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 Bluemercury, Inc., 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 August 1, 2015, August 2, 2014 and January 31, 2015, the related Condensed Consolidating Statements of Comprehensive Income for the 13 and 26 weeks ended August 1, 2015 and August 2, 2014, and the related Condensed Consolidating Statements of Cash Flows for the 26 weeks ended August 1, 2015 and August 2, 2014 are presented on the following pages.

Condensed Consolidating Balance Sheet

As of August 1, 2015

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	511	$	76	$	256	$	—		$	843
Receivables	—		85		249		—			334
Merchandise inventories	—		2,780		2,842		—			5,622
Prepaid expenses and other current assets	—		104		333		—			437
Income taxes	98		—		—		(98		)	—
Total Current Assets	609		3,045		3,680		(98		)	7,236
Property and Equipment – net	—		4,230		3,474		—			7,704
Goodwill	—		3,315		582		—			3,897
Other Intangible Assets – net	—		62		461		—			523
Other Assets	2		74		680		—			756
Deferred Income Taxes	24		—		—		(24		)	—
Intercompany Receivable	—		—		3,634		(3,634		)	—
Investment in Subsidiaries	4,779		3,640		—		(8,419		)	—
Total Assets	$	5,414	$	14,366	$	12,511	$	(12,175	)	$	20,116
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	82	$	1	$	—		$	83
Merchandise accounts payable	—		997		1,070		—			2,067
Accounts payable and accrued liabilities	23		981		1,274		—			2,278
Income taxes	—		10		152		(98		)	64
Deferred income taxes	—		301		66		—			367
Total Current Liabilities	23		2,371		2,563		(98		)	4,859
Long-Term Debt	—		7,162		19		—			7,181
Intercompany Payable	483		3,151		—		(3,634		)	—
Deferred Income Taxes	—		435		671		(24		)	1,082
Other Liabilities	64		551		1,535		—			2,150
Shareholders' Equity	4,844		696		7,723		(8,419		)	4,844
Total Liabilities and Shareholders' Equity	$	5,414	$	14,366	$	12,511	$	(12,175	)	$	20,116

Condensed Consolidating Statement of Comprehensive Income

For the 13 Weeks Ended August 1, 2015

(millions)



	Parent		Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—	$	2,761		$	5,049		$	(1,706	)	$	6,104
Cost of sales	—		(1,688		)	(3,628		)	1,706			(3,610		)
Gross margin	—		1,073			1,421			—			2,494
Selling, general and administrative expenses	—		(1,025		)	(1,033		)	—			(2,058		)
Operating income	—		48			388			—			436
Interest (expense) income, net:
External	—		(93		)	—			—			(93		)
Intercompany	—		(57		)	57			—			—
Equity in earnings of subsidiaries	217		86			—			(303		)	—
Income (loss) before income taxes	217		(16		)	445			(303		)	343
Federal, state and local income tax benefit (expense)	—		42			(168		)	—			(126		)
Net income	$	217	$	26		$	277		$	(303	)	$	217
Comprehensive income	$	224	$	33		$	282		$	(315	)	$	224

Condensed Consolidating Statement of Comprehensive Income

For the 26 Weeks Ended August 1, 2015

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	5,537		$	10,740		$	(3,941	)	$	12,336
Cost of sales	—			(3,497		)	(7,854		)	3,941			(7,410		)
Gross margin	—			2,040			2,886			—			4,926
Selling, general and administrative expenses	(1		)	(2,005		)	(2,075		)	—			(4,081		)
Operating income (loss)	(1		)	35			811			—			845
Interest (expense) income, net:
External	—			(188		)	—			—			(188		)
Intercompany	—			(115		)	115			—			—
Equity in earnings of subsidiaries	411			146			—			(557		)	—
Income (loss) before income taxes	410			(122		)	926			(557		)	657
Federal, state and local income tax benefit (expense)	—			79			(326		)	—			(247		)
Net income (loss)	$	410		$	(43	)	$	600		$	(557	)	$	410
Comprehensive income (loss)	$	425		$	(28	)	$	609		$	(581	)	$	425

