Condensed Consolidating Financial Information

Certain debt obligations of the Company, which constitute debt obligations of Macy's Retail Holdings, Inc. ("Subsidiary Issuer"), a 100%-owned subsidiary of Macy's, Inc. ("Parent"), are fully and unconditionally guaranteed by Parent. In the following condensed consolidating financial statements, "Other Subsidiaries" includes all other direct subsidiaries of Parent, including Bluemercury, Inc., FDS Bank, West 34th Street Insurance Company 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 the 13 weeks ended May 5, 2018 and April 29, 2017, Condensed Consolidating Balance Sheets as of May 5, 2018, April 29, 2017 and February 3, 2018, and the related Condensed Consolidating Statements of Cash Flows for the 13 weeks ended May 5, 2018 and April 29, 2017 are presented on the following pages.

Condensed Consolidating Statement of Comprehensive Income

For the 13 weeks ended May 5, 2018

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	2,008		$	5,363		$	(1,830	)	$	5,541
Credit card revenues (expense), net	—			(6		)	163			—			157

Cost of sales	—			(1,320		)	(3,892		)	1,830			(3,382		)
Selling, general and administrative expenses	—			(828		)	(1,255		)	—			(2,083		)
Gains on sale of real estate	—			23			1			—			24
Impairment and other costs	—			—			(19		)	—			(19		)
Operating income (loss)	—			(123		)	361			—			238
Benefit plan income, net	—			4			7			—			11
Interest (expense) income, net:
External	4			(71		)	1			—			(66		)
Intercompany	—			(18		)	18			—			—
Equity in earnings of subsidiaries	136			102			—			(238		)	—
Income (loss) before income taxes	140			(106		)	387			(238		)	183
Federal, state and local income tax benefit (expense)	(1		)	37			(88		)	—			(52		)
Net income (loss)	139			(69		)	299			(238		)	131
Net loss attributable to noncontrolling interest	—			—			8			—			8
Net income (loss) attributable to Macy's, Inc. shareholders	$	139		$	(69	)	$	307		$	(238	)	$	139
Comprehensive income (loss)	$	146		$	(63	)	$	303		$	(248	)	$	138
Comprehensive loss attributable to noncontrolling interest	—			—			8			—			8
Comprehensive income (loss) attributable to Macy's, Inc. shareholders	$	146		$	(63	)	$	311		$	(248	)	$	146

Condensed Consolidating Statement of Comprehensive Income

For the 13 weeks ended April 29, 2017

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	2,064		$	5,130		$	(1,844	)	$	5,350
Credit card revenues (expense), net	—			(6		)	167			—			161

Cost of sales	—			(1,386		)	(3,761		)	1,844			(3,303		)
Selling, general and administrative expenses	(1		)	(767		)	(1,289		)	—			(2,057		)
Gains on sale of real estate	—			65			3			—			68
Operating income (loss)	(1		)	(30		)	250			—			219
Benefit plan income, net	—			5			8			—			13
Interest (expense) income, net:
External	1			(85		)	—			—			(84		)
Intercompany	—			(34		)	34			—			—
Premiums on early retirement of debt	—			(3		)	—			—			(3		)
Equity in earnings of subsidiaries	78			1			—			(79		)	—
Income (loss) before income taxes	78			(146		)	292			(79		)	145
Federal, state and local income tax benefit (expense)	—			26			(94		)	—			(68		)
Net income (loss)	78			(120		)	198			(79		)	77
Net loss attributable to noncontrolling interest	—			—			1			—			1
Net income (loss) attributable to Macy's, Inc. shareholders	$	78		$	(120	)	$	199		$	(79	)	$	78
Comprehensive income (loss)	$	84		$	(114	)	$	202		$	(89	)	$	83
Comprehensive loss attributable to noncontrolling interest	—			—			1			—			1
Comprehensive income (loss) attributable to Macy's, Inc. shareholders	$	84		$	(114	)	$	203		$	(89	)	$	84

