Condensed Consolidating Financial Information

Certain debt obligations of the Company, which constitute debt obligations of Macy's Retail Holdings, Inc. ("Subsidiary Issuer"), a wholly-owned subsidiary of Macy's, Inc. ("Parent"), are fully and unconditionally guaranteed by Parent. In the following condensed consolidating financial statements, "Other Subsidiaries" includes all other direct subsidiaries of Parent, including FDS Bank, West 34th Street Insurance Company (prior to a merger, known separately as Leadville Insurance Company and Snowdin Insurance Company) and its subsidiary West 34th Street Insurance Company New York, Macy's Merchandising Group, Inc. and its subsidiaries Macy's Merchandising Group (Hong Kong) Limited, Macy's Merchandising Group Procurement, LLC, Macy's Merchandising Group International, LLC, and Macy's Merchandising Group International (Hong Kong) Limited. "Subsidiary Issuer" includes operating divisions and non-guarantor subsidiaries of the Subsidiary Issuer on an equity basis. The assets and liabilities and results of operations of the non-guarantor subsidiaries of the Subsidiary Issuer are also reflected in "Other Subsidiaries."

Condensed Consolidating Balance Sheets as of October 27, 2012, October 29, 2011 and January 28, 2012, the related Condensed Consolidating Statements of Comprehensive Income for the 13 and 39 weeks ended October 27, 2012 and October 29, 2011, and the related Condensed Consolidating Statements of Cash Flows for the 39 weeks ended October 27, 2012 and October 29, 2011 are presented on the following pages.

Condensed Consolidating Balance Sheet

As of October 27, 2012

(millions)



	Parent		Subsidiary Issuer			Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	938	$	36		$	290	$	—		$	1,264
Receivables	—		31			250		—			281
Merchandise inventories	—		3,712			3,496		—			7,208
Prepaid expenses and other current assets	—		103			307		—			410
Income taxes	127		—			—		(127		)	—
Total Current Assets	1,065		3,882			4,343		(127		)	9,163
Property and Equipment – net	—		4,696			3,516		—			8,212
Goodwill	—		3,315			428		—			3,743
Other Intangible Assets – net	—		131			439		—			570
Other Assets	4		65			513		—			582
Deferred Income Tax Assets	11		—			—		(11		)	—
Intercompany Receivable	1,260		—			3,114		(4,374		)	—
Investment in Subsidiaries	3,467		2,675			—		(6,142		)	—
Total Assets	$	5,807	$	14,764		$	12,353	$	(10,654	)	$	22,270
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	121		$	2	$	—		$	123
Merchandise accounts payable	—		1,730			1,897		—			3,627
Accounts payable and accrued liabilities	212		919			1,288		—			2,419
Income taxes	—		54			162		(127		)	89
Deferred income taxes	—		322			104		—			426
Total Current Liabilities	212		3,146			3,453		(127		)	6,684
Long-Term Debt	—		6,793			24		—			6,817
Intercompany Payable	—		4,374			—		(4,374		)	—
Deferred Income Taxes	—		389			804		(11		)	1,182
Other Liabilities	32		746			1,246		—			2,024
Shareholders' Equity (Deficit)	5,563		(684		)	6,826		(6,142		)	5,563
Total Liabilities and Shareholders' Equity	$	5,807	$	14,764		$	12,353	$	(10,654	)	$	22,270

Condensed Consolidating Statement of Comprehensive Income

For the 13 Weeks Ended October 27, 2012

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	2,979		$	5,820		$	(2,724	)	$	6,075
Cost of sales	—			(1,901		)	(4,480		)	2,709			(3,672		)
Gross margin	—			1,078			1,340			(15		)	2,403
Selling, general and administrative expenses	(2		)	(1,132		)	(959		)	15			(2,078		)
Operating income (loss)	(2		)	(54		)	381			—			325
Interest (expense) income, net:
External	—			(103		)	—			—			(103		)
Intercompany	—			(35		)	35			—			—
Equity in earnings of subsidiaries	147			29			—			(176		)	—
Income (loss) before income taxes	145			(163		)	416			(176		)	222
Federal, state and local income tax benefit (expense)	—			50			(127		)	—			(77		)
Net income (loss)	$	145		$	(113	)	$	289		$	(176	)	$	145
Comprehensive income (loss)	$	169		$	(89	)	$	299		$	(210	)	$	169

