For the Fiscal Year Ended January 28, 2017 | Commission File Number: 1-13536 |
Incorporated in Delaware | I.R.S. No. 13-3324058 |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, par value $.01 per share | New York Stock Exchange |
Large accelerated filer ý | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Class | Outstanding at February 24, 2017 | |
Common Stock, $0.01 par value per share | 304,258,647 shares |
Document | Parts Into Which Incorporated |
Proxy Statement for the Annual Meeting of Stockholders to be held May 19, 2017 (Proxy Statement) | Part III |
• | the possible invalidity of the underlying beliefs and assumptions; |
• | competitive pressures from department and specialty stores, general merchandise stores, manufacturers’ outlets, off-price and discount stores, and all other retail channels, including the Internet, catalogs and television; |
• | general consumer-spending levels, including the impact of general economic conditions, consumer disposable income levels, consumer confidence levels, the availability, cost and level of consumer debt, mall vacancy issues, the costs of basic necessities and other goods and the effects of the weather or natural disasters; |
• | conditions to, or changes in the timing of, proposed transactions and changes in expected synergies, cost savings and non-recurring charges; |
• | transactions involving the Company's real estate portfolio; |
• | possible changes or developments in social, economic, business, industry, market, legal and regulatory circumstances and conditions; |
• | possible actions taken or omitted to be taken by third parties, including customers, suppliers, business partners, competitors and legislative, regulatory, judicial and other governmental authorities and officials; |
• | changes in relationships with vendors and other product and service providers; |
• | currency, interest and exchange rates and other capital market, economic and geo-political conditions; |
• | severe or unseasonable weather, possible outbreaks of epidemic or pandemic diseases and natural disasters; |
• | unstable political conditions, civil unrest, terrorist activities and armed conflicts; |
• | the possible inability of the Company’s manufacturers or transporters to deliver products in a timely manner or meet the Company’s quality standards; |
• | the Company’s reliance on foreign sources of production, including risks related to the disruption of imports by labor disputes, regional health pandemics, and regional political and economic conditions; |
• | duties, taxes, other charges and quotas on imports; and |
• | possible systems failures and/or security breaches, including, any security breach that results in the theft, transfer or unauthorized disclosure of customer, employee or company information, or the failure to comply with various laws applicable to the Company in the event of such a breach. |
Item 1. | Business. |
2016 | 2015 | 2014 | ||||||
Women’s Accessories, Intimate Apparel, Shoes, Cosmetics and Fragrances | 38 | % | 38 | % | 38 | % | ||
Women’s Apparel | 23 | 23 | 23 | |||||
Men’s and Children’s | 23 | 23 | 23 | |||||
Home/Miscellaneous | 16 | 16 | 16 | |||||
100 | % | 100 | % | 100 | % |
• | The Company’s bank subsidiary, FDS Bank, provides credit processing, certain collections, customer service and credit marketing services in respect of all credit card accounts that are owned either by Department Stores National Bank (“DSNB”), a subsidiary of Citibank, N.A., or FDS Bank and that constitute a part of the credit programs of the Company’s retail operations. |
• | Macy’s Systems and Technology, Inc. (“MST”), a wholly-owned indirect subsidiary of the Company, provides operational electronic data processing and management information services to all of the Company’s operations other than Bluemercury and Macy's China Limited. |
• | Macy’s Merchandising Group, Inc. (“MMG”), a wholly-owned direct subsidiary of the Company, and its subsidiary Macy's Merchandising Group International, LLC, are responsible for the design, development and marketing of Macy’s private label brands and certain licensed brands. Bloomingdale’s uses MMG for a small portion of its private label merchandise. The Company believes that its private label merchandise differentiates its merchandise assortments from those of its competitors and delivers exceptional value to its customers. MMG also offers its services, either directly or indirectly, to unrelated third parties. |
• | Macy’s Logistics and Operations (“Macy’s Logistics”), a division of a wholly-owned indirect subsidiary of the Company, provides warehousing and merchandise distribution services for the Company’s operations and digital customer fulfillment. |
• | Audit Committee Charter, |
• | Compensation and Management Development Committee Charter, |
• | Finance Committee Charter, |
• | Nominating and Corporate Governance Committee Charter, |
• | Corporate Governance Principles, |
• | Lead Independent Director Policy, |
• | Non-Employee Director Code of Business Conduct and Ethics, and |
• | Code of Conduct. |
Name | Age | Position with the Company | |||
Terry J. Lundgren | 65 | Executive Chairman and Chairman of the Board; Director | |||
Jeff Gennette | 55 | President, Chief Executive Officer; Director | |||
Timothy Baxter | 47 | Chief Merchandising Officer | |||
Elisa D. Garcia | 59 | Chief Legal Officer and Secretary | |||
Robert B. Harrison | 53 | Chief Omnichannel and Operations Officer | |||
Karen M. Hoguet | 60 | Chief Financial Officer | |||
Jeffrey A. Kantor | 58 | Chief Stores and Human Resources Officer | |||
Molly Langenstein | 53 | Chief Private Brands Officer | |||
Richard A. Lennox | 51 | Chief Marketing Officer | |||
Justin S. MacFarlane | 44 | Chief Strategy, Analytics and Innovation Officer | |||
Patti H. Ongman | 61 | Chief Merchandise Planning Officer | |||
Tony Spring | 52 | Chairman and Chief Executive Officer, Bloomingdale's | |||
Felicia Williams | 51 | Executive Vice President, Controller and Enterprise Risk |
Item 1A. | Risk Factors. |
• | materially damage the Company's reputation and brand, negatively affect customer satisfaction and loyalty, expose the Company to individual claims or consumer class actions, administrative, civil or criminal investigations or actions, and infringe on proprietary information; and |
• | cause the Company to incur substantial costs, including but not limited to, costs associated with remediation of information technology systems, customer protection costs and incentive payments for the maintenance of business relationships, litigation costs, lost revenues resulting from negative changes in consumer shopping patterns, unauthorized use of proprietary information or the failure to retain or attract customers following an attack. While the Company maintains insurance coverage that may, subject to policy terms and conditions, cover certain aspects of cyber risks, such insurance coverage may be unavailable or insufficient to cover all losses or all types of claims that may arise in the continually evolving area of cyber risk. |
• | general economic, stock, credit and real estate market conditions; |
• | risks relating to the Company’s business and its industry, including those discussed above; |
• | strategic actions by the Company or its competitors; |
• | variations in the Company’s quarterly results of operations; |
• | future sales or purchases of the Company’s common stock; and |
• | investor perceptions of the investment opportunity associated with the Company’s common stock relative to other investment alternatives. |
Item 1B. | Unresolved Staff Comments. |
Item 2. | Properties. |
2016 | 2015 | 2014 | ||||||
Macy's | 673 | 737 | 773 | |||||
Bloomingdale's | 55 | 54 | 50 | |||||
Bluemercury | 101 | 77 | — | |||||
829 | 868 | 823 |
2016 | 2015 | 2014 | ||||||
Store count at beginning of fiscal year | 868 | 823 | 840 | |||||
Stores opened | 27 | 26 | 5 | |||||
Acquisition of Bluemercury stores | — | 62 | — | |||||
Stores closed or consolidated into existing centers | (66 | ) | (43 | ) | (22 | ) | ||
Store count at end of fiscal year | 829 | 868 | 823 |
Geographic Region | Total | Owned | Leased | Subject to a Ground Lease | Partly Owned and Partly Leased | ||||||||||
North Central | 142 | 84 | 38 | 20 | — | ||||||||||
Northeast | 250 | 90 | 132 | 28 | — | ||||||||||
Northwest | 131 | 44 | 62 | 22 | 3 | ||||||||||
South | 179 | 116 | 42 | 21 | — | ||||||||||
Southwest | 127 | 48 | 56 | 22 | 1 | ||||||||||
829 | 382 | 330 | 113 | 4 |
Location | Primary Function | Owned or Leased | Square Footage (thousands) | ||||
Cheshire, CT | Direct to customer | Owned | 565 | ||||
Chicago, IL | Stores | Owned | 861 | ||||
Denver, CO | Stores | Leased | 20 | ||||
Goodyear, AZ | Direct to customer | Owned | 960 | ||||
Hayward, CA | Stores | Owned | 386 | ||||
Houston, TX | Stores | Owned | 1,124 | ||||
Joppa, MD | Stores | Owned | 850 | ||||
Kapolei, HI | Stores | Owned | 260 | ||||
Los Angeles, CA | Stores | Owned | 1,178 | ||||
Martinsburg, WV | Direct to customer | Owned | 1,300 | ||||
Miami, FL | Stores | Leased | 535 | ||||
Portland, TN | Direct to customer | Owned | 950 | ||||
Raritan, NJ | Stores | Owned | 980 | ||||
Sacramento, CA | Direct to customer | Leased | 385 | ||||
Secaucus, NJ | Stores | Leased | 675 | ||||
South Windsor, CT | Stores | Owned | 510 | ||||
Stone Mountain, GA | Stores | Owned | 1,000 | ||||
Tampa, FL | Stores | Owned | 670 | ||||
Tulsa, OK | Direct to customer | Owned | 1,300 | ||||
Tukwila, WA | Stores | Leased | 500 | ||||
Union City, CA | Stores | Leased | 165 | ||||
Youngstown, OH | Stores | Owned | 851 |
Item 3. | Legal Proceedings. |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
2016 | 2015 | ||||||||||||||||
Low | High | Dividend | Low | High | Dividend | ||||||||||||
1st Quarter | 37.71 | 45.50 | 0.3600 | 61.10 | 69.98 | 0.3125 | |||||||||||
2nd Quarter | 29.94 | 40.15 | 0.3775 | 62.80 | 73.61 | 0.3600 | |||||||||||
3rd Quarter | 31.02 | 40.98 | 0.3775 | 47.10 | 70.12 | 0.3600 | |||||||||||
4th Quarter | 28.55 | 45.41 | 0.3775 | 34.05 | 52.48 | 0.3600 |
Total Number of Shares Purchased | Average Price per Share ($) | Number of Shares Purchased under Program (1) | Open Authorization Remaining ($)(1) | ||||||||
(thousands) | (thousands) | (millions) | |||||||||
October 30, 2016 – November 26, 2016 | 727 | 42.90 | 727 | 1,763 | |||||||
November 27, 2016 – December 31, 2016 | 1,152 | 40.61 | 1,152 | 1,716 | |||||||
January 1, 2017 – January 28, 2017 | — | — | — | 1,716 | |||||||
1,879 | 41.49 | 1,879 |
(1) | Commencing in January 2000, the Company’s Board of Directors has from time to time approved authorizations to purchase, in the aggregate, up to $18 billion of Common Stock. All authorizations are cumulative and do not have an expiration date. As of January 28, 2017, $1,716 million of authorization remained unused. The Company may continue, discontinue or resume purchases of Common Stock under these or possible future authorizations in the open market, in privately negotiated transactions or otherwise at any time and from time to time without prior notice. |
Item 6. | Selected Financial Data. |
2016 | 2015 | 2014 | 2013 | 2012* | |||||||||||||||
(millions, except per share) | |||||||||||||||||||
Consolidated Statement of Income Data: | |||||||||||||||||||
Net sales | $ | 25,778 | $ | 27,079 | $ | 28,105 | $ | 27,931 | $ | 27,686 | |||||||||
Cost of sales | (15,621 | ) | (16,496 | ) | (16,863 | ) | (16,725 | ) | (16,538 | ) | |||||||||
Gross margin | 10,157 | 10,583 | 11,242 | 11,206 | 11,148 | ||||||||||||||
Selling, general and administrative expenses | (8,265 | ) | (8,256 | ) | (8,355 | ) | (8,440 | ) | (8,482 | ) | |||||||||
Impairments, store closing and other costs | (479 | ) | (288 | ) | (87 | ) | (88 | ) | (5 | ) | |||||||||
Settlement charges | (98 | ) | — | — | — | — | |||||||||||||
Operating income | 1,315 | 2,039 | 2,800 | 2,678 | 2,661 | ||||||||||||||
Interest expense | (367 | ) | (363 | ) | (395 | ) | (390 | ) | (425 | ) | |||||||||
Premium on early retirement of debt | — | — | (17 | ) | — | (137 | ) | ||||||||||||
Interest income | 4 | 2 | 2 | 2 | 3 | ||||||||||||||
Income before income taxes | 952 | 1,678 | 2,390 | 2,290 | 2,102 | ||||||||||||||
Federal, state and local income tax expense | (341 | ) | (608 | ) | (864 | ) | (804 | ) | (767 | ) | |||||||||
Net income | 611 | 1,070 | 1,526 | 1,486 | 1,335 | ||||||||||||||
Net loss attributable to noncontrolling interest | 8 | 2 | — | — | — | ||||||||||||||
Net income attributable to Macy's, Inc. shareholders | $ | 619 | $ | 1,072 | $ | 1,526 | $ | 1,486 | $ | 1,335 | |||||||||
Basic earnings per share attributable to Macy's, Inc. shareholders | $ | 2.01 | $ | 3.26 | $ | 4.30 | $ | 3.93 | $ | 3.29 | |||||||||
Diluted earnings per share attributable to Macy's, Inc. shareholders | $ | 1.99 | $ | 3.22 | $ | 4.22 | $ | 3.86 | $ | 3.24 | |||||||||
Average number of shares outstanding | 308.5 | 328.4 | 355.2 | 378.3 | 405.5 | ||||||||||||||
Cash dividends paid per share | $ | 1.4925 | $ | 1.3925 | $ | 1.1875 | $ | .9500 | $ | .8000 | |||||||||
Depreciation and amortization | $ | 1,058 | $ | 1,061 | $ | 1,036 | $ | 1,020 | $ | 1,049 | |||||||||
Capital expenditures | $ | 912 | $ | 1,113 | $ | 1,068 | $ | 863 | $ | 942 | |||||||||
Balance Sheet Data (at year end): | |||||||||||||||||||
Cash and cash equivalents | $ | 1,297 | $ | 1,109 | $ | 2,246 | $ | 2,273 | $ | 1,836 | |||||||||
Total assets | 19,851 | 20,576 | 21,330 | 21,499 | 20,858 | ||||||||||||||
Short-term debt | 309 | 642 | 76 | 463 | 124 | ||||||||||||||
Long-term debt | 6,562 | 6,995 | 7,233 | 6,688 | 6,768 | ||||||||||||||
Total Shareholders’ equity | 4,322 | 4,253 | 5,378 | 6,249 | 6,051 |
* | 53 weeks |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
• | Transforming the omnichannel business and focusing on key growth areas, |
• | Embracing customer centricity, including a simplified value proposition, and |
• | Optimizing value in the real estate portfolio. |
• | In January 2016, the Company completed a $270 million real estate transaction to recreate Macy's Brooklyn store. The Company continues to own and operate the first four floors and lower level of its existing nine-story retail store, which is currently being reconfigured and remodeled. The remaining portion of the store and its nearby parking facility were sold to Tishman Speyer in a single sales transaction. As the sales agreement required the Company to conduct certain redevelopment activities at Macy's Brooklyn store, the Company is recognizing the gain on the transaction, approximately $250 million, under the percentage of completion method of accounting over the redevelopment period. Accordingly, $117 million has been recognized to-date and the remaining gain is anticipated to be recognized over the next two years. |
• | In 2016, the Company had property and equipment sales, primarily related to real estate, totaling $673 million in cash proceeds and recognized real estate gains of $209 million. This includes the sale of its 248,000 square-foot Union Square Men’s building in San Francisco for approximately $250 million in January 2017. The Company will use part of the proceeds to consolidate the Men’s store into its main Union Square store. The Company will lease the Men’s store property for two to three years as it completes the reconfiguration of the main store. The Company is expected to recognize a gain of approximately $235 million in January 2018. |
• | In January 2017, the Company finalized the formation of a strategic alliance with Brookfield Asset Management, a leading global alternative asset manager, to create increased value in its real estate portfolio. Under the alliance, Brookfield has an exclusive right for up to 24 months to create a “pre-development plan” for each of approximately 50 Macy’s real estate assets, with an option for Macy’s to continue to identify and add assets into the alliance. The breadth of opportunity within the portfolio ranges from the additional development on a portion of an asset (such as a Company-controlled land parcel adjacent to a store) to the complete redevelopment of an existing store. Once a "pre-development plan" is created, the Company has the option to contribute the asset into a joint venture for the development plan to commence or sell the asset to Brookfield. If the Company chooses to contribute the asset into a joint venture, the Company may elect to participate as a funding or non-funding partner. After development, the joint venture may sell the asset and distribute proceeds accordingly. |
• | On February 28, 2017, the Company sold its downtown Minneapolis store and parking facility for $59 million of proceeds and a gain of approximately $47 million that is expected to be recognized in the first quarter of 2017. The downtown Minneapolis store will close in early 2017. |
• | Comparable sales on an owned basis decreased 3.5% and comparable sales on an owned plus licensed basis decreased 2.9%. |
• | Operating income for 2016 was $1.892 billion or 7.3% of sales, excluding impairments, store closing and other costs and settlement charges, a decrease of 18.7% and 130 basis points as a percent of sales from 2015 on a comparable basis. |
• | Diluted earnings per share attributable to Macy's, Inc. shareholders, excluding certain items, declined 17.5% to $3.11 in 2016 from $3.77 in 2015. |
• | Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, impairments, store closing and other costs and settlement charges) as a percent to net sales was 11.4% in 2016, as compared to 12.5% in 2015. |
• | Return on invested capital ("ROIC"), a key measure of operating productivity, was 18.5%, a decrease from 20.1% in 2015. |
• | Net cash provided by operating activities, net of cash used by investing activities increased significantly in 2016 as compared to 2015. |
• | The Company repurchased 7.9 million shares of its common stock for $316 million in 2016, and increased its annualized dividend rate to $1.51 per share. This annualized dividend rate represents an increase of 5% and is the sixth increase in the dividend in the past five years. |
2016 | 2015 | 2014 | 2013 | 2012 | ||||||
Increase (decrease) in comparable sales on an owned basis (note 1) | (3.5)% | (3.0)% | 0.7% | 1.9% | 3.7% | |||||
Impact of growth in comparable sales of departments licensed to third parties (note 2) | 0.6% | 0.5% | 0.7% | 0.9% | 0.3% | |||||
Increase (decrease) in comparable sales on an owned plus licensed basis | (2.9)% | (2.5)% | 1.4% | 2.8% | 4.0% |
(1) | Represents the period-to-period percentage change in net sales from stores in operation throughout the year presented and the immediately preceding year and all online sales of macys.com and bloomingdales.com, adjusting for the 53rd week in 2012, excluding commissions from departments licensed to third parties. Stores undergoing remodeling, expansion or relocation remain in the comparable sales calculation unless the store is closed for a significant period of time. Definitions and calculations of comparable sales differ among companies in the retail industry. |
(2) | Represents the impact of including the sales of departments licensed to third parties occurring in stores in operation throughout the year presented and the immediately preceding year and all online sales of macys.com and bloomingdales.com, adjusting for the 53rd week in 2012, in the calculation of comparable sales. The Company licenses third parties to operate certain departments in its stores and online and receives commissions from these third parties based on a percentage of their net sales. In its financial statements prepared in conformity with GAAP, the Company includes these commissions (rather than sales of the departments licensed to third parties) in its net sales. The Company does not, however, include any amounts in respect of licensed department sales (or any commissions earned on such sales) in its comparable sales in accordance with GAAP (i.e., on an owned basis). The amounts of commissions earned on sales of departments licensed to third parties are not material to its net sales for the periods presented. |
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
(millions, except percentages) | ||||||||||||||||||||
Net sales | $ | 25,778 | $ | 27,079 | $ | 28,105 | $ | 27,931 | $ | 27,686 | ||||||||||
Operating income | $ | 1,315 | $ | 2,039 | $ | 2,800 | $ | 2,678 | $ | 2,661 | ||||||||||
Operating income as a percent to net sales | 5.1 | % | 7.5 | % | 10.0 | % | 9.6 | % | 9.6 | % | ||||||||||
Operating income | $ | 1,315 | $ | 2,039 | $ | 2,800 | $ | 2,678 | $ | 2,661 | ||||||||||
Add back impairments, store closing and other costs | 479 | 288 | 87 | 88 | 5 | |||||||||||||||
Add back settlement charges | 98 | — | — | — | — | |||||||||||||||
Operating income, excluding certain items | $ | 1,892 | $ | 2,327 | $ | 2,887 | $ | 2,766 | $ | 2,666 | ||||||||||
Operating income, excluding certain items, as a percent to net sales | 7.3 | % | 8.6 | % | 10.3 | % | 9.9 | % | 9.6 | % |
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
Diluted earnings per share attributable to Macy's, Inc. shareholders | $ | 1.99 | $ | 3.22 | $ | 4.22 | $ | 3.86 | $ | 3.24 | ||||||||||
Add back the pre-tax impact of impairments, store closing and other costs | 1.54 | 0.86 | 0.24 | 0.23 | 0.01 | |||||||||||||||
Add back the pre-tax impact of settlement charges | 0.31 | — | — | — | — | |||||||||||||||
Add back the pre-tax impact of premium on early retirement of debt | — | — | 0.05 | — | 0.33 | |||||||||||||||
Deduct the income tax impact of impairments, store closing and other costs, settlement charges and premium on early retirement of debt | (0.73 | ) | (0.31 | ) | (0.11 | ) | (0.09 | ) | (0.12 | ) | ||||||||||
Diluted earnings per share attributable to Macy's, Inc. shareholders, excluding the impact of impairments, store closing and other costs, settlement charges and premium on early retirement of debt | $ | 3.11 | $ | 3.77 | $ | 4.40 | $ | 4.00 | $ | 3.46 |
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
(millions, except percentages) | ||||||||||||||||||||
Net sales | $ | 25,778 | $ | 27,079 | $ | 28,105 | $ | 27,931 | $ | 27,686 | ||||||||||
Net income | $ | 611 | $ | 1,070 | $ | 1,526 | $ | 1,486 | $ | 1,335 | ||||||||||
Net income as a percent to net sales | 2.4 | % | 4.0 | % | 5.4 | % | 5.3 | % | 4.8 | % | ||||||||||
Net income | $ | 611 | $ | 1,070 | $ | 1,526 | $ | 1,486 | $ | 1,335 | ||||||||||
Add back impairments, store closing and other costs | 479 | 288 | 87 | 88 | 5 | |||||||||||||||
Add back settlement charges | 98 | — | — | — | — | |||||||||||||||
Add back interest expense - net | 363 | 361 | 393 | 388 | 422 | |||||||||||||||
Add back premium on early retirement of debt | — | — | 17 | — | 137 | |||||||||||||||
Add back federal, state and local income tax expense | 341 | 608 | 864 | 804 | 767 | |||||||||||||||
Add back depreciation and amortization | 1,058 | 1,061 | 1,036 | 1,020 | 1,049 | |||||||||||||||
Adjusted EBITDA | $ | 2,950 | $ | 3,388 | $ | 3,923 | $ | 3,786 | $ | 3,715 | ||||||||||
Adjusted EBITDA as a percent to net sales | 11.4 | % | 12.5 | % | 14.0 | % | 13.6 | % | 13.4 | % |
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
(millions, except percentages) | ||||||||||||||||||||
Operating income | $ | 1,315 | $ | 2,039 | $ | 2,800 | $ | 2,678 | $ | 2,661 | ||||||||||
Property and equipment - net | $ | 7,317 | $ | 7,708 | $ | 7,865 | $ | 8,063 | $ | 8,308 | ||||||||||
Operating income as a percent to property and equipment - net | 18.0 | % | 26.5 | % | 35.6 | % | 33.2 | % | 32.0 | % | ||||||||||
Operating income | $ | 1,315 | $ | 2,039 | $ | 2,800 | $ | 2,678 | $ | 2,661 | ||||||||||
Add back impairments, store closing and other costs | 479 | 288 | 87 | 88 | 5 | |||||||||||||||
Add back settlement charges | 98 | — | — | — | — | |||||||||||||||
Add back depreciation and amortization | 1,058 | 1,061 | 1,036 | 1,020 | 1,049 | |||||||||||||||
Add back rent expense, net | ||||||||||||||||||||
Real estate | 319 | 301 | 279 | 268 | 258 | |||||||||||||||
Personal property | 11 | 12 | 12 | 11 | 11 | |||||||||||||||
Deferred rent amortization | 9 | 8 | 7 | 8 | 7 | |||||||||||||||
Adjusted operating income | $ | 3,289 | $ | 3,709 | $ | 4,221 | $ | 4,073 | $ | 3,991 | ||||||||||
Property and equipment - net | $ | 7,317 | $ | 7,708 | $ | 7,865 | $ | 8,063 | $ | 8,308 | ||||||||||
Add back accumulated depreciation and amortization | 5,088 | 5,457 | 5,830 | 6,007 | 5,967 | |||||||||||||||
Add capitalized value of non-capitalized leases | 2,712 | 2,568 | 2,384 | 2,296 | 2,208 | |||||||||||||||
Add (deduct) other selected assets and liabilities: | ||||||||||||||||||||
Receivables | 411 | 338 | 336 | 339 | 322 | |||||||||||||||
Merchandise inventories | 6,012 | 6,226 | 6,155 | 6,065 | 5,754 | |||||||||||||||
Prepaid expenses and other current assets | 456 | 453 | 443 | 398 | 390 | |||||||||||||||
Other assets | 881 | 775 | 784 | 659 | 579 | |||||||||||||||
Merchandise accounts payable | (2,182 | ) | (2,366 | ) | (2,472 | ) | (2,520 | ) | (2,362 | ) | ||||||||||
Accounts payable and accrued liabilities | (2,924 | ) | (2,677 | ) | (2,511 | ) | (2,328 | ) | (2,333 | ) | ||||||||||
Total average invested capital | $ | 17,771 | $ | 18,482 | $ | 18,814 | $ | 18,979 | $ | 18,833 | ||||||||||
ROIC | 18.5 | % | 20.1 | % | 22.4 | % | 21.5 | % | 21.2 | % |
2016 | 2015 | 2014 | ||||||||||||||||||||||
Amount | % to Sales | Amount | % to Sales | Amount | % to Sales | |||||||||||||||||||
(dollars in millions, except per share figures) | ||||||||||||||||||||||||
Net sales | $ | 25,778 | $ | 27,079 | $ | 28,105 | ||||||||||||||||||
Increase (decrease) in sales | (4.8 | ) | % | (3.7 | ) | % | 0.6 | % | ||||||||||||||||
Increase (decrease) in comparable sales | (3.5 | ) | % | (3.0 | ) | % | 0.7 | % | ||||||||||||||||
Cost of sales | (15,621 | ) | (60.6 | ) | % | (16,496 | ) | (60.9 | ) | % | (16,863 | ) | (60.0 | ) | % | |||||||||
Gross margin | 10,157 | 39.4 | % | 10,583 | 39.1 | % | 11,242 | 40.0 | % | |||||||||||||||
Selling, general and administrative expenses | (8,265 | ) | (32.0 | ) | % | (8,256 | ) | (30.5 | ) | % | (8,355 | ) | (29.7 | ) | % | |||||||||
Impairments, store closing and other costs | (479 | ) | (1.9 | ) | % | (288 | ) | (1.1 | ) | % | (87 | ) | (0.3 | ) | % | |||||||||
Settlement charges | (98 | ) | (0.4 | ) | % | — | — | % | — | — | % | |||||||||||||
Operating income | 1,315 | 5.1 | % | 2,039 | 7.5 | % | 2,800 | 10.0 | % | |||||||||||||||
Interest expense - net | (363 | ) | (361 | ) | (393 | ) | ||||||||||||||||||
Premium on early retirement of debt | — | — | (17 | ) | ||||||||||||||||||||
Income before income taxes | 952 | 1,678 | 2,390 | |||||||||||||||||||||
Federal, state and local income tax expense | (341 | ) | (608 | ) | (864 | ) | ||||||||||||||||||
Net income | 611 | 1,070 | 1,526 | |||||||||||||||||||||
Net loss attributable to noncontrolling interest | 8 | 2 | — | |||||||||||||||||||||
Net income attributable to Macy's, Inc. shareholders | $ | 619 | 2.0 | % | % | $ | 1,072 | 4.0 | % | $ | 1,526 | 5.4 | % | |||||||||||
Diluted earnings per share attributable to Macy's, Inc. shareholders | $ | 1.99 | $ | 3.22 | $ | 4.22 | ||||||||||||||||||
Supplemental Non-GAAP Financial Measures | ||||||||||||||||||||||||
Increase (decrease) in comparable sales on an owned plus licensed basis | (2.9 | ) | % | (2.5 | ) | % | 1.4 | % | ||||||||||||||||
Operating income, excluding certain items | $ | 1,892 | 7.3 | % | $ | 2,327 | 8.6 | % | $ | 2,887 | 10.3 | % | ||||||||||||
Diluted earnings per share attributable to Macy's, Inc. shareholders, excluding certain items | $ | 3.11 | $ | 3.77 | $ | 4.40 | ||||||||||||||||||
Adjusted EBITDA as a percent to net sales | 11.4 | % | 12.5 | % | 14.0 | % | ||||||||||||||||||
ROIC | 18.5 | % | 20.1 | % | 22.4 | % | ||||||||||||||||||
See pages 20 to 23 for a reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measure and for other important information. | ||||||||||||||||||||||||
Store information (at year-end): | ||||||||||||||||||||||||
Stores operated | 829 | 868 | 823 | |||||||||||||||||||||
Square footage (in millions) | 130.2 | 141.9 | 147.4 |
• | Total sales decline of approximately 3.2% - 4.3% from 2016 levels. Total sales in 2017 reflect a 53rd week of sales, whereas comparable sales below are on a 52-week basis. |
• | Comparable sales decrease on an owned basis of approximately 2.2% - 3.3%, with comparable sales on an owned plus licensed basis to decline approximately 2% - 3%. |
• | Asset sale gains of approximately $415 million - $435 million, including an expected $235 million gain associated with the sale of the Company's Union Square Macy's store and $100 million of additional gain from the sale of the Brooklyn real estate. |
• | Selling, general and administrative expense savings of approximately $550 million from the restructuring and store closures announced at the end of 2016, partially offset by increased growth spending of approximately $250 million (resulting in a net expense savings of approximately $300 million). |
• | Credit income of approximately $740 million - $760 million. |
• | Adjusted diluted earnings per share attributable to Macy's, Inc. shareholders of $3.37 to $3.62, excluding any charges associated with store closures, restructuring, or settlement charges associated with Company's defined benefit plans. Included in this guidance is the expected gain of approximately $235 million, or approximately $.47 per diluted share, associated with the sale of the Company's Union Square Macy's Men's store. |
• | Capital expenditures of approximately $900 million. |
• | Excess cash after capital expenditures, payment of the Company's dividends and the $300 million debt maturity in July 2017 is expected to be used to repurchase debt. |
Obligations Due, by Period | |||||||||||||||||||
Total | Less than 1 Year | 1 – 3 Years | 3 – 5 Years | More than 5 Years | |||||||||||||||
(millions) | |||||||||||||||||||
Short-term debt | $ | 308 | $ | 308 | $ | — | $ | — | $ | — | |||||||||
Long-term debt | 6,459 | — | 48 | 1,092 | 5,319 | ||||||||||||||
Interest on debt | 4,162 | 342 | 658 | 631 | 2,531 | ||||||||||||||
Capital lease obligations | 52 | 3 | 6 | 6 | 37 | ||||||||||||||
Operating leases | 3,683 | 321 | 587 | 486 | 2,289 | ||||||||||||||
Letters of credit | 30 | 30 | — | — | — | ||||||||||||||
Other obligations | 4,325 | 2,744 | 470 | 279 | 832 | ||||||||||||||
$ | 19,019 | $ | 3,748 | $ | 1,769 | $ | 2,494 | $ | 11,008 |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. |
Item 8. | Consolidated Financial Statements and Supplementary Data. |
Page | |
Consolidated Statements of Comprehensive Income for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015 | |
Consolidated Statements of Changes in Shareholders’ Equity for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015 | |
Consolidated Statements of Cash Flows for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015 | |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
Item 9A. | Controls and Procedures. |
Item 10. | Directors, Executive Officers and Corporate Governance. |
Name | Age | Director Since | Principal Occupation | |||
Francis S. Blake | 67 | 2015 | Former Chairman and Chief Executive Officer of The Home Depot, Inc. | |||
John A. Bryant | 51 | 2015 | Chairman of the Board of Kellogg Company since July 2014 and President and Chief Executive Officer since January 2011. | |||
Deirdre P. Connelly | 56 | 2008 | Former President, North American Pharmaceuticals of GlaxoSmithKline, a global pharmaceutical company. | |||
Leslie D. Hale | 44 | 2015 | Chief Operating Officer since 2016, Chief Financial Officer since 2007 and Executive Vice President since 2013 of RLJ Lodging Trust, a publicly-traded lodging real estate investment trust. | |||
William H. Lenehan | 40 | 2016 | President and Chief Executive Officer of Four Corners Property Trust, Inc., a real estate investment trust, since August 2015. | |||
Sara Levinson | 66 | 1997 | Co-Founder and Director of Katapult, a digital entertainment company making products for today's creative generation, since April 2013. | |||
Joyce M. Roché | 70 | 2006 | Former President and Chief Executive Officer of Girls Incorporated, a national non-profit research, education and advocacy organization. | |||
Paul C. Varga | 53 | 2012 | Chairman of Brown-Forman Corporation, a spirits and wine company, since August 2007 and Chief Executive Officer since 2005. | |||
Marna C. Whittington | 69 | 1993 | Former Chief Executive Officer of Allianz Global Investors Capital, a diversified global investment firm. | |||
Annie Young-Scrivner | 48 | 2014 | Executive Vice President of Starbucks Corporation since September 2009, with responsibility for global loyalty and digital development since September 2015. |
Item 11. | Executive Compensation. |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
Item 13. | Certain Relationships and Related Transactions, and Director Independence. |
Item 14. | Principal Accountant Fees and Services. |
Item 15. | Exhibits and Financial Statement Schedules. |
Exhibit Number | Description | Document if Incorporated by Reference | ||
3.1 | Amended and Restated Certificate of Incorporation | Exhibit 3.1 to the Company's Current Report on Form 8-K filed on May 18, 2010 | ||
3.1.1 | Certificate of Designations of Series A Junior Participating Preferred Stock | Exhibit 3.1.1 to the Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended January 28, 1995 | ||
3.1.2 | Article Seventh of the Amended and Restated Certificate of Incorporation | Exhibit 3.1 to the Company's Current Report on Form 8-K filed on May 24, 2011 | ||
3.2 | Amended and Restated By-Laws | Exhibit 3.1 to the Company's Current Report on Form 8-K filed on September 30, 2016 | ||
4.1 | Amended and Restated Certificate of Incorporation | See Exhibits 3.1, 3.1.1 and 3.1.2 | ||
4.2 | Amended and Restated By-Laws | See Exhibit 3.2 | ||
4.3 | Indenture, dated as of January 15, 1991, among the Company (as successor to The May Department Stores Company (“May Delaware”)), Macy's Retail Holdings, Inc. (“Macy's Retail”) (f/k/a The May Department Stores Company (NY) or “May New York”) and The Bank of New York Mellon Trust Company, N.A. (“BNY Mellon”, successor to J.P. Morgan Trust Company and as successor to The First National Bank of Chicago), as Trustee (the “1991 Indenture”) | Exhibit 4(2) to May New York’s Current Report on Form 8-K filed on January 15, 1991 | ||
4.3.1 | Guarantee of Securities, dated as of August 30, 2005, by the Company relating to the 1991 Indenture | Exhibit 10.13 to the Company's Current Report on Form 8-K filed on August 30, 2005 (the “August 30, 2005 Form 8-K”) | ||
4.4 | Indenture, dated as of December 15, 1994, between the Company and U.S. Bank National Association (successor to State Street Bank and Trust Company and The First National Bank of Boston), as Trustee (the “1994 Indenture”) | Exhibit 4.1 to the Company's Registration Statement on Form S-3 (Registration No. 33-88328) filed on January 9, 1995 | ||
4.4.1 | Eighth Supplemental Indenture to the 1994 Indenture, dated as of July 14, 1997, between the Company and U.S. Bank National Association (successor to State Street Bank and Trust Company and The First National Bank of Boston), as Trustee | Exhibit 2 to the Company's Current Report on Form 8-K filed on July 15, 1997 (the “July 15, 1997 Form 8-K”) | ||
Exhibit Number | Description | Document if Incorporated by Reference | ||
4.4.2 | Ninth Supplemental Indenture to the 1994 Indenture, dated as of July 14, 1997, between the Company and U.S. Bank National Association (successor to State Street Bank and Trust Company and The First National Bank of Boston), as Trustee | Exhibit 3 to the July 15, 1997 Form 8-K | ||
