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, Macy's Merchandising Group International (Hong Kong) Limited, and its majority-owned subsidiary Macy's China 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 April 30, 2016, May 2, 2015 and January 30, 2016, the related Condensed Consolidating Statements of Comprehensive Income for the 13 weeks ended April 30, 2016 and May 2, 2015, and the related Condensed Consolidating Statements of Cash Flows for the 13 weeks ended April 30, 2016 and May 2, 2015 are presented on the following pages.

Condensed Consolidating Balance Sheet

As of April 30, 2016

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	287	$	112	$	335	$	—		$	734
Receivables	—		158		278		—			436
Merchandise inventories	—		2,707		3,031		—			5,738
Income tax receivable	66		—		—		(47		)	19
Prepaid expenses and other current assets	—		121		369		—			490
Total Current Assets	353		3,098		4,013		(47		)	7,417
Property and Equipment – net	—		3,840		3,635		—			7,475
Goodwill	—		3,315		582		—			3,897
Other Intangible Assets – net	—		50		461		—			511
Other Assets	—		154		744		—			898
Deferred Income Taxes	23		—		—		(23		)	—
Intercompany Receivable	—		—		3,433		(3,433		)	—
Investment in Subsidiaries	4,651		3,810		—		(8,461		)	—
Total Assets	$	5,027	$	14,267	$	12,868	$	(11,964	)	$	20,198
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	641	$	1	$	—		$	642
Merchandise accounts payable	—		872		1,180		—			2,052
Accounts payable and accrued liabilities	34		1,192		1,464		—			2,690
Income taxes	—		9		38		(47		)	—
Total Current Liabilities	34		2,714		2,683		(47		)	5,384
Long-Term Debt	—		6,971		19		—			6,990
Intercompany Payable	787		2,646		—		(3,433		)	—
Deferred Income Taxes	—		726		833		(23		)	1,536
Other Liabilities	58		547		1,529		—			2,134
Shareholders' Equity:
Macy's, Inc.	4,148		663		7,798		(8,461		)	4,148
Noncontrolling Interest	—		—		6		—			6
Total Shareholders' Equity	4,148		663		7,804		(8,461		)	4,154
Total Liabilities and Shareholders' Equity	$	5,027	$	14,267	$	12,868	$	(11,964	)	$	20,198

Condensed Consolidating Statement of Comprehensive Income

For the 13 Weeks Ended April 30, 2016

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	2,454		$	5,374		$	(2,057	)	$	5,771
Cost of sales	—			(1,604		)	(3,969		)	2,057			(3,516		)
Gross margin	—			850			1,405			—			2,255
Selling, general and administrative expenses	(1		)	(882		)	(1,083		)	—			(1,966		)
Settlement charges	—			(3		)	(10		)	—			(13		)
Operating income (loss)	(1		)	(35		)	312			—			276
Interest (expense) income, net:
External	1			(99		)	—			—			(98		)
Intercompany	—			(58		)	58			—			—
Equity in earnings of subsidiaries	116			10			—			(126		)	—
Income (loss) before income taxes	116			(182		)	370			(126		)	178
Federal, state and local income tax benefit (expense)	—			61			(124		)	—			(63		)
Net income (loss)	116			(121		)	246			(126		)	115
Net loss attributable to noncontrolling interest	—			—			1			—			1
Net income (loss) attributable to Macy's, Inc. shareholders	$	116		$	(121	)	$	247		$	(126	)	$	116
Comprehensive income (loss)	$	108		$	(129	)	$	241		$	(113	)	$	107
Comprehensive loss attributable to noncontrolling interest	—			—			1			—			1
Comprehensive income (loss) attributable to Macy's, Inc. shareholders	$	108		$	(129	)	$	242		$	(113	)	$	108

