Quarterly report pursuant to Section 13 or 15(d)

Condensed Consolidating Financial Information

v3.20.2
Condensed Consolidating Financial Information
 9 Months Ended
Oct. 31, 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, 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.
Condensed Consolidating Statement of Comprehensive Income (Loss)
For the 13 Weeks Ended October 31, 2020
(millions)
 
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)
Condensed Consolidating Statement of Comprehensive Income
For the 13 Weeks Ended November 2, 2019
(millions)
 
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)
Condensed Consolidating Statement of Comprehensive Income (Loss)
For the 39 Weeks Ended October 31, 2020
(millions)

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)
Condensed Consolidating Statement of Comprehensive Income
For the 39 Weeks Ended November 2, 2019
(millions)
 
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 
Condensed Consolidating Balance Sheet
As of October 31, 2020
(millions)
 
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 
Condensed Consolidating Balance Sheet
As of November 2, 2019
(millions)
 
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 
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 39 Weeks Ended October 31, 2020
(millions)
 
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 
Condensed Consolidating Statement of Cash Flows
For the 39 Weeks Ended November 2, 2019
(millions)
 
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