Condensed Consolidating Financial Information

Certain debt obligations of the Company, which constitute debt obligations of Macy's Retail Holdings, Inc. ("Subsidiary Issuer"), a 100%-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 and its subsidiary West 34th Street Insurance Company New York, Macy's Merchandising Corporation, 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 November 1, 2014, November 2, 2013 and February 1, 2014, the related Condensed Consolidating Statements of Comprehensive Income for the 13 and 39 weeks ended November 1, 2014 and November 2, 2013, and the related Condensed Consolidating Statements of Cash Flows for the 39 weeks ended November 1, 2014 and November 2, 2013 are presented on the following pages.

Condensed Consolidating Balance Sheet

As of November 1, 2014

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	650	$	105	$	293	$	—		$	1,048
Receivables	—		58		234		—			292
Merchandise inventories	—		3,997		3,792		—			7,789
Prepaid expenses and other current assets	—		95		329		—			424
Income taxes	—		—		—		—			—
Total Current Assets	650		4,255		4,648		—			9,553
Property and Equipment – net	—		4,447		3,340		—			7,787
Goodwill	—		3,315		428		—			3,743
Other Intangible Assets – net	—		80		424		—			504
Other Assets	3		135		700		—			838
Deferred Income Taxes	15		—		—		(15		)	—
Intercompany Receivable	245		—		5,106		(5,351		)	—
Investment in Subsidiaries	4,596		3,362		—		(7,958		)	—
Total Assets	$	5,509	$	15,594	$	14,646	$	(13,324	)	$	22,425
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	75	$	1	$	—		$	76
Merchandise accounts payable	—		1,763		2,051		—			3,814
Accounts payable and accrued liabilities	115		1,067		1,381		—			2,563
Income taxes	3		38		73		—			114
Deferred income taxes	—		310		86		—			396
Total Current Liabilities	118		3,253		3,592		—			6,963
Long-Term Debt	—		7,123		20		—			7,143
Intercompany Payable	—		3,641		1,710		(5,351		)	—
Deferred Income Taxes	—		524		805		(15		)	1,314
Other Liabilities	40		520		1,094		—			1,654
Shareholders' Equity	5,351		533		7,425		(7,958		)	5,351
Total Liabilities and Shareholders' Equity	$	5,509	$	15,594	$	14,646	$	(13,324	)	$	22,425

Condensed Consolidating Statement of Comprehensive Income

For the 13 Weeks Ended November 1, 2014

(millions)



	Parent		Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—	$	2,920		$	6,338		$	(3,063	)	$	6,195
Cost of sales	—		(1,916		)	(4,940		)	3,090			(3,766		)
Gross margin	—		1,004			1,398			27			2,429
Selling, general and administrative expenses	—		(1,069		)	(911		)	(27		)	(2,007		)
Operating income (loss)	—		(65		)	487			—			422
Interest (expense) income, net:
External	—		(96		)	—			—			(96		)
Intercompany	—		(56		)	56			—			—
Equity in earnings of subsidiaries	217		21			—			(238		)	—
Income (loss) before income taxes	217		(196		)	543			(238		)	326
Federal, state and local income tax benefit (expense)	—		60			(169		)	—			(109		)
Net income (loss)	$	217	$	(136	)	$	374		$	(238	)	$	217
Comprehensive income (loss)	$	220	$	(133	)	$	377		$	(244	)	$	220

Condensed Consolidating Statement of Comprehensive Income

For the 39 Weeks Ended November 1, 2014

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	8,799		$	16,816		$	(6,874	)	$	18,741
Cost of sales	—			(5,580		)	(12,568		)	6,874			(11,274		)
Gross margin	—			3,219			4,248			—			7,467
Selling, general and administrative expenses	(2		)	(3,122		)	(2,907		)	—			(6,031		)
Operating income (loss)	(2		)	97			1,341			—			1,436
Interest (expense) income, net:
External	—			(296		)	—			—			(296		)
Intercompany	—			(172		)	172			—			—
Equity in earnings of subsidiaries	735			200			—			(935		)	—
Income (loss) before income taxes	733			(171		)	1,513			(935		)	1,140
Federal, state and local income tax benefit (expense)	—			102			(509		)	—			(407		)
Net income (loss)	$	733		$	(69	)	$	1,004		$	(935	)	$	733
Comprehensive income (loss)	$	744		$	(58	)	$	1,011		$	(953	)	$	744

