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 4, 2019 and May 5, 2018, Condensed Consolidating Balance Sheets as of May 4, 2019, May 5, 2018 and February 2, 2019, and the related Condensed Consolidating Statements of Cash Flows for the 13 weeks ended May 4, 2019 and May 5, 2018 are presented on the following pages.

Condensed Consolidating Statement of Comprehensive Income

For the 13 Weeks Ended May 4, 2019

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	2,154		$	4,768		$	(1,418	)	$	5,504
Credit card revenues (expense), net	—			(2		)	174			—			172

Cost of sales	—			(1,341		)	(3,480		)	1,418			(3,403		)
Selling, general and administrative expenses	—			(803		)	(1,309		)	—			(2,112		)
Gains on sale of real estate	—			24			19			—			43
Impairment and other costs	—			—			(1		)	—			(1		)
Operating income	—			32			171			—			203
Benefit plan income, net	—			3			4			—			7
Interest (expense) income, net:
External	5			(53		)	1			—			(47		)
Intercompany	—			(19		)	19			—			—
Equity in earnings (loss) of subsidiaries	132			(30		)	—			(102		)	—
Income (loss) before income taxes	137			(67		)	195			(102		)	163
Federal, state and local income tax benefit (expense)	(1		)	24			(50		)	—			(27		)
Net income (loss)	136			(43		)	145			(102		)	136
Net loss attributable to noncontrolling interest	—			—			—			—			—
Net income (loss) attributable to Macy's, Inc. shareholders	$	136		$	(43	)	$	145		$	(102	)	$	136
Comprehensive income (loss)	$	142		$	(38	)	$	149		$	(111	)	$	142
Comprehensive loss attributable to noncontrolling interest	—			—			—			—			—
Comprehensive income (loss) attributable to Macy's, Inc. shareholders	$	142		$	(38	)	$	149		$	(111	)	$	142

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 Balance Sheet

As of May 4, 2019

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	293	$	151	$	293	$	—		$	737
Receivables	—		40		197		—			237
Merchandise inventories	—		2,369		3,129		—			5,498
Prepaid expenses and other current assets	—		163		470		—			633
Total Current Assets	293		2,723		4,089		—			7,105
Property and Equipment – net	—		3,202		3,297		—			6,499
Right of Use Assets	—		677		1,954		—			2,631
Goodwill	—		3,326		582		—			3,908
Other Intangible Assets – net	—		5		436		—			441
Other Assets	—		28		684		—			712
Deferred Income Taxes	6		—		—		(6		)	—
Intercompany Receivable	2,436		—		886		(3,322		)	—
Investment in Subsidiaries	3,776		3,061		—		(6,837		)	—
Total Assets	$	6,511	$	13,022	$	11,928	$	(10,165	)	$	21,296
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	41	$	—	$	—		$	41
Merchandise accounts payable	—		845		1,105		—			1,950
Accounts payable and accrued liabilities	73		786		1,987		—			2,846
Income taxes	87		61		34		—			182
Total Current Liabilities	160		1,733		3,126		—			5,019
Long-Term Debt	—		4,680		—		—			4,680
Long-Term Lease Liabilities	—		607		2,216		—			2,823
Intercompany Payable	—		3,322		—		(3,322		)	—
Deferred Income Taxes	—		626		573		(6		)	1,193
Other Liabilities	28		341		889		—			1,258
Shareholders' Equity:
Macy's, Inc.	6,323		1,713		5,124		(6,837		)	6,323
Noncontrolling Interest	—		—		—		—			—
Total Shareholders' Equity	6,323		1,713		5,124		(6,837		)	6,323
Total Liabilities and Shareholders' Equity	$	6,511	$	13,022	$	11,928	$	(10,165	)	$	21,296

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 February 2, 2019

(millions)



	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	889	$	59	$	214	$	—		$	1,162
Receivables	—		68		332		—			400
Merchandise inventories	—		2,342		2,921		—			5,263
Prepaid expenses and other current assets	—		143		477		—			620
Total Current Assets	889		2,612		3,944		—			7,445
Property and Equipment – net	—		3,287		3,350		—			6,637
Goodwill	—		3,326		582		—			3,908
Other Intangible Assets – net	—		38		440		—			478
Other Assets	—		41		685		—			726
Deferred Income Taxes	12		—		—		(12		)	—
Intercompany Receivable	1,713		—		1,390		(3,103		)	—
Investment in Subsidiaries	4,030		3,119		—		(7,149		)	—
Total Assets	$	6,644	$	12,423	$	10,391	$	(10,264	)	$	19,194
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	42	$	1	$	—		$	43
Merchandise accounts payable	—		713		942		—			1,655
Accounts payable and accrued liabilities	170		950		2,246		—			3,366
Income taxes	14		52		102		—			168
Total Current Liabilities	184		1,757		3,291		—			5,232
Long-Term Debt	—		4,692		16		—			4,708
Intercompany Payable	—		3,103		—		(3,103		)	—
Deferred Income Taxes	—		679		571		(12		)	1,238
Other Liabilities	24		406		1,150		—			1,580
Shareholders' Equity:
Macy's, Inc.	6,436		1,786		5,363		(7,149		)	6,436
Noncontrolling Interest	—		—		—		—			—
Total Shareholders' Equity	6,436		1,786		5,363		(7,149		)	6,436
Total Liabilities and Shareholders' Equity	$	6,644	$	12,423	$	10,391	$	(10,264	)	$	19,194

Condensed Consolidating Statement of Cash Flows

For the 13 Weeks Ended May 4, 2019

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	136		$	(43	)	$	145		$	(102	)	$	136
Equity in loss (earnings) of subsidiaries	(132		)	30			—			102			—
Impairment and other costs	—			—			1			—			1
Dividends received from subsidiaries	225			—			—			(225		)	—
Depreciation and amortization	—			85			151			—			236
Gains on sale of real estate	—			(24		)	(19		)	—			(43		)
Changes in assets, liabilities and other items not separately identified	78			(118		)	(328		)	—			(368		)
Net cash provided (used) by operating activities	307			(70		)	(50		)	(225		)	(38		)
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net of dispositions	—			(52		)	(178		)	—			(230		)
Other, net	—			—			(7		)	—			(7		)
Net cash used by investing activities	—			(52		)	(185		)	—			(237		)
Cash flows from financing activities:
Debt repaid	—			(3		)	—			—			(3		)
Dividends paid	(116		)	—			(225		)	225			(116		)
Issuance of common stock	6			—			—			—			6
Intercompany activity, net	(700		)	214			486			—			—
Other, net	(93		)	28			20			—			(45		)
Net cash provided (used) by financing activities	(903		)	239			281			225			(158		)
Net increase (decrease) in cash, cash equivalents and restricted cash	(596		)	117			46			—			(433		)
Cash, cash equivalents and restricted cash at beginning of period	889			64			295			—			1,248
Cash, cash equivalents and restricted cash at end of period	$	293		$	181		$	341		$	—		$	815

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
Equity in earnings of subsidiaries	(136		)	(102		)	—			238			—
Impairment and other costs	—			—			19			—			19
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	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