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 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." "Consolidating Adjustments" represent adjustments to eliminate investments in subsidiaries and intercompany balances and transactions between the parent guarantor, subsidiary issuer, and the non-guarantor subsidiaries.

In June 2020, in conjunction with the financing discussed in Note 7, "Financing Activities," Macy's Retail Holdings, Inc. was converted into a limited liability company and in May 2020 direct, wholly-owned subsidiaries of the Parent, Macy’s Inventory Holdings LLC and Macy’s Propco Holdings, LLC, were created. In conjunction with the June 2020 financings transactions, Macy's Inventory Holdings LLC was transferred certain inventory and related trade payables of MRH and its subsidiaries, while Macy's Propco Holdings, LLC was transferred certain real property of MRH and its subsidiaries, both of which serve as collateral for the new debt agreements.

In March 2020, the SEC amended Rule 3-10 of Regulation S-X regarding financial disclosure requirements for certain debt securities. The new rules affect those disclosures related to registered securities that are guaranteed and those that are collateralized by the securities of an affiliate. The changes include expanding the population of subsidiary issuers and guarantors that can use the SEC's guarantee-related disclosure framework, simplifying the disclosure models and allowing for disclosures to be made outside of the financial statements. This rule is effective January 4, 2021 with early adoption permitted. The Company is currently evaluating the impact this new rule will have on the financial statements and related disclosures as well as the timing of adoption.

Condensed Consolidating Statements of Comprehensive Income for the 13 and 26 weeks ended August 1, 2020 and August 3, 2019, Condensed Consolidating Balance Sheets as of August 1, 2020, August 3, 2019 and February 1, 2020, and the related Condensed Consolidating Statements of Cash Flows for the 26 weeks ended August 1, 2020 and August 3, 2019 are presented on the following pages.


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
Net sales	$	—	$	166	$	3,427	$	(34)	$	3,559
Consignment commission income	—		219		—		(219)		—
Credit card revenues (expense), net	—		(1)		169		—		168

Cost of sales	—		14		(2,766)		34		(2,718)
Selling, general and administrative expenses	—		(463)		(1,154)		219		(1,398)
Restructuring, impairment and other costs	—		(85)		(157)		—		(242)
Operating loss	—		(150)		(481)		—		(631)
Benefit plan income, net	—		5		7		—		12
Settlement charges	—		(13)		(25)		—		(38)
Interest (expense) income, net:
External	(17)		(48)		(4)		—		(69)
Intercompany	(21)		10		11		—		—
Financing costs	—		(3)		—		—		(3)
Equity in loss of subsidiaries	(406)		(473)		—		879		—
Loss before income taxes	(444)		(672)		(492)		879		(729)
Federal, state and local income tax benefit	13		75		210		—		298
Net loss	$	(431)	$	(597)	$	(282)	$	879	$	(431)

Comprehensive loss	$	(380)	$	(551)	$	(249)	$	800	$	(380)


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
Net sales	$	—	$	2,219	$	4,416	$	(1,089)	$	5,546
Credit card revenues, net	—		(2)		178		—		176

Cost of sales	—		(1,341)		(3,143)		1,089		(3,395)
Selling, general and administrative expenses	—		(872)		(1,305)		—		(2,177)
Gains on sale of real estate	—		—		7		—		7
Impairment and other costs	—		—		(2)		—		(2)
Operating income	—		4		151		—		155
Benefit plan income, net	—		3		5		—		8
Interest (expense) income, net:
External	4		(52)		1		—		(47)
Intercompany	—		(18)		18		—		—
Equity in earnings (loss) of subsidiaries	82		(108)		—		26		—
Income (loss) before income taxes	86		(171)		175		26		116
Federal, state and local income tax benefit (expense)	—		7		(37)		—		(30)
Net income (loss)	$	86	$	(164)	$	138	$	26	$	86

Comprehensive income (loss)	$	91	$	(159)	$	142	$	17	$	91


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
Net sales	$	—	$	1,033	$	6,382	$	(839)	$	6,576
Consignment commission income	—		219		—		(219)		—
Credit card revenues (expense), net	—		(6)		305		—		299

Cost of sales	—		(782)		(5,276)		839		(5,219)
Selling, general and administrative expenses	—		(1,025)		(2,189)		219		(2,995)
Gains on sale of real estate	—		—		16		—		16
Impairment, restructuring and other costs	—		(2,807)		(619)		—		(3,426)
Operating loss	—		(3,368)		(1,381)		—		(4,749)
Benefit plan income, net	—		8		13		—		21
Settlement charges	—		(13)		(25)		—		(38)
Interest (expense) income, net:
External	(16)		(97)		(4)		—		(117)
Intercompany	(21)		(8)		29		—		—
Financing costs	—		(3)		—		—		(3)
Equity in loss of subsidiaries	(3,988)		(1,268)		—		5,256		—
Loss before income taxes	(4,025)		(4,749)		(1,368)		5,256		(4,886)
Federal, state and local income tax benefit	13		502		359		—		874
Net loss	$	(4,012)	$	(4,247)	$	(1,009)	$	5,256	$	(4,012)