Condensed Consolidating Statement of Comprehensive Income

For the 39 Weeks Ended October 27, 2012

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	9,024		$	15,672		$	(6,360	)	$	18,336
Cost of sales	—			(5,640		)	(11,661		)	6,317			(10,984		)
Gross margin	—			3,384			4,011			(43		)	7,352
Selling, general and administrative expenses	(6		)	(3,282		)	(2,837		)	43			(6,082		)
Operating income (loss)	(6		)	102			1,174			—			1,270
Interest (expense) income, net:
External	1			(320		)	(1		)	—			(320		)
Intercompany	(1		)	(106		)	107			—			—
Equity in earnings of subsidiaries	609			222			—			(831		)	—
Income (loss) before income taxes	603			(102		)	1,280			(831		)	950
Federal, state and local income tax benefit (expense)	2			87			(434		)	—			(345		)
Net income (loss)	$	605		$	(15	)	$	846		$	(831	)	$	605
Comprehensive income	$	676		$	56		$	876		$	(932	)	$	676

Condensed Consolidating Statement of Cash Flows

For the 39 Weeks Ended October 27, 2012

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	605		$	(15	)	$	846		$	(831	)	$	605
Equity in earnings of subsidiaries	(609		)	(222		)	—			831			—
Dividends received from subsidiaries	455						—			(455		)	—
Depreciation and amortization	—			356			426			—			782
Increase in working capital	(173		)	(66		)	(367		)	—			(606		)
Other, net	(17		)	64			61			—			108
Net cash provided by operating activities	261			117			966			(455		)	889
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net	—			(210		)	(387		)	—			(597		)
Other, net	—			—			(18		)	—			(18		)
Net cash used by investing activities	—			(210		)	(405		)	—			(615		)
Cash flows from financing activities:
Debt repaid	—			(800		)	(3		)	—			(803		)
Dividends paid	(246		)	—			(455		)	455			(246		)
Common stock acquired, net of issuance of common stock	(826		)	—			—			—			(826		)
Intercompany activity, net	(733		)	892			(159		)	—			—
Other, net	(51		)	(1		)	90			—			38
Net cash provided (used) by financing activities	(1,856		)	91			(527		)	455			(1,837		)
Net increase (decrease) in cash and cash equivalents	(1,595		)	(2		)	34			—			(1,563		)
Cash and cash equivalents at beginning of period	2,533			38			256			—			2,827
Cash and cash equivalents at end of period	$	938		$	36		$	290		$	—		$	1,264

Condensed Consolidating Balance Sheet

As of October 29, 2011

(millions)



	Parent		Subsidiary Issuer			Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	779	$	34		$	284	$	—		$	1,097
Receivables	—		49			239		—			288
Merchandise inventories	—		3,781			3,377		—			7,158
Prepaid expenses and other current assets	—		102			306		—			408
Income taxes	44		—			—		(44		)	—
Total Current Assets	823		3,966			4,206		(44		)	8,951
Property and Equipment – net	—		4,812			3,611		—			8,423
Goodwill	—		3,315			428		—			3,743
Other Intangible Assets – net	—		161			447		—			608
Other Assets	4		92			442		—			538
Deferred Income Tax Assets	—		—			—		—			—
Intercompany Receivable	2,176		—			2,954		(5,130		)	—
Investment in Subsidiaries	3,094		2,790			—		(5,884		)	—
Total Assets	$	6,097	$	15,136		$	12,088	$	(11,058	)	$	22,263
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	802		$	3	$	—		$	805
Merchandise accounts payable	—		1,748			1,828		—			3,576
Accounts payable and accrued liabilities	211		928			1,236		—			2,375
Income taxes	—		30			80		(44		)	66
Deferred income taxes	—		293			95		—			388
Total Current Liabilities	211		3,801			3,242		(44		)	7,210
Long-Term Debt	—		6,125			26		—			6,151
Intercompany Payable	—		5,130			—		(5,130		)	—
Deferred Income Taxes	1		446			955		—			1,402
Other Liabilities	33		648			967		—			1,648
Shareholders' Equity (Deficit)	5,852		(1,014		)	6,898		(5,884		)	5,852
Total Liabilities and Shareholders' Equity	$	6,097	$	15,136		$	12,088	$	(11,058	)	$	22,263

Condensed Consolidating Statement of Comprehensive Income

For the 13 Weeks Ended October 29, 2011

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	2,941		$	5,733		$	(2,821	)	$	5,853
Cost of sales	—			(1,899		)	(4,452		)	2,807			(3,544		)
Gross margin	—			1,042			1,281			(14		)	2,309
Selling, general and administrative expenses	11			(1,174		)	(869		)	14			(2,018		)
Operating income (loss)	11			(132		)	412			—			291
Interest (expense) income, net:
External	—			(108		)	—			—			(108		)
Intercompany	(1		)	(47		)	48			—			—
Equity in earnings of subsidiaries	132			21			—			(153		)	—
Income (loss) before income taxes	142			(266		)	460			(153		)	183
Federal, state and local income tax benefit (expense)	(3		)	101			(142		)	—			(44		)
Net income (loss)	$	139		$	(165	)	$	318		$	(153	)	$	139
Comprehensive income (loss)	$	153		$	(151	)	$	324		$	(173	)	$	153

