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 and 39 weeks ended November 3, 2018 and October 28, 2017, Condensed Consolidating Balance Sheets as of November 3, 2018, October 28, 2017 and February 3, 2018, and the related Condensed Consolidating Statements of Cash Flows for the 39 weeks ended November 3, 2018 and October 28, 2017 are presented on the following pages.

Condensed Consolidating Statement of Comprehensive Income

For the 13 Weeks Ended November 3, 2018

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	2,030		$	6,185		$	(2,811	)	$	5,404
Credit card revenues, net	—			—			185			—			185

Cost of sales	—			(1,266		)	(4,771		)	2,811			(3,226		)
Selling, general and administrative expenses	—			(883		)	(1,372		)	—			(2,255		)
Gains on sale of real estate	—			41			1			—			42
Restructuring and other costs	—			—			(3		)	—			(3		)
Operating income (loss)	—			(78		)	225			—			147
Benefit plan income, net	—			3			6			—			9
Settlement charges	—			(8		)	(15		)	—			(23		)
Interest (expense) income, net:
External	4			(64		)	1			—			(59		)
Intercompany	—			(18		)	18			—			—
Equity in earnings (loss) of subsidiaries	59			(58		)	—			(1		)	—
Income (loss) before income taxes	63			(223		)	235			(1		)	74
Federal, state and local income tax benefit (expense)	(1		)	57			(68		)	—			(12		)
Net income (loss)	62			(166		)	167			(1		)	62
Net loss attributable to noncontrolling interest	—			—			—			—			—
Net income (loss) attributable to Macy's, Inc. shareholders	$	62		$	(166	)	$	167		$	(1	)	$	62
Comprehensive income (loss)	$	(37	)	$	(257	)	$	106		$	151		$	(37	)
Comprehensive loss attributable to noncontrolling interest	—			—			—			—			—
Comprehensive income (loss) attributable to Macy's, Inc. shareholders	$	(37	)	$	(257	)	$	106		$	151		$	(37	)

Condensed Consolidating Statement of Comprehensive Income

For the 13 Weeks Ended October 28, 2017

(millions)



	Parent		Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—	$	2,073		$	5,865		$	(2,657	)	$	5,281
Credit card revenues, net	—		—			145			—			145

Cost of sales	—		(1,382		)	(4,427		)	2,657			(3,152		)
Selling, general and administrative expenses	—		(834		)	(1,354		)	—			(2,188		)
Gains on sale of real estate	—		24			41			—			65
Restructuring and other costs	—		(1		)	(32		)	—			(33		)
Operating income (loss)	—		(120		)	238			—			118
Benefit plan income, net	—		6			9			—			15
Settlement charges	—		(8		)	(14		)	—			(22		)
Interest (expense) income, net:
External	1		(76		)	1			—			(74		)
Intercompany	—		(34		)	34			—			—
Equity in earnings (loss) of subsidiaries	29		(57		)	—			28			—
Income (loss) before income taxes	30		(289		)	268			28			37
Federal, state and local income tax benefit (expense)	—		59			(69		)	—			(10		)
Net income (loss)	30		(230		)	199			28			27
Net loss attributable to noncontrolling interest	—		—			3			—			3
Net income (loss) attributable to Macy's, Inc. shareholders	$	30	$	(230	)	$	202		$	28		$	30
Comprehensive income (loss)	$	55	$	(207	)	$	215		$	(11	)	$	52
Comprehensive loss attributable to noncontrolling interest	—		—			3			—			3
Comprehensive income (loss) attributable to Macy's, Inc. shareholders	$	55	$	(207	)	$	218		$	(11	)	$	55

Condensed Consolidating Statement of Comprehensive Income

For the 39 Weeks Ended November 3, 2018

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	6,110		$	16,462		$	(6,056	)	$	16,516
Credit card revenues (expense), net	—			(3		)	531			—			528

Cost of sales	—			(3,857		)	(12,126		)	6,056			(9,927		)
Selling, general and administrative expenses	—			(2,522		)	(3,979		)	—			(6,501		)
Gains on sale of real estate	—			83			28			—			111
Impairment, restructuring and other costs	—			—			(39		)	—			(39		)
Operating income (loss)	—			(189		)	877			—			688
Benefit plan income, net	—			12			19			—			31
Settlement charges	(5		)	(24		)	(44		)	—			(73		)
Interest (expense) income, net:
External	13			(203		)	3			—			(187		)
Intercompany	—			(54		)	54			—			—
Losses on early retirement of debt	—			(5		)	—			—			(5		)
Equity in earnings of subsidiaries	362			51			—			(413		)	—
Income (loss) before income taxes	370			(412		)	909			(413		)	454
Federal, state and local income tax benefit (expense)	(2		)	123			(217		)	—			(96		)
Net income (loss)	368			(289		)	692			(413		)	358
Net loss attributable to noncontrolling interest	—			—			10			—			10
Net income (loss) attributable to Macy's, Inc. shareholders	$	368		$	(289	)	$	702		$	(413	)	$	368
Comprehensive income (loss)	$	296		$	(357	)	$	646		$	(299	)	$	286
Comprehensive loss attributable to noncontrolling interest	—			—			10			—			10
Comprehensive income (loss) attributable to Macy's, Inc. shareholders	$	296		$	(357	)	$	656		$	(299	)	$	296