Condensed Consolidating Statement of Cash Flows

For the 13 Weeks Ended April 30, 2016

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	116		$	(121	)	$	246		$	(126	)	$	115
Settlement charges	—			3			10			—			13
Equity in earnings of subsidiaries	(116		)	(10		)	—			126			—
Dividends received from subsidiaries	182			—			—			(182		)	—
Depreciation and amortization	—			102			158			—			260
(Increase) decrease in working capital	(34		)	55			(451		)	—			(430		)
Other, net	19			16			15			—			50
Net cash provided (used) by operating activities	167			45			(22		)	(182		)	8
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net	—			(54		)	(158		)	—			(212		)
Other, net	—			(2		)	3			—			1
Net cash used by investing activities	—			(56		)	(155		)	—			(211		)
Cash flows from financing activities:
Debt repaid	—			(3		)	—			—			(3		)
Dividends paid	(112		)	—			(182		)	182			(112		)
Common stock acquired, net of issuance of common stock	(104		)	—			—			—			(104		)
Proceeds from noncontrolling interest	—			—			4			—			4
Intercompany activity, net	(415		)	52			363			—			—
Other, net	10			(17		)	50			—			43
Net cash provided (used) by financing activities	(621		)	32			235			182			(172		)
Net increase (decrease) in cash and cash equivalents	(454		)	21			58			—			(375		)
Cash and cash equivalents at beginning of period	741			91			277			—			1,109
Cash and cash equivalents at end of period	$	287		$	112		$	335		$	—		$	734

Condensed Consolidating Balance Sheet

As of May 2, 2015

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	1,078	$	115	$	316	$	—		$	1,509
Receivables	—		48		211		—			259
Merchandise inventories	—		2,961		2,968		—			5,929
Income tax receivable	43		—		—		(43		)	—
Prepaid expenses and other current assets	—		101		370		—			471
Total Current Assets	1,121		3,225		3,865		(43		)	8,168
Property and Equipment – net	—		4,250		3,462		—			7,712
Goodwill	—		3,315		582		—			3,897
Other Intangible Assets – net	—		68		463		—			531
Other Assets	1		44		665		—			710
Deferred Income Taxes	22		—		—		(22		)	—
Intercompany Receivable	—		—		3,588		(3,588		)	—
Investment in Subsidiaries	4,701		3,549		—		(8,250		)	—
Total Assets	$	5,845	$	14,451	$	12,625	$	(11,903	)	$	21,018
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	75	$	1	$	—		$	76
Merchandise accounts payable	—		1,139		1,247		—			2,386
Accounts payable and accrued liabilities	13		1,043		1,355		—			2,411
Income taxes	—		10		107		(43		)	74
Total Current Liabilities	13		2,267		2,710		(43		)	4,947
Long-Term Debt	—		7,209		20		—			7,229
Intercompany Payable	564		3,024		—		(3,588		)	—
Deferred Income Taxes	—		744		734		(22		)	1,456
Other Liabilities	61		543		1,575		—			2,179
Shareholders' Equity:
Macy's, Inc.	5,207		664		7,586		(8,250		)	5,207
Noncontrolling Interest	—		—		—		—			—
Total Shareholders' Equity	5,207		664		7,586		(8,250		)	5,207
Total Liabilities and Shareholders' Equity	$	5,845	$	14,451	$	12,625	$	(11,903	)	$	21,018

Condensed Consolidating Statement of Comprehensive Income

For the 13 Weeks Ended May 2, 2015

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	2,776		$	5,691		$	(2,235	)	$	6,232
Cost of sales	—			(1,809		)	(4,226		)	2,235			(3,800		)
Gross margin	—			967			1,465			—			2,432
Selling, general and administrative expenses	(1		)	(980		)	(1,042		)	—			(2,023		)
Operating income (loss)	(1		)	(13		)	423			—			409
Interest (expense) income, net:
External	—			(95		)	—			—			(95		)
Intercompany	—			(58		)	58			—			—
Equity in earnings of subsidiaries	194			60			—			(254		)	—
Income (loss) before income taxes	193			(106		)	481			(254		)	314
Federal, state and local income tax benefit (expense)	—			37			(158		)	—			(121		)
Net income (loss)	193			(69		)	323			(254		)	193
Net loss attributable to noncontrolling interest	—			—			—			—			—
Net income (loss) attributable to Macy's, Inc. shareholders	$	193		$	(69	)	$	323		$	(254	)	$	193
Comprehensive income (loss)	$	201		$	(61	)	$	327		$	(266	)	$	201
Comprehensive loss attributable to noncontrolling interest	—			—			—			—			—
Comprehensive income (loss) attributable to Macy's, Inc. shareholders	$	201		$	(61	)	$	327		$	(266	)	$	201