Condensed Consolidating Balance Sheet

As of May 5, 2018

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries			Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	1,070	$	79	$	382		$	—		$	1,531
Receivables	—		48		202			—			250
Merchandise inventories	—		2,283		3,008			—			5,291
Prepaid expenses and other current assets	—		150		488			—			638
Total Current Assets	1,070		2,560		4,080			—			7,710
Property and Equipment – net	—		3,298		3,277			—			6,575
Goodwill	—		3,326		582			—			3,908
Other Intangible Assets – net	—		43		443			—			486
Other Assets	1		96		792			—			889
Deferred Income Taxes	5		—		—			(5		)	—
Intercompany Receivable	1,156		—		2,113			(3,269		)	—
Investment in Subsidiaries	3,975		4,232		—			(8,207		)	—
Total Assets	$	6,207	$	13,555	$	11,287		$	(11,481	)	$	19,568
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	6	$	19		$	—		$	25
Merchandise accounts payable	—		896		1,149			—			2,045
Accounts payable and accrued liabilities	109		784		1,802			—			2,695
Income taxes	253		35		24			—			312
Total Current Liabilities	362		1,721		2,994			—			5,077
Long-Term Debt	—		5,841		16			—			5,857
Intercompany Payable	—		3,269		—			(3,269		)	—
Deferred Income Taxes	—		570		604			(5		)	1,169
Other Liabilities	24		416		1,224			—			1,664
Shareholders' Equity:
Macy's, Inc.	5,821		1,738		6,469			(8,207		)	5,821
Noncontrolling Interest	—		—		(20		)	—			(20		)
Total Shareholders' Equity	5,821		1,738		6,449			(8,207		)	5,801
Total Liabilities and Shareholders' Equity	$	6,207	$	13,555	$	11,287		$	(11,481	)	$	19,568

Condensed Consolidating Balance Sheet

As of April 29, 2017

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries			Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	779	$	99	$	323		$	—		$	1,201
Receivables	—		118		227			—			345
Merchandise inventories	—		2,560		3,066			—			5,626
Prepaid expenses and other current assets	—		150		484			—			634
Total Current Assets	779		2,927		4,100			—			7,806
Property and Equipment – net	—		3,479		3,407			—			6,886
Goodwill	—		3,315		582			—			3,897
Other Intangible Assets – net	—		49		447			—			496
Other Assets	—		45		748			—			793
Deferred Income Taxes	24		—		—			(24		)	—
Intercompany Receivable	902		—		2,092			(2,994		)	—
Investment in Subsidiaries	3,063		3,598		—			(6,661		)	—
Total Assets	$	4,768	$	13,413	$	11,376		$	(9,679	)	$	19,878
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	306	$	7		$	—		$	313
Merchandise accounts payable	—		841		1,187			—			2,028
Accounts payable and accrued liabilities	22		962		2,058			—			3,042
Income taxes	317		6		32			—			355
Total Current Liabilities	339		2,115		3,284			—			5,738
Long-Term Debt	—		6,395		17			—			6,412
Intercompany Payable	—		2,994		—			(2,994		)	—
Deferred Income Taxes	—		733		813			(24		)	1,522
Other Liabilities	67		498		1,281			—			1,846
Shareholders' Equity:
Macy's, Inc.	4,362		678		5,983			(6,661		)	4,362
Noncontrolling Interest	—		—		(2		)	—			(2		)
Total Shareholders' Equity	4,362		678		5,981			(6,661		)	4,360
Total Liabilities and Shareholders' Equity	$	4,768	$	13,413	$	11,376		$	(9,679	)	$	19,878