Condensed Consolidating Statement of Comprehensive Income

For the 39 Weeks Ended October 28, 2017

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	6,358		$	15,784		$	(5,875	)	$	16,267
Credit card revenues (expense), net	—			(2		)	475			—			473

Cost of sales	—			(4,160		)	(11,573		)	5,875			(9,858		)
Selling, general and administrative expenses	(1		)	(2,458		)	(3,947		)	—			(6,406		)
Gains on sale of real estate	—			116			60			—			176
Restructuring and other costs	—			(1		)	(32		)	—			(33		)
Operating income (loss)	(1		)	(147		)	767			—			619
Benefit plan income, net	—			16			26			—			42
Settlement charges	—			(24		)	(49		)	—			(73		)
Interest (expense) income, net:
External	4			(243		)	2			—			(237		)
Intercompany	—			(102		)	102			—			—
Losses on early retirement of debt	—			(1		)	—			—			(1		)
Equity in earnings (loss) of subsidiaries	217			(26		)	—			(191		)	—
Income (loss) before income taxes	220			(527		)	848			(191		)	350
Federal, state and local income tax benefit (expense)	(1		)	142			(279		)	—			(138		)
Net income (loss)	219			(385		)	569			(191		)	212
Net loss attributable to noncontrolling interest	—			—			7			—			7
Net income (loss) attributable to Macy's, Inc. shareholders	$	219		$	(385	)	$	576		$	(191	)	$	219
Comprehensive income (loss)	$	315		$	(295	)	$	632		$	(344	)	$	308
Comprehensive loss attributable to noncontrolling interest	—			—			7			—			7
Comprehensive income (loss) attributable to Macy's, Inc. shareholders	$	315		$	(295	)	$	639		$	(344	)	$	315

Condensed Consolidating Balance Sheet

As of November 3, 2018

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries			Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	426	$	74	$	236		$	—		$	736
Receivables	1		25		154			—			180
Merchandise inventories	—		3,112		4,035			—			7,147
Income tax receivable	81		—		—			(71		)	10
Prepaid expenses and other current assets	—		139		455			—			594
Total Current Assets	508		3,350		4,880			(71		)	8,667
Property and Equipment – net	—		3,244		3,328			—			6,572
Goodwill	—		3,326		582			—			3,908
Other Intangible Assets – net	—		40		441			—			481
Other Assets	—		39		694			—			733
Deferred Income Taxes	11		—		—			(11		)	—
Intercompany Receivable	1,725		—		882			(2,607		)	—
Investment in Subsidiaries	3,639		3,028		—			(6,667		)	—
Total Assets	$	5,883	$	13,027	$	10,807		$	(9,356	)	$	20,361
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	42	$	23		$	—		$	65
Merchandise accounts payable	—		1,515		1,866			—			3,381
Accounts payable and accrued liabilities	192		874		1,932			—			2,998
Income taxes	—		40		31			(71		)	—
Total Current Liabilities	192		2,471		3,852			(71		)	6,444
Long-Term Debt	—		5,453		16			—			5,469
Intercompany Payable	—		2,607		—			(2,607		)	—
Deferred Income Taxes	—		619		577			(11		)	1,185
Other Liabilities	24		431		1,163			—			1,618
Shareholders' Equity:
Macy's, Inc.	5,667		1,446		5,221			(6,667		)	5,667
Noncontrolling Interest	—		—		(22		)	—			(22		)
Total Shareholders' Equity	5,667		1,446		5,199			(6,667		)	5,645
Total Liabilities and Shareholders' Equity	$	5,883	$	13,027	$	10,807		$	(9,356	)	$	20,361