Comprehensive loss	$	(3,952)	$	(4,192)	$	(970)	$	5,162	$	(3,952)


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
Net sales	$	—	$	4,373	$	9,184	$	(2,507)	$	11,050
Credit card revenues (expense), net	—		(5)		353		—		348

Cost of sales	—		(2,682)		(6,623)		2,507		(6,798)
Selling, general and administrative expenses	1		(1,674)		(2,614)		—		(4,287)
Gains on sale of real estate	—		24		25		—		49
Impairment, restructuring and other costs	—		—		(3)		—		(3)
Operating income	1		36		322		—		359
Benefit plan income, net	—		6		9		—		15
Interest (expense) income, net:
External	9		(105)		2		—		(94)
Intercompany	—		(37)		37		—		—
Equity in earnings (loss) of subsidiaries	214		(138)		—		(76)		—
Income (loss) before income taxes	224		(238)		370		(76)		280
Federal, state and local income tax benefit (expense)	(1)		31		(87)		—		(57)
Net income (loss)	$	223	$	(207)	$	283	$	(76)	$	223

Comprehensive income (loss)	$	234	$	(197)	$	291	$	(94)	$	234


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	737	$	35	$	623	$	—	$	1,395
Receivables	—		40		144		—		184
Merchandise inventories	—		187		3,395		—		3,582
Prepaid expenses and other current assets	15		90		376		(11)		470
Total Current Assets	752		352		4,538		(11)		5,631
Property and Equipment – net	—		2,463		3,816		—		6,279
Right of Use Assets	—		990		2,401		(356)		3,035
Goodwill	—		661		167		—		828
Other Intangible Assets – net	—		4		434		—		438
Other Assets	641		77		685		—		1,403
Deferred Income Taxes	12		—		—		(12)		—
Intercompany Receivable	314		—		2,314		(2,628)		—
Investment in Subsidiaries	1,982		3,907		—		(5,889)		—
Total Assets	$	3,701	$	8,454	$	14,355	$	(8,896)	$	17,614
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	539	$	—	$	—	$	539
Merchandise accounts payable	—		223		1,186		—		1,409
Accounts payable and accrued liabilities	111		815		2,048		(68)		2,906

Total Current Liabilities	111		1,577		3,234		(68)		4,854
Long-Term Debt	1,240		3,611		—		—		4,851
Long-Term Lease Liabilities	—		882		2,686		(299)		3,269
Intercompany Payable	—		2,628		—		(2,628)		—
Deferred Income Taxes	—		370		563		(12)		921
Other Liabilities	26		426		943		—		1,395
Shareholders' Equity (Deficit)	2,324		(1,040)		6,929		(5,889)		2,324
Total Liabilities and Shareholders' Equity	$	3,701	$	8,454	$	14,355	$	(8,896)	$	17,614


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	320	$	100	$	254	$	—	$	674
Receivables	1		44		195		—		240
Merchandise inventories	—		2,138		2,891		—		5,029
Prepaid expenses and other current assets	—		139		464		—		603
Income taxes	39		—		—		(39)		—
Total Current Assets	360		2,421		3,804		(39)		6,546
Property and Equipment – net	—		3,162		3,321		—		6,483
Right of Use Assets	—		660		1,976		—		2,636
Goodwill	—		3,326		582		—		3,908
Other Intangible Assets – net	—		4		436		—		440
Other Assets	—		39		689		—		728
Deferred Income Taxes	9		—		—		(9)		—
Intercompany Receivable	2,564		—		643		(3,207)		—
Investment in Subsidiaries	3,484		2,957		—		(6,441)		—
Total Assets	$	6,417	$	12,569	$	11,451	$	(9,696)	$	20,741
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	6	$	—	$	—	$	6
Merchandise accounts payable	—		717		957		—		1,674
Accounts payable and accrued liabilities	74		754		1,911		—		2,739
Income taxes	—		47		12		(39)		20
Total Current Liabilities	74		1,524		2,880		(39)		4,439
Long-Term Debt	—		4,680		—		—		4,680
Long-Term Lease Liabilities	—		594		2,242		—		2,836
Intercompany Payable	—		3,207		—		(3,207)		—
Deferred Income Taxes	—		643		572		(9)		1,206
Other Liabilities	28		364		873		—		1,265
Shareholders' Equity	6,315		1,557		4,884		(6,441)		6,315
Total Liabilities and Shareholders' Equity	$	6,417	$	12,569	$	11,451	$	(9,696)	$	20,741