Condensed Consolidating Balance Sheet

As of February 3, 2018

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries			Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	1,109	$	58	$	288		$	—		$	1,455
Receivables	—		85		278			—			363
Merchandise inventories	—		2,344		2,834			—			5,178
Prepaid expenses and other current assets	—		165		485			—			650
Total Current Assets	1,109		2,652		3,885			—			7,646
Property and Equipment – net	—		3,349		3,323			—			6,672
Goodwill	—		3,315		582			—			3,897
Other Intangible Assets – net	—		44		444			—			488
Other Assets	1		89		790			—			880
Deferred Income Taxes	11		—		—			(11		)	—
Intercompany Receivable	884		—		2,388			(3,272		)	—
Investment in Subsidiaries	4,032		4,126		—			(8,158		)	—
Total Assets	$	6,037	$	13,575	$	11,412		$	(11,441	)	$	19,583
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	6	$	16		$	—		$	22
Merchandise accounts payable	—		653		937			—			1,590
Accounts payable and accrued liabilities	159		980		2,132			—			3,271
Income taxes	113		30		153			—			296
Total Current Liabilities	272		1,669		3,238			—			5,179
Long-Term Debt	—		5,844		17			—			5,861
Intercompany Payable	—		3,272		—			(3,272		)	—
Deferred Income Taxes	—		559		600			(11		)	1,148
Other Liabilities	20		430		1,212			—			1,662
Shareholders' Equity:
Macy's, Inc.	5,745		1,801		6,357			(8,158		)	5,745
Noncontrolling Interest	—		—		(12		)	—			(12		)
Total Shareholders' Equity	5,745		1,801		6,345			(8,158		)	5,733
Total Liabilities and Shareholders' Equity	$	6,037	$	13,575	$	11,412		$	(11,441	)	$	19,583

Condensed Consolidating Statement of Cash Flows

For the 13 weeks ended May 5, 2018

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	139		$	(69	)	$	299		$	(238	)	$	131
Impairment and other costs	—			—			19			—			19
Equity in earnings of subsidiaries	(136		)	(102		)	—			238			—
Dividends received from subsidiaries	200			—			—			(200		)	—
Depreciation and amortization	—			82			153			—			235
Gains on sale of real estate	—			(23		)	(1		)	—			(24		)
Changes in assets, liabilities and other items not separately identified	150			175			(364		)	—			(39		)
Net cash provided by operating activities	353			63			106			(200		)	322
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net of dispositions	—			(50		)	(117		)	—			(167		)
Other, net	—			(10		)	21			—			11
Net cash used by investing activities	—			(60		)	(96		)	—			(156		)
Cash flows from financing activities:
Debt repaid	—			(3		)	—			—			(3		)
Dividends paid	(116		)	—			(200		)	200			(116		)
Issuance of common stock, net of common stock acquired	28			—			—			—			28
Proceeds from noncontrolling interest	—			—			2			—			2
Intercompany activity, net	(254		)	(10		)	264			—			—
Other, net	(50		)	23			17			—			(10		)
Net cash provided (used) by financing activities	(392		)	10			83			200			(99		)
Net increase (decrease) in cash, cash equivalents and restricted cash	(39		)	13			93			—			67
Cash, cash equivalents and restricted cash at beginning of period	1,109			79			325			—			1,513
Cash, cash equivalents and restricted cash at end of period	$	1,070		$	92		$	418		$	—		$	1,580

Condensed Consolidating Statement of Cash Flows

For the 13 weeks ended April 29, 2017

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	78		$	(120	)	$	198		$	(79	)	$	77
Equity in earnings of subsidiaries	(78		)	(1		)	—			79			—
Dividends received from subsidiaries	211			—			—			(211		)	—
Depreciation and amortization	—			89			154			—			243
Gains on sale of real estate	—			(65		)	(3		)	—			(68		)
Changes in assets, liabilities and other items not separately identified	251			241			(507		)	—			(15		)
Net cash provided (used) by operating activities	462			144			(158		)	(211		)	237
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net of dispositions	—			58			(139		)	—			(81		)
Other, net	—			—			21			—			21
Net cash provided (used) by investing activities	—			58			(118		)	—			(60		)
Cash flows from financing activities:
Debt repaid	—			(152		)	—			—			(152		)
Dividends paid	(115		)	—			(211		)	211			(115		)
Issuance of common stock, net of common stock acquired	1			—			—			—			1
Proceeds from noncontrolling interest	—			—			3			—			3
Intercompany activity, net	(515		)	(1		)	516			—			—
Other, net	8			(31		)	13			—			(10		)
Net cash provided (used) by financing activities	(621		)	(184		)	321			211			(273		)
Net increase (decrease) in cash, cash equivalents and restricted cash	(159		)	18			45			—			(96		)
Cash, cash equivalents and restricted cash at beginning of period	938			81			315			—			1,334
Cash, cash equivalents and restricted cash at end of period	$	779		$	99		$	360		$	—		$	1,238