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, ABL Parent and Propco were created. In conjunction with the June 2020 financings transactions, ABL Parent was transferred certain inventory and related trade payables of MRH and its subsidiaries, while Propco 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 when it is adopted for the Company's Annual Report on Form 10-K for the fiscal year ended January 30, 2021.

Condensed Consolidating Statements of Comprehensive Income for the 13 and 39 weeks ended October 31, 2020 and November 2, 2019, Condensed Consolidating Balance Sheets as of October 31, 2020, November 2, 2019 and February 1, 2020, and the related Condensed Consolidating Statements of Cash Flows for the 39 weeks ended October 31, 2020 and November 2, 2019 are presented on the following pages.


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
Net sales	$	—	$	97	$	3,893	$	—	$	3,990
Consignment commission income	—		353		—		(353)		—
Credit card revenues, net	—		2		193		—		195

Cost of sales	—		(32)		(2,537)		—		(2,569)
Selling, general and administrative expenses	—		(624)		(1,455)		353		(1,726)
Gains on sale of real estate	—		—		3		—		3
Restructuring, impairment and other costs	—		(5)		(15)		—		(20)
Operating income (loss)	—		(209)		82		—		(127)
Benefit plan income, net	—		6		10		—		16
Settlement charges	—		(12)		(14)		—		(26)
Interest (expense) income, net:
External	(29)		(44)		(7)		—		(80)
Intercompany	(33)		26		7		—		—
Equity in loss of subsidiaries	(53)		(92)		—		145		—
Income (loss) before income taxes	(115)		(325)		78		145		(217)
Federal, state and local income tax benefit	24		95		7		—		126
Net income (loss)	$	(91)	$	(230)	$	85	$	145	$	(91)

Comprehensive income (loss)	$	(89)	$	(227)	$	85	$	142	$	(89)


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
Net sales	$	—	$	2,044	$	5,245	$	(2,116)	$	5,173
Credit card revenues (expense), net	—		(2)		185		—		183

Cost of sales	—		(1,230)		(3,992)		2,116		(3,106)
Selling, general and administrative expenses	—		(870)		(1,332)		—		(2,202)
Gains on sale of real estate	—		8		9		—		17
Impairment and other costs	—		(1)		(12)		—		(13)
Operating income (loss)	—		(51)		103		—		52
Benefit plan income, net	—		3		5		—		8
Settlement charges	—		—		(12)		—		(12)
Interest (expense) income, net:
External	3		(52)		1		—		(48)
Intercompany	—		(18)		18		—		—
Equity in loss of subsidiaries	(3)		(125)		—		128		—
Income (loss) before income taxes	—		(243)		115		128		—
Federal, state and local income tax benefit (expense)	2		30		(30)		—		2
Net income (loss)	$	2	$	(213)	$	85	$	128	$	2

Comprehensive income (loss)	$	(35)	$	(249)	$	65	$	184	$	(35)


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
Net sales	$	—	$	1,131	$	10,274	$	(839)	$	10,566
Consignment commission income	—		572		—		(572)		—
Credit card revenues (expense), net	—		(4)		498		—		494

Cost of sales	—		(814)		(7,813)		839		(7,788)
Selling, general and administrative expenses	—		(1,651)		(3,644)		572		(4,723)
Gains on sale of real estate	—		1		19		—		20
Impairment, restructuring and other costs	—		(2,811)		(634)		—		(3,445)
Operating loss	—		(3,576)		(1,300)		—		(4,876)
Benefit plan income, net	—		14		23		—		37
Settlement charges	—		(26)		(39)		—		(65)
Interest (expense) income, net:
External	(44)		(141)		(11)		—		(196)
Intercompany	(55)		18		37		—		—
Financing costs	—		(4)		—		—		(4)
Equity in loss of subsidiaries	(4,041)		(1,360)		—		5,401		—
Loss before income taxes	(4,140)		(5,075)		(1,290)		5,401		(5,104)
Federal, state and local income tax benefit	36		597		367		—		1,000
Net loss	$	(4,104)	$	(4,478)	$	(923)	$	5,401	$	(4,104)

Comprehensive loss	$	(4,041)	$	(4,420)	$	(884)	$	5,304	$	(4,041)


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
Net sales	$	—	$	6,418	$	14,428	$	(4,623)	$	16,223
Credit card revenues (expense), net	—		(8)		539		—		531

Cost of sales	—		(3,913)		(10,615)		4,623		(9,905)
Selling, general and administrative expenses	1		(2,544)		(3,946)		—		(6,489)
Gains on sale of real estate	—		32		35		—		67
Impairment, restructuring and other costs	—		(1)		(15)		—		(16)
Operating income (loss)	1		(16)		426		—		411
Benefit plan income, net	—		9		14		—		23
Settlement charges	—		—		(12)		—		(12)
Interest (expense) income, net:
External	11		(157)		3		—		(143)
Intercompany	—		(55)		55		—		—
Equity in earnings (loss) of subsidiaries	212		(264)		—		52		—
Income (loss) before income taxes	224		(483)		486		52		279
Federal, state and local income tax benefit (expense)	—		61		(116)		—		(55)
Net income (loss)	$	224	$	(422)	$	370	$	52	$	224