4.4.3 | Tenth Supplemental Indenture to the 1994 Indenture, dated as of August 30, 2005, among the Company, Macy's Retail and U.S. Bank National Association (as successor to State Street Bank and Trust Company and as successor to The First National Bank of Boston), as Trustee | Exhibit 10.14 to the August 30, 2005 Form 8-K | ||
4.4.4 | Guarantee of Securities, dated as of August 30, 2005, by the Company relating to the 1994 Indenture | Exhibit 10.16 to the August 30, 2005 Form 8-K | ||
4.5 | Indenture, dated as of September 10, 1997, between the Company and U.S. Bank National Association (successor to Citibank, N.A.), as Trustee (the “1997 Indenture”) | Exhibit 4.4 to the Company's Amendment No. 1 to Form S-3 (Registration No. 333-34321) filed on September 11, 1997 | ||
4.5.1 | First Supplemental Indenture to the 1997 Indenture, dated as of February 6, 1998, between the Company and U.S. Bank National Association (successor to Citibank, N.A.), as Trustee | Exhibit 2 to the Company's Current Report on Form 8-K filed on February 6, 1998 | ||
4.5.2 | Third Supplemental Indenture to the 1997 Indenture, dated as of March 24, 1999, between the Company and U.S. Bank National Association (successor to Citibank, N.A.), as Trustee | Exhibit 4.2 to the Company's Registration Statement on Form S-4 (Registration No. 333-76795) filed on April 22, 1999 | ||
4.5.3 | Seventh Supplemental Indenture to the 1997 Indenture, dated as of August 30, 2005 among the Company, Macy's Retail and U.S. Bank National Association (successor to Citibank, N.A.), as Trustee | Exhibit 10.15 to the August 30, 2005 Form 8-K | ||
4.5.4 | Guarantee of Securities, dated as of August 30, 2005, by the Company relating to the 1997 Indenture | Exhibit 10.17 to the August 30, 2005 Form 8-K | ||
4.6 | Indenture, dated as of June 17, 1996, among the Company (as successor to May Delaware), Macy's Retail (f/k/a May New York) and The Bank of New York Mellon Trust Company, N.A. (“BNY Mellon”, successor to J.P. Morgan Trust Company), as Trustee (the “1996 Indenture”) | Exhibit 4.1 to the Registration Statement on Form S-3 (Registration No. 333-06171) filed on June 18, 1996 by May Delaware | ||
4.6.1 | First Supplemental Indenture to the 1996 Indenture, dated as of August 30, 2005, by and among the Company (as successor to May Delaware), Macy's Retail (f/k/a May New York) and BNY Mellon, as Trustee | Exhibit 10.9 to the August 30, 2005 Form 8-K | ||
4.7 | Indenture, dated as of July 20, 2004, among the Company (as successor to May Delaware), Macy's Retail (f/k/a May New York) and BNY Mellon, as Trustee (the “2004 Indenture”) | Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-00079) filed on July 21, 2004 by May Delaware | ||
4.7.1 | First Supplemental Indenture to the 2004 Indenture, dated as of August 30, 2005 among the Company (as successor to May Delaware), Macy's Retail and BNY Mellon, as Trustee | Exhibit 10.10 to the August 30, 2005 Form 8-K | ||
4.8 | Indenture, dated as of November 2, 2006, by and among Macy's Retail, the Company and U.S. Bank National Association, as Trustee (the “2006 Indenture”) | Exhibit 4.6 to the Company's Registration Statement on Form S-3ASR (Registration No. 333-138376) filed on November 2, 2006 | ||
Exhibit Number | Description | Document if Incorporated by Reference | ||
4.8.1 | First Supplemental Indenture to the 2006 Indenture, dated November 29, 2006, among Macy's Retail, the Company and U.S. Bank National Association, as Trustee | Exhibit 4.1 to the Company's Current Report on Form 8-K filed on November 29, 2006 | ||
4.8.2 | Third Supplemental Indenture to the 2006 Indenture, dated March 12, 2007, among Macy's Retail, the Company and U.S. Bank National Association, as Trustee | Exhibit 4.2 to the Company's Current Report on Form 8-K filed on March 12, 2007 | ||
4.8.3 | Sixth Supplemental Indenture to the 2006 Indenture, dated December 10, 2015, among Macy's Retail, the Company and U.S. Bank National Association, as Trustee | Exhibit 4.2 to the Company's Current Report on Form 8-K filed on December 10, 2015 | ||
4.9 | Indenture, dated as of January 13, 2012, among Macy's Retail, the Company and BNY Mellon, as Trustee (the "2012 Indenture") | Exhibit 4.1 to the Company's Current Report on Form 8-K filed on January 13, 2012 (the “January 13, 2012 Form 8-K”) | ||
4.9.1 | First Supplemental Trust Indenture to the 2012 Indenture, dated as of January 13, 2012, among Macy's Retail, as issuer, the Company, as guarantor, and BNY Mellon, as trustee | Exhibit 4.2 to the January 13, 2012 Form 8-K | ||
4.9.2 | Second Supplemental Trust Indenture to the 2012 Indenture, dated as of January 13, 2012, among Macy's Retail, as issuer, the Company, as guarantor, and BNY Mellon, as trustee | Exhibit 4.3 to the January 13, 2012 Form 8-K | ||
4.9.3 | Third Supplemental Trust Indenture, dated as of November 20, 2012, among Macy's Retail, as issuer, the Company, as guarantor, and BNY Mellon, as trustee | Exhibit 4.2 to the Company's Current Report on Form 8-K filed on November 20, 2012 (the “November 20, 2012 Form 8-K”) | ||
4.9.4 | Fourth Supplemental Trust Indenture, dated as of November 20, 2012, among Macy's Retail, as issuer, the Company, as guarantor, and BNY Mellon, as trustee | Exhibit 4.3 to the November 20, 2012 Form 8-K | ||
4.9.5 | Fifth Supplemental Trust Indenture, dated as of September 6, 2013, among Macy's Retail, as issuer, the Company, as guarantor, and BNY Mellon, as trustee | Exhibit 4.2 to the Company's Current Report on Form 8-K filed on September 6, 2013 | ||
4.9.6 | Sixth Supplemental Trust Indenture, dated as of May 23, 2014, among Macy's Retail, as issuer, the Company, as guarantor, and BNY Mellon, as trustee | Exhibit 4.2 to the Company's Current Report on Form 8-K filed on May 23, 2014 | ||
4.9.7 | Seventh Supplemental Trust Indenture, dated as of November 18, 2014, among Macy's Retail, as issuer, the Company, as guarantor, and BNY Mellon, as trustee | Exhibit 4.2 to the Company's Current Report on Form 8-K filed on November 18, 2014 | ||
10.1 | Credit Agreement, dated as of May 6, 2016, among the Company, Macy's Retail, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and paying agent, and Bank of America, N.A., as administrative agent | Exhibit 10.01 to the Company's Current Report on Form 8-K filed on May 11, 2016 (the “May 11, 2016 Form 8-K”) | ||
10.2 | Guarantee Agreement, dated as of May 16, 2016, among the Company, Macy's Retail, certain subsidiary guarantors and JPMorgan Chase Bank, N.A., as paying agent | Exhibit 10.02 to the May 11, 2016 Form 8-K | ||
10.3 | Tax Sharing Agreement, dated as of October 31, 2014, among Macy's, Inc. and members of the Affiliated Group | Exhibit 10.7 to the Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended January 31, 2015 (the “2014 Form 10-K”) | ||
Exhibit Number | Description | Document if Incorporated by Reference | ||
10.4+ | Amended and Restated Credit Card Program Agreement, dated November 10, 2014, among the Company, FDS Bank, Macy's Credit and Customer Services, Inc. (“MCCS”), Macy's West Stores, Inc., Bloomingdales, Inc., Department Stores National Bank ("DSNB") and Citibank, N.A. | Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on December 8, 2014 | ||
10.5 | 1995 Executive Equity Incentive Plan, as amended and restated as of June 1, 2007 (the “1995 Plan”) * | Exhibit 10.11 to the Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended January 31, 2009 (the “2008 Form 10-K”) | ||
10.6 | Senior Executive Incentive Compensation Plan * | Appendix B to the Company's Proxy Statement dated March 28, 2012 | ||
10.7 | 1994 Stock Incentive Plan, as amended and restated as of June 1, 2007 * | Exhibit 10.13 to the 2008 Form 10-K | ||
10.8 | Form of Indemnification Agreement * | Exhibit 10.14 to the Registration Statement on Form 10 (File No. 1-10951), filed on November 27, 1991 | ||
10.9 | Executive Severance Plan, effective November 1, 2009, as revised and restated January 1, 2014 * | Exhibit 10.14 to the Company’s Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended February 1, 2014 (the “2013 Form 10-K”) | ||
10.10 | Form of Non-Qualified Stock Option Agreement for the 1995 Plan (for Executives and Key Employees) * | Exhibit 10.2 to the Company's Current Report on Form 8-K filed on March 29, 2005 | ||
10.10.1 | Form of Non-Qualified Stock Option Agreement for the 1995 Plan (for Executives and Key Employees), as amended * | Exhibit 10.33.1 to the Company's Annual Report Form 10-K (File No. 1-13536) for the fiscal year ended January 28, 2006 | ||
10.10.2 | Form of Non-Qualified Stock Option Agreement for the 1994 Stock Incentive Plan * | Exhibit 10.7 to the Current Report on From 8-K (File No. 001-00079) filed on March 23, 2005 by May Delaware (the “March 23, 2005 Form 8-K”) | ||
10.10.3 | Form of Nonqualified Stock Option Agreement under the 2009 Omnibus Incentive Compensation Plan (for Executives and Key Employees) * | Exhibit 10.15.3 to the Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended February 2, 2013 (the "2012 Form 10-K") | ||
10.10.4 | Form of Nonqualified Stock Option Agreement under the Amended and Restated 2009 Omnibus Incentive Compensation Plan (for Executives and Key Employees) * | Exhibit 10.14.4 to the 2014 Form 10-K | ||
10.11 | Nonqualified Stock Option Agreement, dated as of October 26, 2007, by and between the Company and Terry Lundgren * | Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 1, 2007 | ||
10.12 | Form of Restricted Stock Agreement for the 1994 Stock Incentive Plan * | Exhibit 10.4 to the March 23, 2005 Form 8-K | ||
10.12.1 | Form of Time-Based Restricted Stock Agreement under the 2009 Omnibus Incentive Compensation Plan * | Exhibit 10.3 to the Company's Current Report on Form 8-K filed on March 25, 2010 | ||
10.13 | Form of Performance-Based Restricted Stock Unit Agreement under the Amended and Restated 2009 Omnibus Incentive Compensation Plan for the 2015-2017 performance period * | Exhibit 10.17.2 to the 2014 Form 10-K | ||
10.13.1 | 2016-2018 Performance-Based Restricted Stock Unit Terms and Conditions * | Exhibit 10.13.2 to the 2015 Form 10-K | ||
10.13.2 | 2017-2019 Performance-Based Restricted Stock Unit Terms and Conditions * |
Exhibit Number | Description | Document if Incorporated by Reference | ||
10.14 | Form of Time-Based Restricted Stock Unit Agreement under the 2009 Omnibus Incentive Compensation Plan * | Exhibit 10.19 to the 2012 Form 10-K | ||
10.14.1 | Form of Time-Based Restricted Stock Unit Agreement under the Amended and Restated 2009 Omnibus Incentive Compensation Plan * | Exhibit 10.18.1 to the 2014 Form 10-K | ||
10.15 | Supplementary Executive Retirement Plan * | Exhibit 10.29 to the 2008 Form 10-K | ||
10.15.1 | First Amendment to the Supplementary Executive Retirement Plan effective January 1, 2012 * | Exhibit 10.21.1 to the Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended January 28, 2012 | ||
10.15.2 | Second Amendment to Supplementary Executive Retirement Plan effective January 1, 2012 * | Exhibit 10.20.2 to the 2012 Form 10-K | ||
10.15.3 | Third Amendment to Supplementary Executive Retirement Plan effective December 31, 2013 * | Exhibit 10.20.3 to the 2013 Form 10-K | ||
10.16 | Executive Deferred Compensation Plan * | Exhibit 10.30 to the 2008 Form 10-K | ||
10.16.1 | First Amendment to Executive Deferred Compensation Plan effective December 19, 2013 * | Exhibit 10.21.1 to the 2013 Form 10-K | ||
10.17 | Macy's, Inc. 401(k) Retirement Investment Plan (the "Plan") (amending and restating the Macy's, Inc. 401(k) Retirement Investment Plan) effective as of January 1, 2014 * | Exhibit 10.22 to the 2013 Form 10-K | ||
10.17.1 | First Amendment to the Plan regarding matching contributions with respect to the Plan’s plan years beginning on and after January 1, 2014, effective January 1, 2014 * | Exhibit 10.21.1 to the 2014 Form 10-K | ||
10.17.2 | Second Amendment to the Plan regarding marriage status, effective January 1, 2014 * | Exhibit 10.21.2 to the 2014 Form 10-K | ||
10.17.3 | Third Amendment to the Plan regarding matching contributions with respect to the Plan’s plan years beginning on and after January 1, 2014 * | Exhibit 10.21.3 to the 2014 Form 10-K | ||
10.17.4 | Fourth Amendment to the Plan regarding rules applicable to Puerto Rico participants effective January 1, 2011 (and for the Plan's plan years beginning on and after that date)* | Exhibit 10.17.4 to the 2015 Form 10-K | ||
10.17.5 | Fifth Amendment to the Plan regarding eligible associates to participate (pre-tax deferrals only, no match) immediately upon hire* | Exhibit 10.17.5 to the 2015 Form 10-K | ||
10.18 | Director Deferred Compensation Plan * | Exhibit 10.33 to the 2008 Form 10-K | ||
10.19 | Macy's, Inc. Amended and Restated 2009 Omnibus Incentive Compensation Plan * | Appendix B to the Company's Proxy Statement dated April 2, 2014 | ||
10.20 | Macy's, Inc. Deferred Compensation Plan * | Exhibit 4.5 to the Company's Registration Statement on Form S-8 (Registration No. 333-192917) filed on December 18, 2013 | ||
10.20.1 | First Amendment to Deferred Compensation Plan regarding special rules of eligibility for newly eligible participants, effective April 1, 2014 * | Exhibit 10.24.1 to the 2014 Form 10-K | ||
Exhibit Number | Description | Document if Incorporated by Reference | ||
10.20.2 | Second Amendment to Deferred Compensation Plan regarding payment rules for plan years that begin on or after January 1, 2015, effective January 1, 2014 * | Exhibit 10.24.2 to the 2014 Form 10-K | ||
10.20.3 | Third Amendment to Deferred Compensation Plan regarding a lump sum distribution from account if its balance does not exceed a certain amount, effective July 1, 2015* | Exhibit 10.20.3 to the 2015 Form 10-K | ||
10.21 | Change in Control Plan, effective November 1, 2009, as revised and restated January 1, 2014 * | Exhibit 10.26 to the 2013 Form 10-K | ||
10.22 | Amended and Restated Time Sharing Agreement between Macy's, Inc. and Terry J. Lundgren, dated August 21, 2014 * | Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on September 8, 2014 | ||
10.23 | General Release with Addendum between Macy's, Inc. and Peter R. Sachse * | |||
21 | Subsidiaries | |||
23 | Consent of KPMG LLP | |||
24 | Powers of Attorney | |||
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) | |||
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) | |||
32.1 | Certification by Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act | |||
32.2 | Certification by Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act | |||
101 | The following financial statements from Macy's, Inc.’s Annual Report on Form 10-K for the year ended January 28, 2017, filed on March 29, 2017, formatted in XBRL: (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Changes in Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail. |
+ | Portions of the exhibit have been omitted pursuant to a request for confidential treatment. The confidential portions have been provided to the SEC. |
* | Constitutes a compensatory plan or arrangement. |
MACY’S, INC. | ||
By: | /s/ ELISA D. GARCIA | |
Elisa D. Garcia Chief Legal Officer and Secretary |
* | * | * | ||
Jeff Gennette | Karen M. Hoguet | Felicia Williams | ||
President, Chief Executive Officer (principal executive officer), and Director | Chief Financial Officer (principal financial officer) | Executive Vice President, Controller and Enterprise Risk (principal accounting officer) | ||
* | * | * | ||
Terry J. Lundgren | Francis S. Blake | John A. Bryant | ||
Executive Chairman, Chairman of the Board and Director | Director | Director | ||
* | * | * | ||
Deirdre P. Connelly | Leslie D. Hale | William H. Lenehan | ||
Director | Director | Director | ||
* | * | * | ||
Sara Levinson | Joyce M. Roché | Paul C. Varga | ||
Director | Director | Director | ||
* | * | |||
Marna C. Whittington | Annie Young-Scrivner | |||
Director | Director |
* | The undersigned, by signing his name hereto, does sign and execute this Annual Report on Form 10-K pursuant to the Powers of Attorney executed by the above-named officers and directors and filed herewith. |
By: | /s/ ELISA D. GARCIA | |
Elisa D. Garcia Attorney-in-Fact |
Page | |
Consolidated Statements of Income for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015 | |
Consolidated Statements of Comprehensive Income for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015 | |
Consolidated Balance Sheets at January 28, 2017 and January 30, 2016 | |
Consolidated Statements of Changes in Shareholders’ Equity for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015 | |
Consolidated Statements of Cash Flows for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015 | |
Notes to Consolidated Financial Statements |
2016 | 2015 | 2014 | |||||||||
Net sales | $ | 25,778 | $ | 27,079 | $ | 28,105 | |||||
Cost of sales | (15,621 | ) | (16,496 | ) | (16,863 | ) | |||||
Gross margin | 10,157 | 10,583 | 11,242 | ||||||||
Selling, general and administrative expenses | (8,265 | ) | (8,256 | ) | (8,355 | ) | |||||
Impairments, store closing and other costs | (479 | ) | (288 | ) | (87 | ) | |||||
Settlement charges | (98 | ) | — | — | |||||||
Operating income | 1,315 | 2,039 | 2,800 | ||||||||
Interest expense | (367 | ) | (363 | ) | (395 | ) | |||||
Premium on early retirement of debt | — | — | (17 | ) | |||||||
Interest income | 4 | 2 | 2 | ||||||||
Income before income taxes | 952 | 1,678 | 2,390 | ||||||||
Federal, state and local income tax expense | (341 | ) | (608 | ) | (864 | ) | |||||
Net income | 611 | 1,070 | 1,526 | ||||||||
Net loss attributable to noncontrolling interest | 8 | 2 | — | ||||||||
Net income attributable to Macy's, Inc. shareholders | $ | 619 | $ | 1,072 | $ | 1,526 | |||||
Basic earnings per share attributable to Macy's, Inc. shareholders | $ | 2.01 | $ | 3.26 | $ | 4.30 | |||||
Diluted earnings per share attributable to Macy's, Inc. shareholders | $ | 1.99 | $ | 3.22 | $ | 4.22 |
2016 | 2015 | 2014 | |||||||||
Net income | $ | 611 | $ | 1,070 | $ | 1,526 | |||||
Other comprehensive income (loss), net of taxes: | |||||||||||
Actuarial gain (loss) and prior service cost on post employment and postretirement benefit plans, net of tax effect of $42 million and $269 million | 65 | — | (422 | ) | |||||||
Reclassifications to net income: | |||||||||||
Net actuarial loss on post employment and postretirement benefit plans, net of tax effect of $14 million, $19 million and $10 million | 22 | 29 | 15 | ||||||||
Settlement charges, net of tax effect of $38 million | 60 | — | — | ||||||||
Total other comprehensive income (loss) | 147 | 29 | (407 | ) | |||||||
Comprehensive income | 758 | 1,099 | 1,119 | ||||||||
Comprehensive loss attributable to noncontrolling interest | 8 | 2 | — | ||||||||
Comprehensive income attributable to Macy's, Inc. shareholders | $ | 766 | $ | 1,101 | $ | 1,119 |
January 28, 2017 | January 30, 2016 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 1,297 | $ | 1,109 | |||
Receivables | 522 | 558 | |||||
Merchandise inventories | 5,399 | 5,506 | |||||
Prepaid expenses and other current assets | 408 | 479 | |||||
Total Current Assets | 7,626 | 7,652 | |||||
Property and Equipment – net | 7,017 | 7,616 | |||||
Goodwill | 3,897 | 3,897 | |||||
Other Intangible Assets – net | 498 | 514 | |||||
Other Assets | 813 | 897 | |||||
Total Assets | $ | 19,851 | $ | 20,576 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Short-term debt | $ | 309 | $ | 642 | |||
Merchandise accounts payable | 1,423 | 1,526 | |||||
Accounts payable and accrued liabilities | 3,563 | 3,333 | |||||
Income taxes | 352 | 227 | |||||
Total Current Liabilities | 5,647 | 5,728 | |||||
Long-Term Debt | 6,562 | 6,995 | |||||
Deferred Income Taxes | 1,443 | 1,477 | |||||
Other Liabilities | 1,877 | 2,123 | |||||
Shareholders’ Equity: | |||||||
Common stock (304.1 and 310.3 shares outstanding) | 3 | 3 | |||||
Additional paid-in capital | 617 | 621 | |||||
Accumulated equity | 6,088 | 6,334 | |||||
Treasury stock | (1,489 | ) | (1,665 | ) | |||
Accumulated other comprehensive loss | (896 | ) | (1,043 | ) | |||
Total Macy's, Inc. Shareholders’ Equity | 4,323 | 4,250 | |||||
Noncontrolling interest | (1 | ) | 3 | ||||
Total Shareholders' Equity | 4,322 | 4,253 | |||||
Total Liabilities and Shareholders’ Equity | $ | 19,851 | $ | 20,576 |
Common Stock | Additional Paid-In Capital | Accumulated Equity | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Macy's, Inc. Shareholders’ Equity | Non-controlling Interest | Total Shareholders' Equity | ||||||||||||||||||||||||
Balance at February 1, 2014 | $ | 4 | $ | 2,522 | $ | 6,235 | $ | (1,847 | ) | $ | (665 | ) | $ | 6,249 | $ | — | $ | 6,249 | |||||||||||||
Net income | 1,526 | 1,526 | 1,526 | ||||||||||||||||||||||||||||
Other comprehensive income | (407 | ) | (407 | ) | (407 | ) | |||||||||||||||||||||||||
Common stock dividends ($1.1875 per share) | (421 | ) | (421 | ) | (421 | ) | |||||||||||||||||||||||||
Stock repurchases | (1,901 | ) | (1,901 | ) | (1,901 | ) | |||||||||||||||||||||||||
Stock-based compensation expense | 72 | 72 | 72 | ||||||||||||||||||||||||||||
Stock issued under stock plans | (66 | ) | 324 | 258 | 258 | ||||||||||||||||||||||||||
Retirement of common stock | (1,480 | ) | 1,480 | — | — | ||||||||||||||||||||||||||
Deferred compensation plan distributions | 2 | 2 | 2 | ||||||||||||||||||||||||||||
Balance at January 31, 2015 | 4 | 1,048 | 7,340 | (1,942 | ) | (1,072 | ) | 5,378 | — | 5,378 | |||||||||||||||||||||
Net income (loss) | 1,072 | 1,072 | (2 | ) | 1,070 | ||||||||||||||||||||||||||
Other comprehensive loss | 29 | 29 | 29 | ||||||||||||||||||||||||||||
Common stock dividends ($1.3925 per share) | (456 | ) | (456 | ) | (456 | ) | |||||||||||||||||||||||||
Stock repurchases | (2,001 | ) | (2,001 | ) | (2,001 | ) | |||||||||||||||||||||||||
Stock-based compensation expense | 64 | 64 | 64 | ||||||||||||||||||||||||||||
Stock issued under stock plans | (64 | ) | 226 | 162 | 162 | ||||||||||||||||||||||||||
Retirement of common stock | (1 | ) | (427 | ) | (1,622 | ) | 2,050 | — | — | ||||||||||||||||||||||
Deferred compensation plan distributions | 2 | 2 | 2 | ||||||||||||||||||||||||||||
Macy's China Limited | — | 5 | 5 | ||||||||||||||||||||||||||||
Balance at January 30, 2016 | 3 | 621 | 6,334 | (1,665 | ) | (1,043 | ) | 4,250 | 3 | 4,253 | |||||||||||||||||||||
Net income (loss) | 619 | 619 | (8 | ) | 611 | ||||||||||||||||||||||||||
Other comprehensive income | 147 | 147 | 147 | ||||||||||||||||||||||||||||
Common stock dividends ($1.4925 per share) | (459 | ) | (459 | ) | (459 | ) | |||||||||||||||||||||||||
Stock repurchases | (316 | ) | (316 | ) | (316 | ) | |||||||||||||||||||||||||
Stock-based compensation expense | 60 | 60 | 60 | ||||||||||||||||||||||||||||
Stock issued under stock plans | (64 | ) | 81 | 17 | 17 | ||||||||||||||||||||||||||
Retirement of common stock | (406 | ) | 406 | — | — | ||||||||||||||||||||||||||
Deferred compensation plan distributions | 5 | 5 | 5 | ||||||||||||||||||||||||||||
Macy's China Limited | — | 4 | 4 | ||||||||||||||||||||||||||||
Balance at January 28, 2017 | $ | 3 | $ | 617 | $ | 6,088 | $ | (1,489 | ) | $ | (896 | ) | $ | 4,323 | $ | (1 | ) | $ | 4,322 |
2016 | 2015 | 2014 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 611 | $ | 1,070 | $ | 1,526 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Impairments, store closing and other costs | 479 | 288 | 87 | ||||||||
Settlement charges | 98 | — | — | ||||||||
Depreciation and amortization | 1,058 | 1,061 | 1,036 | ||||||||
Stock-based compensation expense | 61 | 65 | 73 | ||||||||
Gains on sale of real estate | (209 | ) | (212 | ) | (92 | ) | |||||
Amortization of financing costs and premium on acquired debt | (14 | ) | (14 | ) | (5 | ) | |||||
Changes in assets and liabilities: | |||||||||||
(Increase) decrease in receivables | (1 | ) | (45 | ) | 22 | ||||||
(Increase) decrease in merchandise inventories | 107 | (60 | ) | 44 | |||||||
Increase in prepaid expenses and other current assets | (8 | ) | — | (3 | ) | ||||||
Increase in other assets not separately identified | — | (1 | ) | (61 | ) | ||||||
Decrease in merchandise accounts payable | (132 | ) | (78 | ) | (21 | ) | |||||
Increase (decrease) in accounts payable, accrued liabilities and other items not separately identified | (162 | ) | 68 | 129 | |||||||
Increase (decrease) in current income taxes | 125 | (69 | ) | (65 | ) | ||||||
Increase (decrease) in deferred income taxes | (139 | ) | (1 | ) | 29 | ||||||
Increase (decrease) in other liabilities not separately identified | (73 | ) | (88 | ) | 10 | ||||||
Net cash provided by operating activities | 1,801 | 1,984 | 2,709 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchase of property and equipment | (596 | ) | (777 | ) | (770 | ) | |||||
Capitalized software | (316 | ) | (336 | ) | (298 | ) | |||||
Acquisition of Bluemercury, Inc., net of cash acquired | — | (212 | ) | — | |||||||
Disposition of property and equipment | 673 | 204 | 172 | ||||||||
Other, net | 52 | 29 | (74 | ) | |||||||
Net cash used by investing activities | (187 | ) | (1,092 | ) | (970 | ) | |||||
Cash flows from financing activities: | |||||||||||
Debt issued | 2 | 499 | 1,044 | ||||||||
Financing costs | (3 | ) | (4 | ) | (9 | ) | |||||
Debt repaid | (751 | ) | (152 | ) | (870 | ) | |||||
Dividends paid | (459 | ) | (456 | ) | (421 | ) | |||||
Increase (decrease) in outstanding checks | 61 | (83 | ) | 133 | |||||||
Acquisition of treasury stock | (316 | ) | (2,001 | ) | (1,901 | ) | |||||
Issuance of common stock | 36 | 163 | 258 | ||||||||
Proceeds from noncontrolling interest | 4 | 5 | — | ||||||||
Net cash used by financing activities | (1,426 | ) | (2,029 | ) | (1,766 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 188 | (1,137 | ) | (27 | ) | ||||||
Cash and cash equivalents beginning of period | 1,109 | 2,246 | 2,273 | ||||||||
Cash and cash equivalents end of period | $ | 1,297 | $ | 1,109 | $ | 2,246 | |||||
Supplemental cash flow information: | |||||||||||
Interest paid | $ | 396 | $ | 383 | $ | 413 | |||||
Interest received | 4 | 2 | 2 | ||||||||
Income taxes paid (net of refunds received) | 352 | 635 | 834 |
1. | Organization and Summary of Significant Accounting Policies |
2016 | 2015 | 2014 | ||||||
Women’s Accessories, Intimate Apparel, Shoes, Cosmetics and Fragrances | 38 | % | 38 | % | 38 | % | ||
Women’s Apparel | 23 | 23 | 23 | |||||
Men’s and Children’s | 23 | 23 | 23 | |||||
Home/Miscellaneous | 16 | 16 | 16 | |||||
100 | % | 100 | % | 100 | % |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
Gross advertising and promotional costs | $ | 1,547 | $ | 1,587 | $ | 1,602 | |||||
Cooperative advertising allowances | 394 | 414 | 425 | ||||||||
Advertising and promotional costs, net of cooperative advertising allowances | $ | 1,153 | $ | 1,173 | $ | 1,177 | |||||
Net sales | $ | 25,778 | $ | 27,079 | $ | 28,105 | |||||
Advertising and promotional costs, net of cooperative advertising allowances, as a percent to net sales | 4.5 | % | 4.3 | % | 4.2 | % |
2. | Impairments, Store Closing and Other Costs |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
Asset Impairments | $ | 265 | $ | 148 | $ | 33 | |||||
Severance | 168 | 123 | 46 | ||||||||
Other | 46 | 17 | 8 | ||||||||
$ | 479 | $ | 288 | $ | 87 |
3. | Receivables |
4. | Properties and Leases |
January 28, 2017 | January 30, 2016 | ||||||
(millions) | |||||||
Land | $ | 1,541 | $ | 1,629 | |||
Buildings on owned land | 4,212 | 4,690 | |||||
Buildings on leased land and leasehold improvements | 1,545 | 1,672 | |||||
Fixtures and equipment | 4,541 | 4,910 | |||||
Leased properties under capitalized leases | 34 | 34 | |||||
11,873 | 12,935 | ||||||
Less accumulated depreciation and amortization | 4,856 | 5,319 | |||||
$ | 7,017 | $ | 7,616 |
Capitalized Leases | Operating Leases | Total | |||||||||
(millions) | |||||||||||
Fiscal year | |||||||||||
2017 | $ | 3 | $ | 321 | $ | 324 | |||||
2018 | 3 | 304 | 307 | ||||||||
2019 | 3 | 283 | 286 | ||||||||
2020 | 3 | 249 | 252 | ||||||||
2021 | 3 | 237 | 240 | ||||||||
After 2021 | 37 | 2,289 | 2,326 | ||||||||
Total minimum lease payments | 52 | $ | 3,683 | $ | 3,735 | ||||||
Less amount representing interest | 24 | ||||||||||
Present value of net minimum capitalized lease payments | $ | 28 |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
Real estate (excluding executory costs) | |||||||||||
Capitalized leases – | |||||||||||
Contingent rentals | $ | — | $ | — | $ | — | |||||
Operating leases – | |||||||||||
Minimum rentals | 312 | 288 | 265 | ||||||||
Contingent rentals | 12 | 19 | 22 | ||||||||
324 | 307 | 287 | |||||||||
Less income from subleases – | |||||||||||
Operating leases | (5 | ) | (6 | ) | (8 | ) | |||||
$ | 319 | $ | 301 | $ | 279 | ||||||
Personal property – Operating leases | $ | 11 | $ | 12 | $ | 12 |
5. | Goodwill and Other Intangible Assets |
January 28, 2017 | January 30, 2016 | ||||||
(millions) | |||||||
Non-amortizing intangible assets | |||||||
Goodwill | $ | 9,279 | $ | 9,279 | |||
Accumulated impairment losses | (5,382 | ) | (5,382 | ) | |||
3,897 | 3,897 | ||||||
Tradenames | 403 | 414 | |||||
$ | 4,300 | $ | 4,311 | ||||
Amortizing intangible assets | |||||||
Favorable leases and other contractual assets | $ | 141 | $ | 149 | |||
Tradenames | 43 | 43 | |||||
184 | 192 | ||||||
Accumulated amortization | |||||||
Favorable leases and other contractual assets | (85 | ) | (90 | ) | |||
Tradenames | (4 | ) | (2 | ) | |||
(89 | ) | (92 | ) | ||||
$ | 95 | $ | 100 |
(millions) | |||
Fiscal year | |||
2017 | $ | 10 | |
2018 | 10 | ||
2019 | 9 | ||
2020 | 8 | ||
2021 | 6 |
6. | Financing |
January 28, 2017 | January 30, 2016 | ||||||
(millions) | |||||||
Short-term debt: | |||||||
7.45% Senior debentures due 2017 | $ | 300 | $ | — | |||
5.9% Senior notes due 2016 | — | 577 | |||||
7.45% Senior debentures due 2016 | — | 59 | |||||
Capital lease and current portion of other long-term obligations | 9 | 6 | |||||
$ | 309 | $ | 642 | ||||
Long-term debt: | |||||||
2.875% Senior notes due 2023 | $ | 750 | $ | 750 | |||
3.875% Senior notes due 2022 | 550 | 550 | |||||
4.5% Senior notes due 2034 | 550 | 550 | |||||
3.45% Senior notes due 2021 | 500 | 500 | |||||
3.625% Senior notes due 2024 | 500 | 500 | |||||
6.375% Senior notes due 2037 | 500 | 500 | |||||
4.375% Senior notes due 2023 | 400 | 400 | |||||
6.9% Senior debentures due 2029 | 400 | 400 | |||||
6.7% Senior debentures due 2034 | 400 | 400 | |||||
7.45% Senior debentures due 2017 | — | 300 | |||||
6.65% Senior debentures due 2024 | 300 | 300 | |||||
7.0% Senior debentures due 2028 | 300 | 300 | |||||
6.9% Senior debentures due 2032 | 250 | 250 | |||||
5.125% Senior debentures due 2042 | 250 | 250 | |||||
4.3% Senior notes due 2043 | 250 | 250 | |||||
6.7% Senior debentures due 2028 | 200 | 200 | |||||
6.79% Senior debentures due 2027 | 165 | 165 | |||||
7.875% Senior debentures due 2036 | — | 108 | |||||
8.75% Senior debentures due 2029 | 61 | 61 | |||||
8.5% Senior debentures due 2019 | 36 | 36 | |||||
10.25% Senior debentures due 2021 | 33 | 33 | |||||
7.6% Senior debentures due 2025 | 24 | 24 | |||||
7.875% Senior debentures due 2030 | 18 | 18 | |||||
9.5% amortizing debentures due 2021 | 14 | 17 | |||||
9.75% amortizing debentures due 2021 | 8 | 9 | |||||
Unamortized debt issue costs | (29 | ) | (32 | ) | |||
Unamortized debt discount | (16 | ) | (16 | ) | |||
Premium on acquired debt, using an effective interest yield of 5.542% to 6.021% | 121 | 143 | |||||
Capital lease and other long-term obligations | 27 | 29 | |||||
$ | 6,562 | $ | 6,995 |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
Interest on debt | $ | 392 | $ | 393 | $ | 411 | |||||
Amortization of debt premium | (22 | ) | (21 | ) | (12 | ) | |||||
Amortization of financing costs and debt discount | 5 | 6 | 7 | ||||||||
Interest on capitalized leases | 2 | 2 | 2 | ||||||||
377 | 380 | 408 | |||||||||
Less interest capitalized on construction | 10 | 17 | 13 | ||||||||
Interest expense | $ | 367 | $ | 363 | $ | 395 | |||||
Premium on early retirement of debt | $ | — | $ | — | $ | 17 |
(millions) | |||
Fiscal year | |||
2018 | $ | 6 | |
2019 | 42 | ||
2020 | 539 | ||
2021 | 553 | ||
2022 | — | ||
After 2022 | 5,319 |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
5.9% Senior notes due 2016 | $ | 577 | $ | — | $ | — | |||||
7.875% Senior notes due 2036 | 108 | — | — | ||||||||
7.45% Senior debentures due 2016 | 59 | — | — | ||||||||
7.5% Senior debentures due 2015 | — | 69 | — | ||||||||
8.125% Senior debentures due 2035 | — | 76 | — | ||||||||
5.75% Senior notes due 2014 | — | — | 453 | ||||||||
7.875% Senior debentures due 2015 | — | — | 407 | ||||||||
9.5% amortizing debentures due 2021 | 4 | 4 | 4 | ||||||||
9.75% amortizing debentures due 2021 | 2 | 3 | 2 | ||||||||
Capital leases and other obligations | 1 | — | 4 | ||||||||
$ | 751 | $ | 152 | $ | 870 |
7. | Accounts Payable and Accrued Liabilities |
January 28, 2017 | January 30, 2016 | ||||||
(millions) | |||||||
Accounts payable | $ | 754 | $ | 814 | |||
Gift cards and customer rewards | 970 | 920 | |||||
Deferred real estate gains | 340 | 104 | |||||
Current portion of post employment and postretirement benefits | 208 | 257 | |||||
Taxes other than income taxes | 166 | 184 | |||||
Lease related liabilities | 174 | 165 | |||||
Accrued wages and vacation | 215 | 153 | |||||
Current portion of workers’ compensation and general liability reserves | 119 | 127 | |||||
Severance and relocation | 166 | 123 | |||||
Allowance for future sales returns | 96 | 112 | |||||
Accrued interest | 74 | 88 | |||||
Other | 281 | 286 | |||||
$ | 3,563 | $ | 3,333 |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
Balance, beginning of year | $ | 508 | $ | 505 | $ | 497 | |||||
Charged to costs and expenses | 145 | 159 | 160 | ||||||||
Payments, net of recoveries | (150 | ) | (156 | ) | (152 | ) | |||||
Balance, end of year | $ | 503 | $ | 508 | $ | 505 |
8. | Taxes |
2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||
Current | Deferred | Total | Current | Deferred | Total | Current | Deferred | Total | |||||||||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||||||||||
Federal | $ | 433 | $ | (125 | ) | $ | 308 | $ | 536 | $ | — | $ | 536 | $ | 743 | $ | 28 | $ | 771 | ||||||||||||||||
State and local | 37 | (4 | ) | 33 | 72 | — | 72 | 92 | 1 | 93 | |||||||||||||||||||||||||
$ | 470 | $ | (129 | ) | $ | 341 | $ | 608 | $ | — | $ | 608 | $ | 835 | $ | 29 | $ | 864 |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
Expected tax | $ | 333 | $ | 587 | $ | 836 | |||||
State and local income taxes, net of federal income tax benefit | 12 | 43 | 59 | ||||||||
Historic rehabilitation tax credit | (1 | ) | (12 | ) | (20 | ) | |||||
Change in valuation allowance | 9 | 3 | 1 | ||||||||
Other | (12 | ) | (13 | ) | (12 | ) | |||||
$ | 341 | $ | 608 | $ | 864 |
January 28, 2017 | January 30, 2016 | ||||||
(millions) | |||||||
Deferred tax assets | |||||||
Post employment and postretirement benefits | $ | 405 | $ | 536 | |||
Accrued liabilities accounted for on a cash basis for tax purposes | 379 | 340 | |||||
Long-term debt | 63 | 73 | |||||
Unrecognized state tax benefits and accrued interest | 76 | 79 | |||||
State operating loss and credit carryforwards | 79 | 82 | |||||
Other | 347 | 206 | |||||
Valuation allowance | (36 | ) | (27 | ) | |||
Total deferred tax assets | 1,313 | 1,289 | |||||
Deferred tax liabilities | |||||||
Excess of book basis over tax basis of property and equipment | (1,381 | ) | (1,485 | ) | |||
Merchandise inventories | (604 | ) | (606 | ) | |||
Intangible assets | (380 | ) | (345 | ) | |||
Other | (391 | ) | (330 | ) | |||
Total deferred tax liabilities | (2,756 | ) | (2,766 | ) | |||
Net deferred tax liability | $ | (1,443 | ) | $ | (1,477 | ) |