Condensed Consolidating Statement of Cash Flows

For the 26 Weeks Ended August 1, 2015

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	410		$	(43	)	$	600		$	(557	)	$	410
Equity in earnings of subsidiaries	(411		)	(146		)	—			557			—
Dividends received from subsidiaries	337			—			—			(337		)	—
Depreciation and amortization	—			214			306			—			520
Increase in working capital	(11		)	(17		)	(503		)	—			(531		)
Other, net	24			2			(27		)	—			(1		)
Net cash provided by operating activities	349			10			376			(337		)	398
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net	—			(158		)	(349		)	—			(507		)
Other, net	—			9			(117		)	—			(108		)
Net cash used by investing activities	—			(149		)	(466		)	—			(615		)
Cash flows from financing activities:
Debt repaid	—			(72		)	—			—			(72		)
Dividends paid	(227		)	—			(337		)	337			(227		)
Common stock acquired, net of issuance of common stock	(751		)	—			—			—			(751		)
Intercompany activity, net	(722		)	262			460			—			—
Other, net	(46		)	(69		)	(21		)	—			(136		)
Net cash provided (used) by financing activities	(1,746		)	121			102			337			(1,186		)
Net increase (decrease) in cash and cash equivalents	(1,397		)	(18		)	12			—			(1,403		)
Cash and cash equivalents at beginning of period	1,908			94			244			—			2,246
Cash and cash equivalents at end of period	$	511		$	76		$	256		$	—		$	843

Condensed Consolidating Balance Sheet

As of August 2, 2014

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	1,287	$	85	$	258	$	—		$	1,630
Receivables	—		91		261		—			352
Merchandise inventories	—		2,799		2,617		—			5,416
Prepaid expenses and other current assets	6		94		299		—			399
Income taxes	34		—		—		(34		)	—
Total Current Assets	1,327		3,069		3,435		(34		)	7,797
Property and Equipment – net	—		4,438		3,333		—			7,771
Goodwill	—		3,315		428		—			3,743
Other Intangible Assets – net	—		85		427		—			512
Other Assets	4		110		669		—			783
Deferred Income Taxes	20		—		—		(20		)	—
Intercompany Receivable	—		—		3,412		(3,412		)	—
Investment in Subsidiaries	4,832		3,340		—		(8,172		)	—
Total Assets	$	6,183	$	14,357	$	11,704	$	(11,638	)	$	20,606
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	481	$	2	$	—		$	483
Merchandise accounts payable	—		926		1,064		—			1,990
Accounts payable and accrued liabilities	122		951		1,077		—			2,150
Income taxes	—		45		109		(34		)	120
Deferred income taxes	—		305		88		—			393
Total Current Liabilities	122		2,708		2,340		(34		)	5,136
Long-Term Debt	—		6,709		20		—			6,729
Intercompany Payable	188		3,224		—		(3,412		)	—
Deferred Income Taxes	—		568		739		(20		)	1,287
Other Liabilities	66		482		1,099		—			1,647
Shareholders' Equity	5,807		666		7,506		(8,172		)	5,807
Total Liabilities and Shareholders' Equity	$	6,183	$	14,357	$	11,704	$	(11,638	)	$	20,606

Condensed Consolidating Statement of Comprehensive Income

For the 13 Weeks Ended August 2, 2014

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	2,961		$	4,994		$	(1,688	)	$	6,267
Cost of sales	—			(1,778		)	(3,582		)	1,688			(3,672		)
Gross margin	—			1,183			1,412			—			2,595
Selling, general and administrative expenses	(2		)	(1,044		)	(978		)	—			(2,024		)
Operating income (loss)	(2		)	139			434			—			571
Interest (expense) income, net:
External	—			(100		)	—			—			(100		)
Intercompany	—			(58		)	58			—			—
Equity in earnings of subsidiaries	293			113			—			(406		)	—
Income before income taxes	291			94			492			(406		)	471
Federal, state and local income tax benefit (expense)	1			3			(183		)	—			(179		)
Net income	$	292		$	97		$	309		$	(406	)	$	292
Comprehensive income	$	296		$	101		$	311		$	(412	)	$	296

