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

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



	2013		2012			2011
	(millions)
Impairments of properties held and used	$	39	$	4		$	22
Severance	43		3			4
Gain on sale of leases	—		—			(54		)
Other	6		(2		)	3
	$	88	$	5		$	(25	)

During January 2014, the Company announced a series of cost-reduction initiatives, including organization changes that combine certain region and district organizations of the My Macy’s store management structure and the realignment and elimination of certain store, central office and administrative functions.

During January 2014, the Company announced the closure of five Macy's stores; during January 2013, the Company announced the closure of six Macy's and Bloomingdale's stores; and during January 2012, the Company announced the closure of ten Macy’s and Bloomingdale's stores.

In connection with these announcements and the plans to dispose of these locations, the Company incurred severance and other human resource-related costs and other costs related to lease obligations and other store liabilities.

As a result of the Company’s projected undiscounted future cash flows related to certain store locations and other assets being less than their carrying value, the Company recorded impairment charges, including properties that were the subject of announced store closings. The fair values of these assets 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.

The Company expects to pay out the 2013 accrued severance costs, which are included in accounts payable and accrued liabilities on the Consolidated Balance Sheets, prior to May 3, 2014. The 2012 and 2011 accrued severance costs, which were 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 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.