January 28, 2017 | January 30, 2016 | January 31, 2015 | |||||||||
(millions) | |||||||||||
Balance, beginning of year | $ | 178 | $ | 172 | $ | 189 | |||||
Additions based on tax positions related to the current year | 16 | 30 | 33 | ||||||||
Additions for tax positions of prior years | — | — | — | ||||||||
Reductions for tax positions of prior years | (12 | ) | (7 | ) | (15 | ) | |||||
Settlements | (4 | ) | (3 | ) | (23 | ) | |||||
Statute expirations | (11 | ) | (14 | ) | (12 | ) | |||||
Balance, end of year | $ | 167 | $ | 178 | $ | 172 | |||||
Amounts recognized in the Consolidated Balance Sheets at January 28, 2017, January 30, 2016 and January 31, 2015 | |||||||||||
Current income taxes | $ | 6 | $ | 12 | $ | 11 | |||||
Long-term deferred income taxes | 4 | 5 | 6 | ||||||||
Other liabilities | 157 | 161 | 155 | ||||||||
$ | 167 | $ | 178 | $ | 172 |
9. | Retirement Plans |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
401(k) Qualified Defined Contribution Plan | $ | 94 | $ | 88 | $ | 89 | |||||
Non-Qualified Defined Contribution Plan | 2 | 2 | 2 | ||||||||
Pension Plan | (83 | ) | (54 | ) | (64 | ) | |||||
Supplementary Retirement Plan | 31 | 41 | 38 | ||||||||
$ | 44 | $ | 77 | $ | 65 |
2016 | 2015 | ||||||
(millions) | |||||||
Change in projected benefit obligation | |||||||
Projected benefit obligation, beginning of year | $ | 3,585 | $ | 3,966 | |||
Service cost | 5 | 6 | |||||
Interest cost | 108 | 137 | |||||
Actuarial (gain) loss | 55 | (282 | ) | ||||
Benefits paid | (284 | ) | (242 | ) | |||
Projected benefit obligation, end of year | 3,469 | 3,585 | |||||
Changes in plan assets | |||||||
Fair value of plan assets, beginning of year | 3,256 | 3,636 | |||||
Actual return on plan assets | 402 | (138 | ) | ||||
Company contributions | — | — | |||||
Benefits paid | (284 | ) | (242 | ) | |||
Fair value of plan assets, end of year | 3,374 | 3,256 | |||||
Funded status at end of year | $ | (95 | ) | $ | (329 | ) | |
Amounts recognized in the Consolidated Balance Sheets at January 28, 2017 and January 30, 2016 | |||||||
Other liabilities | $ | (95 | ) | $ | (329 | ) | |
Amounts recognized in accumulated other comprehensive loss at January 28, 2017 and January 30, 2016 | |||||||
Net actuarial loss | $ | 1,232 | $ | 1,451 |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
Net Periodic Pension Cost | |||||||||||
Service cost | $ | 5 | $ | 6 | $ | 6 | |||||
Interest cost | 108 | 137 | 151 | ||||||||
Expected return on assets | (227 | ) | (235 | ) | (246 | ) | |||||
Amortization of net actuarial loss | 31 | 38 | 25 | ||||||||
Amortization of prior service credit | — | — | — | ||||||||
(83 | ) | (54 | ) | (64 | ) | ||||||
Settlement charges | 68 | — | — | ||||||||
Other Changes in Plan Assets and Projected Benefit Obligation Recognized in Other Comprehensive Loss | |||||||||||
Net actuarial (gain) loss | (120 | ) | 92 | 491 | |||||||
Amortization of net actuarial loss | (31 | ) | (38 | ) | (25 | ) | |||||
Amortization of prior service credit | — | — | — | ||||||||
Settlement charges | (68 | ) | — | — | |||||||
(219 | ) | 54 | 466 | ||||||||
Total recognized | $ | (234 | ) | $ | — | $ | 402 |
2016 | 2015 | ||||
Discount rate | 4.00 | % | 4.17 | % | |
Rate of compensation increases | 4.10 | % | 4.10 | % |
2016 | 2015 | 2014 | ||||||
Discount rate used to measure service cost | 3.79% - 4.26% | 3.55 | % | 4.50 | % | |||
Discount rate used to measure interest cost | 2.96% - 3.30% | 3.55 | % | 4.50 | % | |||
Expected long-term return on plan assets | 7.00 | % | 7.00 | % | 7.50 | % | ||
Rate of compensation increases | 4.10 | % | 4.10 | % | 4.10 | % |
Fair Value Measurements | |||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
(millions) | |||||||||||||||
Short term investments | $ | 14 | $ | — | $ | 14 | $ | — | |||||||
Money market funds | 74 | 74 | — | — | |||||||||||
Equity securities: | |||||||||||||||
U.S. stocks | 309 | 309 | — | — | |||||||||||
U.S. pooled funds (a) | 654 | 446 | — | — | |||||||||||
International pooled funds (a) | 649 | 131 | — | — | |||||||||||
Fixed income securities: | |||||||||||||||
U. S. Treasury bonds | 194 | — | 194 | — | |||||||||||
Other Government bonds | 40 | — | 40 | — | |||||||||||
Agency backed bonds | 24 | — | 24 | — | |||||||||||
Corporate bonds | 453 | — | 453 | — | |||||||||||
Mortgage-backed securities | 85 | — | 85 | — | |||||||||||
Asset-backed securities | 17 | — | 17 | — | |||||||||||
Pooled funds | 461 | 461 | — | — | |||||||||||
Other types of investments: | |||||||||||||||
Real estate (a) | 223 | — | — | — | |||||||||||
Private equity (a) | 186 | — | — | — | |||||||||||
Derivatives in a positive position | 13 | — | 13 | — | |||||||||||
Derivatives in a negative position | (19 | ) | — | (19 | ) | — | |||||||||
Total | $ | 3,377 | $ | 1,421 | $ | 821 | $ | — |
Fair Value Measurements | |||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
(millions) | |||||||||||||||
Cash and cash equivalents | $ | 15 | $ | 15 | $ | — | $ | — | |||||||
Short term investments | 36 | — | 36 | — | |||||||||||
Money market funds | 46 | 46 | — | — | |||||||||||
Equity securities: | |||||||||||||||
U.S. stocks | 280 | 280 | — | — | |||||||||||
U.S. pooled funds (a) | 391 | 207 | — | — | |||||||||||
International pooled funds (a) | 575 | 336 | — | — | |||||||||||
Fixed income securities: | |||||||||||||||
U. S. Treasury bonds | 233 | — | 233 | — | |||||||||||
Other Government bonds | 41 | — | 41 | — | |||||||||||
Agency backed bonds | 31 | — | 31 | — | |||||||||||
Corporate bonds | 433 | — | 433 | — | |||||||||||
Mortgage-backed securities | 112 | — | 112 | — | |||||||||||
Asset-backed securities | 28 | — | 28 | — | |||||||||||
Pooled funds | 427 | 427 | — | — | |||||||||||
Other types of investments: | |||||||||||||||
Real estate (a) | 238 | — | — | — | |||||||||||
Hedge funds (a) | 179 | — | — | — | |||||||||||
Private equity (a) | 188 | — | — | — | |||||||||||
Derivatives in a positive position | 15 | — | 15 | — | |||||||||||
Derivatives in a negative position | (22 | ) | — | (22 | ) | — | |||||||||
Total | $ | 3,246 | $ | 1,311 | $ | 907 | $ | — |
(millions) | |||
Fiscal year | |||
2017 | $ | 383 | |
2018 | 309 | ||
2019 | 299 | ||
2020 | 286 | ||
2021 | 246 | ||
2022-2026 | 1,113 |
2016 | 2015 | ||||||
(millions) | |||||||
Change in projected benefit obligation | |||||||
Projected benefit obligation, beginning of year | $ | 823 | $ | 920 | |||
Service cost | — | — | |||||
Interest cost | 22 | 31 | |||||
Actuarial (gain) loss | 26 | (70 | ) | ||||
Benefits paid | (124 | ) | (58 | ) | |||
Projected benefit obligation, end of year | 747 | 823 | |||||
Change in plan assets | |||||||
Fair value of plan assets, beginning of year | — | — | |||||
Company contributions | 124 | 58 | |||||
Benefits paid | (124 | ) | (58 | ) | |||
Fair value of plan assets, end of year | — | — | |||||
Funded status at end of year | $ | (747 | ) | $ | (823 | ) | |
Amounts recognized in the Consolidated Balance Sheets at January 28, 2017 and January 30, 2016 | |||||||
Accounts payable and accrued liabilities | $ | (86 | ) | $ | (138 | ) | |
Other liabilities | (661 | ) | (685 | ) | |||
$ | (747 | ) | $ | (823 | ) | ||
Amounts recognized in accumulated other comprehensive loss at January 28, 2017 and January 30, 2016 | |||||||
Net actuarial loss | $ | 248 | $ | 261 | |||
Prior service cost | 8 | 8 | |||||
$ | 256 | $ | 269 |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
Net Periodic Pension Cost | |||||||||||
Service cost | $ | — | $ | — | $ | — | |||||
Interest cost | 22 | 31 | 33 | ||||||||
Amortization of net actuarial loss | 9 | 10 | 5 | ||||||||
Amortization of prior service credit | — | — | — | ||||||||
31 | 41 | 38 | |||||||||
Settlement charges | 30 | — | — | ||||||||
Other Changes in Plan Assets and Projected Benefit Obligation Recognized in Other Comprehensive Loss | |||||||||||
Net actuarial (gain) loss | 26 | (70 | ) | 170 | |||||||
Prior service cost | — | — | — | ||||||||
Amortization of net actuarial loss | (9 | ) | (10 | ) | (5 | ) | |||||
Amortization of prior service credit | — | — | — | ||||||||
Settlement charges | (30 | ) | — | — | |||||||
(13 | ) | (80 | ) | 165 | |||||||
Total recognized | $ | 48 | $ | (39 | ) | $ | 203 |
2016 | 2015 | ||||
Discount rate | 4.07 | % | 4.23 | % |
2016 | 2015 | 2014 | |||||
Discount rate used to measure interest cost | 2.65% - 3.16% | 3.55 | % | 4.50 | % |
(millions) | |||
Fiscal year | |||
2017 | $ | 86 | |
2018 | 78 | ||
2019 | 46 | ||
2020 | 48 | ||
2021 | 48 | ||
2022-2026 | 228 |
10. | Postretirement Health Care and Life Insurance Benefits |
2016 | 2015 | ||||||
(millions) | |||||||
Change in accumulated postretirement benefit obligation | |||||||
Accumulated postretirement benefit obligation, beginning of year | $ | 212 | $ | 243 | |||
Service cost | — | — | |||||
Interest cost | 6 | 8 | |||||
Actuarial gain | (13 | ) | (22 | ) | |||
Medicare Part D subsidy | 1 | 1 | |||||
Benefits paid | (20 | ) | (18 | ) | |||
Accumulated postretirement benefit obligation, end of year | 186 | 212 | |||||
Change in plan assets | |||||||
Fair value of plan assets, beginning of year | — | — | |||||
Company contributions | 20 | 18 | |||||
Benefits paid | (20 | ) | (18 | ) | |||
Fair value of plan assets, end of year | — | — | |||||
Funded status at end of year | $ | (186 | ) | $ | (212 | ) | |
Amounts recognized in the Consolidated Balance Sheets at January 28, 2017 and January 30, 2016 | |||||||
Accounts payable and accrued liabilities | $ | (18 | ) | $ | (20 | ) | |
Other liabilities | (168 | ) | (192 | ) | |||
$ | (186 | ) | $ | (212 | ) | ||
Amounts recognized in accumulated other comprehensive loss at January 28, 2017 and January 30, 2016 | |||||||
Net actuarial gain | $ | (31 | ) | $ | (22 | ) |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
Net Periodic Postretirement Benefit Cost | |||||||||||
Service cost | $ | — | $ | — | $ | — | |||||
Interest cost | 6 | 8 | 10 | ||||||||
Amortization of net actuarial gain | (4 | ) | — | (5 | ) | ||||||
Amortization of prior service cost | — | — | — | ||||||||
2 | 8 | 5 | |||||||||
Other Changes in Plan Assets and Projected Benefit Obligation Recognized in Other Comprehensive Loss | |||||||||||
Net actuarial (gain) loss | (13 | ) | (22 | ) | 30 | ||||||
Amortization of net actuarial gain | 4 | — | 5 | ||||||||
Amortization of prior service cost | — | — | — | ||||||||
(9 | ) | (22 | ) | 35 | |||||||
Total recognized | $ | (7 | ) | $ | (14 | ) | $ | 40 |
2016 | 2015 | ||||
Discount rate | 3.99 | % | 4.15 | % |
2016 | 2015 | 2014 | ||||||
Discount rate used to measure interest cost | 3.14 | % | 3.55 | % | 4.50 | % |
2016 | 2015 | ||
Health care cost trend rates assumed for next year | 6.15% - 9.75% | 6.25% - 10.0% | |
Rates to which the cost trend rate is assumed to decline (the ultimate trend rate) | 5.0% | 5.0% | |
Year that the rate reaches the ultimate trend rate | 2027 | 2027 |
1 – Percentage Point Increase | 1 – Percentage Point Decrease | ||||||
(millions) | |||||||
Effect on total of service and interest cost | $ | — | $ | — | |||
Effect on accumulated postretirement benefit obligations | $ | 11 | $ | (10 | ) |
Expected Benefit Payments | Expected Federal Subsidy | ||||||
(millions) | |||||||
Fiscal Year | |||||||
2017 | $ | 17 | $ | 1 | |||
2018 | 17 | 1 | |||||
2019 | 16 | 1 | |||||
2020 | 16 | — | |||||
2021 | 15 | — | |||||
2022-2026 | 63 | 1 |
11. | Stock Based Compensation |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
Stock options | $ | 43 | $ | 52 | $ | 47 | |||||
Restricted stock units | 18 | 13 | 26 | ||||||||
$ | 61 | $ | 65 | $ | 73 |
2016 | 2015 | 2014 | |||||||||
Weighted average grant date fair value of stock options granted during the period | $ | 12.14 | $ | 20.78 | $ | 19.07 | |||||
Dividend yield | 3.8 | % | 2.7 | % | 2.5 | % | |||||
Expected volatility | 42.7 | % | 43.3 | % | 42.7 | % | |||||
Risk-free interest rate | 1.4 | % | 1.7 | % | 1.5 | % | |||||
Expected life | 5.7 years | 5.7 years | 5.7 years |
Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value | |||||||||
(thousands) | (years) | (millions) | ||||||||||
Outstanding, beginning of period | 18,829.8 | $ | 41.92 | |||||||||
Granted | 3,886.8 | $ | 42.97 | |||||||||
Canceled or forfeited | (1,116.6 | ) | $ | 51.33 | ||||||||
Exercised | (1,122.1 | ) | $ | 31.30 | ||||||||
Outstanding, end of period | 20,477.9 | $ | 42.18 | |||||||||
Exercisable, end of period | 12,541.5 | $ | 36.48 | 4.1 | $ | 46 | ||||||
Options expected to vest | 6,657.5 | $ | 51.07 | 8.3 | $ | — |
2016 | 2015 | 2014 | |||||||||
(millions) | |||||||||||
Intrinsic value of options exercised | $ | 12 | $ | 127 | $ | 189 | |||||
Cash received from stock options exercised | 35 | 125 | 200 |
2016 | 2015 | 2014 | |||||||||
Restricted stock units | $ | 40.02 | $ | 62.61 | $ | 59.41 |
Shares | Weighted Average Grant Date Fair Value | |||||
(thousands) | ||||||
Nonvested, beginning of period | 1,497.0 | $ | 57.06 | |||
Granted – performance-based | 575.1 | 43.72 | ||||
Performance adjustment | (237.6 | ) | 59.82 | |||
Granted – time-based | 482.8 | 35.61 | ||||
Forfeited | (250.0 | ) | 32.99 | |||
Vested | (249.0 | ) | 33.70 | |||
Nonvested, end of period | 1,818.3 | $ | 53.29 |
12. | Shareholders’ Equity |
Treasury Stock | ||||||||||||||
Common Stock Issued | Deferred Compensation Plans | Other | Total | Common Stock Outstanding | ||||||||||
(thousands) | ||||||||||||||
Balance at February 1, 2014 | 410,605.8 | (1,229.2 | ) | (44,441.6 | ) | (45,670.8 | ) | 364,935.0 | ||||||
Stock issued under stock plans | (54.8 | ) | 7,490.6 | 7,435.8 | 7,435.8 | |||||||||
Stock repurchases | ||||||||||||||
Repurchase program | (31,874.9 | ) | (31,874.9 | ) | (31,874.9 | ) | ||||||||
Other | (27.0 | ) | (27.0 | ) | (27.0 | ) | ||||||||
Deferred compensation plan distributions | 104.8 | 104.8 | 104.8 | |||||||||||
Retirement of common stock | (31,000.0 | ) | 31,000.0 | 31,000.0 | — | |||||||||
Balance at January 31, 2015 | 379,605.8 | (1,179.2 | ) | (37,852.9 | ) | (39,032.1 | ) | 340,573.7 | ||||||
Stock issued under stock plans | (60.4 | ) | 4,493.5 | 4,433.1 | 4,433.1 | |||||||||
Stock repurchases | ||||||||||||||
Repurchase program | (34,806.8 | ) | (34,806.8 | ) | (34,806.8 | ) | ||||||||
Other | (12.7 | ) | (12.7 | ) | (12.7 | ) | ||||||||
Deferred compensation plan distributions | 68.8 | 68.8 | 68.8 | |||||||||||
Retirement of common stock | (38,000.0 | ) | 38,000.0 | 38,000.0 | — | |||||||||
Balance at January 30, 2016 | 341,605.8 | (1,170.8 | ) | (30,178.9 | ) | (31,349.7 | ) | 310,256.1 | ||||||
Stock issued under stock plans | (87.0 | ) | 1,611.7 | 1,524.7 | 1,524.7 | |||||||||
Stock repurchases | ||||||||||||||
Repurchase program | (7,874.3 | ) | (7,874.3 | ) | (7,874.3 | ) | ||||||||
Other | (4.6 | ) | (4.6 | ) | (4.6 | ) | ||||||||
Deferred compensation plan distributions | 160.9 | 160.9 | 160.9 | |||||||||||
Retirement of common stock | (8,000.0 | ) | 8,000.0 | 8,000.0 | — | |||||||||
Balance at January 28, 2017 | 333,605.8 | (1,096.9 | ) | (28,446.1 | ) | (29,543.0 | ) | 304,062.8 |
13. | Fair Value Measurements and Concentrations of Credit Risk |
January 28, 2017 | January 30, 2016 | ||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements | ||||||||||||||||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||||||
Marketable equity and debt securities | $ | 112 | $ | 20 | $ | 92 | $ | — | $ | 132 | $ | 13 | $ | 119 | $ | — |
January 28, 2017 | January 30, 2016 | ||||||||||||||||||||||
Notional Amount | Carrying Amount | Fair Value | Notional Amount | Carrying Amount | Fair Value | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
Long-term debt | $ | 6,459 | $ | 6,535 | $ | 6,438 | $ | 6,871 | $ | 6,966 | $ | 6,756 |
January 28, 2017 | January 30, 2016 | ||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements | ||||||||||||||||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||||||
Long-lived assets held and used | $ | 147 | $ | — | $ | — | $ | 147 | $ | 53 | $ | — | $ | — | $ | 53 |
14. | Earnings Per Share Attributable to Macy's, Inc. Shareholders |
2016 | 2015 | 2014 | ||||||||||||||||||||||||||||||
Net Income | Shares | Net Income | Shares | Net Income | Shares | |||||||||||||||||||||||||||
(millions, except per share data) | ||||||||||||||||||||||||||||||||
Net income attributable to Macy's, Inc. shareholders and average number of shares outstanding | $ | 619 | 307.6 | $ | 1,072 | 327.6 | $ | 1,526 | 354.3 | |||||||||||||||||||||||
Shares to be issued under deferred compensation and other plans | 0.9 | 0.8 | 0.9 | |||||||||||||||||||||||||||||
$ | 619 | 308.5 | $ | 1,072 | 328.4 | $ | 1,526 | 355.2 | ||||||||||||||||||||||||
Basic earnings per share attributable to Macy's, Inc. shareholders | $ | 2.01 | $ | 3.26 | $ | 4.30 | ||||||||||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||||||||||
Stock options, restricted stock and restricted stock units | 2.3 | 4.6 | 6.5 | |||||||||||||||||||||||||||||
$ | 619 | 310.8 | $ | 1,072 | 333.0 | $ | 1,526 | 361.7 | ||||||||||||||||||||||||
Diluted earnings per share attributable to Macy's, Inc. shareholders | $ | 1.99 | $ | 3.22 | $ | 4.22 |
15. | Quarterly Results (unaudited) |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
(millions, except per share data) | |||||||||||||||
2016: | |||||||||||||||
Net sales | $ | 5,771 | $ | 5,866 | $ | 5,626 | $ | 8,515 | |||||||
Cost of sales | (3,516 | ) | (3,468 | ) | (3,386 | ) | (5,251 | ) | |||||||
Gross margin | 2,255 | 2,398 | 2,240 | 3,264 | |||||||||||
Selling, general and administrative expenses | (1,966 | ) | (2,026 | ) | (2,071 | ) | (2,202 | ) | |||||||
Impairments, store closing and other costs | — | (249 | ) | — | (230 | ) | |||||||||
Settlement charges | (13 | ) | (6 | ) | (62 | ) | (17 | ) | |||||||
Net income attributable to Macy's, Inc. shareholders | 116 | 11 | 17 | 475 | |||||||||||
Basic earnings per share attributable to Macy's, Inc. shareholders | .37 | .03 | .05 | 1.56 | |||||||||||
Diluted earnings per share attributable to Macy's, Inc. shareholders | .37 | .03 | .05 | 1.54 | |||||||||||
2015: | |||||||||||||||
Net sales | $ | 6,232 | $ | 6,104 | $ | 5,874 | $ | 8,869 | |||||||
Cost of sales | (3,800 | ) | (3,610 | ) | (3,537 | ) | (5,549 | ) | |||||||
Gross margin | 2,432 | 2,494 | 2,337 | 3,320 | |||||||||||
Selling, general and administrative expenses | (2,023 | ) | (2,058 | ) | (1,968 | ) | (2,207 | ) | |||||||
Impairments, store closing and other costs | — | — | (111 | ) | (177 | ) | |||||||||
Net income attributable to Macy's, Inc. shareholders | 193 | 217 | 118 | 544 | |||||||||||
Basic earnings per share attributable to Macy's, Inc. shareholders | .57 | .65 | .36 | 1.74 | |||||||||||
Diluted earnings per share attributable to Macy's, Inc. shareholders | .56 | .64 | .36 | 1.73 |
16. | Condensed Consolidating Financial Information |
Parent | Subsidiary Issuer | Other Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 10,677 | $ | 23,436 | $ | (8,335 | ) | $ | 25,778 | ||||||||
Cost of sales | — | (6,787 | ) | (17,169 | ) | 8,335 | (15,621 | ) | |||||||||||
Gross margin | — | 3,890 | 6,267 | — | 10,157 | ||||||||||||||
Selling, general and administrative expenses | (2 | ) | (3,739 | ) | (4,524 | ) | — | (8,265 | ) | ||||||||||
Impairments, store closing and other costs | — | (295 | ) | (184 | ) | — | (479 | ) | |||||||||||
Settlement charges | — | (34 | ) | (64 | ) | — | (98 | ) | |||||||||||
Operating income (loss) | (2 | ) | (178 | ) | 1,495 | — | 1,315 | ||||||||||||
Interest (expense) income, net: | |||||||||||||||||||
External | 2 | (366 | ) | 1 | — | (363 | ) | ||||||||||||
Intercompany | — | (200 | ) | 200 | — | — | |||||||||||||
Equity in earnings of subsidiaries | 619 | 255 | — | (874 | ) | — | |||||||||||||
Income (loss) before income taxes | 619 | (489 | ) | 1,696 | (874 | ) | 952 | ||||||||||||
Federal, state and local income tax benefit (expense) | — | 281 | (622 | ) | — | (341 | ) | ||||||||||||
Net income (loss) | 619 | (208 | ) | 1,074 | (874 | ) | 611 | ||||||||||||
Net loss attributable to noncontrolling interest | — | — | 8 | — | 8 | ||||||||||||||
Net income (loss) attributable to Macy's, Inc. shareholders | $ | 619 | $ | (208 | ) | $ | 1,082 | $ | (874 | ) | $ | 619 | |||||||
Comprehensive income (loss) | $ | 766 | $ | (61 | ) | $ | 1,153 | $ | (1,100 | ) | $ | 758 | |||||||
Comprehensive loss attributable to noncontrolling interest | — | — | 8 | — | 8 | ||||||||||||||
Comprehensive income (loss) attributable to Macy's, Inc. shareholders | $ | 766 | $ | (61 | ) | $ | 1,161 | $ | (1,100 | ) | $ | 766 |
Parent | Subsidiary Issuer | Other Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 11,959 | $ | 24,037 | $ | (8,917 | ) | $ | 27,079 | ||||||||
Cost of sales | — | (7,670 | ) | (17,743 | ) | 8,917 | (16,496 | ) | |||||||||||
Gross margin | — | 4,289 | 6,294 | — | 10,583 | ||||||||||||||
Selling, general and administrative expenses | (2 | ) | (3,980 | ) | (4,274 | ) | — | (8,256 | ) | ||||||||||
Impairments, store closing and other costs | — | (170 | ) | (118 | ) | — | (288 | ) | |||||||||||
Operating income (loss) | (2 | ) | 139 | 1,902 | — | 2,039 | |||||||||||||
Interest (expense) income, net: | |||||||||||||||||||
External | 1 | (361 | ) | (1 | ) | — | (361 | ) | |||||||||||
Intercompany | — | (230 | ) | 230 | — | — | |||||||||||||
Equity in earnings of subsidiaries | 1,072 | 421 | — | (1,493 | ) | — | |||||||||||||
Income (loss) before income taxes | 1,071 | (31 | ) | 2,131 | (1,493 | ) | 1,678 | ||||||||||||
Federal, state and local income tax benefit (expense) | 1 | 120 | (729 | ) | — | (608 | ) | ||||||||||||
Net income | 1,072 | 89 | 1,402 | (1,493 | ) | 1,070 | |||||||||||||
Net loss attributable to noncontrolling interest | — | — | 2 | — | 2 | ||||||||||||||
Net income attributable to Macy's, Inc. shareholders | $ | 1,072 | $ | 89 | $ | 1,404 | $ | (1,493 | ) | $ | 1,072 | ||||||||
Comprehensive income | $ | 1,101 | $ | 118 | $ | 1,415 | $ | (1,535 | ) | $ | 1,099 | ||||||||
Comprehensive loss attributable to noncontrolling interest | — | — | 2 | — | 2 | ||||||||||||||
Comprehensive income attributable to Macy's, Inc. shareholders | $ | 1,101 | $ | 118 | $ | 1,417 | $ | (1,535 | ) | $ | 1,101 |
Parent | Subsidiary Issuer | Other Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 13,078 | $ | 23,522 | $ | (8,495 | ) | $ | 28,105 | ||||||||
Cost of sales | — | (8,127 | ) | (17,231 | ) | 8,495 | (16,863 | ) | |||||||||||
Gross margin | — | 4,951 | 6,291 | — | 11,242 | ||||||||||||||
Selling, general and administrative expenses | (3 | ) | (4,351 | ) | (4,001 | ) | — | (8,355 | ) | ||||||||||
Impairments, store closing and other costs | — | (45 | ) | (42 | ) | — | (87 | ) | |||||||||||
Operating income (loss) | (3 | ) | 555 | 2,248 | — | 2,800 | |||||||||||||
Interest (expense) income, net: | |||||||||||||||||||
External | 1 | (394 | ) | — | — | (393 | ) | ||||||||||||
Intercompany | — | (230 | ) | 230 | — | — | |||||||||||||
Premium on early retirement of debt | — | (17 | ) | — | — | (17 | ) | ||||||||||||
Equity in earnings of subsidiaries | 1,528 | 624 | — | (2,152 | ) | — | |||||||||||||
Income before income taxes | 1,526 | 538 | 2,478 | (2,152 | ) | 2,390 | |||||||||||||
Federal, state and local income tax benefit (expense) | — | 25 | (889 | ) | — | (864 | ) | ||||||||||||
Net income | 1,526 | 563 | 1,589 | (2,152 | ) | 1,526 | |||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | ||||||||||||||
Net income attributable to Macy's, Inc. shareholders | $ | 1,526 | $ | 563 | $ | 1,589 | $ | (2,152 | ) | $ | 1,526 | ||||||||
Comprehensive income | $ | 1,119 | $ | 156 | $ | 1,338 | $ | (1,494 | ) | $ | 1,119 | ||||||||
Comprehensive loss attributable to noncontrolling interest | — | — | — | — | — | ||||||||||||||
Comprehensive income attributable to Macy's, Inc. shareholders | $ | 1,119 | $ | 156 | $ | 1,338 | $ | (1,494 | ) | $ | 1,119 |
Parent | Subsidiary Issuer | Other Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
ASSETS: | |||||||||||||||||||
Current Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 938 | $ | 81 | $ | 278 | $ | — | $ | 1,297 | |||||||||
Receivables | — | 169 | 353 | — | 522 | ||||||||||||||
Merchandise inventories | — | 2,565 | 2,834 | — | 5,399 | ||||||||||||||
Prepaid expenses and other current assets | — | 84 | 324 | — | 408 | ||||||||||||||
Total Current Assets | 938 | 2,899 | 3,789 | — | 7,626 | ||||||||||||||
Property and Equipment – net | — | 3,397 | 3,620 | — | 7,017 | ||||||||||||||
Goodwill | — | 3,315 | 582 | — | 3,897 | ||||||||||||||
Other Intangible Assets – net | — | 51 | 447 | — | 498 | ||||||||||||||
Other Assets | — | 47 | 766 | — | 813 | ||||||||||||||
Deferred Income Taxes | 26 | — | — | (26 | ) | — | |||||||||||||
Intercompany Receivable | 375 | — | 2,428 | (2,803 | ) | — | |||||||||||||
Investment in Subsidiaries | 3,137 | 3,540 | — | (6,677 | ) | — | |||||||||||||
Total Assets | $ | 4,476 | $ | 13,249 | $ | 11,632 | $ | (9,506 | ) | $ | 19,851 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | |||||||||||||||||||
Current Liabilities: | |||||||||||||||||||
Short-term debt | $ | — | $ | 306 | $ | 3 | $ | — | $ | 309 | |||||||||
Merchandise accounts payable | — | 590 | 833 | — | 1,423 | ||||||||||||||
Accounts payable and accrued liabilities | 15 | 1,064 | 2,484 | — | 3,563 | ||||||||||||||
Income taxes | 71 | 16 | 265 | — | 352 | ||||||||||||||
Total Current Liabilities | 86 | 1,976 | 3,585 | — | 5,647 | ||||||||||||||
Long-Term Debt | — | 6,544 | 18 | — | 6,562 | ||||||||||||||
Intercompany Payable | — | 2,803 | — | (2,803 | ) | — | |||||||||||||
Deferred Income Taxes | — | 688 | 781 | (26 | ) | 1,443 | |||||||||||||
Other Liabilities | 66 | 500 | 1,311 | — | 1,877 | ||||||||||||||
Shareholders’ Equity: | |||||||||||||||||||
Macy's, Inc. | 4,323 | 738 | 5,939 | (6,677 | ) | 4,323 | |||||||||||||
Noncontrolling Interest | — | — | (1 | ) | — | (1 | ) | ||||||||||||
Total Shareholders’ Equity | 4,323 | 738 | 5,938 | (6,677 | ) | 4,322 | |||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 4,475 | $ | 13,249 | $ | 11,633 | $ | (9,506 | ) | $ | 19,851 |
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 | ||||||||||||||
Prepaid expenses and other current assets | — | 135 | 344 | — | 479 | ||||||||||||||
Income taxes | 44 | — | — | (44 | ) | — | |||||||||||||
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 |
Parent | Subsidiary Issuer | Other Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||
Net income (loss) | $ | 619 | $ | (208 | ) | $ | 1,074 | $ | (874 | ) | $ | 611 | |||||||
Impairments, store closing and other costs | — | 295 | 184 | — | 479 | ||||||||||||||
Settlement charges | — | 34 | 64 | — | 98 | ||||||||||||||
Equity in earnings of subsidiaries | (619 | ) | (255 | ) | — | 874 | — | ||||||||||||
Dividends received from subsidiaries | 957 | 575 | — | (1,532 | ) | — | |||||||||||||
Depreciation and amortization | — | 407 | 651 | — | 1,058 | ||||||||||||||
(Increase) decrease in working capital | 110 | (482 | ) | 92 | — | (280 | ) | ||||||||||||
Other, net | 28 | 51 | (244 | ) | — | (165 | ) | ||||||||||||
Net cash provided by operating activities | 1,095 | 417 | 1,821 | (1,532 | ) | 1,801 | |||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Purchase of property and equipment and capitalized software, net | — | 12 | (251 | ) | — | (239 | ) | ||||||||||||
Other, net | — | 32 | 20 | — | 52 | ||||||||||||||
Net cash provided (used) by investing activities | — | 44 | (231 | ) | — | (187 | ) | ||||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Debt repaid, net of debt issued | — | (750 | ) | 1 | — | (749 | ) | ||||||||||||
Dividends paid | (459 | ) | — | (1,532 | ) | 1,532 | (459 | ) | |||||||||||
Common stock acquired, net of issuance of common stock | (280 | ) | — | — | — | (280 | ) | ||||||||||||
Proceeds from noncontrolling interest | — | — | 4 | — | 4 | ||||||||||||||
Intercompany activity, net | (144 | ) | 255 | (111 | ) | — | — | ||||||||||||
Other, net | (15 | ) | 24 | 49 | — | 58 | |||||||||||||
Net cash used by financing activities | (898 | ) | (471 | ) | (1,589 | ) | 1,532 | (1,426 | ) | ||||||||||
Net increase (decrease) in cash and cash equivalents | 197 | (10 | ) | 1 | — | 188 | |||||||||||||
Cash and cash equivalents at beginning of period | 741 | 91 | 277 | — | 1,109 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 938 | $ | 81 | $ | 278 | $ | — | $ | 1,297 |
Parent | Subsidiary Issuer | Other Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||
Net income | $ | 1,072 | $ | 89 | $ | 1,402 | $ | (1,493 | ) | $ | 1,070 | ||||||||
Impairments, store closing and other costs | — | 170 | 118 | — | 288 | ||||||||||||||
Equity in earnings of subsidiaries | (1,072 | ) | (421 | ) | — | 1,493 | — | ||||||||||||
Dividends received from subsidiaries | 1,086 | — | — | (1,086 | ) | — | |||||||||||||
Depreciation and amortization | — | 440 | 621 | — | 1,061 | ||||||||||||||
(Increase) decrease in working capital | 25 | (340 | ) | (81 | ) | — | (396 | ) | |||||||||||
Other, net | (8 | ) | (78 | ) | 47 | — | (39 | ) | |||||||||||
Net cash provided (used) by operating activities | 1,103 | (140 | ) | 2,107 | (1,086 | ) | 1,984 | ||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Purchase of property and equipment and capitalized software, net | — | (88 | ) | (821 | ) | — | (909 | ) | |||||||||||
Other, net | — | 83 | (266 | ) | — | (183 | ) | ||||||||||||
Net cash used by investing activities | — | (5 | ) | (1,087 | ) | — | (1,092 | ) | |||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Debt issued, net of debt repaid | — | 348 | (1 | ) | — | 347 | |||||||||||||
Dividends paid | (456 | ) | — | (1,086 | ) | 1,086 | (456 | ) | |||||||||||
Common stock acquired, net of issuance of common stock | (1,838 | ) | — | — | — | (1,838 | ) | ||||||||||||
Proceeds from noncontrolling interest | — | — | 5 | — | 5 | ||||||||||||||
Intercompany activity, net | 12 | (243 | ) | 231 | — | — | |||||||||||||
Other, net | 12 | 37 | (136 | ) | — | (87 | ) | ||||||||||||
Net cash provided (used) by financing activities | (2,270 | ) | 142 | (987 | ) | 1,086 | (2,029 | ) | |||||||||||
Net increase (decrease) in cash and cash equivalents | (1,167 | ) | (3 | ) | 33 | — | (1,137 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 1,908 | 94 | 244 | — | 2,246 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 741 | $ | 91 | $ | 277 | $ | — | $ | 1,109 |
Parent | Subsidiary Issuer | Other Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||
Net income | $ | 1,526 | $ | 563 | $ | 1,589 | $ | (2,152 | ) | $ | 1,526 | ||||||||
Impairments, store closing and other costs | — | 45 | 42 | — | 87 | ||||||||||||||
Equity in earnings of subsidiaries | (1,528 | ) | (624 | ) | — | 2,152 | — | ||||||||||||
Dividends received from subsidiaries | 1,088 | 1 | — | (1,089 | ) | — | |||||||||||||
Depreciation and amortization | — | 454 | 582 | — | 1,036 | ||||||||||||||
Increase (decrease) in working capital | 9 | 74 | (69 | ) | — | 14 | |||||||||||||
Other, net | (20 | ) | (177 | ) | 243 | — | 46 | ||||||||||||
Net cash provided by operating activities | 1,075 | 336 | 2,387 | (1,089 | ) | 2,709 | |||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Purchase (disposition) of property and equipment and capitalized software, net | — | (260 | ) | (636 | ) | — | (896 | ) | |||||||||||
Other, net | — | (12 | ) | (62 | ) | — | (74 | ) | |||||||||||
Net cash used by investing activities | — | (272 | ) | (698 | ) | — | (970 | ) | |||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Debt repaid, net of debt issued | — | 177 | (3 | ) | — | 174 | |||||||||||||
Dividends paid | (421 | ) | — | (1,089 | ) | 1,089 | (421 | ) | |||||||||||
Common stock acquired, net of issuance of common stock | (1,643 | ) | — | — | — | (1,643 | ) | ||||||||||||
Proceeds from noncontrolling interest | — | — | — | — | — | ||||||||||||||
Intercompany activity, net | 927 | (283 | ) | (644 | ) | — | — | ||||||||||||
Other, net | 15 | 52 | 57 | — | 124 | ||||||||||||||
Net cash used by financing activities | (1,122 | ) | (54 | ) | (1,679 | ) | 1,089 | (1,766 | ) | ||||||||||
Net increase (decrease) in cash and cash equivalents | (47 | ) | 10 | 10 | — | (27 | ) | ||||||||||||
Cash and cash equivalents at beginning of period | 1,955 | 84 | 234 | — | 2,273 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 1,908 | $ | 94 | $ | 244 | $ | — | $ | 2,246 |
EBITDA Margin (50%) | ||||
Performance Level* | 3-year Average | Vesting Percentage | ||
Outstanding | ≥12.2% | 150% | ||
Target | 11.9 | % | 100% | |
Threshold | 11.2 | % | 50% | |
Below Threshold | <11.2% | 0% |
ROIC (30%) | ||||
Performance Level* | 3-year Average | Vesting Percentage | ||
Outstanding | ≥19.3% | 150% | ||
Target | 18.9 | % | 100% | |
Threshold | 17.3 | % | 50% | |
Below Threshold | <17.3% | 0% |
Relative TSR (20%) | |||
Performance Level* | 3-year TSR vs. Peer Group** | Vesting Percentage | |
Outstanding | ≥75% | 150% | |
Target | 50% | 100% | |
Threshold | 35% | 50% | |
Below Threshold | <35% | 0% |
• | Will be accelerated if, within the 24-month period following the Change in Control, the Grantee is terminated by the Company or the continuing entity without Cause or if the Grantee voluntarily terminates employment with Good Reason; |
• | Will be accelerated at the Change in Control if awards are not assumed or replaced by the acquiror/continuing entity on terms deemed by the Compensation Committee to be appropriate; and |
• | Will occur on the third anniversary of the Date of Grant, if Vesting has not otherwise been accelerated as provided above. |
(i) | following a voluntary retirement and prior to the later to occur of (a) settlement date for the Performance Units or (b) two years following retirement, the Grantee renders personal services to a Competing Business (as hereafter defined in Section 17) in any manner, including, without limitation, as employee, agent, consultant, advisor, independent contractor, proprietor, partner, officer, director, manager, owner, financer, joint venturer or otherwise; or |
(ii) | following a voluntary or involuntary retirement and prior to the later to occur of (a) the settlement date for the Performance Units or (b) two years following retirement, the Grantee directly or indirectly solicits or otherwise entices any of the Company’s employees to resign from their employment with the Company, whether individually or as a group; or |
(iii) | at any time following a voluntary or involuntary retirement, the Grantee discloses or provides to any third party, or uses, modifies, copies or adapts any of the Company’s Confidential Information (as hereafter defined in Section 17). |
Abercrombie & Fitch | The Gap | Ross Stores |
Bed, Bath & Beyond | J.C. Penney | Saks |
Belk, Inc. | Kohl’s | Sears |
Burlington Coat Factory | L Brands | Target |
Bon-Ton Stores | Nordstrom | TJX |
Dillard’s | Neiman-Marcus | Walmart |
1. | This General Release and Waiver (“General Release”) is given by Peter Sachse (“Executive”) to the Released Parties as defined below in this paragraph 1. This General Release will also be binding on Executive’s heirs, successors, assigns, agents, executors, and administrators. This General Release releases Macy’s, Inc. (“Macy’s”), all of its predecessors, successors, and assigns, divisions, subsidiaries, facilities, related or affiliated entities, (collectively referred to as “the Company”), and all of their respective current and former officers, directors, shareholders, employees, insurers, agents, and counsel, including, without limitation, any and all current and former management and supervisory employees (hereinafter collectively referred to as the “Released Parties”). |
2. | The Company advises Executive to consult with an attorney prior to executing this General Release. Executive acknowledges that Executive has been advised by the Company, in writing, to consult with legal counsel of Executive’s choosing and that Executive has had the opportunity to consult counsel, if Executive chose to do so. Executive acknowledges that Executive is responsible for any costs and fees resulting from Executive’s attorney or any other advisor reviewing this General Release. |
