td></tr><tr><td>Lapse of statute</td><td>-6</td><td>-5</td></tr><tr><td>Balance at end of year</td><td>$180</td><td>$170</td></tr></table>
<table><tr><td>GEOGRAPHIC AREA</td><td rowspan="2">MILLIONS OF CUBIC METERS TOTAL INVENTORY</td><td colspan="3">THOUSANDS OF ACRES ATDECEMBER 31, 2010</td></tr><tr><td></td><td>FEE OWNERSHIP</td><td>LONG- TERM LEASES</td><td>TOTAL ACRES</td></tr><tr><td>U.S.:</td><td></td><td></td><td></td><td></td></tr><tr><td>West</td><td>157</td><td>2,038</td><td>—</td><td>2,038</td></tr><tr><td>South</td><td>138</td><td>3,434</td><td>681</td><td>4,115</td></tr><tr><td> Total U.S.</td><td> 295</td><td> 5,472</td><td> 681</td><td> 6,153</td></tr></table>
<table><tr><td>PRODUCTS</td><td>HOW THEY’REUSED</td></tr><tr><td>Logs</td><td>Logs are made into lumber, other wood and building products andpulp and paper products</td></tr><tr><td>Timberlands</td><td>Timberland tracts are exchanged to improve our timberlandportfolio or are sold to third parties by our land development subsidiary within this segment</td></tr><tr><td>Timber</td><td>Standing timber may be sold to third parties or converted intochips and other raw materials to be made into pulp and paper products</td></tr><tr><td>Minerals, oil and gas</td><td>Sold into construction and energy markets</td></tr><tr><td>Other products</td><td>Includes seed and seedlings, poles, as well as plywood andhardwood lumber produced by our international operations, primarily in South America</td></tr></table>
<table><tr><td colspan="5">DOLLARAMOUNTS IN MILLIONS</td><td colspan="2">Fair Value Measurements Using</td></tr><tr><td></td><td>Number ofProjectsTested forRecoverability</td><td>Number ofProjectsImpaired</td><td>ImpairmentChargesRecognized</td><td>FairValue ofImpairedAssets</td><td>SignificantOtherObservableInputs(Level 2)</td><td>SignificantUnobservableInputs(Level 3)</td></tr><tr><td>Real estate communities:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>First Quarter2010</td><td>12</td><td>2</td><td>$1</td><td>$7</td><td>$5</td><td>$2</td></tr><tr><td>Second Quarter2010</td><td>15</td><td>1</td><td>$1</td><td>$9</td><td>$8</td><td>$1</td></tr><tr><td>Third Quarter2010</td><td>11</td><td>—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td></tr><tr><td>Fourth Quarter2010</td><td>15</td><td>2</td><td>$11</td><td>$17</td><td>$6</td><td>$11</td></tr><tr><td>Total2010</td><td></td><td></td><td>$13</td><td></td><td></td><td></td></tr><tr><td>First Quarter2009</td><td>59</td><td>9</td><td>$15</td><td>$17</td><td>$9</td><td>$8</td></tr><tr><td>Second Quarter2009</td><td>44</td><td>17</td><td>$45</td><td>$73</td><td>$40</td><td>$33</td></tr><tr><td>Third Quarter2009</td><td>41</td><td>12</td><td>$41</td><td>$59</td><td>$48</td><td>$11</td></tr><tr><td>Fourth Quarter2009</td><td>25</td><td>8</td><td>$105</td><td>$60</td><td>$15</td><td>$45</td></tr><tr><td>Total2009</td><td></td><td></td><td>$206</td><td></td><td></td><td></td></tr></table>

Question: What is the average value of Foreign currency translation for ECEMBER 31, 2010 and Fourth Quarter 2010 for Number ofProjectsTested forRecoverability in 2010?