Quarterly report pursuant to Section 13 or 15(d)

Condensed Consolidating Financial Information

v3.20.2
Condensed Consolidating Financial Information
 6 Months Ended
Aug. 01, 2020
Condensed Financial Information Disclosure [Abstract]  
Condensed Consolidating Financial Information 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." "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.
Condensed Consolidating Statement of Comprehensive Income (Loss)
For the 13 Weeks Ended August 1, 2020
(millions)
 
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)
Condensed Consolidating Statement of Comprehensive Income
For the 13 Weeks Ended August 3, 2019
(millions)
 
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 
Condensed Consolidating Statement of Comprehensive Income (Loss)
For the 26 Weeks Ended August 1, 2020
(millions)

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)
Condensed Consolidating Statement of Comprehensive Income
For the 26 Weeks Ended August 3, 2019
(millions)
 
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 
Condensed Consolidating Balance Sheet
As of August 1, 2020
(millions)
 
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 
Condensed Consolidating Balance Sheet
As of August 3, 2019
(millions)
 
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 
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 26 Weeks Ended August 1, 2020
(millions)
 
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 
Condensed Consolidating Statement of Cash Flows
For the 26 Weeks Ended August 3, 2019
(millions)
 
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