Condensed Consolidating Balance Sheet

As of October 28, 2017

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries			Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	116	$	89	$	329		$	—		$	534
Receivables	—		67		152			—			219
Merchandise inventories	—		3,218		3,847			—			7,065
Income tax receivable	—		2		—			(2		)	—
Prepaid expenses and other current assets	—		141		469			—			610
Total Current Assets	116		3,517		4,797			(2		)	8,428
Property and Equipment – net	—		3,370		3,372			—			6,742
Goodwill	—		3,315		582			—			3,897
Other Intangible Assets – net	—		46		445			—			491
Other Assets	1		62		772			—			835
Deferred Income Taxes	27		—		—			(27		)	—
Intercompany Receivable	1,436		—		2,161			(3,597		)	—
Investment in Subsidiaries	2,932		3,700		—			(6,632		)	—
Total Assets	$	4,512	$	14,010	$	12,129		$	(10,258	)	$	20,393
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	6	$	16		$	—		$	22
Merchandise accounts payable	—		1,339		1,834			—			3,173
Accounts payable and accrued liabilities	139		1,008		2,110			—			3,257
Income taxes	20		—		16			(2		)	34
Total Current Liabilities	159		2,353		3,976			(2		)	6,486
Long-Term Debt	—		6,280		17			—			6,297
Intercompany Payable	—		3,597		—			(3,597		)	—
Deferred Income Taxes	—		731		882			(27		)	1,586
Other Liabilities	71		476		1,203			—			1,750
Shareholders' Equity:
Macy's, Inc.	4,282		573		6,059			(6,632		)	4,282
Noncontrolling Interest	—		—		(8		)	—			(8		)
Total Shareholders' Equity	4,282		573		6,051			(6,632		)	4,274
Total Liabilities and Shareholders' Equity	$	4,512	$	14,010	$	12,129		$	(10,258	)	$	20,393

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 39 Weeks Ended November 3, 2018

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	368		$	(289	)	$	692		$	(413	)	$	358
Equity in earnings of subsidiaries	(362		)	(51		)	—			413			—
Impairment, restructuring and other costs	—			—			39			—			39
Settlement charges	5			24			44			—			73
Dividends received from subsidiaries	689			—			—			(689		)	—
Depreciation and amortization	—			250			468			—			718
Gains on sale of real estate	—			(83		)	(28		)	—			(111		)
Changes in assets, liabilities and other items not separately identified	(191		)	115			(571		)	(1		)	(648		)
Net cash provided (used) by operating activities	509			(34		)	644			(690		)	429
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net of dispositions	—			(98		)	(458		)	—			(556		)
Other, net	—			(15		)	(29		)	51			7
Net cash used by investing activities	—			(113		)	(487		)	51			(549		)
Cash flows from financing activities:
Debt repaid	—			(310		)	(1		)	(50		)	(361		)
Dividends paid	(347		)	—			(689		)	689			(347		)
Issuance of common stock	41			—			—			—			41
Proceeds from noncontrolling interest	—			—			7			—			7
Intercompany activity, net	(803		)	378			425			—			—
Other, net	(83		)	74			53			—			44
Net cash provided (used) by financing activities	(1,192		)	142			(205		)	639			(616		)
Net decrease in cash, cash equivalents and restricted cash	(683		)	(5		)	(48		)	—			(736		)
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	$	426		$	74		$	277		$	—		$	777

Condensed Consolidating Statement of Cash Flows

For the 39 Weeks Ended October 28, 2017

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	219		$	(385	)	$	569		$	(191	)	$	212
Equity in loss (earnings) of subsidiaries	(217		)	26			—			191			—
Restructuring and other costs	—			1			32			—			33
Settlement charges	—			24			49			—			73
Dividends received from subsidiaries	571			—			—			(571		)	—
Depreciation and amortization	—			265			476			—			741
Gains on sale of real estate	—			(116		)	(60		)	—			(176		)
Changes in assets, liabilities and other items not separately identified	(44		)	167			(607		)	—			(484		)
Net cash provided (used) by operating activities	529			(18		)	459			(571		)	399
Cash flows from investing activities:
Disposition (purchase) of property and equipment and capitalized software, net	—			30			(368		)	—			(338		)
Other, net	—			2			7			—			9
Net cash provided (used) by investing activities	—			32			(361		)	—			(329		)
Cash flows from financing activities:
Debt repaid	—			(563		)	(1		)	—			(564		)
Dividends paid	(346		)	—			(571		)	571			(346		)
Issuance of common stock, net of common stock acquired	2			—			—			—			2
Proceeds from noncontrolling interest	—			—			12			—			12
Intercompany activity, net	(1,016		)	589			427			—			—
Other, net	9			(32		)	103			—			80
Net cash used by financing activities	(1,351		)	(6		)	(30		)	571			(816		)
Net increase (decrease) in cash, cash equivalents and restricted cash	(822		)	8			68			—			(746		)
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	$	116		$	89		$	383		$	—		$	588