Condensed Consolidating Financial Information

3 Months Ended

May 02, 2020

Condensed Financial Information Disclosure [Abstract]

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 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."

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.

Condensed Consolidating Statements of Comprehensive Income for the 13 weeks ended May 2, 2020 and May 4, 2019, Condensed Consolidating Balance Sheets as of May 2, 2020, May 4, 2019 and February 1, 2020, and the related Condensed Consolidating Statements of Cash Flows for the 13 weeks ended May 2, 2020 and May 4, 2019 are presented on the following pages.

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the 13 Weeks Ended May 2, 2020

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	—		$	867		$	2,955		$	(805	)	$	3,017
Credit card revenues (expense), net	—			(5		)	136			—			131

Cost of sales	—			(796		)	(2,510		)	805			(2,501		)
Selling, general and administrative expenses	—			(562		)	(1,036		)	—			(1,598		)
Gains on sale of real estate	—			—			16			—			16
Impairment, restructuring and other costs	—			(2,722		)	(462		)	—			(3,184		)
Operating loss	—			(3,218		)	(901		)	—			(4,119		)
Benefit plan income, net	—			3			6			—			9
Interest (expense) income, net:
External	1			(49		)	1			—			(47		)
Intercompany	—			(18		)	18			—			—
Equity in loss of subsidiaries	(3,582		)	(795		)	—			4,377			—
Loss before income taxes	(3,581		)	(4,077		)	(876		)	4,377			(4,157		)
Federal, state and local income tax benefit	—			427			149			—			576
Net loss	$	(3,581	)	$	(3,650	)	$	(727	)	$	4,377		$	(3,581	)

Comprehensive loss	$	(3,572	)	$	(3,641	)	$	(721	)	$	4,362		$	(3,572	)

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, 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

Comprehensive income (loss)	$	142		$	(38	)	$	149		$	(111	)	$	142

Condensed Consolidating Balance Sheet

As of May 2, 2020

(millions)



	Parent		Subsidiary Issuer			Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	1,160	$	25		$	338	$	—		$	1,523
Receivables	—		23			147		—			170
Merchandise inventories	—		2,072			2,851		—			4,923
Income taxes	—		—			3		(3		)	—
Prepaid expenses and other current assets	—		102			417		—			519
Total Current Assets	1,160		2,222			3,756		(3		)	7,135
Property and Equipment – net	—		2,978			3,447		—			6,425
Right of Use Assets	—		600			2,072		—			2,672
Goodwill	—		670			168		—			838
Other Intangible Assets – net	—		4			435		—			439
Other Assets	418		46			608		—			1,072
Deferred Income Taxes	11		—			—		(11		)	—
Intercompany Receivable	1,598		—			677		(2,275		)	—
Investment in Subsidiaries	—		2,010			—		(2,010		)	—
Total Assets	$	3,187	$	8,530		$	11,163	$	(4,299	)	$	18,581
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	739		$	—	$	—		$	739
Merchandise accounts payable	—		928			1,268		—			2,196
Accounts payable and accrued liabilities	14		719			2,024		—			2,757
Income taxes	65		18			—		(3		)	80
Total Current Liabilities	79		2,404			3,292		(3		)	5,772
Long-Term Debt	—		4,918			—		—			4,918
Long-Term Lease Liabilities	—		548			2,375		—			2,923
Intercompany Payable	—		2,275			—		(2,275		)	—
Deferred Income Taxes	—		377			578		(11		)	944
Other Liabilities	25		407			895		—			1,327
Accumulated Losses from Subsidiaries	386		—			—		(386		)	—
Shareholders' Equity (Deficit)	2,697		(2,399		)	4,023		(1,624		)	2,697
Total Liabilities and Shareholders' Equity	$	3,187	$	8,530		$	11,163	$	(4,299	)	$	18,581

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	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 February 1, 2020

(millions)



	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

Condensed Consolidating Statement of Cash Flows

For the 13 Weeks Ended May 2, 2020

(millions)



	Parent			Subsidiary Issuer			Other Subsidiaries			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net loss	$	(3,581	)	$	(3,650	)	$	(727	)	$	4,377		$	(3,581	)
Impairment, restructuring and other costs	—			2,722			462			—			3,184
Equity in loss of subsidiaries	3,582			795			—			(4,377		)	—
Dividends received from subsidiaries	251			—			—			(251		)	—
Depreciation and amortization	—			77			160			—			237
Gains on sale of real estate	—			—			(16		)	—			(16		)
Changes in assets, liabilities and other items not separately identified	(353		)	151			214			—			12
Net cash provided (used) by operating activities	(101		)	95			93			(251		)	(164		)
Cash flows from investing activities:
Purchase of property and equipment and capitalized software, net of dispositions	—			(34		)	(105		)	—			(139		)
Other, net	—			—			26			—			26
Net cash used by investing activities	—			(34		)	(79		)	—			(113		)
Cash flows from financing activities:
Debt issued, net of debt repaid	—			1,497			(1		)	—			1,496
Dividends paid	(117		)	—			(251		)	251			(117		)
Intercompany activity, net	1,082			(1,529		)	447			—			—
Other, net	(117		)	(68		)	(46		)	—			(231		)
Net cash provided (used) by financing activities	848			(100		)	149			251			1,148
Net increase (decrease) in cash, cash equivalents and restricted cash	747			(39		)	163			—			871
Cash, cash equivalents and restricted cash at beginning of period	413			64			254			—			731
Cash, cash equivalents and restricted cash at end of period	$	1,160		$	25		$	417		$	—		$	1,602

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
Impairment and other costs	—			—			1			—			1
Equity in loss (earnings) of subsidiaries	(132		)	30			—			102			—
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