Comprehensive income (loss)	$	198	$	(448)	$	358	$	90	$	198


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	566	$	52	$	933	$	—	$	1,551
Receivables	—		41		144		—		185
Merchandise inventories	—		244		4,900		—		5,144
Prepaid expenses and other current assets	84		109		308		(24)		477
Total Current Assets	650		446		6,285		(24)		7,357
Property and Equipment – net	—		2,391		3,731		—		6,122
Right of Use Assets	—		979		2,399		(350)		3,028
Goodwill	—		661		167		—		828
Other Intangible Assets – net	—		4		433		—		437
Other Assets	760		74		608		—		1,442
Deferred Income Taxes	11		—		—		(11)		—
Intercompany Receivable	436		—		2,341		(2,777)		—
Investment in Subsidiaries	1,750		3,815		—		(5,565)		—
Total Assets	$	3,607	$	8,370	$	15,964	$	(8,727)	$	19,214
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	536	$	—	$	—	$	536
Merchandise accounts payable	—		220		3,047		—		3,267
Accounts payable and accrued liabilities	97		893		1,939		(81)		2,848

Total Current Liabilities	97		1,649		4,986		(81)		6,651
Long-Term Debt	1,242		3,610		—		—		4,852
Long-Term Lease Liabilities	—		872		2,687		(293)		3,266
Intercompany Payable	—		2,777		—		(2,777)		—
Deferred Income Taxes	—		403		525		(11)		917
Other Liabilities	25		327		933		—		1,285
Shareholders' Equity (Deficit)	2,243		(1,268)		6,833		(5,565)		2,243
Total Liabilities and Shareholders' Equity	$	3,607	$	8,370	$	15,964	$	(8,727)	$	19,214


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	42	$	73	$	186	$	—	$	301
Receivables	—		30		145		—		175
Merchandise inventories	—		3,145		4,111		—		7,256
Prepaid expenses and other current assets	96		126		442		(95)		569
Total Current Assets	138		3,374		4,884		(95)		8,301
Property and Equipment – net	—		3,174		3,384		—		6,558
Right of Use Assets	—		653		1,943		—		2,596
Goodwill	—		3,326		582		—		3,908
Other Intangible Assets – net	—		5		435		—		440
Other Assets	—		49		695		—		744
Deferred Income Taxes	9		—		—		(9)		—
Intercompany Receivable	2,923		—		454		(3,377)		—
Investment in Subsidiaries	3,231		2,812		—		(6,043)		—
Total Assets	$	6,301	$	13,393	$	12,377	$	(9,524)	$	22,547
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	6	$	—	$	—	$	6
Merchandise accounts payable	—		1,521		1,906		—		3,427
Accounts payable and accrued liabilities	216		835		1,995		—		3,046
Income taxes	—		51		44		(95)		—
Total Current Liabilities	216		2,413		3,945		(95)		6,479
Long-Term Debt	—		4,677		—		—		4,677
Long-Term Lease Liabilities	—		589		2,230		—		2,819
Intercompany Payable	—		3,377		—		(3,377)		—
Deferred Income Taxes	—		654		555		(9)		1,200
Other Liabilities	28		377		910		—		1,315
Shareholders' Equity	6,057		1,306		4,737		(6,043)		6,057
Total Liabilities and Shareholders' Equity	$	6,301	$	13,393	$	12,377	$	(9,524)	$	22,547


	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	$	(4,104)	$	(4,478)	$	(923)	$	5,401	$	(4,104)
Impairment, restructuring and other costs	—		2,811		634		—		3,445
Settlement charges	—		26		39		—		65
Equity in loss of subsidiaries	4,041		1,360		—		(5,401)		—
Dividends received from subsidiaries	608		300		—		(908)		—
Depreciation and amortization	—		225		497		—		722
Gains on sale of real estate	—		(1)		(19)		—		(20)
Changes in assets, liabilities and other items not separately identified	(750)		1,058		(172)		—		136
Net cash provided (used) by operating activities	(205)		1,301		56		(908)		244
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net of dispositions	—		(63)		(284)		—		(347)
Other, net	—		(1)		34		—		33
Net cash used by investing activities	—		(64)		(250)		—		(314)
Cash flows from financing activities:
Debt issued, net of debt issuance costs	1,238		1,492		(52)		—		2,678
Debt repaid	—		(1,506)		(2)		—		(1,508)
Dividends paid	(117)		—		(908)		908		(117)

Intercompany activity, net	(641)		(1,210)		1,851		—		—
Other, net	(63)		(15)		(12)		—		(90)
Net cash provided (used) by financing activities	417		(1,239)		877		908		963
Net increase (decrease) in cash, cash equivalents and restricted cash	212		(2)		683		—		893
Cash, cash equivalents and restricted cash at beginning of period	413		64		254		—		731
Cash, cash equivalents and restricted cash at end of period	$	625	$	62	$	937	$	—	$	1,624


	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments		Consolidated
Cash flows from operating activities:
Net income (loss)	$	224	$	(422)	$	370	$	52	$	224
Impairment, restructuring and other costs	—		1		15		—		16
Settlement charges	—		—		12		—		12
Equity in loss (earnings) of subsidiaries	(212)		264		—		(52)		—
Dividends received from subsidiaries	819		—		—		(819)		—
Depreciation and amortization	—		251		474		—		725
Gains on sale of real estate	—		(32)		(35)		—		(67)
Changes in assets, liabilities and other items not separately identified	(99)		(139)		(500)		—		(738)
Net cash provided (used) by operating activities	732		(77)		336		(819)		172
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net of dispositions	—		(179)		(560)		—		(739)
Other, net	—		(2)		12		—		10
Net cash used by investing activities	—		(181)		(548)		—		(729)
Cash flows from financing activities:
Debt repaid	—		(45)		—		—		(45)
Dividends paid	(349)		—		(819)		819		(349)
Issuance of common stock	5		—		—		—		5

Intercompany activity, net	(1,161)		239		922		—		—
Other, net	(74)		73		50		—		49
Net cash provided (used) by financing activities	(1,579)		267		153		819		(340)
Net increase (decrease) in cash, cash equivalents and restricted cash	(847)		9		(59)		—		(897)
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	$	42	$	73	$	236	$	—	$	351