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	413	59		$	213	$	—	$	685
Receivables	—		83		326		—		409
Merchandise inventories	—		2,239		2,949		—		5,188
Prepaid expenses and other current assets	—		118		410		—		528
Total Current Assets	413		2,499		3,898		—		6,810
Property and Equipment – net	—		3,103		3,530		—		6,633
Right of Use Assets	—		611		2,057		—		2,668
Goodwill	—		3,326		582		—		3,908
Other Intangible Assets – net	—		4		435		—		439
Other Assets	—		37		677		—		714
Deferred Income Taxes	12		—		—		(12)		—
Intercompany Receivable	2,675		—		1,128		(3,803)		—
Investment in Subsidiaries	3,433		2,796		—		(6,229)		—
Total Assets	$	6,533	$	12,376	$	12,307	$	(10,044)	$	21,172
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	539	$	—	$	—	$	539
Merchandise accounts payable	—		702		980		—		1,682
Accounts payable and accrued liabilities	126		909		2,413		—		3,448
Income taxes	5		11		65		—		81
Total Current Liabilities	131		2,161		3,458		—		5,750
Long-Term Debt	—		3,621		—		—		3,621
Long-Term Lease Liabilities	—		543		2,375		—		2,918
Intercompany Payable	—		3,803		—		(3,803)		—
Deferred Income Taxes	—		595		586		(12)		1,169
Other Liabilities	25		414		898		—		1,337
Shareholders' Equity	6,377		1,239		4,990		(6,229)		6,377
Total Liabilities and Shareholders' Equity	$	6,533	$	12,376	$	12,307	$	(10,044)	$	21,172


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
Cash flows from operating activities:
Net loss	$	(4,012)	$	(4,247)	$	(1,009)	$	5,256	$	(4,012)
Impairment, restructuring and other costs	—		2,807		619		—		3,426
Settlement charges	—		13		25		—		38
Equity in loss of subsidiaries	3,988		1,268		—		(5,256)		—
Dividends received from subsidiaries	427		300		—		(727)		—
Depreciation and amortization	—		148		324		—		472
Gains on sale of real estate	—		—		(16)		—		(16)
Changes in assets, liabilities and other items not separately identified	(647)		1,046		(314)		—		85
Net cash provided (used) by operating activities	(244)		1,335		(371)		(727)		(7)
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net of dispositions	—		(48)		(210)		—		(258)
Other, net	—		—		(14)		—		(14)
Net cash used by investing activities	—		(48)		(224)		—		(272)
Cash flows from financing activities:
Debt issued, net of debt issuance costs	1,240		1,493		(51)		—		2,682
Debt repaid	—		(1,503)		(1)		—		(1,504)
Dividends paid	(117)		—		(727)		727		(117)

Intercompany activity, net	(526)		(1,256)		1,782		—		—
Other, net	(26)		(50)		(35)		—		(111)
Net cash provided (used) by financing activities	571		(1,316)		968		727		950
Net increase (decrease) in cash, cash equivalents and restricted cash	327		(29)		373		—		671
Cash, cash equivalents and restricted cash at beginning of period	413		64		254		—		731
Cash, cash equivalents and restricted cash at end of period	$	740	$	35	$	627	$	—	$	1,402


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
Cash flows from operating activities:
Net income (loss)	$	223	$	(207)	$	283	$	(76)	$	223
Impairment and other costs	—		—		3		—		3
Equity in loss (earnings) of subsidiaries	(214)		138		—		76		—
Dividends received from subsidiaries	606		—		—		(606)		—
Depreciation and amortization	—		169		303		—		472
Gains on sale of real estate	—		(24)		(25)		—		(49)
Changes in assets, liabilities and other items not separately identified	(52)		47		(294)		—		(299)
Net cash provided (used) by operating activities	563		123		270		(606)		350
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net of dispositions	—		(97)		(345)		—		(442)
Other, net	—		(11)		(1)		—		(12)
Net cash used by investing activities	—		(108)		(346)		—		(454)
Cash flows from financing activities:
Debt repaid	—		(42)		—		—		(42)
Dividends paid	(233)		—		(606)		606		(233)
Issuance of common stock	6		—		—		—		6

Intercompany activity, net	(813)		93		720		—		—
Other, net	(92)		(21)		(15)		—		(128)
Net cash provided (used) by financing activities	(1,132)		30		99		606		(397)
Net increase (decrease) in cash, cash equivalents and restricted cash	(569)		45		23		—		(501)
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	$	320	$	109	$	318	$	—	$	747