Condensed Consolidating Statement of Cash Flows

For the 13 Weeks Ended May 2, 2015

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	193		$	(69	)	$	323		$	(254	)	$	193
Equity in earnings of subsidiaries	(194		)	(60		)	—			254			—
Dividends received from subsidiaries	191			—			—			(191		)	—
Depreciation and amortization	—			106			153			—			259
(Increase) decrease in working capital	43			16			(461		)	—			(402		)
Other, net	24			(6		)	(15		)	—			3
Net cash provided (used) by operating activities	257			(13		)	—			(191		)	53
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net	—			(69		)	(170		)	—			(239		)
Other, net	—			7			(149		)	—			(142		)
Net cash used by investing activities	—			(62		)	(319		)	—			(381		)
Cash flows from financing activities:
Debt repaid	—			(3		)	—			—			(3		)
Dividends paid	(106		)	—			(191		)	191			(106		)
Common stock acquired, net of issuance of common stock	(259		)	—			—			—			(259		)
Intercompany activity, net	(669		)	146			523			—			—
Other, net	(53		)	(47		)	59			—			(41		)
Net cash provided (used) by financing activities	(1,087		)	96			391			191			(409		)
Net increase (decrease) in cash and cash equivalents	(830		)	21			72			—			(737		)
Cash and cash equivalents at beginning of period	1,908			94			244			—			2,246
Cash and cash equivalents at end of period	$	1,078		$	115		$	316		$	—		$	1,509

Condensed Consolidating Balance Sheet

As of January 30, 2016

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	741	$	91	$	277	$	—		$	1,109
Receivables	—		217		341		—			558
Merchandise inventories	—		2,702		2,804		—			5,506
Income tax receivable	44		—		—		(44		)	—
Prepaid expenses and other current assets	—		135		344		—			479
Total Current Assets	785		3,145		3,766		(44		)	7,652
Property and Equipment – net	—		3,925		3,691		—			7,616
Goodwill	—		3,315		582		—			3,897
Other Intangible Assets – net	—		52		462		—			514
Other Assets	—		154		743		—			897
Deferred Income Taxes	14		—		—		(14		)	—
Intercompany Receivable	—		—		3,800		(3,800		)	—
Investment in Subsidiaries	4,725		3,804		—		(8,529		)	—
Total Assets	$	5,524	$	14,395	$	13,044	$	(12,387	)	$	20,576
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	641	$	1	$	—		$	642
Merchandise accounts payable	—		667		859		—			1,526
Accounts payable and accrued liabilities	35		1,439		1,859		—			3,333
Income taxes	—		41		230		(44		)	227
Total Current Liabilities	35		2,788		2,949		(44		)	5,728
Long-Term Debt	—		6,976		19		—			6,995
Intercompany Payable	1,218		2,582		—		(3,800		)	—
Deferred Income Taxes	—		693		798		(14		)	1,477
Other Liabilities	21		558		1,544		—			2,123
Shareholders' Equity:
Macy's, Inc.	4,250		798		7,731		(8,529		)	4,250
Noncontrolling Interest	—		—		3		—			3
Total Shareholders' Equity	4,250		798		7,734		(8,529		)	4,253
Total Liabilities and Shareholders' Equity	$	5,524	$	14,395	$	13,044	$	(12,387	)	$	20,576