3. | The Company hereby advises Executive that Executive will not be eligible to receive benefits under any other severance plan if Executive elects to receive benefits under the MACY’S, INC. EXECUTIVE SEVERANCE PLAN (the “Plan”) by signing this General Release. |
4. | To the extent applicable, it is intended that the payments under the Plan be in full compliance with Section 409A. The Company will not make any payments which it believes will violate Section 409A. The Company may at any time amend or terminate the benefits under the Plan to comply with Section 409A of the Internal Revenue Code. No amendment or termination may be made or effected if it would cause the Plan to fail to comply. Executive’s termination of employment shall be treated as an involuntary separation from service for purposes of 409A of the Internal Revenue Code of 1986, as amended. |
5. | As consideration for Executive’s promises set forth in this General Release, the Company has agreed to provide the Executive with the benefits under the Plan. Employee acknowledges that the benefits provided under the Plan are more than the Company is otherwise obliged to provide to Executive. Executive acknowledges and agrees that Company has paid Executive any outstanding amounts owed to Executive. |
6. | In consideration for the payment of benefits provided to Executive upon Executive’s separation from employment, as described in the Plan, and pursuant to the terms of this General Release, Executive releases and discharges forever the Released Parties of and from all actions, causes of action, claims, demands, costs, and expenses for damages, known or unknown, which Executive had or now has or may have against the Company or any of the Released Parties. This release includes, but is not limited to: (a) any claim of age discrimination under the Age Discrimination in Employment Act, as amended, or under any other state or local statute, ordinance, order, or law; (b) any claim of discrimination on any other basis, including, without limitation, race, color, national origin, sex, sexual orientation, gender identity, religion, age, disability, military status, veteran status, marital status, political affiliation, appearance, or any other characteristic (including but not limited to status as a “whistleblower”), under any federal, state, or local statute, ordinance, order, or law, including but not limited to the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Older Worker’s Benefit Protection Act of 1990, the Family and Medical Leave Act, the Equal Pay Act, the Lilly Ledbetter Fair Pay Act of 2009, the Pregnancy Discrimination Act of 1978, and the laws in the state in which Executive worked for the Company, all as the same may have been from time-to-time amended; (c) any other claim relating to Executive’s employment, the termination of Executive’s employment, or the Released Parties’ failure to reemploy the Executive, under any federal, state, or local statute, law, or ordinance, as amended, and the Worker Adjustment and Retraining Notification Act; (d) any claim under any contract, tort, or any other state, local, or federal statutory or common law, including but not limited to any claim that the Released Parties, jointly or severally, breached any contract or promise, express or implied, or any term or condition of Executive’s employment, and any claim for promissory estoppel or wrongful discharge arising out of Executive’s employment with the Company or any of the Released Parties and/or the termination of such employment; (e) any claim arising under the Company’s internal dispute resolution |
a. | This General Release does not waive or release any rights or claims that Executive may have under the Age Discrimination in Employment Act, as amended, that arise after the date that Executive executes this General Release. |
b. | Nor shall this General Release have any effect on Executive’s rights, if any: (i) accrued and vested prior to the employment termination date under the Company's ERISA benefit plans; (ii) brought pursuant to the terms of an ERISA plan; or (iii) arising under the provisions of Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), as the same have been amended, to continue coverage after the employment termination date under the Company's health plans. |
8. | If and only if, Executive is a California based employee, Executive acknowledges and agrees that all rights Executive enjoys pursuant to Section 1542 of the California Civil Code are hereby expressly waived by Executive. Said Section reads as follows: |
9. | Executive agrees that he or she has terminated or will terminate employment with the Company and that his or her last day of employment will be a date decided upon by the Company (the “Release Date”). The Executive will return (or has returned) all property of the Company, including but not limited to any Company electronic devices such as laptops, cell phones, smart phones, PDAs, security ID tokens, keys, identification, and any Company business or proprietary information in his or her possession, by no later than his or her Release Date. |
10. | Executive acknowledges that the provision of the consideration referenced in the Plan above is conditioned upon the promises in this General Release and is not normally available under Company policy or any other plan or program of the Released Parties. Executive further acknowledges that such payment does not constitute an admission by the Company or any of the Released Parties of liability or of violation of any applicable law or regulation. The Company and the other Released Parties expressly deny any such liability or such alleged violation and state that payment has been made solely for the purpose of compromising any and all claims of the Executive without the cost and burden of litigation. |
11. | Executive agrees that all provisions, terms and conditions of this General Release are and shall remain confidential and shall not be disclosed to any person not a party hereto under any circumstances, except as required by court order or other compulsory legal process. Neither Executive nor anyone on Executive’s behalf shall communicate, either orally or in writing, with any print or broadcast media about any matter arising out of Executive’s employment with the Company and/or Executive’s involuntary termination from the Company. Notwithstanding the foregoing, the parties hereto expressly agree that Executive may disclose the provisions, terms and conditions of this General Release to Executive’s immediate family, attorney(s), and/or financial advisor(s). |
12. | Executive agrees that this General Release reflects the complete agreement between the parties hereto and that there are no written or oral understandings, promises, or agreements related to this General Release that have been made to Executive except those contained in this General Release. Executive further agrees that the General Release fully supersedes any and all prior agreements or understandings concerning the subject matter of this release, to the extent that any such prior agreements or understandings exist. |
13. | Executive hereby agrees: |
a. | Pending or threatened litigation: to make himself or herself available upon reasonable notice to discuss with Macy’s and its counsel, issues related to litigation or potential litigation, to appear without subpoena for deposition or testimony, to meet with Macy’s attorneys for deposition preparation and trial preparation and to submit receipts for actual expenses, if any, for reimbursement in accordance with the Company’s expense reimbursement policy. |
b. | No-solicit: during a period of two years beginning on the Executive’s Release Date (the “No-recruit period”), that the Executive will not actively, in personal conversation or by telephone, in writing (including but not limited to via electronic communications) or by any other medium, either directly or indirectly, without written permission from the Company, solicit any person that Executive knows or should reasonably know to be an employee of the Company or any of its subsidiaries, divisions, or affiliates (whether such employees are now or hereafter through the No-recruit period so employed or engaged) to terminate their employment with the Company or any of its subsidiaries, divisions, or affiliates, and commence employment at, or provide services to, any other business enterprise. |
c. | Confidential and Proprietary Information: that Executive will not disclose any confidential or proprietary information belonging to the Company and obtained by Executive or to be obtained by Executive in the course of employment with the Company. The Company specifically acknowledges that since Executive has been involuntarily terminated, Executive shall be free to work for a Competing Business, as that term is defined in the Plan. |
d. | Non-disparagement: that Executive will take no action which is intended to, or would reasonably be expected to, harm the Released Parties, impair their reputations, or lead to unwarranted or unfavorable publicity regarding the Released Parties. The prohibition in this paragraph 13.d does not apply to communications with administrative or other governmental authorities or in response to valid compulsory legal process. In the event of such government inquiry or compulsory legal process requiring comments about any Released Party, Executive agrees to promptly notify the Company in advance of any such disclosures and provide the details of the government inquiry or compulsory legal process in order to enable the Company to consider objecting to any such disclosure. |
14. | The Company hereby informs Executive that the consideration recited in this General Release is being offered as part of the MACY’S, INC. EXECUTIVE SEVERANCE PLAN. The Company further informs Executive of the following: |
a. | As specified in the Plan: (i) The amount of the severance benefit payable under the Plan is equal to twenty four times Executive’s monthly base salary rate in effect at the time of Executive’s termination of employment; and (ii) The severance benefit will not be provided to an Executive who is otherwise entitled to benefits under the Plan if the Executive is offered a substantially equivalent position by, or accepts any position with, a Macy’s, Inc. division, subsidiary, facility, or related or affiliated entity prior to the employee’s receipt of severance benefits hereunder. For purposes of this provision, a newly offered position is considered substantially equivalent to the Executive’s former position if the work site of the new position is within twenty-five (25) miles, one way, of the work site of the former position, the new position does not require a reclassification from full-time to part-time status, and the annual base salary for the new and former positions are substantially comparable. |
b. | In order to accept the Offer, an eligible employee must execute and return to the Company (and not revoke) this General Release within twenty-one (21) days as set forth in paragraph 15 below. |
c. | If an Executive who is entitled to benefits under the Plan dies following Executive’s termination from employment, but prior to receipt of the severance payment provided under the Plan, payment shall be made to Executive’s estate, provided, however, if Executive dies before having signed the Release, payment shall be made to Executive's estate if and only if, no later than 70 days after the Executive’s termination of |
15. | Executive acknowledges that Executive has twenty-one (21) calendar days from the date that this General Release was first given to Executive to read and consider it before executing it, although Executive could have executed it at any time within those twenty-one (21) calendar days. Executive agrees that any changes to this General Release do not restart the twenty-one (21) day consideration period. Executive agrees that Executive has carefully read this General Release and knows and understands its contents, and that Executive signs this General Release knowingly and voluntarily. This General Release was voluntarily entered into without fraud, duress, or coercion, and with full understanding of its significance, effects, and consequences, and Executive fully intends to be bound by its terms. |
16. | The Executive may revoke and cancel this General Release by providing notice of revocation to the Company in writing at any time within seven (7) calendar days after his or her execution of this General Release. The written notice of revocation must be personally delivered or sent by first class mail, postage prepaid, or by certified mail to William Tompkins, Senior Vice President, Human Resources, located at 7 West Seventh Street, Cincinnati, OH 45202, within seven (7) calendar days after Executive’s execution of this General Release. If mailed, the date of the postmark or certification will be used to determine the date of revocation. If Executive does so revoke by personal delivery or mail, this General Release will be null and void and the Company shall have no obligation whatsoever pursuant to this General Release to provide the consideration referenced in paragraph 5. This General Release shall not become effective and enforceable until after the expiration of this seven (7) day revocation period; after such time, if there has been no revocation, the General Release shall be fully effective, enforceable, and irrevocable. |
17. | If any provision of this General Release is declared invalid or unenforceable, the remaining portions of the General Release shall not be affected thereby and shall be enforced, provided, however, if the Executive’s obligations as set forth in paragraphs 6 and 8 (or any part of it) is declared invalid, the General Release is nullified in its entirety and Company is not obligated to make any payment to Executive |
18. | This General Release shall be governed by the laws of the State of Ohio, without regard to conflict of laws principles. |
A) | In connection with Executive’s employment by Macy’s, Executive has been: |
i. | exposed to trade secrets and confidential business and technical information and strategies that provide Macy’s with a legitimate competitive advantage in the conduct of its business; and |
ii. | brought into contact with existing and potential Customers, suppliers and vendors of Macy’s. In addition, the business of Macy’s is highly competitive. Macy’s devotes a substantial amount of time, effort and money to the development and maintenance of its Confidential Information and Customers and Macy’s Confidential Information and Customer information constitute valuable assets of Macy’s. |
1) | “Customer” means any person or entity which at the time of Executive’s cessation of employment with Macy’s is, or was within two years prior to such cessation of employment, a prospective or existing customer of Macy’s. |
2) | “Confidential Information” means any data or information that is material to Macy’s and not generally known to the public, including, without limitation: (i) price, cost, and sales data; (ii) the identities and locations of vendors and consultants furnishing materials and services to Macy’s and the terms of vendor or consultant contracts or arrangements; (iii) lists and other information regarding Customers and suppliers; (iv) financial information that has not been released to the public; (v) future business plans, marketing or licensing strategies, and advertising campaigns; or (vi) information about Macy’s employees and executives, as well as Macy’s talent strategies including but not limited to compensation, retention and recruiting initiatives. |
B) | In exchange for the additional remuneration detailed in this Addendum, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Executive agrees that for the thirty-six (36) month period beginning on the date that Executive’s employment with Macy’s ceases, Executive shall not act in any capacity (whether as an employee, agent, consultant, advisor, independent contractor, proprietor, partner, officer, director, manager, owner, financer, joint venturer or otherwise), for: |
i. | any of the following named companies, or any other business into which such company is merged, consolidated, or otherwise combined: Abercrombie & Fitch; Bed, Bath & Beyond; Belk’s; Burlington Coat Factory; Bon-Ton Stores; Dillard’s; The Gap; J.C. Penney; Kohl’s; Limited Brands; Nordstrom; Neiman-Marcus; Ross Stores; Saks; Sears; Target; TJX; and Walmart, and the subsidiaries, affiliates and successors of each such company; or |
ii. | a Restricted Business. A “Restricted Business” means any business or enterprise engaged in the business of retail sales that had annual revenues for its most recently completed fiscal year of at least $2.5 billion; and both (i) offers a category or categories of merchandise (e.g., Fine Jewelry, Cosmetics, Kids, Big Ticket, Housewares, Men’s, Dresses), any of which are offered by Macy’s, and (ii) the revenue derived by such other retailer during such retailer’s most recently ended fiscal year from such category or categories of merchandise represent(s), in the aggregate, more than 50% of Macy’s total revenues for the most recently completed |
C) | upon the Executive’s termination of employment, the Company shall pay to Executive a lump sum of Two Million Seven Hundred Thousand Dollars and No Cents ($2,700,000.00), less withholding for applicable taxes. For the avoidance of doubt, Executive’s Release Date as set forth in Paragraph 9 of the General Release is January 30, 2017. This payment will be made at the same time as the payment pursuant to paragraph 14a of the General Release is made; |
D) | on the date bonuses under the Company’s Senior Executive Incentive Compensation Plan are normally paid to employees, but no later than April 15, 2017, the Company shall pay to Executive a lump sum payment, less withholdings for applicable taxes, equivalent to the amount, if any, that would have been paid to Executive under the Company’s Senior Executive Incentive Compensation Plan for fiscal 2016 (the “2016 Bonus Amount”), it being acknowledged and agreed that for purposes of calculating the 2016 Bonus Amount Executive shall be: (i) deemed to have remained employed with the Company through March 2017 (or such later date as is required to receive such 2016 Bonus Amount), and (ii) Executive shall be treated no less favorably than other similarly situated senior executive officers of the Company. Executive agrees and acknowledges no other annual bonus awards or payments are due or owing to Executive under any bonus or incentive plan of the Company (other than as specifically set forth herein or as otherwise vested under such plans); |
E) | Executive shall receive the shares of Common Stock payable with respect to Performance Restricted Stock Units (“PRSUs”) granted in 2014, 2015 and 2016 under the Amended and Restated 2009 Omnibus Incentive Compensation Plan, less withholdings for applicable taxes, as set forth below. The shares of Common Stock shall be paid to the Executive on the date such shares normally would be paid to employees under the Amended and Restated 2009 Omnibus Incentive Compensation Plan: |
i. | with respect to the 2014 – 2016 performance period, it being acknowledged and agreed that (i) Executive shall be deemed to have remained employed with the Company through the February 2017 vesting date (or such later vesting date as is required in order to receive full vesting), (ii) there are no individual goals and/or targets required to be achieved by Executive in order to receive full vesting shall be deemed to have been achieved in full, (iii) Executive shall be treated no less favorably than other similarly situated senior executive officers of the Company and (iv) the Compensation and Management Development Committee of the Macy’s, Inc. Board of Directors certifies performance results related to such performance period and PRSUs and authorizes such PRSU payouts at its February 2017 meeting; |
ii. | with respect to the 2015 – 2017 performance period, it being acknowledged and agreed that (i) Executive shall be deemed to have remained employed with the Company through the February 2018 vesting date (or such later vesting date as is required in order to receive full vesting), (ii) there are no individual goals and/or targets required to be achieved by Executive in order to receive full vesting shall be deemed to have been achieved in full, (iii) Executive |
iii. | with respect to the 2016 – 2018 performance period, it being acknowledged and agreed that (i) Executive shall be deemed to have remained employed with the Company through the February 2019 vesting date (or such later vesting date as is required in order to receive full vesting), (ii) there are no individual goals and/or targets required to be achieved by Executive in order to receive full vesting shall be deemed to have been achieved in full, (iii) Executive shall be treated no less favorably than other similarly situated senior executive officers of the Company and (iv) the Compensation and Management Development Committee of the Macy’s, Inc. Board of Directors certifies performance results related to such performance period and PRSUs and authorizes such PRSU payouts at its February 2018 meeting. |
F) | all unvested stock option awards will continue to vest on the anniversary of their grant dates through March 31, 2019, as if Executive remained employed with the Company through such date. All stock options that are vested as of March 31, 2019 shall be exercisable by Executive for the full term of each such stock option as if Executive remained in the continuous employ of the Company. Any stock option that is not vested as of March 31, 2019, shall be forfeited; |
G) | within 30 days after the Executive’s execution of this General Release, the Company shall reimburse Executive for attorneys’ fees incurred in connection with Executive’s termination up to a maximum of Ten Thousand Dollars and No Cents ($10,000.00); and |
H) | if Executive is eligible for and elects either COBRA health care continuation coverage or retiree health care benefits, the Company will pay the entire premium (both the employer and employee portions and any administrative fee applicable to COBRA recipients) for an eighteen (18) month period. If applicable, this Company-paid eighteen (18) month period shall count towards the maximum eighteen (18) month period of COBRA health care continuation coverage. This subsidy will apply only if Executive elects such coverage, completes and submits the applicable paperwork, remains eligible for this coverage during the applicable period, and does not become enrolled in other health care coverage. Executive may elect COBRA health care continuation coverage or retiree health care benefits, but not both; |
I) | upon the Executive’s termination of employment, the Company shall reimburse Executive up to a maximum of Twenty-five Thousand Dollars and No Cents ($25,000.00), for outplacement services provided by a third-party selected by Executive. Such expenses shall be reimbursed by the Company as soon as practical after receiving proof of the expenses from the Executive, but in no event shall such services be utilized later than December 31, 2017; |
J) | For the avoidance of doubt, Executive may retain his Company issued smart phone and Executive is permitted to maintain his personal contacts without violating the restrictions in paragraph 9 of the General Release so long as Executive has not stored any confidential Company information on such device; |
K) | For the avoidance of doubt, the matters subject to the obligations set forth in paragraph 13a relate to matters that occurred during Executive’s employment tenure with the Company;. |
L) | For the avoidance of doubt, the restrictions in paragraph 13b do not apply to general advertisements not targeted at the Company’s employees and requests for references by the Company’s employees; |
M) | Notwithstanding the provisions in paragraph 13c of the General Release, the prohibitions expire ten (10) years from Executive’s Release Date and do not apply to communications with administrative or other governmental authorities or in response to valid compulsory legal process. In the event of such government inquiry or compulsory legal process requiring comments about any party or Released Party, Executive agrees to promptly notify the Company in advance of any such disclosures and provide the details of the government inquiry or compulsory legal process in order to enable the Company to consider objecting to any such disclosure. In addition, the Company’s senior executives will not make disparaging remarks about or in any other way condone or seek by word or act to harm or impair Executive’s reputation, provided that the prohibition in this paragraph expire ten (10) years from Executive’s Release Date and does not apply to communications with administrative or other governmental authorities or in response to valid compulsory legal process, including, but not limited to a subpoena. In the event of such government inquiry or compulsory legal process requiring comments about Executive, the Company shall promptly notify Executive in advance of any such disclosures and provide Executive the details of the government inquiry or compulsory legal process in order to enable Executive to consider objecting to any such disclosure; and |
N) | This General Release and Addendum does not waive or release any rights to: (i) any indemnification rights under the Company’s by-laws, charters, Directors and Officers liability insurance policies or any other documents or instruments relating to indemnification or otherwise under the law; (ii); payment of five (5) weeks of retiree Paid Time Off in accordance with Company policy; and (iii) enforce this General Release and Addendum. |
January 9, 2017 | /s/ SHERRY HOLLOCK | ||
Date | Sherry Hollock | ||
Chief Human Resources Officer | |||
Macy’s, Inc. | |||
7 West Seventh Street | |||
Cincinnati, OH 45202 | |||
1/9/2017 | /s/ PETER R. SACHSE | ||
Date | Peter Sachse | ||
Corporate Name | State of Incorporation/ Formation | Trade Name(s) | |
Advertex Communications, Inc. | New York | Macy’s Marketing | |
Bloomingdale's, Inc. | Ohio | ||
Bloomingdale’s The Outlet Store, Inc. | Ohio | ||
Bloomingdales.com, LLC | Ohio | ||
Bluemercury, Inc. | Delaware | ||
FDS Bank | N/A | ||
FDS Thrift Holding Co., Inc. | Ohio | ||
Macy's Backstage, Inc. | Ohio | ||
Macy’s Corporate Services, Inc. | Ohio | ||
Macy’s Credit and Customer Services, Inc. | Ohio | ||
Macy’s Credit Operations, Inc. | Ohio | ||
Macy’s Florida Stores, LLC | Ohio | Macy’s | |
Macy’s Merchandising Corporation | New York | ||
Macy’s Merchandising Group (Hong Kong) Limited | Hong Kong | ||
Macy’s Merchandising Group International (Hong Kong) Limited | Hong Kong | ||
Macy’s Merchandising Group International, LLC | Delaware | ||
Macy’s Merchandising Group Procurement, LLC | Delaware | ||
Macy’s Merchandising Group, Inc. | New York | ||
Macy’s Retail Holdings, Inc. | New York | Macy’s | |
Macy’s Systems and Technology, Inc. | Ohio | ||
Macy’s West Stores, Inc. | Ohio | Macy’s | |
Macys.com, LLC | Ohio | ||
West 34th Street Insurance Company New York | New York |
/s/ Francis S. Blake | /s/ John Bryant | /s/ Deirdre P. Connelly | ||
Francis S. Blake | John Bryant | Deirdre P. Connelly | ||
/s/ Jeff Gennette | /s/ Leslie D. Hale | /s/ Karen M. Hoguet | ||
Jeff Gennette | Leslie D. Hale | Karen M. Hoguet | ||
/s/ William H. Lenehan | /s/ Sara Levinson | /s/ Terry J. Lundgren | ||
William H. Lenehan | Sara Levinson | Terry J. Lundgren | ||
/s/ Joyce M. Roché | /s/ Paul C. Varga | /s/ Marna C. Whittington | ||
Joyce M. Roché | Paul C. Varga | Marna C. Whittington | ||
/s/ Felicia Williams | /s/ Annie Young-Scrivner | |||
Felicia Williams | Annie Young-Scrivner | |||
CERTIFICATION | |||||
I, Jeff Gennette, certify that: | |||||
1. | I have reviewed this Annual Report on Form 10-K of Macy's, Inc.; | ||||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||||
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | ||||
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||||
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||||
c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||||
d. | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. | ||||
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): | ||||
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | ||||
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. | ||||
March 29, 2017 | /s/Jeff Gennette | ||||
Jeff Gennette | |||||
Chief Executive Officer |
CERTIFICATION | |||||
I, Karen M. Hoguet, certify that: | |||||
1. | I have reviewed this Annual Report on Form 10-K of Macy's, Inc.; | ||||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||||
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | ||||
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||||
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||||
c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||||
d. | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. | ||||
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): | ||||
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | ||||
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. | ||||
March 29, 2017 | /s/ Karen M. Hoguet | ||||
Karen M. Hoguet | |||||
Chief Financial Officer |
CERTIFICATION UNDER SECTION 906 OF THE SARBANES-OXLEY ACT | |||
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with the filing of the Annual Report on Form 10-K of Macy's, Inc. (the "Company") for the fiscal year ended January 28, 2017, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned officer of the Company certifies that, to his knowledge: | |||
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. | ||
Dated: March 29, 2017 | |||
/s/ Jeff Gennette | |||
Name: Jeff Gennette | |||
Title: Chief Executive Officer |
CERTIFICATION UNDER SECTION 906 OF THE SARBANES-OXLEY ACT | |||
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with the filing of the Annual Report on Form 10-K of Macy's, Inc. (the "Company") for the fiscal year ended January 28, 2017, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned officer of the Company certifies that, to her knowledge: | |||
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. | ||
Dated: March 29, 2017 | |||
/s/Karen M. Hoguet________________________ | |||
Name: Karen M. Hoguet | |||
Title: Chief Financial Officer |
]FN$/DTT(MJA$YJH($I$'K#++1#H
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Feb. 24, 2017 |
Jul. 30, 2016 |
|
Document Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jan. 28, 2017 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | M | ||
Entity Registrant Name | Macy's, Inc. | ||
Entity Central Index Key | 0000794367 | ||
Current Fiscal Year End Date | --01-28 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 304,258,647 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Public Float | $ 11,052,402,000 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No |
Consolidated Statements of Comprehensive Income Statement - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Net income | $ 611 | $ 1,070 | $ 1,526 |
Actuarial gain (loss) and prior service cost on post employment and postretirement benefit plans, net of tax effect | 65 | 0 | (422) |
Amortization of net actuarial loss on post employment and postretirement benefit plans, after tax | 22 | 29 | 15 |
Settlement charges, net of tax effect | 60 | 0 | 0 |
Total other comprehensive income (loss) | 147 | 29 | (407) |
Comprehensive income | 758 | 1,099 | 1,119 |
Comprehensive loss attributable to noncontrolling interest | 8 | 2 | 0 |
Comprehensive income attributable to Macy's, Inc. shareholders | $ 766 | $ 1,101 | $ 1,119 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | |||
Actuarial loss and prior service cost, tax effect | $ 42 | $ 0 | $ (269) |
Net actuarial loss on post-employment and postretirement benefit plans, tax effect | 14 | 19 | 10 |
Settlement charges, tax effect | $ 38 | $ 0 | $ 0 |
Consolidated Balance Sheets Parenthetical - shares |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
---|---|---|---|---|
Common stock, shares outstanding | 304,062,800 | 310,256,100 | 340,573,700 | 364,935,000 |
Consolidated Statements of Changes in Shareholders' Equity Parenthetical - $ / shares |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Common Stock [Member] | |||
Common stock, dividends declared per share | $ 1.4925 | $ 1.3925 | $ 1.1875 |
Organization and Summary of Significant Accounting Policies |
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Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Nature of Operations Macy’s, Inc. and subsidiaries (the “Company”) is an omnichannel retail organization operating stores, websites and mobile applications under three brands (Macy’s, Bloomingdale’s and Bluemercury) that sell a wide range of merchandise, including apparel and accessories (men's, women's and children's), cosmetics, home furnishings and other consumer goods. The Company has stores in 45 states, the District of Columbia, Guam and Puerto Rico. As of January 28, 2017, the Company’s operations and reportable segments were conducted through Macy’s, Bloomingdale’s, Bloomingdale’s The Outlet, Macy's Backstage, Bluemercury and Macy's China Limited, which are aggregated into one reporting segment in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, “Segment Reporting.” The metrics used by management to assess the performance of the Company’s operating divisions include sales trends, gross margin rates, expense rates, and rates of earnings before interest and taxes (“EBIT”) and earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Company’s operating divisions have historically had similar economic characteristics and are expected to have similar economic characteristics and long-term financial performance in future periods. For 2016, 2015 and 2014, the following merchandise constituted the following percentages of sales:
Fiscal Year The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years 2016, 2015 and 2014 ended on January 28, 2017, January 30, 2016 and January 31, 2015, respectively, and each included 52 weeks. References to years in the Consolidated Financial Statements relate to fiscal years rather than calendar years. Basis of Presentation In August 2015, the Company established a joint venture, Macy's China Limited, of which the Company holds a sixty-five percent ownership interest and Hong Kong-based Fung Retailing Limited holds the remaining thirty-five percent ownership interest. Macy's China Limited sells merchandise in China through an e-commerce presence on Alibaba Group's Tmall Global. The Consolidated Financial Statements include the accounts of Macy's, Inc. and its 100%-owned subsidiaries and the newly established majority-owned subsidiary, Macy's China Limited. The noncontrolling interest represents the Fung Retailing Limited's thirty-five percent proportionate share of the results of Macy's China Limited. All significant intercompany transactions have been eliminated. Certain reclassifications were made to prior years’ amounts to conform to the classifications of such amounts for the most recent year. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions are subject to inherent uncertainties, which may result in actual amounts differing from reported amounts. Net Sales Net sales include merchandise sales, licensed department income, shipping and handling fees, sales of private brand goods directly to third party retailers and sales of excess inventory to third parties. Sales of merchandise are recorded at the time of delivery to the customer and are reported net of merchandise returns. The Company licenses third parties to operate certain departments in its stores. The Company receives commissions from these licensed departments based on a percentage of net sales. Commissions are recognized as income at the time merchandise is sold to customers. Sales taxes collected from customers are not considered revenue and are included in accounts payable and accrued liabilities until remitted to the taxing authorities. Cost of Sales Cost of sales consists of the cost of merchandise, including inbound freight, and shipping and handling costs. An estimated allowance for future sales returns is recorded and cost of sales is adjusted accordingly. Cash and Cash Equivalents Cash and cash equivalents include cash and liquid investments with original maturities of three months or less. Cash and cash equivalents includes amounts due in respect of credit card sales transactions that are settled early in the following period in the amount of $119 million at January 28, 2017 and $128 million at January 30, 2016. Investments The Company from time to time invests in debt and equity securities, including companies engaged in complementary businesses. All marketable equity and debt securities held by the Company are accounted for under ASC Topic 320, “Investments – Debt and Equity Securities.” Unrealized holding gains and losses on trading securities are recognized in the Consolidated Statements of Income and unrealized holding gains and losses on available-for-sale securities are included as a separate component of accumulated other comprehensive income, net of income tax effect, until realized. At January 28, 2017, the Company did not hold any held-to-maturity or available-for-sale securities. Receivables In connection with the sale of most of the Company’s credit assets to Citibank, the Company and Citibank entered into a long-term marketing and servicing alliance pursuant to the terms of a Credit Card Program Agreement (the “Program Agreement”). Income earned under the Program Agreement is treated as a reduction of selling, general and administrative ("SG&A") expenses on the Consolidated Statements of Income. Under the Program Agreement, Citibank offers proprietary and non-proprietary credit cards to the Company’s customers through previously existing and newly opened accounts. Loyalty Programs The Company maintains customer loyalty programs in which customers earn points based on their spending. Under the Macy’s brand, the Company participates in a coalition program (Plenti) whereby customers can earn points based on spending levels with bonus opportunities through various targeted offers and promotions at Macy's and other partners. Coalition partners currently include - American Express, AT&T, Direct Energy, Exxon Mobil, Hulu, Nationwide, and Rite Aid. Under the Bloomingdale’s brand, the Company offers a tender neutral points-based program. Benefits also include free delivery and gift wrap services. The Company recognizes the estimated net amount of the rewards that will be earned and redeemed as a reduction to net sales. Merchandise Inventories Merchandise inventories are valued at lower of cost or market using the last-in, first-out (LIFO) retail inventory method. Under the retail inventory method, inventory is segregated into departments of merchandise having similar characteristics, and is stated at its current retail selling value. Inventory retail values are converted to a cost basis by applying specific average cost factors for each merchandise department. Cost factors represent the average cost-to-retail ratio for each merchandise department based on beginning inventory and the annual purchase activity. At January 28, 2017 and January 30, 2016, merchandise inventories valued at LIFO, including adjustments as necessary to record inventory at the lower of cost or market, approximated the cost of such inventories using the first-in, first-out (FIFO) retail inventory method. The application of the LIFO retail inventory method did not result in the recognition of any LIFO charges or credits affecting cost of sales for 2016, 2015 or 2014. The retail inventory method inherently requires management judgments and estimates, such as the amount and timing of permanent markdowns to clear unproductive or slow-moving inventory, which may impact the ending inventory valuation as well as gross margins. Permanent markdowns designated for clearance activity are recorded when the utility of the inventory has diminished. Factors considered in the determination of permanent markdowns include current and anticipated demand, customer preferences, age of the merchandise and fashion trends. When a decision is made to permanently markdown merchandise, the resulting gross margin reduction is recognized in the period the markdown is recorded. Physical inventories are generally taken within each merchandise department annually, and inventory records are adjusted accordingly, resulting in the recording of actual shrinkage. Physical inventories are taken at all store locations for substantially all merchandise categories approximately three weeks before the end of the year. Shrinkage is estimated as a percentage of sales at interim periods and for this approximate three-week period, based on historical shrinkage rates. While it is not possible to quantify the impact from each cause of shrinkage, the Company has loss prevention programs and policies that are intended to minimize shrinkage, including the use of radio frequency identification cycle counts and interim inventories to keep the Company's merchandise files accurate. Vendor Allowances The Company receives certain allowances as reimbursement for markdowns taken and/or to support the gross margins earned in connection with the sales of merchandise. These allowances are recognized when earned in accordance with ASC Subtopic 605-50, “Customer Payments and Incentives.” The Company also receives advertising allowances from approximately 1,000 of its merchandise vendors pursuant to cooperative advertising programs, with some vendors participating in multiple programs. These allowances represent reimbursements by vendors of costs incurred by the Company to promote the vendors’ merchandise and are netted against advertising and promotional costs when the related costs are incurred in accordance with ASC Subtopic 605-50. Advertising allowances in excess of costs incurred are recorded as a reduction of merchandise costs and, ultimately, through cost of sales when the merchandise is sold. The arrangements pursuant to which the Company’s vendors provide allowances, while binding, are generally informal in nature and one year or less in duration. The terms and conditions of these arrangements vary significantly from vendor to vendor and are influenced by, among other things, the type of merchandise to be supported. Advertising Department store non-direct response advertising and promotional costs are expensed either as incurred or the first time the advertising occurs. Direct response advertising and promotional costs are deferred and expensed over the period during which the sales are expected to occur, generally one to four months. Advertising and promotional costs and cooperative advertising allowances were as follows:
Property and Equipment Depreciation of owned properties is provided primarily on a straight-line basis over the estimated asset lives, which range from fifteen to fifty years for buildings and building equipment and three to fifteen years for fixtures and equipment. Real estate taxes and interest on construction in progress and land under development are capitalized. Amounts capitalized are amortized over the estimated lives of the related depreciable assets. The Company receives contributions from developers and merchandise vendors to fund building improvement and the construction of vendor shops. Such contributions are generally netted against the capital expenditures. Buildings on leased land and leasehold improvements are amortized over the shorter of their economic lives or the lease term, beginning on the date the asset is put into use. The carrying value of long-lived assets is periodically reviewed by the Company whenever events or changes in circumstances indicate that a potential impairment has occurred. For long-lived assets held for use, a potential impairment has occurred if projected future undiscounted cash flows are less than the carrying value of the assets. The estimate of cash flows includes management’s assumptions of cash inflows and outflows directly resulting from the use of those assets in operations. When a potential impairment has occurred, an impairment write-down is recorded if the carrying value of the long-lived asset exceeds its fair value. The Company believes its estimated cash flows are sufficient to support the carrying value of its long-lived assets. If estimated cash flows significantly differ in the future, the Company may be required to record asset impairment write-downs. If the Company commits to a plan to dispose of a long-lived asset before the end of its previously estimated useful life, estimated cash flows are revised accordingly, and the Company may be required to record an asset impairment write-down. Additionally, related liabilities arise such as severance, contractual obligations and other accruals associated with store closings from decisions to dispose of assets. The Company estimates these liabilities based on the facts and circumstances in existence for each restructuring decision. The amounts the Company will ultimately realize or disburse could differ from the amounts assumed in arriving at the asset impairment and restructuring charge recorded. The Company classifies certain long-lived assets as held for disposal by sale and ceases depreciation when the particular criteria for such classification are met, including the probable sale within one year. For long-lived assets to be disposed of by sale, an impairment charge is recorded if the carrying amount of the asset exceeds its fair value less costs to sell. Such valuations include estimations of fair values and incremental direct costs to transact a sale. Leases The Company recognizes operating lease minimum rentals on a straight-line basis over the lease term. Executory costs such as real estate taxes and maintenance, and contingent rentals such as those based on a percentage of sales are recognized as incurred. The lease term, which includes all renewal periods that are considered to be reasonably assured, begins on the date the Company has access to the leased property. The Company receives contributions from landlords to fund buildings and leasehold improvements. Such contributions are recorded as deferred rent and amortized as reductions to lease expense over the lease term. Goodwill and Other Intangible Assets The carrying value of goodwill and other intangible assets with indefinite lives are reviewed at least annually for possible impairment in accordance with ASC Subtopic 350-20 “Goodwill.” Goodwill and other intangible assets with indefinite lives have been assigned to reporting units for purposes of impairment testing. The reporting units are the Company’s retail operating divisions. Goodwill and other intangible assets with indefinite lives are tested for impairment annually at the end of the fiscal month of May. The Company evaluates qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value and whether it is necessary to perform the two-step goodwill impairment process. If required, the first step involves a comparison of each reporting unit’s fair value to its carrying value and the Company estimates fair value based on discounted cash flows. The reporting unit’s discounted cash flows require significant management judgment with respect to sales, gross margin and SG&A rates, capital expenditures and the selection and use of an appropriate discount rate. The projected sales, gross margin and SG&A expense rate assumptions and capital expenditures are based on the Company’s annual business plan or other forecasted results. Discount rates reflect market-based estimates of the risks associated with the projected cash flows directly resulting from the use of those assets in operations. The estimates of fair value of reporting units are based on the best information available as of the date of the assessment. If the carrying value of a reporting unit exceeds its estimated fair value in the first step, a second step is performed, in which the reporting unit’s goodwill is written down to its implied fair value. The second step requires the Company to allocate the fair value of the reporting unit derived in the first step to the fair value of the reporting unit’s net assets, with any fair value in excess of amounts allocated to such net assets representing the implied fair value of goodwill for that reporting unit. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-lived intangible asset is written down by an amount equal to such excess. Capitalized Software The Company capitalizes purchased and internally developed software and amortizes such costs to expense on a straight-line basis over two to five years. Capitalized software is included in other assets on the Consolidated Balance Sheets. Gift Cards The Company only offers no-fee, non-expiring gift cards to its customers. At the time gift cards are sold, no revenue is recognized; rather, the Company records an accrued liability to customers. The liability is relieved and revenue is recognized equal to the amount redeemed at the time gift cards are redeemed for merchandise. The Company records income from unredeemed gift cards (breakage) as a reduction of SG&A expenses, and income is recorded in proportion and over the time period gift cards are actually redeemed. At least three years of historical data, updated annually, is used to determine actual redemption patterns. Self-Insurance Reserves The Company, through its insurance subsidiary, is self-insured for workers compensation and general liability claims up to certain maximum liability amounts. Although the amounts accrued are actuarially determined based on analysis of historical trends of losses, settlements, litigation costs and other factors, the amounts the Company will ultimately disburse could differ from such accrued amounts. Post Employment and Postretirement Obligations The Company, through its actuaries, utilizes assumptions when estimating the liabilities for pension and other employee benefit plans. These assumptions, where applicable, include the discount rates used to determine the actuarial present value of projected benefit obligations, the rate of increase in future compensation levels, the long-term rate of return on assets and the growth in health care costs. The Company measures post employment and postretirement assets and obligations using the month-end that is closest to the Company's fiscal year-end. The benefit expense is generally recognized in the Consolidated Financial Statements on an accrual basis over the average remaining lifetime of participants, and the accrued benefits are reported in accounts payable and accrued liabilities and other liabilities on the Consolidated Balance Sheets, as appropriate. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and net operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Income in the period that includes the enactment date. Deferred income tax assets are reduced by a valuation allowance when it is more likely than not that some portion of the deferred income tax assets will not be realized. Derivatives The Company records derivative transactions according to the provisions of ASC Topic 815 “Derivatives and Hedging,” which establishes accounting and reporting standards for derivative instruments and hedging activities and requires recognition of all derivatives as either assets or liabilities and measurement of those instruments at fair value. The Company makes limited use of derivative financial instruments. The Company does not use financial instruments for trading or other speculative purposes and is not a party to any leveraged financial instruments. On the date that the Company enters into a derivative contract, the Company designates the derivative instrument as either a fair value hedge, a cash flow hedge or as a free-standing derivative instrument, each of which would receive different accounting treatment. Prior to entering into a hedge transaction, the Company formally documents the relationship between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. Derivative instruments that the Company may use as part of its interest rate risk management strategy include interest rate swap and interest rate cap agreements and Treasury lock agreements. At January 28, 2017, the Company was not a party to any derivative financial instruments. Stock Based Compensation The Company records stock-based compensation expense according to the provisions of ASC Topic 718, “Compensation – Stock Compensation.” ASC Topic 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Under the provisions of ASC Topic 718, the Company determines the appropriate fair value model to be used for valuing share-based payments and the amortization method for compensation cost. |
Impairments, Store Closing Costs and Gain on Sale of Leases |
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Impairments, Store Closing Costs and Other Costs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairments, Store Closing and Other Costs |
Impairments, store closing and other costs consist of the following:
During January 2017, the Company announced a series of actions to streamline its store portfolio, intensify cost efficiency efforts and execute its real estate strategy. These actions are intended to support the Company's strategy to further invest in omnichannel capabilities, improve customer experience and create shareholder value. These actions include the announced closure of sixty-eight Macy's stores and the reorganization of the field structure that supports the remaining stores and a significant restructuring of the Company's operations to focus resources on strategic priorities, improve organizational agility and reduce expense. During January 2016, the Company announced a series of cost-efficiency and process improvement measures, including organization changes that combine certain region and district organizations of the My Macy's store management structure, adjusting staffing levels in each Macy's and Bloomingdale's store, implementing a voluntary separation opportunity for certain senior executives in stores, office and support functions who meet certain age and service requirements, reducing additional positions in back-office organizations, consolidating the four existing Macy's, Inc. credit and customer service center facilities into three, and decreasing non-payroll budgets company-wide. During January 2015, the Company announced a series of initiatives to evolve its business model and invest in continued growth opportunities, including a restructuring of merchandising and marketing functions at Macy's and Bloomingdale's consistent with the Company's omnichannel approach to retailing, as well as a series of adjustments to its field and store operations to increase productivity and efficiency. During January 2017, the Company announced the closure of sixty-eight Macy's stores, part of the approximately 100 planned closings announced in August 2016; during January 2016, the Company announced the closure of forty Macy's stores; and during January 2015, the Company announced the closure of fourteen Macy’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 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 majority of the 2016 accrued severance costs, which are included in accounts payable and accrued liabilities on the Consolidated Balance Sheets, prior to July 29, 2017. The 2015 and 2014 accrued severance costs, which were included in accounts payable and accrued liabilities on the Consolidated Balance Sheets, were paid out in the year subsequent to incurring such severance costs. |
Receivables |
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Accounts, Notes, Loans and Financing Receivable, Classified [Abstract] | |
Receivables | Receivables Receivables were $522 million at January 28, 2017, compared to $558 million at January 30, 2016. In January 2016, the Company completed a $270 million real estate transaction that will enable a re-creation of Macy’s Brooklyn store. The Company will continue to own and operate the first four floors and lower level of its existing nine-story retail store, which will be reconfigured and remodeled. The remaining portion of the store and its nearby parking facility were sold to Tishman Speyer in a single sales transaction. The Company has received approximately $209 million of cash ($68 million in 2015 and $141 million in 2016) from Tishman Speyer for these real estate assets and will receive $61 million of additional cash over the next two years,. This receivable is backed by a guarantee. In connection with the sale of most of the Company's credit card accounts and related receivable balances to Citibank, the Company and Citibank entered into a long-term marketing and servicing alliance pursuant to the terms of a Credit Card Program Agreement with an initial term of 10 years which was to expire on July 17, 2016. During 2014, the Company entered into an amended and restated Credit Card Program Agreement (the “Program Agreement”) with substantially similar financial terms as the prior credit card program agreement. The Program Agreement is now set to expire March 31, 2025, subject to an additional renewal term of three years. The Program Agreement provides for, among other things, (i) the ownership by Citibank of the accounts purchased by Citibank, (ii) the ownership by Citibank of new accounts opened by the Company’s customers, (iii) the provision of credit by Citibank to the holders of the credit cards associated with the foregoing accounts, (iv) the servicing of the foregoing accounts, and (v) the allocation between Citibank and the Company of the economic benefits and burdens associated with the foregoing and other aspects of the alliance. Pursuant to the Program Agreement, the Company continues to provide certain servicing functions related to the accounts and related receivables owned by Citibank and receives compensation from Citibank for these services. The amounts earned under the Program Agreement related to the servicing functions are deemed adequate compensation and, accordingly, no servicing asset or liability has been recorded on the Consolidated Balance Sheets. Amounts received under the Program Agreement were $912 million for 2016, $1,026 million for 2015 and $975 million for 2014, and are treated as reductions of SG&A expenses on the Consolidated Statements of Income. The Company’s earnings from credit operations, net of servicing expenses, were $736 million for 2016, $831 million for 2015, and $776 million for 2014. |
Properties and Leases |
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Property Plant and Equipment and Leases of Lessee [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Properties and Leases | Properties and Leases
In connection with various shopping center agreements, the Company is obligated to operate certain stores within the centers for periods of up to twenty years. Some of these agreements require that the stores be operated under a particular name. The Company leases a portion of the real estate and personal property used in its operations. Most leases require the Company to pay real estate taxes, maintenance and other executory costs; some also require additional payments based on percentages of sales and some contain purchase options. Certain of the Company’s real estate leases have terms that extend for significant numbers of years and provide for rental rates that increase or decrease over time. In addition, certain of these leases contain covenants that restrict the ability of the tenant (typically a subsidiary of the Company) to take specified actions (including the payment of dividends or other amounts on account of its capital stock) unless the tenant satisfies certain financial tests. Minimum rental commitments (excluding executory costs) at January 28, 2017, for noncancellable leases are:
Capitalized leases are included in the Consolidated Balance Sheets as property and equipment while the related obligation is included in short-term ($1 million) and long-term ($27 million) debt. Amortization of assets subject to capitalized leases is included in depreciation and amortization expense. Total minimum lease payments shown above have not been reduced by minimum sublease rentals of $17 million on operating leases. The Company is a guarantor with respect to certain lease obligations associated with The May Department Stores Company and previously disposed subsidiaries or businesses. The leases, one of which includes potential extensions to 2070, have future minimum lease payments aggregating $284 million and are offset by payments from existing tenants and subtenants. In addition, the Company is liable for other expenses related to the above leases, such as property taxes and common area maintenance, which are also payable by existing tenants and subtenants. Potential liabilities related to these guarantees are subject to certain defenses by the Company. The Company believes that the risk of significant loss from the guarantees of these lease obligations is remote. Rental expense consists of:
Included as a reduction to the expense above is deferred rent amortization of $9 million, $8 million and $7 million for 2016, 2015 and 2014, respectively, related to contributions received from landlords. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The following summarizes the Company’s goodwill and other intangible assets:
In March 2015, the Company completed its acquisition of Bluemercury, Inc., a luxury beauty products and spa retailer. Goodwill during 2015 increased as a result of this acquisition. Also as a result of the acquisition of Bluemercury, the Company established intangible assets relating to definite lived tradenames and favorable leases. Definite lived tradenames are being amortized over their respective useful lives of 20 years. Favorable lease intangible assets are being amortized over their respective lease terms (weighted average remaining life of approximately six years). Customer relationship intangible assets relating to the acquisition of The May Department Stores Company were being amortized in 2015 and 2014 and were fully amortized as of January 30, 2016. Intangible amortization expense amounted to $10 million for 2016, $23 million for 2015 and $31 million for 2014. Future estimated intangible amortization expense is shown below:
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Financing |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing | Financing The Company’s debt is as follows:
Interest expense and premium on early retirement of debt is as follows:
On August 15, 2016, the Company redeemed at par the principal amount of $108 million of 7.875% senior debentures due 2036, pursuant to the terms of the debentures. Interest expense in 2016 benefited from the recognition of unamortized debt premium associated with this debt. On August 17, 2015, the Company redeemed at par the principal amount of $76 million of 8.125% senior debentures due 2035, pursuant to the terms of the debentures. Interest expense in 2015 benefited from the recognition of unamortized debt premium associated with this debt. On November 14, 2014, the Company provided a notice of redemption related to all of the $407 million of 7.875% senior notes due 2015, as allowed under the terms of the indenture. The price for the redemption was calculated pursuant to the indenture and resulted in the recognition of additional interest expense of $17 million during 2014. This additional interest expense is presented as premium on early retirement of debt on the Consolidated Statements of Income. Future maturities of long-term debt, other than capitalized leases, are shown below:
During 2016, 2015 and 2014, the Company repaid $636 million, $69 million and $453 million, respectively, of indebtedness at maturity. On December 7, 2015, the Company issued $500 million aggregate principal amount of 3.45% senior notes due 2021, the proceeds of which were used for general corporate purposes. On November 18, 2014, the Company issued $550 million aggregate principal amount of 4.5% senior notes due 2034. This debt was used to pay for the redemption of the $407 million of 7.875% senior notes due 2015 described above. On May 23, 2014, the Company issued $500 million aggregate principal amount of 3.625% senior unsecured notes due 2024, the proceeds of which were used for general corporate purposes. The following table shows the detail of debt repayments:
The following summarizes certain components of the Company’s debt: Bank Credit Agreement The Company entered into a new credit agreement with certain financial institutions on May 6, 2016 providing for revolving credit borrowings and letters of credit in an aggregate amount not to exceed $1,500 million (which may be increased to $1,750 million at the option of the Company, subject to the willingness of existing or new lenders to provide commitments for such additional financing) outstanding at any particular time. The agreement is set to expire May 6, 2021 and replaced the prior agreement which was set to expire May 10, 2018. As of January 28, 2017, and January 30, 2016, there were no revolving credit loans outstanding under this credit agreement, and there were no borrowings under the agreement throughout all of 2016 and 2015. In addition, there were no standby letters of credit outstanding at January 28, 2017 and there were less than $1 million of standby letters of credit outstanding at January 30, 2016. Revolving loans under the credit agreement bear interest based on various published rates. The Company's credit agreement, which is an obligation of a 100%-owned subsidiary of Macy’s, Inc. (“Parent”), is not secured. However, Parent has fully and unconditionally guaranteed this obligation, subject to specified limitations. The Company’s interest coverage ratio for 2016 was 7.36 and its leverage ratio at January 28, 2017 was 2.38, in each case as calculated in accordance with the credit agreement. The credit agreement requires the Company to maintain a specified interest coverage ratio for the latest four quarters of no less than 3.25 and a specified leverage ratio as of and for the latest four quarters of no more than 3.75. The interest coverage ratio is defined as EBITDA (earnings before interest, taxes, depreciation and amortization) divided by net interest expense and the leverage ratio is defined as debt divided by EBITDA. For purposes of these calculations EBITDA is calculated as net income plus interest expense, taxes, depreciation, amortization, non-cash impairment of goodwill, intangibles and real estate, non-recurring cash charges not to exceed in the aggregate $300 million and extraordinary losses less interest income and non-recurring or extraordinary gains. Debt is adjusted to exclude the premium on acquired debt and net interest is adjusted to exclude the amortization of premium on acquired debt and premium on early retirement of debt. A breach of a restrictive covenant in the Company’s credit agreement or the inability of the Company to maintain the financial ratios described above could result in an event of default under the credit agreement. In addition, an event of default would occur under the credit agreement if any indebtedness of the Company in excess of an aggregate principal amount of $150 million becomes due prior to its stated maturity or the holders of such indebtedness become able to cause it to become due prior to its stated maturity. Upon the occurrence of an event of default, the lenders could, subject to the terms and conditions of the credit agreement, elect to declare the outstanding principal, together with accrued interest, to be immediately due and payable. Moreover, most of the Company’s senior notes and debentures contain cross-default provisions based on the non-payment at maturity, or other default after an applicable grace period, of any other debt, the unpaid principal amount of which is not less than $100 million that could be triggered by an event of default under the credit agreement. In such an event, the Company’s senior notes and debentures that contain cross-default provisions would also be subject to acceleration. Commercial Paper The Company is a party to a $1,500 million unsecured commercial paper program. The Company may issue and sell commercial paper in an aggregate amount outstanding at any particular time not to exceed its then-current combined borrowing availability under the bank credit agreement described above. The issuance of commercial paper will have the effect, while such commercial paper is outstanding, of reducing the Company’s borrowing capacity under the bank credit agreement by an amount equal to the principal amount of such commercial paper. During 2016 and 2015, the Company utilized seasonal borrowings available under this commercial paper program. The amount of borrowings under the commercial paper program increased to its highest level for 2016 of approximately $388 million during the fourth quarter. As of January 28, 2017, there were no remaining borrowings outstanding under the commercial paper program. This program, which is an obligation of a 100%-owned subsidiary of Macy’s, Inc., is not secured. However, Parent has fully and unconditionally guaranteed the obligations. Senior Notes and Debentures The senior notes and the senior debentures are unsecured obligations of a 100%-owned subsidiary of Macy’s, Inc. and Parent has fully and unconditionally guaranteed these obligations (see Note 16, “Condensed Consolidating Financial Information”). Other Financing Arrangements At January 28, 2017 and January 30, 2016, the Company had dedicated $37 million of cash, included in prepaid expenses and other current assets, which is used to collateralize the Company’s issuances of standby letters of credit. There were $30 million and $21 million of other standby letters of credit outstanding at January 28, 2017 and January 30, 2016, respectively. |
Accounts Payable and Accrued Liabilities |
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Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities
Adjustments to the allowance for future sales returns, which amounted to a credit of $16 million, and charges of $19 million and $8 million for 2016, 2015 and 2014, respectively, are reflected in cost of sales. Changes in workers’ compensation and general liability reserves, including the current portion, are as follows:
The non-current portion of workers’ compensation and general liability reserves is included in other liabilities on the Consolidated Balance Sheets. At January 28, 2017 and January 30, 2016, workers’ compensation and general liability reserves included $112 million of liabilities which are covered by deposits and receivables included in current assets on the Consolidated Balance Sheets. |
Taxes |
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Taxes Payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxes | Taxes Income tax expense is as follows:
The income tax expense reported differs from the expected tax computed by applying the federal income tax statutory rate of 35% for 2016, 2015 and 2014 to income before income taxes. The reasons for this difference and their tax effects are as follows:
The Company participates in the Internal Revenue Service (“IRS”) Compliance Assurance Program ("CAP"). As part of the CAP, tax years are audited on a contemporaneous basis so that all or most issues are resolved prior to the filing of the tax return. The IRS has completed examinations of 2015 and all prior tax years. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:
The valuation allowance at January 28, 2017 and January 30, 2016 relates to net deferred tax assets for state net operating loss and credit carryforwards. The net change in the valuation allowance amounted to an increase of $9 million for 2016 and an increase of $3 million for 2015. As of January 28, 2017, the Company had no federal net operating loss carryforwards, state net operating loss carryforwards of $374 million, and state credit carryforwards of $31 million, which will expire between 2017 and 2036. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
As of January 28, 2017 and January 30, 2016, the amount of unrecognized tax benefits, net of deferred tax assets, that, if recognized would affect the effective income tax rate, was $109 million and $115 million, respectively. The Company classifies unrecognized tax benefits not expected to be settled within one year as other liabilities on the Consolidated Balance Sheets. The Company classifies federal, state and local interest and penalties not expected to be settled within one year as other liabilities on the Consolidated Balance Sheets and follows a policy of recognizing all interest and penalties related to unrecognized tax benefits in income tax expense. Federal, state and local interest and penalties, which amounted to an expense of $2 million for 2016, an expense of $1 million for 2015, and a credit of $3 million for 2014, are reflected in income tax expense. The Company had $55 million and $53 million accrued for the payment of federal, state and local interest and penalties at January 28, 2017 and January 30, 2016, respectively. The accrued federal, state and local interest and penalties primarily relates to state tax issues and the amount of penalties paid in prior periods, and the amount of penalties accrued at January 28, 2017 and January 30, 2016 are insignificant. At January 28, 2017, $54 million of federal, state and local interest and penalties is included in other liabilities and $1 million is included in current income taxes on the Consolidated Balance Sheets. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2013. With respect to state and local jurisdictions, with limited exceptions, the Company and its subsidiaries are no longer subject to income tax audits for years before 2007. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties have been accrued for any adjustments that are expected to result from the years still subject to examination. |
Retirement Plans |
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Pension and Other Postretirement Benefit Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans | Retirement Plans The Company has defined contribution plans which cover substantially all employees who work 1,000 hours or more in a year. In addition, the Company has a funded defined benefit plan (“Pension Plan”) and an unfunded defined benefit supplementary retirement plan (“SERP”), which provides benefits, for certain employees, in excess of qualified plan limitations. Effective January 1, 2012, the Pension Plan was closed to new participants, with limited exceptions, and effective January 2, 2012, the SERP was closed to new participants. In February 2013, the Company announced changes to the Pension Plan and SERP whereby eligible employees no longer earn future pension service credits after December 31, 2013, with limited exceptions. All retirement benefits attributable to service in subsequent periods are provided through defined contribution plans. Retirement expenses, excluding settlement charges, included the following components:
In 2016, the Company changed the method used to estimate the service and interest cost components of net periodic benefit costs for the Pension Plan and SERP. The new method uses a full yield curve approach in the estimation of these components of net periodic benefit costs. Under this approach, the Company applies discounting using individual spot rates from the yield curve composed of the rates of return from a portfolio of high quality corporate debt securities available at the measurement date. These spot rates align to each of the projected benefit obligations and service cost cash flows. Historically, the Company estimated the service and interest cost components using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligations. The Company made this change to improve the correlation between projected benefit cash flows and the corresponding yield curve spot rates and to provide a more precise measurement of service and interest costs. The Company accounted for this change as a change in estimate prospectively starting in 2016. The discount rates that would have been used to measure the 2016 service and interest cost components of net periodic benefit costs as of the beginning of the year under the single weighted-average discount rate was 4.17% and 4.23%, respectively. The 2016 reduction in service cost and interest cost for the Pension Plan and SERP associated with this change was approximately $36 million. Defined Contribution Plans The Company has a qualified plan that permits participating associates to defer eligible compensation up to the maximum limits allowable under the Internal Revenue Code. Beginning January 1, 2014, the Company has a non-qualified plan which permits participating associates to defer eligible compensation above the limits of the qualified plan. The Company contributes a matching percentage of employee contributions under both the qualified and non-qualified plans. Effective January 1, 2014, the Company's matching contribution to the qualified plan was enhanced for all participating employees, with limited exceptions. Prior to January 1, 2014, the matching contribution rate under the qualified plan was higher for those employees not eligible for the Pension Plan than for employees eligible for the Pension Plan. The liability related to the qualified plan matching contribution, which is reflected in accounts payable and accrued liabilities on the Consolidated Balance Sheets, was $102 million at January 28, 2017 and $97 million January 30, 2016. Expense related to matching contributions for the qualified plan amounted to $94 million for 2016, $88 million for 2015 and $89 million for 2014. At January 28, 2017 and January 30, 2016, the liability under the non-qualified plan, which is reflected in other liabilities on the Consolidated Balance Sheets, was $20 million and $13 million, respectively. The liability related to the non-qualified plan matching contribution, which is reflected in accounts payable and accrued liabilities on the Consolidated Balance Sheets, was $2 million at January 28, 2017 and January 30, 2016. Expense related to matching contributions for the non-qualified plan amounted to $2 million for 2016 and 2015. In connection with the non-qualified plan, the Company had mutual fund investments at January 28, 2017 and January 30, 2016 of $20 million and $13 million, respectively, which are included in prepaid expenses and other current assets on the Consolidated Balance Sheets. The Company has an additional deferred compensation plan wherein eligible executives elected to defer a portion of their compensation each year as either stock credits or cash credits. Effective January 1, 2015, no additional compensation is eligible for deferral. The Company has transferred shares to a trust to cover the number estimated for distribution on account of stock credits currently outstanding. At January 28, 2017 and January 30, 2016, the liability under the plan, which is reflected in other liabilities on the Consolidated Balance Sheets, was $37 million and $39 million, respectively. Expense for 2016, 2015 and 2014 was immaterial. Pension Plan The following provides a reconciliation of benefit obligations, plan assets, and funded status of the Pension Plan as of January 28, 2017 and January 30, 2016:
The accumulated benefit obligation for the Pension Plan was $3,464 million as of January 28, 2017 and $3,574 million as of January 30, 2016. Net pension costs, settlement charges and other amounts recognized in other comprehensive loss for the Pension Plan included the following actuarially determined components:
The estimated net actuarial loss for the Pension Plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2017 is $33 million. The following weighted average assumptions were used to determine the projected benefit obligations for the Pension Plan at January 28, 2017 and January 30, 2016:
The following weighted average assumptions were used to determine the net periodic pension cost for the Pension Plan:
The Pension Plan’s assumptions are evaluated annually and updated as necessary. The discount rate used to determine the present value of the projected benefit obligation for the Pension Plan is based on a yield curve constructed from a portfolio of high quality corporate debt securities with various maturities. Each year’s expected future benefit payments are discounted to their present value at the appropriate yield curve rate, thereby generating the overall discount rate for the projected benefit obligation. Due to settlement accounting and re-measurements during 2016, the discount rate used to measure service cost and the discount rate to measure interest cost varied between periods. The table above shows the range of rates used to determine net periodic expense for the Pension Plan. The Company develops its expected long-term rate of return on plan asset assumption by evaluating input from several professional advisors taking into account the asset allocation of the portfolio and long-term asset class return expectations, as well as long-term inflation assumptions. Expected returns for each major asset class are considered along with their volatility and the expected correlations among them. These expectations are based upon historical relationships as well as forecasts of how future returns may vary from historical returns. Returns by asset class and correlations among asset classes are combined using the target asset allocation to derive an expected return for the portfolio as a whole. Long-term historical returns of the portfolio are also considered. Portfolio returns are calculated net of all expenses, therefore, the Company also analyzes expected costs and expenses, including investment management fees, administrative expenses, Pension Benefit Guaranty Corporation premiums and other costs and expenses. As of January 31, 2015, the Company lowered the assumed annual long-term rate of return for the Pension Plan's assets from 7.50% to 7.00% based on expected future returns on the portfolio of assets. The Company develops its rate of compensation increase assumption based on recent experience and reflects an estimate of future compensation levels taking into account general increase levels, seniority, promotions and other factors. The salary increase assumption is used to project employees’ pay in future years and its impact on the projected benefit obligation for the Pension Plan. The assets of the Pension Plan are managed by investment specialists with the primary objectives of payment of benefit obligations to Plan participants and an ultimate realization of investment returns over longer periods in excess of inflation. The Company employs a total return investment approach whereby a mix of domestic and foreign equity securities, fixed income securities and other investments is used to maximize the long-term return on the assets of the Pension Plan for a prudent level of risk. Risks are mitigated through asset diversification and the use of multiple investment managers. The target allocation for plan assets is currently 50% equity securities, 40% debt securities, 5% real estate and 5% private equities. The Company generally employs investment managers to specialize in a specific asset class. These managers are chosen and monitored with the assistance of professional advisors, using criteria that include organizational structure, investment philosophy, investment process, performance compared to market benchmarks and peer groups. The Company periodically conducts an analysis of the behavior of the Pension Plan’s assets and liabilities under various economic and interest rate scenarios to ensure that the long-term target asset allocation is appropriate given the liabilities. The fair values of the Pension Plan assets as of January 28, 2017, excluding interest and dividend receivables and pending investment purchases and sales, by asset category are as follows:
(a) Certain investments that are measured at fair value using the net asset value per share as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets. The fair values of the Pension Plan assets as of January 30, 2016, excluding interest and dividend receivables and pending investment purchases and sales, by asset category are as follows:
(a) Certain investments that are measured at fair value using the net asset value per share as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets. Corporate bonds consist primarily of investment grade bonds of U.S. issuers from diverse industries. The fair value of certain pooled funds including equity securities, real estate, hedge funds and private equity investments represents the reported net asset value of shares or underlying assets of the investment as a practical expedient to estimate fair value. International equity pooled funds seek to provide long-term capital growth and income by investing in equity securities of non-U.S. companies located both in developed and emerging markets. There are generally no redemption restrictions or unfunded commitments related to these equity securities. Real estate investments include several funds which seek risk-adjusted return by providing a stable, income-driven rate of return over the long term with high potential for growth of net investment income and appreciation of value. The real estate investments are diversified across property types and geographical areas primarily in the United States of America. Private equity investments have an objective of realizing aggregate long-term returns in excess of those available from investments in the public equity markets. Private equity investments generally consist of limited partnerships in the United States of America, Europe and Asia. Private equity and real estate investments are valued using fair values per the most recent financial reports provided by the investment sponsor, adjusted as appropriate for any lag between the date of the financial reports and the Company’s reporting date. Hedge fund investments seek to provide strong downside protection qualities and to produce long-term risk-adjusted returns with low volatility through active asset management among a select group of U.S. and non-U.S. investment partnerships and companies, managed funds, separately managed accounts, securities and commodities held in segregated accounts and other investment vehicles. Due to the nature of the underlying assets of the real estate, hedge funds and private equity investments, changes in market conditions and the economic environment may significantly impact the net asset value of these investments and, consequently, the fair value of the Pension Plan’s investments. These investments are redeemable at net asset value to the extent provided in the documentation governing the investments. However, these redemption rights may be restricted in accordance with the governing documents. Redemption of these investments is subject to restrictions including lock-up periods where no redemptions are allowed, restrictions on redemption frequency and advance notice periods for redemptions. As of January 28, 2017 and January 30, 2016, certain of these investments are generally subject to lock-up periods, ranging from two to fourteen years, certain of these investments are subject to restrictions on redemption frequency, ranging from daily to twice per year, and certain of these investments are subject to advance notice requirements, ranging from sixty-day notification to ninety-day notification. As of January 28, 2017 and January 30, 2016, the Pension Plan had unfunded commitments related to certain of these investments totaling $72 million and $96 million, respectively. The Company does not anticipate making funding contributions to the Pension Plan in 2017. The following benefit payments are estimated to be paid from the Pension Plan:
Supplementary Retirement Plan The following provides a reconciliation of benefit obligations, plan assets and funded status of the supplementary retirement plan as of January 28, 2017 and January 30, 2016:
The accumulated benefit obligation for the supplementary retirement plan was $747 million as of January 28, 2017 and $823 million as of January 30, 2016. Net pension costs, settlement charges and other amounts recognized in other comprehensive loss for the supplementary retirement plan included the following actuarially determined components:
The estimated net actuarial loss for the supplementary retirement plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2017 is $8 million. The following weighted average assumption was used to determine the projected benefit obligations for the supplementary retirement plan at January 28, 2017 and January 30, 2016:
The following weighted average assumption was used to determine net pension costs for the supplementary retirement plan:
The supplementary retirement plan’s assumptions are evaluated annually and updated as necessary. The discount rate used to determine the present value of the projected benefit obligation for the supplementary retirement plan is based on a yield curve constructed from a portfolio of high quality corporate debt securities with various maturities. Each year’s expected future benefit payments are discounted to their present value at the appropriate yield curve rate, thereby generating the overall discount rate for the projected benefit obligation. Due to settlement accounting and re-measurements during 2016, the discount rate used to measure interest cost varied between periods. The table above shows the range of rates used to determine net periodic expense for the supplementary retirement plan. The following benefit payments are estimated to be funded by the Company and paid from the supplementary retirement plan:
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Postretirement Health Care and Life Insurance Benefits |
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Pension and Other Postretirement Benefit Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Postretirement Health Care and Life Insurance Benefits | Postretirement Health Care and Life Insurance Benefits In addition to pension and other supplemental benefits, certain retired employees currently are provided with specified health care and life insurance benefits. Eligibility requirements for such benefits vary by division and subsidiary, but generally state that benefits are available to eligible employees who were hired prior to a certain date and retire after a certain age with specified years of service. Certain employees are subject to having such benefits modified or terminated. In 2016, the Company changed the method used to estimate the service and interest cost components of net periodic benefit costs for the postretirement obligations. The new method uses a full yield curve approach in the estimation of these components of net periodic benefit costs. Under this approach, the Company applies discounting using individual spot rates from the yield curve composed of the rates of return from a portfolio of high quality corporate debt securities available at the measurement date. These spot rates align to each of the accumulated postretirement obligation and service cost cash flows. Historically, the Company estimated the service and interest cost components using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligations. The Company made this change to improve the correlation between projected benefit cash flows and the corresponding yield curve spot rates and to provide a more precise measurement of service and interest costs. The Company accounted for this change as a change in estimate prospectively starting in 2016. The discount rate that would have been used to measure the 2016 service and interest cost components of net periodic benefit cost as of the beginning of the year under the single weighted-average discount rate was 4.15%. The 2016 reduction in service cost and interest cost for the postretirement obligations associated with this change was approximately $2 million. The following provides a reconciliation of benefit obligations, plan assets, and funded status of the postretirement obligations as of January 28, 2017 and January 30, 2016:
Net postretirement benefit costs and other amounts recognized in other comprehensive loss included the following actuarially determined components:
The estimated net actuarial gain that will be amortized from accumulated other comprehensive loss into net periodic postretirement benefit cost during 2017 is $4 million. The following weighted average assumption was used to determine the accumulated postretirement benefit obligations at January 28, 2017 and January 30, 2016:
The following weighted average assumption was used to determine the net postretirement benefit costs for the postretirement obligations:
The postretirement benefit obligation assumptions are evaluated annually and updated as necessary. The discount rate used to determine the present value of the Company’s accumulated postretirement benefit obligations is based on a yield curve constructed from a portfolio of high quality corporate debt securities with various maturities. Each year’s expected future benefit payments are discounted to their present value at the appropriate yield curve rate, thereby generating the overall discount rate for the accumulated postretirement benefit obligations. The future medical benefits provided by the Company for certain employees are based on a fixed amount per year of service, and the accumulated postretirement benefit obligation is not affected by increases in health care costs. However, the future medical benefits provided by the Company for certain other employees are affected by increases in health care costs. The following provides the assumed health care cost trend rates related to the Company’s accumulated postretirement benefit obligations at January 28, 2017 and January 30, 2016:
The assumed health care cost trend rates have an impact on the amounts reported for the accumulated postretirement benefit obligations. A one-percentage-point change in the assumed health care cost trend rates would have the following effects:
The following table reflects the benefit payments estimated to be funded by the Company and paid from the accumulated postretirement benefit obligations and estimated federal subsidies expected to be received under the Medicare Prescription Drug Improvement and Modernization Act of 2003:
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Stock Based Compensation |
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Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Based Compensation | Stock Based Compensation During 2009, the Company obtained shareholder approval for the Macy’s 2009 Omnibus Incentive Compensation Plan under which up to 51 million shares of Common Stock may be issued. This plan is intended to help the Company attract and retain directors, officers, other key executives and employees and is also intended to provide incentives and rewards relating to the Company’s business plans to encourage such persons to devote themselves to the business of the Company. Prior to 2009, the Company had two equity plans; the Macy's 1995 Executive Equity Incentive Plan and the Macy's 1994 Stock Incentive Plan. After shareholders approved the 2009 Omnibus Incentive Compensation Plan, Common Stock may no longer be granted under the Macy's 1995 Executive Equity Incentive Plan or the Macy's 1994 Stock Incentive Plan. The following disclosures present the Company’s equity plans on a combined basis. The equity plan is administered by the Compensation and Management Development Committee of the Board of Directors (the “CMD Committee”). The CMD Committee is authorized to grant options, stock appreciation rights, restricted stock and restricted stock units to officers and key employees of the Company and its subsidiaries and to non-employee directors. There have been no grants of stock appreciation rights under the equity plans. Stock option grants have an exercise price at least equal to the market value of the underlying common stock on the date of grant, have ten-year terms and typically vest ratably over four years of continued employment. Restricted stock and time-based restricted stock unit awards generally vest one to four years from the date of grant. Performance-based restricted stock units generally are earned based on the attainment of specified goals achieved over the performance period. As of January 28, 2017, 16 million shares of common stock were available for additional grants pursuant to the Company’s equity plan. Shares awarded are generally issued from the Company's treasury stock. Stock-based compensation expense included the following components:
All stock-based compensation expense is recorded in SG&A expense in the Consolidated Statements of Income. As of January 28, 2017, the Company had $63 million of unrecognized compensation costs related to nonvested stock options, which is expected to be recognized over a weighted average period of approximately 1.7 years, and $21 million of unrecognized compensation costs related to nonvested restricted stock units, which is expected to be recognized over a weighted average period of approximately 1.4 years. During 2016, 2015 and 2014, the CMD Committee approved awards of performance-based restricted stock units to certain senior executives of the Company. Each award reflects a target number of shares (“Target Shares”) that may be issued to the award recipient. These awards may be earned upon the completion of three-year performance periods ending February 2, 2019, February 3, 2018 and January 28, 2017, respectively. Whether units are earned at the end of the performance period will be determined based on the achievement of certain performance objectives set by the CMD Committee in connection with the issuance of the units. The performance objectives are based on the Company’s business plan covering the performance period. The performance objectives include achieving a cumulative EBITDA level for the performance period and also include an EBITDA as a percent to sales ratio and a return on invested capital ratio. The performance-based restricted stock units also include a performance objective relating to relative total shareholder return (“TSR”). Relative TSR reflects the change in the value of the Company’s common stock over the performance period in relation to the change in the value of the common stock of a twelve-company executive compensation peer group over the performance period, assuming the reinvestment of dividends. Depending on the results achieved during the three-year performance periods, the actual number of shares that a grant recipient receives at the end of the period may range from 0% to 150% of the Target Shares granted. Also during 2016, 2015 and 2014, the CMD Committee approved awards of time-based restricted stock units to certain senior executives and other employees of the Company and awards of time-based restricted stock units to the non-employee members of the Company’s board of directors. Stock Options The fair value of stock options granted during 2016, 2015 and 2014 and the weighted average assumptions used to estimate the fair value are as follows:
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company estimates the expected volatility and expected option life assumption consistent with ASC Topic 718, “Compensation – Stock Compensation.” The expected volatility of the Company’s common stock at the date of grant is estimated based on a historic volatility rate and the expected option life is calculated based on historical stock option experience as the best estimate of future exercise patterns. The dividend yield assumption is based on historical and anticipated dividend payouts. The risk-free interest rate assumption is based on observed interest rates consistent with the expected life of each stock option grant. The Company uses historical data to estimate pre-vesting option forfeitures and records stock-based compensation expense only for those awards that are expected to vest. Compensation expense is recorded for all stock options expected to vest based on the amortization of the fair value at the date of grant on a straight-line basis primarily over the vesting period of the options. Activity related to stock options for 2016 is as follows:
Additional information relating to stock options is as follows:
Restricted Stock Units The weighted average grant date fair values of restricted stock units granted during 2016, 2015 and 2014 are as follows:
The fair value of the Target Shares and restricted stock awards are based on the fair value of the underlying shares on the date of grant. The fair value of the portion of the Target Shares that relate to a relative TSR performance objective was determined using a Monte Carlo simulation analysis to estimate the total shareholder return ranking of the Company among a twelve-company executive compensation peer group over the remaining performance periods. The expected volatility of the Company’s common stock at the date of grant was estimated based on a historical average volatility rate for the approximate three-year performance period. The dividend yield assumption was based on historical and anticipated dividend payouts. The risk-free interest rate assumption was based on observed interest rates consistent with the approximate three-year performance measurement period. Compensation expense is recorded for all restricted stock unit awards based on the amortization of the fair market value at the date of grant over the period the restrictions lapse or over the performance period of the performance-based restricted stock units. Activity related to restricted stock units for 2016 is as follows:
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Shareholders' Equity |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity The authorized shares of the Company consist of 125 million shares of preferred stock (“Preferred Stock”), par value of $.01 per share, with no shares issued, and 1,000 million shares of Common Stock, par value of $.01 per share, with 333.6 million shares of Common Stock issued and 304.1 million shares of Common Stock outstanding at January 28, 2017, and with 341.6 million shares of Common Stock issued and 310.3 million shares of Common Stock outstanding at January 30, 2016 (with shares held in the Company’s treasury being treated as issued, but not outstanding). The Company retired 8.0 million, 38.0 million and 31.0 million shares of Common Stock during 2016, 2015 and 2014, respectively. The Company's board of directors approved an additional authorization to purchase Common Stock of $1,500 million on February 26, 2016. Combined with previous authorizations commencing in January 2000, the Company’s board of directors has from time to time approved authorizations to purchase, in the aggregate, up to $18,000 million of Common Stock. All authorizations are cumulative and do not have an expiration date. During 2016, the Company purchased approximately 7.9 million shares of Common Stock under its share repurchase program for a total of $316 million. During 2015, the Company purchased approximately 34.8 million shares of Common Stock under its share repurchase program for a total of $2,000 million. During 2014, the Company purchased approximately 31.9 million shares of Common Stock under its share repurchase program for a total of $1,900 million. As of January 28, 2017, $1,716 million of authorization remained unused. The Company may continue or, from time to time, suspend repurchases of its shares under its share repurchase program, depending on prevailing market conditions, alternative uses of capital and other factors. Common Stock The holders of the Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders. Subject to preferential rights that may be applicable to any Preferred Stock, holders of Common Stock are entitled to receive ratably such dividends as may be declared by the Board of Directors in its discretion, out of funds legally available therefor. Treasury Stock Treasury stock contains shares repurchased under the share repurchase program, shares repurchased to cover employee tax liabilities related to stock plan activity and shares maintained in a trust related to deferred compensation plans. Under the deferred compensation plans, shares are maintained in a trust to cover the number estimated to be needed for distribution on account of stock credits currently outstanding. Changes in the Company’s Common Stock issued and outstanding, including shares held by the Company’s treasury, are as follows:
Accumulated Other Comprehensive Loss For the Company, the only component of accumulated other comprehensive loss for 2016, 2015 and 2014 relates to post employment and postretirement plan items. The net actuarial gains and losses and prior service costs and credits related to post employment and postretirement benefit plans are reclassified out of accumulated other comprehensive loss and included in the computation of net periodic benefit cost (income) and are included in SG&A expenses in the Consolidated Statements of Income. In addition, the Company incurred the pro-rata recognition of net actuarial losses associated with an increase in lump sum distributions associated with store closings, a voluntary separation program, organizational restructuring, and periodic distribution activity as settlement charges in the Consolidated Statements of Income. See Note 9, "Retirement Plans," and Note 10, "Postretirement Health Care and Life Insurance Benefits," for further information. |
Fair Value Measurements and Concentrations of Credit Risk |
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Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements and Concentrations of Credit Risk | Fair Value Measurements and Concentrations of Credit Risk The following table shows the Company’s financial assets that are required to be measured at fair value on a recurring basis, by level within the hierarchy as defined by applicable accounting standards:
Other financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, receivables, short-term debt, merchandise accounts payable, accounts payable and accrued liabilities and long-term debt. With the exception of long-term debt, the carrying amount approximates fair value because of the short maturity of these instruments. The fair values of long-term debt, excluding capitalized leases, are generally estimated based on quoted market prices for identical or similar instruments, and are classified as Level 2 measurements within the hierarchy as defined by applicable accounting standards. The following table shows the estimated fair value of the Company’s long-term debt:
The following table shows certain of the Company’s non-financial assets that were measured at fair value on a nonrecurring basis during 2016 and 2015:
During 2016, long-lived assets held and used with a carrying value of $405 million were written down to their fair value of $147 million, resulting in asset impairment charges of $258 million. During 2015, long-lived assets held and used with a carrying value of $201 million were written down to their fair value of $53 million, resulting in asset impairment charges of $148 million. The fair values of these locations 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 prices of similar assets. In connection with the May 30, 2016 annual impairment test of goodwill and other intangible assets with indefinite lives, the Company recognized approximately $7 million of asset impairment charges in relation to indefinite lived tradenames. The fair values of these tradenames 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 prices of similar assets and are classified as Level 3 measurements within the hierarchy as defined by applicable accounting standards. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments. The Company places its temporary cash investments in what it believes to be high credit quality financial instruments. |
Earnings Per Share |
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Earnings Per Share | Earnings Per Share Attributable to Macy's, Inc. Shareholders The following table sets forth the computation of basic and diluted earnings per share attributable to Macy's, Inc. shareholders:
In addition to the stock options and restricted stock units reflected in the foregoing table, stock options to purchase 15.5 million of shares of common stock and restricted stock units relating to 1.1 million shares of common stock were outstanding at January 28, 2017, stock options to purchase 12.6 million of shares of common stock and restricted stock units relating to 140,000 shares of common stock were outstanding at January 30, 2016, and stock options to purchase 3.2 million of shares of common stock and restricted stock units relating to 0.6 million shares of common stock were outstanding at January 31, 2015, but were not included in the computation of diluted earnings per share attributable to Macy's, Inc. shareholders for 2016, 2015 and 2014, respectively, because their inclusion would have been antidilutive or they were subject to performance conditions that had not been met. |
Quarterly Results (unaudited) |
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Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Results (unaudited) | Quarterly Results (unaudited) Unaudited quarterly results for the last two years were as follows:
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Condensed Consolidating Financial Information |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information Certain debt obligations of the Company described in Note 6, "Financing," which constitute debt obligations of Parent’s 100%-owned subsidiary, Macy’s Retail Holdings, Inc. (“Subsidiary Issuer”), 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 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 Statements of Comprehensive Income for 2016, 2015 and 2014, Consolidating Balance Sheets as of January 28, 2017 and January 30, 2016, and the related Condensed Consolidating Statements of Cash Flows for 2016, 2015, and 2014 are presented on the following pages. MACY’S, INC. Condensed Consolidating Statement of Comprehensive Income For 2016 (millions)
MACY’S, INC. Condensed Consolidating Statement of Comprehensive Income For 2015 (millions)
MACY’S, INC. Condensed Consolidating Statement of Comprehensive Income For 2014 (millions)
MACY’S, INC. Condensed Consolidating Balance Sheet As of January 28, 2017 (millions)
MACY’S, INC. Condensed Consolidating Balance Sheet As of January 30, 2016 (millions)
MACY’S, INC. Condensed Consolidating Statement of Cash Flows For 2016 (millions)
MACY’S, INC. Condensed Consolidating Statement of Cash Flows For 2015 (millions)
MACY’S, INC. Condensed Consolidating Statement of Cash Flows For 2014 (millions)
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Organization and Summary of Significant Accounting Policies (Policy) |
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Organization and Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature Of Operations | Macy’s, Inc. and subsidiaries (the “Company”) is an omnichannel retail organization operating stores, websites and mobile applications under three brands (Macy’s, Bloomingdale’s and Bluemercury) that sell a wide range of merchandise, including apparel and accessories (men's, women's and children's), cosmetics, home furnishings and other consumer goods. The Company has stores in 45 states, the District of Columbia, Guam and Puerto Rico. As of January 28, 2017, the Company’s operations and reportable segments were conducted through Macy’s, Bloomingdale’s, Bloomingdale’s The Outlet, Macy's Backstage, Bluemercury and Macy's China Limited, which are aggregated into one reporting segment in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, “Segment Reporting.” The metrics used by management to assess the performance of the Company’s operating divisions include sales trends, gross margin rates, expense rates, and rates of earnings before interest and taxes (“EBIT”) and earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Company’s operating divisions have historically had similar economic characteristics and are expected to have similar economic characteristics and long-term financial performance in future periods. |
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Fiscal Period | The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years 2016, 2015 and 2014 ended on January 28, 2017, January 30, 2016 and January 31, 2015, respectively, and each included 52 weeks. References to years in the Consolidated Financial Statements relate to fiscal years rather than calendar years. |
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Consolidation | In August 2015, the Company established a joint venture, Macy's China Limited, of which the Company holds a sixty-five percent ownership interest and Hong Kong-based Fung Retailing Limited holds the remaining thirty-five percent ownership interest. Macy's China Limited sells merchandise in China through an e-commerce presence on Alibaba Group's Tmall Global. The Consolidated Financial Statements include the accounts of Macy's, Inc. and its 100%-owned subsidiaries and the newly established majority-owned subsidiary, Macy's China Limited. The noncontrolling interest represents the Fung Retailing Limited's thirty-five percent proportionate share of the results of Macy's China Limited. All significant intercompany transactions have been eliminated. |
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Reclassifications | Certain reclassifications were made to prior years’ amounts to conform to the classifications of such amounts for the most recent year. |
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Use Of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions are subject to inherent uncertainties, which may result in actual amounts differing from reported amounts. |
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Net Sales | Net sales include merchandise sales, licensed department income, shipping and handling fees, sales of private brand goods directly to third party retailers and sales of excess inventory to third parties. Sales of merchandise are recorded at the time of delivery to the customer and are reported net of merchandise returns. The Company licenses third parties to operate certain departments in its stores. The Company receives commissions from these licensed departments based on a percentage of net sales. Commissions are recognized as income at the time merchandise is sold to customers. Sales taxes collected from customers are not considered revenue and are included in accounts payable and accrued liabilities until remitted to the taxing authorities. |
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Cost of Sales | Cost of sales consists of the cost of merchandise, including inbound freight, and shipping and handling costs. An estimated allowance for future sales returns is recorded and cost of sales is adjusted accordingly. |
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Cash and Cash Equivalents | Cash and cash equivalents include cash and liquid investments with original maturities of three months or less. Cash and cash equivalents includes amounts due in respect of credit card sales transactions that are settled early in the following period in the amount of $119 million at January 28, 2017 and $128 million at January 30, 2016. |
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Investments | The Company from time to time invests in debt and equity securities, including companies engaged in complementary businesses. All marketable equity and debt securities held by the Company are accounted for under ASC Topic 320, “Investments – Debt and Equity Securities.” Unrealized holding gains and losses on trading securities are recognized in the Consolidated Statements of Income and unrealized holding gains and losses on available-for-sale securities are included as a separate component of accumulated other comprehensive income, net of income tax effect, until realized. At January 28, 2017, the Company did not hold any held-to-maturity or available-for-sale securities. |
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Receivables | In connection with the sale of most of the Company’s credit assets to Citibank, the Company and Citibank entered into a long-term marketing and servicing alliance pursuant to the terms of a Credit Card Program Agreement (the “Program Agreement”). Income earned under the Program Agreement is treated as a reduction of selling, general and administrative ("SG&A") expenses on the Consolidated Statements of Income. Under the Program Agreement, Citibank offers proprietary and non-proprietary credit cards to the Company’s customers through previously existing and newly opened accounts. |
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Loyalty Programs | The Company maintains customer loyalty programs in which customers earn points based on their spending. Under the Macy’s brand, the Company participates in a coalition program (Plenti) whereby customers can earn points based on spending levels with bonus opportunities through various targeted offers and promotions at Macy's and other partners. Coalition partners currently include - American Express, AT&T, Direct Energy, Exxon Mobil, Hulu, Nationwide, and Rite Aid. Under the Bloomingdale’s brand, the Company offers a tender neutral points-based program. Benefits also include free delivery and gift wrap services. The Company recognizes the estimated net amount of the rewards that will be earned and redeemed as a reduction to net sales. |
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Merchandise Inventories | Merchandise inventories are valued at lower of cost or market using the last-in, first-out (LIFO) retail inventory method. Under the retail inventory method, inventory is segregated into departments of merchandise having similar characteristics, and is stated at its current retail selling value. Inventory retail values are converted to a cost basis by applying specific average cost factors for each merchandise department. Cost factors represent the average cost-to-retail ratio for each merchandise department based on beginning inventory and the annual purchase activity. At January 28, 2017 and January 30, 2016, merchandise inventories valued at LIFO, including adjustments as necessary to record inventory at the lower of cost or market, approximated the cost of such inventories using the first-in, first-out (FIFO) retail inventory method. The application of the LIFO retail inventory method did not result in the recognition of any LIFO charges or credits affecting cost of sales for 2016, 2015 or 2014. The retail inventory method inherently requires management judgments and estimates, such as the amount and timing of permanent markdowns to clear unproductive or slow-moving inventory, which may impact the ending inventory valuation as well as gross margins. Permanent markdowns designated for clearance activity are recorded when the utility of the inventory has diminished. Factors considered in the determination of permanent markdowns include current and anticipated demand, customer preferences, age of the merchandise and fashion trends. When a decision is made to permanently markdown merchandise, the resulting gross margin reduction is recognized in the period the markdown is recorded. Physical inventories are generally taken within each merchandise department annually, and inventory records are adjusted accordingly, resulting in the recording of actual shrinkage. Physical inventories are taken at all store locations for substantially all merchandise categories approximately three weeks before the end of the year. Shrinkage is estimated as a percentage of sales at interim periods and for this approximate three-week period, based on historical shrinkage rates. While it is not possible to quantify the impact from each cause of shrinkage, the Company has loss prevention programs and policies that are intended to minimize shrinkage, including the use of radio frequency identification cycle counts and interim inventories to keep the Company's merchandise files accurate. |
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Vendor Allowances | The Company receives certain allowances as reimbursement for markdowns taken and/or to support the gross margins earned in connection with the sales of merchandise. These allowances are recognized when earned in accordance with ASC Subtopic 605-50, “Customer Payments and Incentives.” The Company also receives advertising allowances from approximately 1,000 of its merchandise vendors pursuant to cooperative advertising programs, with some vendors participating in multiple programs. These allowances represent reimbursements by vendors of costs incurred by the Company to promote the vendors’ merchandise and are netted against advertising and promotional costs when the related costs are incurred in accordance with ASC Subtopic 605-50. Advertising allowances in excess of costs incurred are recorded as a reduction of merchandise costs and, ultimately, through cost of sales when the merchandise is sold. The arrangements pursuant to which the Company’s vendors provide allowances, while binding, are generally informal in nature and one year or less in duration. The terms and conditions of these arrangements vary significantly from vendor to vendor and are influenced by, among other things, the type of merchandise to be supported. |
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Advertising | Department store non-direct response advertising and promotional costs are expensed either as incurred or the first time the advertising occurs. Direct response advertising and promotional costs are deferred and expensed over the period during which the sales are expected to occur, generally one to four months. Advertising and promotional costs and cooperative advertising allowances were as follows:
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Property and Equipment | Depreciation of owned properties is provided primarily on a straight-line basis over the estimated asset lives, which range from fifteen to fifty years for buildings and building equipment and three to fifteen years for fixtures and equipment. Real estate taxes and interest on construction in progress and land under development are capitalized. Amounts capitalized are amortized over the estimated lives of the related depreciable assets. The Company receives contributions from developers and merchandise vendors to fund building improvement and the construction of vendor shops. Such contributions are generally netted against the capital expenditures. Buildings on leased land and leasehold improvements are amortized over the shorter of their economic lives or the lease term, beginning on the date the asset is put into use. |
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Long-lived Assets | The carrying value of long-lived assets is periodically reviewed by the Company whenever events or changes in circumstances indicate that a potential impairment has occurred. For long-lived assets held for use, a potential impairment has occurred if projected future undiscounted cash flows are less than the carrying value of the assets. The estimate of cash flows includes management’s assumptions of cash inflows and outflows directly resulting from the use of those assets in operations. When a potential impairment has occurred, an impairment write-down is recorded if the carrying value of the long-lived asset exceeds its fair value. The Company believes its estimated cash flows are sufficient to support the carrying value of its long-lived assets. If estimated cash flows significantly differ in the future, the Company may be required to record asset impairment write-downs. If the Company commits to a plan to dispose of a long-lived asset before the end of its previously estimated useful life, estimated cash flows are revised accordingly, and the Company may be required to record an asset impairment write-down. Additionally, related liabilities arise such as severance, contractual obligations and other accruals associated with store closings from decisions to dispose of assets. The Company estimates these liabilities based on the facts and circumstances in existence for each restructuring decision. The amounts the Company will ultimately realize or disburse could differ from the amounts assumed in arriving at the asset impairment and restructuring charge recorded. The Company classifies certain long-lived assets as held for disposal by sale and ceases depreciation when the particular criteria for such classification are met, including the probable sale within one year. For long-lived assets to be disposed of by sale, an impairment charge is recorded if the carrying amount of the asset exceeds its fair value less costs to sell. Such valuations include estimations of fair values and incremental direct costs to transact a sale. |
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Leases | The Company recognizes operating lease minimum rentals on a straight-line basis over the lease term. Executory costs such as real estate taxes and maintenance, and contingent rentals such as those based on a percentage of sales are recognized as incurred. The lease term, which includes all renewal periods that are considered to be reasonably assured, begins on the date the Company has access to the leased property. The Company receives contributions from landlords to fund buildings and leasehold improvements. Such contributions are recorded as deferred rent and amortized as reductions to lease expense over the lease term. |
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Goodwill and Other Intangible Assets | The carrying value of goodwill and other intangible assets with indefinite lives are reviewed at least annually for possible impairment in accordance with ASC Subtopic 350-20 “Goodwill.” Goodwill and other intangible assets with indefinite lives have been assigned to reporting units for purposes of impairment testing. The reporting units are the Company’s retail operating divisions. Goodwill and other intangible assets with indefinite lives are tested for impairment annually at the end of the fiscal month of May. The Company evaluates qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value and whether it is necessary to perform the two-step goodwill impairment process. If required, the first step involves a comparison of each reporting unit’s fair value to its carrying value and the Company estimates fair value based on discounted cash flows. The reporting unit’s discounted cash flows require significant management judgment with respect to sales, gross margin and SG&A rates, capital expenditures and the selection and use of an appropriate discount rate. The projected sales, gross margin and SG&A expense rate assumptions and capital expenditures are based on the Company’s annual business plan or other forecasted results. Discount rates reflect market-based estimates of the risks associated with the projected cash flows directly resulting from the use of those assets in operations. The estimates of fair value of reporting units are based on the best information available as of the date of the assessment. If the carrying value of a reporting unit exceeds its estimated fair value in the first step, a second step is performed, in which the reporting unit’s goodwill is written down to its implied fair value. The second step requires the Company to allocate the fair value of the reporting unit derived in the first step to the fair value of the reporting unit’s net assets, with any fair value in excess of amounts allocated to such net assets representing the implied fair value of goodwill for that reporting unit. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-lived intangible asset is written down by an amount equal to such excess. |
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Capitalized Software | The Company capitalizes purchased and internally developed software and amortizes such costs to expense on a straight-line basis over two to five years. Capitalized software is included in other assets on the Consolidated Balance Sheets. |
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Gift Cards | The Company only offers no-fee, non-expiring gift cards to its customers. At the time gift cards are sold, no revenue is recognized; rather, the Company records an accrued liability to customers. The liability is relieved and revenue is recognized equal to the amount redeemed at the time gift cards are redeemed for merchandise. The Company records income from unredeemed gift cards (breakage) as a reduction of SG&A expenses, and income is recorded in proportion and over the time period gift cards are actually redeemed. At least three years of historical data, updated annually, is used to determine actual redemption patterns. |
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Self-Insurance Reserves | The Company, through its insurance subsidiary, is self-insured for workers compensation and general liability claims up to certain maximum liability amounts. Although the amounts accrued are actuarially determined based on analysis of historical trends of losses, settlements, litigation costs and other factors, the amounts the Company will ultimately disburse could differ from such accrued amounts. |
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Pension and other Employee Benefit Plans | The Company, through its actuaries, utilizes assumptions when estimating the liabilities for pension and other employee benefit plans. These assumptions, where applicable, include the discount rates used to determine the actuarial present value of projected benefit obligations, the rate of increase in future compensation levels, the long-term rate of return on assets and the growth in health care costs. The Company measures post employment and postretirement assets and obligations using the month-end that is closest to the Company's fiscal year-end. The benefit expense is generally recognized in the Consolidated Financial Statements on an accrual basis over the average remaining lifetime of participants, and the accrued benefits are reported in accounts payable and accrued liabilities and other liabilities on the Consolidated Balance Sheets, as appropriate. |
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Income Taxes | Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and net operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Income in the period that includes the enactment date. Deferred income tax assets are reduced by a valuation allowance when it is more likely than not that some portion of the deferred income tax assets will not be realized. |
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Derivatives | The Company records derivative transactions according to the provisions of ASC Topic 815 “Derivatives and Hedging,” which establishes accounting and reporting standards for derivative instruments and hedging activities and requires recognition of all derivatives as either assets or liabilities and measurement of those instruments at fair value. The Company makes limited use of derivative financial instruments. The Company does not use financial instruments for trading or other speculative purposes and is not a party to any leveraged financial instruments. On the date that the Company enters into a derivative contract, the Company designates the derivative instrument as either a fair value hedge, a cash flow hedge or as a free-standing derivative instrument, each of which would receive different accounting treatment. Prior to entering into a hedge transaction, the Company formally documents the relationship between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. Derivative instruments that the Company may use as part of its interest rate risk management strategy include interest rate swap and interest rate cap agreements and Treasury lock agreements. At January 28, 2017, the Company was not a party to any derivative financial instruments. |
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Stock Based Compensation | The Company records stock-based compensation expense according to the provisions of ASC Topic 718, “Compensation – Stock Compensation.” ASC Topic 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Under the provisions of ASC Topic 718, the Company determines the appropriate fair value model to be used for valuing share-based payments and the amortization method for compensation cost. |
Organization and Summary of Significant Accounting Policies (Tables) |
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Organization and Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising Costs and Cooperative Advertising Allowances [Table Text Block] | Advertising and promotional costs and cooperative advertising allowances were as follows:
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Percentage of Sales on Enterprise-Wide Basis by Merchandise Category | For 2016, 2015 and 2014, the following merchandise constituted the following percentages of sales:
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Impairments, Store Closing Costs and Gain on Sale of Leases (Tables) |
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Impairments, Store Closing Costs and Other Costs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairments, Store Closing and Other Costs | Impairments, store closing and other costs consist of the following:
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Properties and Leases (Tables) |
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Property Plant and Equipment and Leases of Lessee [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment |
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Minimum Rental Commitments (Excluding Executory Costs) for Noncancellable Leases | Minimum rental commitments (excluding executory costs) at January 28, 2017, for noncancellable leases are:
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Rental Expense | Rental expense consists of:
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's Goodwill and Other Intangible Assets | The following summarizes the Company’s goodwill and other intangible assets:
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Future Estimated Intangible Amortization Expense | Future estimated intangible amortization expense is shown below:
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Financing (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Company Debt | The Company’s debt is as follows:
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Schedule of Interest Expense and Premium on Early Retirement of Debt | Interest expense and premium on early retirement of debt is as follows:
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Future Maturities of Long-term Debt | Future maturities of long-term debt, other than capitalized leases, are shown below:
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Detail of Debt Repayments | The following table shows the detail of debt repayments:
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Accounts Payable And Accrued Liabilities (Tables) |
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Accounts Payable and Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities |
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Changes in Workers' Compensation and General Liability Reserve Including Current Portion | Changes in workers’ compensation and general liability reserves, including the current portion, are as follows:
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Taxes (Tables) |
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Taxes Payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income Tax Expense (Benefit) | Income tax expense is as follows:
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Schedule of Effective Income Tax Reconciliation | The reasons for this difference and their tax effects are as follows:
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Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:
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Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
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Retirement Plans (Tables) |
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Costs of Retirement Plans | Retirement expenses, excluding settlement charges, included the following components:
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Pension Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Benefit Obligations, Plan Assets, and Funded Status Pension Plan | The following provides a reconciliation of benefit obligations, plan assets, and funded status of the Pension Plan as of January 28, 2017 and January 30, 2016:
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Schedule of Net Periodic Benefit Costs | Net pension costs, settlement charges and other amounts recognized in other comprehensive loss for the Pension Plan included the following actuarially determined components:
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Weighted Average Assumptions | The following weighted average assumptions were used to determine the net periodic pension cost for the Pension Plan:
The following weighted average assumptions were used to determine the projected benefit obligations for the Pension Plan at January 28, 2017 and January 30, 2016:
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Fair Values of Plan Assets | The fair values of the Pension Plan assets as of January 28, 2017, excluding interest and dividend receivables and pending investment purchases and sales, by asset category are as follows:
(a) Certain investments that are measured at fair value using the net asset value per share as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets. The fair values of the Pension Plan assets as of January 30, 2016, excluding interest and dividend receivables and pending investment purchases and sales, by asset category are as follows:
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Estimated Future Benefit Payments | The following benefit payments are estimated to be paid from the Pension Plan:
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Supplemental Employee Retirement Plan | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Benefit Obligations, Plan Assets, and Funded Status Pension Plan | The following provides a reconciliation of benefit obligations, plan assets and funded status of the supplementary retirement plan as of January 28, 2017 and January 30, 2016:
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Schedule of Net Periodic Benefit Costs | Net pension costs, settlement charges and other amounts recognized in other comprehensive loss for the supplementary retirement plan included the following actuarially determined components:
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Weighted Average Assumptions | The following weighted average assumption was used to determine the projected benefit obligations for the supplementary retirement plan at January 28, 2017 and January 30, 2016:
The following weighted average assumption was used to determine net pension costs for the supplementary retirement plan:
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Estimated Future Benefit Payments | The following benefit payments are estimated to be funded by the Company and paid from the supplementary retirement plan:
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Postretirement Health Care and Life Insurance Benefits (Tables) - Other Postretirement Benefit Plan [Member] |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Benefit Obligations, Plan Assets, and Funded Status Pension Plan | The following provides a reconciliation of benefit obligations, plan assets, and funded status of the postretirement obligations as of January 28, 2017 and January 30, 2016:
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Schedule of Net Periodic Benefit Costs | Net postretirement benefit costs and other amounts recognized in other comprehensive loss included the following actuarially determined components:
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Weighted Average Assumptions | The following weighted average assumption was used to determine the net postretirement benefit costs for the postretirement obligations:
The following weighted average assumption was used to determine the accumulated postretirement benefit obligations at January 28, 2017 and January 30, 2016:
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Schedule of Health Care Cost Trend Rates | The following provides the assumed health care cost trend rates related to the Company’s accumulated postretirement benefit obligations at January 28, 2017 and January 30, 2016:
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Schedule Of Effect Of One Percentage Point Change In Assumed Health Care Cost Trend Rates | A one-percentage-point change in the assumed health care cost trend rates would have the following effects:
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Estimated Future Benefit Payments | The following table reflects the benefit payments estimated to be funded by the Company and paid from the accumulated postretirement benefit obligations and estimated federal subsidies expected to be received under the Medicare Prescription Drug Improvement and Modernization Act of 2003:
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Stock Based Compensation (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonvested Restricted Stock Shares Activity [Table Text Block] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Stock Based Compensation Expense | Stock-based compensation expense included the following components:
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Weighted Average Assumption Used To Estimate Fair Value of Stock Options | The fair value of stock options granted during 2016, 2015 and 2014 and the weighted average assumptions used to estimate the fair value are as follows:
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Schedule of Stock Option Activity | Activity related to stock options for 2016 is as follows:
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Additional Information Relating to Stock Options | Additional information relating to stock options is as follows:
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Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] | Activity related to restricted stock units for 2016 is as follows:
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Restricted Stock Units [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity Related to Restricted Stock and Restricted Stock Units | Restricted Stock Units The weighted average grant date fair values of restricted stock units granted during 2016, 2015 and 2014 are as follows:
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Shareholders' Equity (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the Company's Common Stock Issued and Outstanding | Changes in the Company’s Common Stock issued and outstanding, including shares held by the Company’s treasury, are as follows:
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Fair Value Measurements and Concentrations of Credit Risk (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Plan Assets Measured on a Recurring Basis | The following table shows the Company’s financial assets that are required to be measured at fair value on a recurring basis, by level within the hierarchy as defined by applicable accounting standards:
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Estimated Fair Values of Company's Long Term Debt | The following table shows the estimated fair value of the Company’s long-term debt:
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Fair Value Measurements, Nonrecurring Basis | The following table shows certain of the Company’s non-financial assets that were measured at fair value on a nonrecurring basis during 2016 and 2015:
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Earnings Per Share (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Loss Per Share | The following table sets forth the computation of basic and diluted earnings per share attributable to Macy's, Inc. shareholders:
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Quarterly Results (unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited Quarterly Results for the Last Two Years | Unaudited quarterly results for the last two years were as follows:
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Condensed Consolidating Financial Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet | MACY’S, INC. Condensed Consolidating Balance Sheet As of January 28, 2017 (millions)
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Condensed Consolidating Statement of Comprehensive Income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statement of Cash Flows | MACY’S, INC. Condensed Consolidating Statement of Cash Flows For 2014 (millions)
MACY’S, INC. Condensed Consolidating Statement of Cash Flows For 2015 (millions)
MACY’S, INC. Condensed Consolidating Statement of Cash Flows For 2016 (millions)
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Organization and Summary of Significant Accounting Policies (Percentage of Sales by Merchandise Category) (Details) |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
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Percentage of sales from Merchandise Categories | 100.00% | 100.00% | 100.00% |
Women's Accessories, Intimate Apparel, Shoes and Cosmetics [Member] | |||
Percentage of sales from Merchandise Categories | 38.00% | 38.00% | 38.00% |
Women's Apparel [Member] | |||
Percentage of sales from Merchandise Categories | 23.00% | 23.00% | 23.00% |
Men's and Children's [Member] | |||
Percentage of sales from Merchandise Categories | 23.00% | 23.00% | 23.00% |
Home/Miscellaneous [Member] | |||
Percentage of sales from Merchandise Categories | 16.00% | 16.00% | 16.00% |
Organization and Summary of Significant Accounting Policies Advertising expenses (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Oct. 29, 2016 |
Jul. 30, 2016 |
Apr. 30, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
Aug. 01, 2015 |
May 02, 2015 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||
Gross advertising and promotional costs | $ 1,547 | $ 1,587 | $ 1,602 | ||||||||
Cooperative advertising allowances | 394 | 414 | 425 | ||||||||
Advertising and promotional costs, net of cooperative advertising allowances | 1,153 | 1,173 | 1,177 | ||||||||
Net sales | $ 8,515 | $ 5,626 | $ 5,866 | $ 5,771 | $ 8,869 | $ 5,874 | $ 6,104 | $ 6,232 | $ 25,778 | $ 27,079 | $ 28,105 |
Advertising expense as a percent to sales | 4.50% | 4.30% | 4.20% |
Impairments, Store Closing Costs and Gain on Sale of Leases (Impairments and Store Closing Related Costs) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Oct. 29, 2016 |
Jul. 30, 2016 |
Apr. 30, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
Aug. 01, 2015 |
May 02, 2015 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
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Impairments, Store Closing Costs and Other Costs [Abstract] | |||||||||||
Asset impairments | $ 265 | $ 148 | $ 33 | ||||||||
Severance | 168 | 123 | 46 | ||||||||
Other | 46 | 17 | 8 | ||||||||
Impairments, store closing and other costs | $ 230 | $ 0 | $ 249 | $ 0 | $ 177 | $ 111 | $ 0 | $ 0 | $ 479 | $ 288 | $ 87 |
Impairments, Store Closing Costs and Gain on Sale of Leases (Narrative) (Details) - stores |
1 Months Ended | |||
---|---|---|---|---|
Jan. 28, 2017 |
Aug. 31, 2016 |
Jan. 30, 2016 |
Jan. 31, 2015 |
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Impairments, Store Closing Costs and Other Costs [Abstract] | ||||
Number of stores closed | 68 | 40 | 14 | |
Planned store closings | 100 |
Receivables (Narrative) (Details) $ in Millions |
12 Months Ended | 24 Months Ended | ||
---|---|---|---|---|
Jan. 28, 2017
USD ($)
|
Jan. 30, 2016
USD ($)
|
Jan. 31, 2015
USD ($)
|
Jan. 28, 2017
USD ($)
|
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Receivables | $ 522 | $ 558 | $ 522 | |
Credit Card Program Agreement [Member] | ||||
Effective period of agreement, years | 10 | |||
Number of years in renewal option | 3 | |||
Amount received under agreement | $ 912 | 1,026 | $ 975 | |
Net earnings from credit operations | 736 | 831 | $ 776 | |
Name of Property [Domain] | ||||
Sale of Brooklyn real estate transaction | 270 | 270 | ||
Proceeds from sale of Brooklyn in current year | 141 | $ 68 | 209 | |
Cash receivable for Brooklyn sale, total | $ 61 | $ 61 |
Properties and Leases (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
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Minimum operating period of some stores | 20 years | ||
Capital lease obligations included in short-term debt | $ 1 | ||
Capital lease obligations included in long-term debt | 27 | ||
Minimum sublease rentals on operating leases | 17 | ||
Deferred rent amortization | $ 9 | $ 8 | $ 7 |
Property Lease Guarantee [Member] | |||
Potential lease extension date of divested business | 2070 | ||
Future minimum lease payments | $ 284 |
Properties and Leases (Property, Plant and Equipment) (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Land | $ 1,541 | $ 1,629 |
Fixtures and equipment | 4,541 | 4,910 |
Leased properties under capitalized leases | 34 | 34 |
Property, plant and equipment, gross | 11,873 | 12,935 |
Less accumulated depreciation and amortization | 4,856 | 5,319 |
Property, plant and equipment, net | 7,017 | 7,616 |
Wholly Owned Properties [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Buildings and Improvements, Gross | 4,212 | 4,690 |
Property Subject to Operating Lease [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Buildings and Improvements, Gross | $ 1,545 | $ 1,672 |
Properties and Leases (Minimum Rental Commitments Excluding Executory Costs for Noncancellable Leases) (Details) $ in Millions |
Jan. 28, 2017
USD ($)
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Property Plant and Equipment and Leases of Lessee [Abstract] | |
2017, Capitalized leases | $ 3 |
2018, Capitalized leases | 3 |
2019, Capitalized leases | 3 |
2020, Capitalized leases | 3 |
2021, Capitalized leases | 3 |
After 2021, Capitalized leases | 37 |
Total minimum lease payments, Capitalized leases | 52 |
Less amount representing interest | 24 |
Present value of net minimum capitalized lease payments | 28 |
2017, Operating leases | 321 |
2018, Operating leases | 304 |
2019, Operating leases | 283 |
2020, Operating leases | 249 |
2021, Operating leases | 237 |
After 2021, Operating leases | 2,289 |
Total minimum lease payments, Operating leases | 3,683 |
2017, Total | 324 |
2018, Total | 307 |
2019, Total | 286 |
2020, Total | 252 |
2021, Total | 240 |
After 2021, Total | 2,326 |
Total minimum lease payments, Total | $ 3,735 |
Properties and Leases (Rental Expense) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
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Property Plant and Equipment and Leases of Lessee [Abstract] | |||
Contingent rent expense related to a capitalized lease | $ 0 | $ 0 | $ 0 |
Minimum rentals, Operating leases | 312 | 288 | 265 |
Contingent rentals, Operating leases | 12 | 19 | 22 |
Lease and rental expense, Gross | 324 | 307 | 287 |
Operating leases, less income from subleases | (5) | (6) | (8) |
Lease and Rental Expense | 319 | 301 | 279 |
Personal property, Operating leases | $ 11 | $ 12 | $ 12 |
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Intangible amortization expense | $ 10 | $ 23 | $ 31 |
Tradenames [Member] | |||
Weighted average useful life of favorable lease intangible assets, years | 20 years | ||
Favorable Lease [Member] | |||
Weighted average useful life of favorable lease intangible assets, years | 6 years |
Goodwill and Other Intangible Assets (Company's Goodwill and Other Intangible Assets) (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Goodwill, gross | $ 9,279 | $ 9,279 |
Accumulated impairment losses | 5,382 | 5,382 |
Net goodwill, Non-amortizing intangible assets | 3,897 | 3,897 |
Indefinite lifed tradenames | 403 | 414 |
Net non-amortizing intangible assets | 4,300 | 4,311 |
Favorable leases, gross | 141 | 149 |
Finite-lived tradenames, gross | 43 | 43 |
Amortizing intangible assets, gross | 184 | 192 |
Accumulated amortization | (89) | (92) |
Net amortizing intangible assets | 95 | 100 |
Favorable Lease [Member] | ||
Accumulated amortization | (85) | (90) |
Tradenames [Member] | ||
Accumulated amortization | $ (4) | $ (2) |
Goodwill and Other Intangible Assets (Future Estimated Intangible Amortization Expense) (Details) $ in Millions |
Jan. 28, 2017
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2017 | $ 10 |
2018 | 10 |
2019 | 9 |
2020 | 8 |
2021 | $ 6 |
Financing (Interest Expense) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Debt Disclosure [Abstract] | |||
Interest on debt | $ 392 | $ 393 | $ 411 |
Amortization of debt premium | (22) | (21) | (12) |
Amortization of financing costs | 5 | 6 | 7 |
Interest on capitalized leases | 2 | 2 | 2 |
Interest expense, gross | 377 | 380 | 408 |
Less interest capitalized on construction | 10 | 17 | 13 |
Interest Expense, Total | 367 | 363 | 395 |
Premium on early retirement of long-term debt | $ 0 | $ 0 | $ 17 |
Financing (Future Maturities Of Long-Term Debt) (Details) $ in Millions |
Jan. 28, 2017
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2018 | $ 6 |
2019 | 42 |
2020 | 539 |
2021 | 553 |
2022 | 0 |
After 2022 | $ 5,319 |
Accounts Payable and Accrued Liabilities (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Accounts Payable and Accrued Liabilities, Current [Abstract] | |||
Adjustments to reserve for sales returns | $ (16) | $ 19 | $ 8 |
Workers compensation and general liability reserves covered by deposits and receivables | $ 112 | $ 112 |
Accounts Payable and Accrued Liabilities (Schedule Of Accounts Payable And Accrued Liabilities) (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Accounts payable | $ 754 | $ 814 |
Gift card and customer rewards | 970 | 920 |
Deferred real estate gains | 340 | 104 |
Current portion of post employment and postretirement benefits | 208 | 257 |
Taxes other than income taxes | 166 | 184 |
Lease related liabilities | 174 | 165 |
Accrued wages and vacation | 215 | 153 |
Current portion of workers' compensation and general liability reserves | 119 | 127 |
Severance and relocation | 166 | 123 |
Allowance for future sales returns | 96 | 112 |
Accrued interest | 74 | 88 |
Other | 281 | 286 |
Accounts payable and accrued liabilities, total | $ 3,563 | $ 3,333 |
Accounts Payable and Accrued Liabilities (Changes In Workers' Compensation And General Liability Reserves) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Accounts Payable and Accrued Liabilities, Current [Abstract] | |||
Balance, beginning of year | $ 508 | $ 505 | $ 497 |
Expense for workers compensation and general liability reserves | 145 | 159 | 160 |
Payments of workers compensation and general liability reserves | (150) | (156) | (152) |
Balance, end of year | $ 503 | $ 508 | $ 505 |
Taxes (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Federal income tax statutory rate | 35.00% | 35.00% | 35.00% |
Net change in the valuation allowance | $ 9 | $ 3 | |
Federal net operating loss carryforwards | 0 | ||
State net operating loss carryforwards | 374 | ||
State credit carryforwards | 31 | ||
Unrecognized tax benefits that would impact effective income tax rate | 109 | 115 | |
Charges (credit) to income tax expense for federal, state and local interest and penalties | 2 | 1 | $ (3) |
Accrual for payment of federal, state and local interest and penalties | 55 | $ 53 | |
Other noncurrent liabilities [Member] | |||
Accrual for payment of federal, state and local interest and penalties | 54 | ||
Current Income Taxes [Member] | |||
Accrual for payment of federal, state and local interest and penalties | $ 1 | ||
Maximum [Member] | |||
Operating Loss Carryforwards, Expiration Dates | Dec. 31, 2036 | ||
Minimum [Member] | |||
Operating Loss Carryforwards, Expiration Dates | Dec. 31, 2017 |
Taxes (Income Tax Expense) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Taxes Payable [Abstract] | |||
Current federal income tax expense (benefit) | $ 433 | $ 536 | $ 743 |
Deferred federal income tax expense (benefit) | (125) | 0 | 28 |
Federal income tax expense (benefit), total | 308 | 536 | 771 |
Current state and local income tax expense (benefit) | 37 | 72 | 92 |
Deferred state and local income tax expense (benefit) | (4) | 0 | 1 |
State and local income tax expense (benefit), total | 33 | 72 | 93 |
Current income tax expense (benefit), total | 470 | 608 | 835 |
Deferred income tax expense, total | (129) | 0 | 29 |
Income tax expense (benefit), total | $ 341 | $ 608 | $ 864 |
Taxes (Reason For Difference Between Expected Tax Computed And Income Tax Expense) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
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Taxes Payable [Abstract] | |||
Expected tax | $ 333 | $ 587 | $ 836 |
State and local income taxes, net of federal income tax benefit | 12 | 43 | 59 |
Historic rehabilitation tax credit | (1) | (12) | (20) |
Change in valuation allowance | 9 | 3 | 1 |
Other | (12) | (13) | (12) |
Income tax expense (benefit), total | $ 341 | $ 608 | $ 864 |
Taxes (Tax Effects That Give Rise To Significant Portions Of Deferred Tax Assets And Liabilities) (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Deferred tax assets: | ||
Post employment and postretirement benefits | $ 405 | $ 536 |
Accrued liabilities accounted for on a cash basis for tax purposes | 379 | 340 |
Long-term debt | 63 | 73 |
Unrecognized state tax benefits and accrued interest | 76 | 79 |
State operating loss and credit carryforwards | 79 | 82 |
Other | 347 | 206 |
Valuation allowance | (36) | (27) |
Total deferred tax assets | 1,313 | 1,289 |
Deferred tax liabilities: | ||
Excess of book basis over tax basis of property and equipment | (1,381) | (1,485) |
Merchandise inventories | (604) | (606) |
Intangible assets | (380) | (345) |
Other | (391) | (330) |
Total deferred tax liabilities | (2,756) | (2,766) |
Net deferred tax liability | $ (1,443) | $ (1,477) |
Taxes (Reconciliation Of Beginning And Ending Amount Of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Balance, beginning of period | $ 178 | $ 172 | $ 189 | |||
Additions based on tax positions related to the current year | 16 | 30 | 33 | |||
Additions for tax positions of prior years | 0 | 0 | 0 | |||
Reductions for tax positions of prior years | (12) | (7) | (15) | |||
Settlements | (4) | (3) | (23) | |||
Statute expirations | (11) | (14) | (12) | |||
Balance, end of period | 167 | 178 | 172 | |||
Current income taxes | $ 6 | $ 12 | $ 11 | |||
Unrecognized tax benefits | $ 178 | $ 172 | $ 189 | 167 | 178 | 172 |
Long term deferred income taxes [Member] | ||||||
Long-term uncertian tax positions | 4 | 5 | 6 | |||
Other noncurrent liabilities [Member] | ||||||
Long-term uncertian tax positions | $ 157 | $ 161 | $ 155 |
Retirement Plans (Retirement Expenses) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Total Retirement Expense | $ 44 | $ 77 | $ 65 |
Pension Plan [Member] | |||
Total net periodic benefit cost | (83) | (54) | (64) |
Supplemental Employee Retirement Plan | |||
Total net periodic benefit cost | 31 | 41 | 38 |
Non qualified defined contribution plan [Member] | Other Postretirement Benefit Plan [Member] | |||
Defined Contribution Plan, Cost Recognized | $ 2 | $ 2 | $ 2 |
Retirement Plans (Weighted Average Assumptions Used To Determine Projected Benefit Obligations For The Pension Plan) (Details) |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Supplemental Employee Retirement Plan | ||
Discount rate | 4.07% | 4.23% |
Pension Plan [Member] | ||
Discount rate | 4.00% | 4.17% |
Rate of compensation increases | 4.10% | 4.10% |
Retirement Plans (Weighted Average Assumptions Used To Determine Net Periodic Pension Costs For The Pension Plan) (Details) - Pension Plan [Member] |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Discount rate for service cost (percent) | 3.55% | 4.50% | |
Discount rate for interest cost (percent) | 3.55% | 4.50% | |
Expected long-term return on plan assets | 7.00% | 7.00% | 7.50% |
Rate of compensation increases | 4.10% | 4.10% | 4.10% |
Minimum [Member] | |||
Discount rate for service cost (percent) | 3.79% | ||
Discount rate for interest cost (percent) | 2.96% | ||
Maximum [Member] | |||
Discount rate for service cost (percent) | 4.26% | ||
Discount rate for interest cost (percent) | 3.30% |
Retirement Plans (Estimated Pension Plan Benefit Payments) (Details) - Pension Plan [Member] $ in Millions |
Jan. 28, 2017
USD ($)
|
---|---|
2017 | $ 383 |
2018 | 309 |
2019 | 299 |
2020 | 286 |
2021 | 246 |
2022-2026 | $ 1,113 |
Retirement Plans (Reconciliation Of Benefit Obligations, Plan Assets, And Funded Status Of The Supplementary Retirement Plan) (Details) - Supplemental Employee Retirement Plan - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Projected benefit obligation, beginning of year | $ 823 | $ 920 | |
Service cost | 0 | 0 | $ 0 |
Interest cost | 22 | 31 | 33 |
Actuarial (gain) loss | 26 | (70) | |
Benefits paid | (124) | (58) | |
Projected benefit obligation, end of year | 747 | 823 | 920 |
Fair value of plan assets, beginning of year | 0 | 0 | |
Company contributions | 124 | 58 | |
Fair value of plan assets, end of year | 0 | 0 | $ 0 |
Funded status at end of year | 747 | 823 | |
Accounts payable and accrued liabilities | (86) | (138) | |
Defined Benefit Pension Plan, Liabilities, Noncurrent | (661) | (685) | |
Defined Benefit Plan, Amounts Recognized in Balance Sheet | (747) | (823) | |
Net actuarial (gain) loss | 248 | 261 | |
Prior service credit | 8 | 8 | |
Total included in accumulated other comprehensive income | $ 256 | $ 269 |
Retirement Plans (Net Periodic Benefit Cost Of Supplemental Retirement Plan) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Oct. 29, 2016 |
Jul. 30, 2016 |
Apr. 30, 2016 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Settlement charges | $ (17) | $ (62) | $ (6) | $ (13) | $ (98) | $ 0 | $ 0 |
Settlement charges | $ 17 | $ 62 | $ 6 | $ 13 | 98 | 0 | 0 |
Supplemental Employee Retirement Plan | |||||||
Service cost | 0 | 0 | 0 | ||||
Interest cost | 22 | 31 | 33 | ||||
Amortization of net actuarial (gain) loss | 9 | 10 | 5 | ||||
Amortization of prior service credit | 0 | 0 | 0 | ||||
Total net periodic benefit cost | 31 | 41 | 38 | ||||
Settlement charges | 30 | 0 | 0 | ||||
Net actuarial (gain) loss recognized in OCI before tax | 26 | (70) | 170 | ||||
Prior service cost recognized in OCI before tax | 0 | 0 | 0 | ||||
Amortization of net actuarial loss | (9) | (10) | (5) | ||||
Amortization of prior service credit | 0 | 0 | 0 | ||||
Settlement charges | (30) | 0 | 0 | ||||
Total recognized in other comprehensive income | (13) | (80) | 165 | ||||
Total recognized in net periodic benefit cost and other comprehensive income | $ 48 | $ (39) | $ 203 |
Retirement Plans (Estimated Supplementary Retirement Plan Benefit Payments) (Details) - Supplemental Employee Retirement Plan $ in Millions |
Jan. 28, 2017
USD ($)
|
---|---|
2017 | $ 86 |
2018 | 78 |
2019 | 46 |
2020 | 48 |
2021 | 48 |
2022-2026 | $ 228 |
Postretirement Health Care and Life Insurance Benefits (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
2016 reduction in service cost and interest cost | $ 36 | ||
Other Postretirement Benefit Plan [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 3.14% | 3.55% | 4.50% |
2016 reduction in service cost and interest cost | $ 2 | ||
Previously Reported | Other Postretirement Benefit Plan [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 4.15% |
Postretirement Health Care and Life Insurance Benefits (Reconciliation Of Benefit Obligations, Plan Assets, And Funded Status Of The Postretirement Obligations) (Details) - Other Postretirement Benefit Plan [Member] - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Projected benefit obligation, beginning of year | $ 212 | $ 243 | |
Service cost | 0 | 0 | $ 0 |
Interest cost | 6 | 8 | 10 |
Actuarial (gain) loss | (13) | (22) | |
Medicare Part D subsidy | 1 | 1 | |
Benefits paid | (20) | (18) | |
Projected benefit obligation, end of year | 186 | 212 | 243 |
Fair value of plan assets, beginning of year | 0 | 0 | |
Company contributions | 20 | 18 | |
Fair value of plan assets, end of year | 0 | 0 | $ 0 |
Funded status at end of year | 186 | 212 | |
Accounts payable and accrued liabilities | (18) | (20) | |
Other liabilities | (168) | (192) | |
Defined Benefit Plan, Amounts Recognized in Balance Sheet | (186) | (212) | |
Net actuarial (gain) loss | (31) | $ (22) | |
Defined Benefit Plan, Future Amortization of Gain (Loss) | $ 4 |
Postretirement Health Care and Life Insurance Benefits (Net Periodic Benefit Cost) (Details) - Other Postretirement Benefit Plan [Member] - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Service cost | $ 0 | $ 0 | $ 0 |
Interest cost | 6 | 8 | 10 |
Amortization of net actuarial (gain) loss | (4) | 0 | (5) |
Amortization of prior service credit | 0 | 0 | 0 |
Total net periodic benefit cost | 2 | 8 | 5 |
Net actuarial (gain) loss recognized in OCI before tax | (13) | (22) | 30 |
Amortization of net actuarial loss | 4 | 0 | 5 |
Amortization of prior service credit | 0 | 0 | 0 |
Total recognized in other comprehensive income | (9) | (22) | 35 |
Total recognized in net periodic benefit cost and other comprehensive income | $ (7) | $ (14) | $ 40 |
Postretirement Health Care and Life Insurance Benefits (Weighted Average Assumptions Used To Determine Projected Benefit Obligations For Postretirement Obligations) (Details) |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Other Postretirement Benefit Plan [Member] | ||
Discount rate | 3.99% | 4.15% |
Postretirement Health Care and Life Insurance Benefits (Weighted Average Assumptions Used To Determine Net Periodic Costs For Postretirement Plans) (Details) |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Other Postretirement Benefit Plan [Member] | |||
Discount rate | 3.14% | 3.55% | 4.50% |
Postretirement Health Care and Life Insurance Benefits (Assumed Health Care Cost Trend Rates) (Details) |
12 Months Ended | |
---|---|---|
Jan. 28, 2017
Rate
|
Jan. 30, 2016
Rate
|
|
Rates to which is the cost trend rate is assumed to decline (the ultimate trend rate) | 5.00% | 5.00% |
Year that the rate reaches the ultimate trend rate | 2027 | 2027 |
Minimum [Member] | ||
Defined Benefit Plan, Health Care Cost Trend Rate Assumed for Next Fiscal Year | 6.15% | 6.25% |
Maximum [Member] | ||
Defined Benefit Plan, Health Care Cost Trend Rate Assumed for Next Fiscal Year | 9.75% | 10.00% |
Postretirement Health Care and Life Insurance Benefits (One Percentage Point Change In Assumed Health Care Cost Rates Would Have The Following Effects) (Details) $ in Millions |
12 Months Ended |
---|---|
Jan. 28, 2017
USD ($)
| |
Postretirement Medical Plans with Prescription Drug Benefits [Abstract] | |
Effect on total of service and interest cost, 1 - percentage point increase | $ 0 |
Effect on total of service and interest cost, 1 - percentage point decrease | 0 |
Effect on accumulated postretirement benefit obligations, 1 - percentage point increase | 11 |
Effect on accumulated postretirement benefit obligations, 1 - percentage point decrease | $ (10) |
Postretirement Health Care and Life Insurance Benefits (Estimated Postretirement Benefit Payments In Future Years) (Details) - Other Postretirement Benefit Plan [Member] $ in Millions |
Jan. 28, 2017
USD ($)
|
---|---|
Expected Benefit | |
2017 | $ 17 |
2018 | 17 |
2019 | 16 |
2020 | 16 |
2021 | 15 |
2022-2026 | 63 |
Expected Federal Subsidy | |
2017 | 1 |
2018 | 1 |
2019 | 1 |
2020 | 0 |
2021 | 0 |
2022-2026 | $ 1 |
Stock Based Compensation (Stock-Based Compensation Expense) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Stock options | $ 43 | $ 52 | $ 47 |
Share-based compensation, total | 61 | 65 | 73 |
Restricted Stock Units [Member] | |||
Restricted stock | $ 18 | $ 13 | $ 26 |
Stock Based Compensation (Fair Value of Stock-Options Granted And Weighted Average Assumptions to Calculate Fair Value) (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Share-based Compensation [Abstract] | |||
Weighted average grant date fair value of stock options granted during the period | $ 12.14 | $ 20.78 | $ 19.07 |
Dividend yield | 3.80% | 2.70% | 2.50% |
Expected volatility | 42.70% | 43.30% | 42.70% |
Risk-free interest rate | 1.40% | 1.70% | 1.50% |
Expected life | 5 years 8 months 12 days | 5 years 8 months 12 days | 5 years 8 months 12 days |
Stock Based Compensation (Additional Information Relating To Stock Options) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Share-based Compensation [Abstract] | |||
Intrinsic value of options exercised | $ 12 | $ 127 | $ 189 |
Cash received from stock options exercised | $ 35 | $ 125 | $ 200 |
Stock Based Compensation (Fair Value of Restricted Stock Awards During the Period) (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Restricted Stock Units [Member] | |||
Granted, weighted average fair value | $ 40.02 | $ 62.61 | $ 59.41 |
Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 26, 2016 |
Feb. 01, 2014 |
|
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized | 125,000,000 | ||||
Preferred stock, par value | $ 0.01 | ||||
Preferred stock, shares issued | 0 | ||||
Common stock, shares authorized | 1,000,000,000 | ||||
Common stock, par value | $ 0.01 | ||||
Common stock, shares issued | 333,605,800 | 341,605,800 | 379,605,800 | 410,605,800 | |
Common stock, shares outstanding | 304,062,800 | 310,256,100 | 340,573,700 | 364,935,000 | |
Retirement of common stock | 8,000,000 | 38,000,000 | 31,000,000 | ||
Stock Repurchase Program, Additional Authorized Amount | $ 1,500 | ||||
Stock repurchase program authorized amount | $ 18,000 | ||||
Stock repurchased during period, shares | 7,900,000 | 34,800,000 | 31,900,000 | ||
Stock repurchased during period, value | $ 316 | $ 2,000 | $ 1,900 | ||
Stock repurchase program remaining authorized repurchase amount | $ 1,716 |
Shareholders' Equity (Changes In The Company's Common Stock Issued and Outstanding) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Common stock, shares issued | (341,605,800) | (379,605,800) | (410,605,800) |
Common stock, shares outstanding | 310,256,100 | 340,573,700 | 364,935,000 |
Stock issued under stock plans | (1,524,700) | (4,433,100) | (7,435,800) |
Stock repurchases | (4,600) | (12,700) | (27,000) |
Deferred compensation plan distributions | 160,900 | 68,800 | 104,800 |
Retirement of common stock | (8,000,000) | (38,000,000) | (31,000,000) |
Common stock, shares issued | (333,605,800) | (341,605,800) | (379,605,800) |
Common stock, shares outstanding | 304,062,800 | 310,256,100 | 340,573,700 |
Balance | $ (4,323) | $ (4,250) | |
Other comprehensive income (loss) | (147) | (29) | $ 407 |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Other comprehensive income (loss) | $ (147) | $ (29) | $ 407 |
Other [Member] | |||
Stock repurchases | (7,874,300) | (34,806,800) | (31,874,900) |
Treasury Stock, Deferred Compensation Plans [Member] | |||
Common stock, shares issued | (1,170,800) | (1,179,200) | (1,229,200) |
Stock issued under stock plans | (87,000) | (60,400) | (54,800) |
Deferred compensation plan distributions | 160,900 | 68,800 | 104,800 |
Common stock, shares issued | (1,096,900) | (1,170,800) | (1,179,200) |
Treasury Stock, Other [Member] | |||
Common stock, shares issued | (30,178,900) | (37,852,900) | (44,441,600) |
Stock issued under stock plans | (1,611,700) | (4,493,500) | (7,490,600) |
Stock repurchases | (4,600) | (12,700) | (27,000) |
Common stock, shares issued | (28,446,100) | (30,178,900) | (37,852,900) |
Treasury Stock, Other [Member] | Other [Member] | |||
Stock repurchases | (7,874,300) | (34,806,800) | (31,874,900) |
Treasury Stock [Member] | |||
Common stock, shares issued | (31,349,700) | (39,032,100) | (45,670,800) |
Stock issued under stock plans | (1,524,700) | (4,433,100) | (7,435,800) |
Stock repurchases | (4,600) | (12,700) | (27,000) |
Deferred compensation plan distributions | 160,900 | 68,800 | 104,800 |
Retirement of common stock | (8,000,000) | (38,000,000) | (31,000,000) |
Common stock, shares issued | (29,543,000) | (31,349,700) | (39,032,100) |
Treasury Stock [Member] | Other [Member] | |||
Stock repurchases | (7,874,300) | (34,806,800) | (31,874,900) |
Fair Value Measurements and Concentrations of Credit Risk (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | ||
Carrying value of long-lived assets held and used | $ 405 | $ 201 |
Long-lived assets held and used | 147 | 53 |
Impairments of properties held and used | $ 258 | $ 148 |
Fair Value Measurements and Concentrations of Credit Risk (Financial Assets Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Marketable equity and debt securities | $ 112 | $ 132 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Marketable equity and debt securities | 20 | 13 |
Significant Observable Inputs (Level 2) [Member] | ||
Marketable equity and debt securities | 92 | 119 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Marketable equity and debt securities | $ 0 | $ 0 |
Fair Value Measurements and Concentrations of Credit Risk (Estimated Fair Value Of Company Long Term Debt) (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Long-term debt | $ 6,438 | $ 6,756 |
Notional Amount | ||
Long-term debt | 6,459 | 6,871 |
Carrying Amount | ||
Long-term debt | $ 6,535 | $ 6,966 |
Fair Value Measurements and Concentrations of Credit Risk (Company Non-Financial Assets Measured On A Recurring Basis) (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Long-lived assets held and used | $ 147 | $ 53 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Long-lived assets held and used | 0 | 0 |
Significant Observable Inputs (Level 2) [Member] | ||
Long-lived assets held and used | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Long-lived assets held and used | $ 147 | $ 53 |
Earnings Per Share (Computation Of Basic and Diluted Earnings (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Oct. 29, 2016 |
Jul. 30, 2016 |
Apr. 30, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
Aug. 01, 2015 |
May 02, 2015 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Earnings Per Share [Abstract] | |||||||||||
Net income attributable to Macy's, Inc. shareholders | $ 475 | $ 17 | $ 11 | $ 116 | $ 544 | $ 118 | $ 217 | $ 193 | $ 619 | $ 1,072 | $ 1,526 |
Net income (loss) available to common stockholders, basic | 619 | 1,072 | 1,526 | ||||||||
Net income (loss) available to common stockholders, diluted | $ 619 | $ 1,072 | $ 1,526 | ||||||||
Basic earnings per share attributable to Macy's, Inc. shareholders | $ 1.56 | $ 0.05 | $ 0.03 | $ 0.37 | $ 1.74 | $ 0.36 | $ 0.65 | $ 0.57 | $ 2.01 | $ 3.26 | $ 4.30 |
Diluted earnings per share attributable to Macy's, Inc. shareholders | $ 1.54 | $ 0.05 | $ 0.03 | $ 0.37 | $ 1.73 | $ 0.36 | $ 0.64 | $ 0.56 | $ 1.99 | $ 3.22 | $ 4.22 |
Average number of shares issued, basic | 307.6 | 327.6 | 354.3 | ||||||||
Net income | $ 611 | $ 1,070 | $ 1,526 | ||||||||
Shares to be issued under deferred compensation and other plans | 0.9 | 0.8 | 0.9 | ||||||||
Average number of shares outstanding, basic | 308.5 | 328.4 | 355.2 | ||||||||
Effect of dilutive securities-stock options, restricted stock and restricted stock units | 2.3 | 4.6 | 6.5 | ||||||||
Average number of shares outstanding, diluted | 310.8 | 333.0 | 361.7 |
Earnings Per Share (Narrative) (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Restricted Stock Units [Member] | |||
Stock options outstanding, not included in computation of diluted earnings (loss) per share | 1,100 | 140 | 600 |
Employee Stock Options [Member] | |||
Stock options outstanding, not included in computation of diluted earnings (loss) per share | 15,500 | 12,600 | 3,200 |
Quarterly Results (unaudited) (Unaudited Quarterly Results) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Oct. 29, 2016 |
Jul. 30, 2016 |
Apr. 30, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
Aug. 01, 2015 |
May 02, 2015 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Quarterly Financial Data [Abstract] | |||||||||||
Net sales | $ 8,515 | $ 5,626 | $ 5,866 | $ 5,771 | $ 8,869 | $ 5,874 | $ 6,104 | $ 6,232 | $ 25,778 | $ 27,079 | $ 28,105 |
Cost of sales | (5,251) | (3,386) | (3,468) | (3,516) | (5,549) | (3,537) | (3,610) | (3,800) | (15,621) | (16,496) | (16,863) |
Gross margin | 3,264 | 2,240 | 2,398 | 2,255 | 3,320 | 2,337 | 2,494 | 2,432 | 10,157 | 10,583 | 11,242 |
Selling, general and administrative expenses | (2,202) | (2,071) | (2,026) | (1,966) | (2,207) | (1,968) | (2,058) | (2,023) | (8,265) | (8,256) | (8,355) |
Impairments, store closing and other costs | (230) | 0 | (249) | 0 | (177) | (111) | 0 | 0 | (479) | (288) | (87) |
Settlement charges | (17) | (62) | (6) | (13) | (98) | 0 | 0 | ||||
Net income attributable to Macy's, Inc. shareholders | $ 475 | $ 17 | $ 11 | $ 116 | $ 544 | $ 118 | $ 217 | $ 193 | $ 619 | $ 1,072 | $ 1,526 |
Basic earnings per share attributable to Macy's, Inc. shareholders | $ 1.56 | $ 0.05 | $ 0.03 | $ 0.37 | $ 1.74 | $ 0.36 | $ 0.65 | $ 0.57 | $ 2.01 | $ 3.26 | $ 4.30 |
Diluted earnings per share attributable to Macy's, Inc. shareholders | $ 1.54 | $ 0.05 | $ 0.03 | $ 0.37 | $ 1.73 | $ 0.36 | $ 0.64 | $ 0.56 | $ 1.99 | $ 3.22 | $ 4.22 |
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