Condensed Consolidating Statement of Comprehensive Income

For the 26 Weeks Ended August 2, 2014

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	5,879		$	10,451		$	(3,784	)	$	12,546
Cost of sales	—			(3,664		)	(7,628		)	3,784			(7,508		)
Gross margin	—			2,215			2,823			—			5,038
Selling, general and administrative expenses	(4		)	(2,052		)	(1,968		)	—			(4,024		)
Operating income (loss)	(4		)	163			855			—			1,014
Interest (expense) income, net:
External	—			(200		)	—			—			(200		)
Intercompany	—			(116		)	116			—			—
Equity in earnings of subsidiaries	518			179			—			(697		)	—
Income before income taxes	514			26			971			(697		)	814
Federal, state and local income tax benefit (expense)	2			41			(341		)	—			(298		)
Net income	$	516		$	67		$	630		$	(697	)	$	516
Comprehensive income	$	524		$	75		$	634		$	(709	)	$	524

Condensed Consolidating Statement of Cash Flows

For the 26 Weeks Ended August 2, 2014

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income	$	516		$	67		$	630		$	(697	)	$	516
Equity in earnings of subsidiaries	(518		)	(179		)	—			697			—
Dividends received from subsidiaries	319			—			—			(319		)	—
Depreciation and amortization	—			225			282			—			507
(Increase) decrease in working capital	55			8			(347		)	—			(284		)
Other, net	6			(27		)	18			—			(3		)
Net cash provided by operating activities	378			94			583			(319		)	736
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net	—			(117		)	(310		)	—			(427		)
Other, net	—			6			43			—			49
Net cash used by investing activities	—			(111		)	(267		)	—			(378		)
Cash flows from financing activities:
Debt issued, net of debt repaid	—			42			(1		)	—			41
Dividends paid	(204		)	—			(319		)	319			(204		)
Common stock acquired, net of issuance of common stock	(773		)	—			—			—			(773		)
Intercompany activity, net	(137		)	8			129			—			—
Other, net	68			(32		)	(101		)	—			(65		)
Net cash provided (used) by financing activities	(1,046		)	18			(292		)	319			(1,001		)
Net increase (decrease) in cash and cash equivalents	(668		)	1			24			—			(643		)
Cash and cash equivalents at beginning of period	1,955			84			234			—			2,273
Cash and cash equivalents at end of period	$	1,287		$	85		$	258		$	—		$	1,630

Condensed Consolidating Balance Sheet

As of January 31, 2015

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	1,908	$	94	$	244	$	—		$	2,246
Receivables	—		97		327		—			424
Merchandise inventories	—		2,817		2,699		—			5,516
Prepaid expenses and other current assets	—		113		380		—			493
Income taxes	88		—		—		(88		)	—
Total Current Assets	1,996		3,121		3,650		(88		)	8,679
Property and Equipment – net	—		4,315		3,485		—			7,800
Goodwill	—		3,315		428		—			3,743
Other Intangible Assets – net	—		73		423		—			496
Other Assets	1		74		668		—			743
Deferred Income Taxes	10		—		—		(10		)	—
Intercompany Receivable	—		—		4,140		(4,140		)	—
Investment in Subsidiaries	4,655		3,526		—		(8,181		)	—
Total Assets	$	6,662	$	14,424	$	12,794	$	(12,419	)	$	21,461
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	75	$	1	$	—		$	76
Merchandise accounts payable	—		784		909		—			1,693
Accounts payable and accrued liabilities	42		1,360		1,707		—			3,109
Income taxes	—		22		362		(88		)	296
Deferred income taxes	—		295		67		—			362
Total Current Liabilities	42		2,536		3,046		(88		)	5,536
Long-Term Debt	—		7,245		20		—			7,265
Intercompany Payable	1,215		2,925		—		(4,140		)	—
Deferred Income Taxes	—		414		677		(10		)	1,081
Other Liabilities	27		593		1,581		—			2,201
Shareholders' Equity	5,378		711		7,470		(8,181		)	5,378
Total Liabilities and Shareholders' Equity	$	6,662	$	14,424	$	12,794	$	(12,419	)	$	21,461