
2.	Impairments, Store Closing Costs and Gain on Sale of Leases

Impairments, store closing costs and gain on sale of leases consist of the following:



	2012			2011			2010
	(millions)
Impairments of properties held and used	$	4		$	22		$	18
Gain on sale of leases	—			(54		)	—
Severance	3			4			1
Other	(2		)	3			6
	$	5		$	(25	)	$	25

The Company expects to pay out the 2012 accrued severance costs, which are included in accounts payable and accrued liabilities on the Consolidated Balance Sheets, prior to May 4, 2013. The 2011 and 2010 accrued severance costs, which are included in accounts payable and accrued liabilities on the Consolidated Balance Sheets, were paid out in the fiscal year subsequent to incurring such severance costs.

During January 2013, the Company announced the closure of six Macy's and Bloomingdale's stores; during January 2012, the Company announced the closure of ten Macy's and Bloomingdale's stores; and during January 2011, the Company announced the closure of three Macy’s stores. In connection with these announcements and the plans to dispose of these locations, the Company incurred severance costs and other costs related to lease obligations and other store liabilities. For 2012, these costs also included a gain on the sale of one property that was disposed in 2013 and for 2010 these costs also included a loss on the sale of one property that was disposed in 2011.

As a result of the Company’s projected undiscounted future cash flows related to certain store locations being less than the carrying value of those assets, the Company recorded the impairment charges reflected in the table above relating to properties held and used, including properties that were the subject of announced store closings. The fair values of these locations were calculated based on the projected cash flows and an estimated risk-adjusted rate of return that would be used by market participants in valuing these assets or based on prices of similar assets.

During 2011, the Company recognized a gain on the sale of store leases related to the 2006 divestiture of Lord & Taylor, partially offset by impairment charges and other costs and expenses related to store closings.

At January 28, 2012, the Company had $82 million of cash in a qualified escrow account related to the sale of store leases discussed above, included in prepaid expenses and other current assets, which was utilized during 2012 for the purchase of two parcels of the Macy's flagship Union Square location in San Francisco in tax deferred like-kind exchange transactions.