Condensed Consolidating Statement of Cash Flows

For the 39 Weeks Ended November 1, 2014

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	733		$	(69	)	$	1,004		$	(935	)	$	733
Equity in earnings of subsidiaries	(735		)	(200		)	—			935			—
Dividends received from subsidiaries	775			1			—			(776		)	—
Depreciation and amortization	—			331			439			—			770
(Increase) decrease in working capital	99			(284		)	(572		)	—			(757		)
Other, net	(14		)	(29		)	74			—			31
Net cash provided (used) by operating activities	858			(250		)	945			(776		)	777
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net	—			(175		)	(419		)	—			(594		)
Other, net	—			6			(8		)	—			(2		)
Net cash used by investing activities	—			(169		)	(427		)	—			(596		)
Cash flows from financing activities:
Debt issued, net of debt repaid	—			39			(1		)	—			38
Dividends paid	(314		)	—			(776		)	776			(314		)
Common stock acquired, net of issuance of common stock	(1,248		)	—			—			—			(1,248		)
Intercompany activity, net	(553		)	416			137			—			—
Other, net	(48		)	(15		)	181			—			118
Net cash provided (used) by financing activities	(2,163		)	440			(459		)	776			(1,406		)
Net increase (decrease) in cash and cash equivalents	(1,305		)	21			59			—			(1,225		)
Cash and cash equivalents at beginning of period	1,955			84			234			—			2,273
Cash and cash equivalents at end of period	$	650		$	105		$	293		$	—		$	1,048

Condensed Consolidating Balance Sheet

As of November 2, 2013

(millions)



	Parent		Subsidiary Issuer			Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	807	$	21		$	343	$	—		$	1,171
Receivables	—		44			232		—			276
Merchandise inventories	—		3,946			3,770		—			7,716
Prepaid expenses and other current assets	—		99			298		—			397
Income taxes	38		—			—		(38		)	—
Total Current Assets	845		4,110			4,643		(38		)	9,560
Property and Equipment – net	—		4,531			3,419		—			7,950
Goodwill	—		3,315			428		—			3,743
Other Intangible Assets – net	—		103			432		—			535
Other Assets	4		73			581		—			658
Deferred Income Taxes	3		—			—		(3		)	—
Intercompany Receivable	464		—			3,218		(3,682		)	—
Investment in Subsidiaries	4,320		2,753			—		(7,073		)	—
Total Assets	$	5,636	$	14,885		$	12,721	$	(10,796	)	$	22,446
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	463		$	2	$	—		$	465
Merchandise accounts payable	—		1,812			2,085		—			3,897
Accounts payable and accrued liabilities	107		965			1,251		—			2,323
Income taxes	—		6			110		(38		)	78
Deferred income taxes	—		322			101		—			423
Total Current Liabilities	107		3,568			3,549		(38		)	7,186
Long-Term Debt	—		6,711			21		—			6,732
Intercompany Payable	—		3,682			—		(3,682		)	—
Deferred Income Taxes	—		450			778		(3		)	1,225
Other Liabilities	87		619			1,155		—			1,861
Shareholders' Equity (Deficit)	5,442		(145		)	7,218		(7,073		)	5,442
Total Liabilities and Shareholders' Equity	$	5,636	$	14,885		$	12,721	$	(10,796	)	$	22,446

Condensed Consolidating Statement of Comprehensive Income

For the 13 Weeks Ended November 2, 2013

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	2,979		$	6,337		$	(3,040	)	$	6,276
Cost of sales	—			(1,930		)	(4,913		)	3,026			(3,817		)
Gross margin	—			1,049			1,424			(14		)	2,459
Selling, general and administrative expenses	(2		)	(1,113		)	(998		)	14			(2,099		)
Operating income (loss)	(2		)	(64		)	426			—			360
Interest (expense) income, net:
External	1			(96		)	(1		)	—			(96		)
Intercompany	(1		)	(39		)	40			—			—
Equity in earnings of subsidiaries	178			(15		)	—			(163		)	—
Income (loss) before income taxes	176			(214		)	465			(163		)	264
Federal, state and local income tax benefit (expense)	1			56			(144		)	—			(87		)
Net income (loss)	$	177		$	(158	)	$	321		$	(163	)	$	177
Comprehensive income (loss)	$	201		$	(134	)	$	331		$	(197	)	$	201