Condensed Consolidating Statement of Comprehensive Income

For the 39 Weeks Ended October 29, 2011

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	8,967		$	15,188		$	(6,474	)	$	17,681
Cost of sales	—			(5,614		)	(11,406		)	6,433			(10,587		)
Gross margin	—			3,353			3,782			(41		)	7,094
Selling, general and administrative expenses	7			(3,303		)	(2,712		)	41			(5,967		)
Operating income	7			50			1,070			—			1,127
Interest (expense) income, net:
External	1			(336		)	—			—			(335		)
Intercompany	(1		)	(144		)	145			—			—
Equity in earnings of subsidiaries	506			175			—			(681		)	—
Income (loss) before income taxes	513			(255		)	1,215			(681		)	792
Federal, state and local income tax benefit (expense)	(2		)	132			(411		)	—			(281		)
Net income (loss)	$	511		$	(123	)	$	804		$	(681	)	$	511
Comprehensive income (loss)	$	542		$	(92	)	$	822		$	(730	)	$	542

Condensed Consolidating Statement of Cash Flows

For the 39 Weeks Ended October 29, 2011

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	511		$	(123	)	$	804		$	(681	)	$	511
Equity in earnings of subsidiaries	(506		)	(175		)	—			681			—
Dividends received from subsidiaries	352			—			—			(352		)	—
Depreciation and amortization	—			390			428			—			818
Increase in working capital	(73		)	(213		)	(432		)	—			(718		)
Other, net	1			23			(8		)	—			16
Net cash provided (used) by operating activities	285			(98		)	792			(352		)	627
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net	—			(194		)	(278		)	—			(472		)
Other, net	—			38			(38		)	—			—
Net cash used by investing activities	—			(156		)	(316		)	—			(472		)
Cash flows from financing activities:
Debt repaid	—			(449		)	(2		)	—			(451		)
Dividends paid	(106		)	—			(352		)	352			(106		)
Acquisition of common stock, net of common stock issued	(97		)	—			—			—			(97		)
Intercompany activity, net	(488		)	705			(217		)	—			—
Other, net	11			(9		)	130			—			132
Net cash provided (used) by financing activities	(680		)	247			(441		)	352			(522		)
Net increase (decrease) in cash and cash equivalents	(395		)	(7		)	35			—			(367		)
Cash and cash equivalents at beginning of period	1,174			41			249			—			1,464
Cash and cash equivalents at end of period	$	779		$	34		$	284		$	—		$	1,097

Condensed Consolidating Balance Sheet

As of January 28, 2012

(millions)



	Parent		Subsidiary Issuer			Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	2,533	$	38		$	256	$	—		$	2,827
Receivables	—		58			310		—			368
Merchandise inventories	—		2,722			2,395		—			5,117
Prepaid expenses and other current assets	—		152			313		—			465
Total Current Assets	2,533		2,970			3,274		—			8,777
Property and Equipment – net	—		4,827			3,593		—			8,420
Goodwill	—		3,315			428		—			3,743
Other Intangible Assets – net	—		153			445		—			598
Other Assets	4		73			480		—			557
Intercompany Receivable	520		—			2,963		(3,483		)	—
Investment in Subsidiaries	3,210		2,435			—		(5,645		)	—
Total Assets	$	6,267	$	13,773		$	11,183	$	(9,128	)	$	22,095
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	1,099		$	4	$	—		$	1,103
Merchandise accounts payable	—		731			862		—			1,593
Accounts payable and accrued liabilities	248		1,103			1,437		—			2,788
Income taxes	46		29			296		—			371
Deferred income taxes	—		314			94		—			408
Total Current Liabilities	294		3,276			2,693		—			6,263
Long-Term Debt	—		6,630			25		—			6,655
Intercompany Payable	—		3,483			—		(3,483		)	—
Deferred Income Taxes	4		351			786		—			1,141
Other Liabilities	36		771			1,296		—			2,103
Shareholders' Equity (Deficit)	5,933		(738		)	6,383		(5,645		)	5,933
Total Liabilities and Shareholders' Equity	$	6,267	$	13,773		$	11,183	$	(9,128	)	$	22,095