Condensed Consolidating Statement of Comprehensive Income

For the 39 Weeks Ended November 2, 2013

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	8,911		$	16,716		$	(6,898	)	$	18,729
Cost of sales	—			(5,590		)	(12,529		)	6,858			(11,261		)
Gross margin	—			3,321			4,187			(40		)	7,468
Selling, general and administrative expenses	(7		)	(3,217		)	(2,955		)	40			(6,139		)
Operating income (loss)	(7		)	104			1,232			—			1,329
Interest (expense) income, net:
External	1			(289		)	(1		)	—			(289		)
Intercompany	(1		)	(118		)	119			—			—
Equity in earnings of subsidiaries	679			129			—			(808		)	—
Income (loss) before income taxes	672			(174		)	1,350			(808		)	1,040
Federal, state and local income tax benefit (expense)	3			93			(461		)	—			(365		)
Net income (loss)	$	675		$	(81	)	$	889		$	(808	)	$	675
Comprehensive income (loss)	$	747		$	(9	)	$	919		$	(910	)	$	747

Condensed Consolidating Statement of Cash Flows

For the 39 Weeks Ended November 2, 2013

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	675		$	(81	)	$	889		$	(808	)	$	675
Equity in earnings of subsidiaries	(679		)	(129		)	—			808			—
Dividends received from subsidiaries	458			—			—			(458		)	—
Depreciation and amortization	—			349			412			—			761
Increase in working capital	(34		)	(185		)	(554		)	—			(773		)
Other, net	16			107			33			—			156
Net cash provided by operating activities	436			61			780			(458		)	819
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net	—			(206		)	(325		)	—			(531		)
Other, net	—			—			(10		)	—			(10		)
Net cash used by investing activities	—			(206		)	(335		)	—			(541		)
Cash flows from financing activities:
Debt issued, net of debt repaid	—			281			(2		)	—			279
Dividends paid	(267		)	—			(458		)	458			(267		)
Common stock acquired, net of issuance of common stock	(1,018		)	—			—			—			(1,018		)
Intercompany activity, net	224			(159		)	(65		)	—			—
Other, net	(106		)	3			166			—			63
Net cash provided (used) by financing activities	(1,167		)	125			(359		)	458			(943		)
Net increase (decrease) in cash and cash equivalents	(731		)	(20		)	86			—			(665		)
Cash and cash equivalents at beginning of period	1,538			41			257			—			1,836
Cash and cash equivalents at end of period	$	807		$	21		$	343		$	—		$	1,171

Condensed Consolidating Balance Sheet

As of February 1, 2014

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	1,955	$	84	$	234	$	—		$	2,273
Receivables	—		102		336		—			438
Merchandise inventories	—		2,896		2,661		—			5,557
Prepaid expenses and other current assets	—		103		317		—			420
Income taxes	80		—		—		(80		)	—
Total Current Assets	2,035		3,185		3,548		(80		)	8,688
Property and Equipment – net	—		4,590		3,340		—			7,930
Goodwill	—		3,315		428		—			3,743
Other Intangible Assets – net	—		97		430		—			527
Other Assets	4		101		641		—			746
Deferred Income Taxes	19		—		—		(19		)	—
Intercompany Receivable	—		—		3,561		(3,561		)	—
Investment in Subsidiaries	4,625		3,157		—		(7,782		)	—
Total Assets	$	6,683	$	14,445	$	11,948	$	(11,442	)	$	21,634
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	461	$	2	$	—		$	463
Merchandise accounts payable	—		760		931		—			1,691
Accounts payable and accrued liabilities	10		1,265		1,535		—			2,810
Income taxes	—		80		362		(80		)	362
Deferred income taxes	—		315		85		—			400
Total Current Liabilities	10		2,881		2,915		(80		)	5,726
Long-Term Debt	—		6,708		20		—			6,728
Intercompany Payable	362		3,199		—		(3,561		)	—
Deferred Income Taxes	—		544		748		(19		)	1,273
Other Liabilities	62		522		1,074		—			1,658
Shareholders' Equity (Deficit)	6,249		591		7,191		(7,782		)	6,249
Total Liabilities and Shareholders' Equity	$	6,683	$	14,445	$	11,948	$	(11,442	)	$	21,634